October 17, 2026
The US budget deficit rose to about two trillion dollars over the past year, recording its highest level since 2021, despite President Donald Trump’s promises to reduce public spending and reduce the fiscal deficit.
US Treasury Department data showed the deficit rising by $217 billion to reach $1.99 trillion in fiscal year 2026, partly driven by customs duty refunds and record spending to service the public debt, which exceeds $40 trillion, thus witnessing the largest annual budget deficit in five years.
These results come for the fiscal year ending on September 30, which is the first full fiscal year in President Donald Trump’s second term, compared to a deficit of $1.78 trillion in fiscal year 2025.
This level of deficit is the largest since recording a deficit of $2.77 trillion in fiscal year 2021 – which was then driven by COVID-19 pandemic relief spending – thus ranking it as the third largest annual deficit in the history of the United States ever.
