The US ended fiscal year 2026 with an estimated $2 trillion deficit, while the national debt crossed $40 trillion for the first time on 30 September 2026.
The figures bring renewed focus to the gap between federal spending and revenue. The FY2026 deficit was roughly 6.2% of gross domestic product, while interest payments reached a record $1.1 trillion, equal to 3.4% of GDP.
The debt milestone arrived earlier than earlier Congressional Budget Office projections had suggested. Before COVID-19, the CBO did not expect debt to reach $40 trillion until 2030.
That timetable tightened over successive forecasts. The CBO’s estimate still put the threshold in 2030 in 2022, then moved it to 2028 in 2023 and 2027 in 2024.
Its most recent forecast, published in February 2026, projected debt of $39.4 trillion at the close of FY2026 and $43.3 trillion by the end of 2028. That forecast preceded the US war with Iran.
The longer record gives little sign of a durable change in the federal balance. Outlays exceeded revenues, with limited exceptions, in fiscal years from 1966 through 2024. The exceptions were fiscal years 1998 through 2001. Across that period, the median level of outlays stood at 117.05% of total federal revenues.
In its baseline forecast of 17 January 2025, the CBO projected outlays would remain above revenues through fiscal year 2029. It also projected that outlays would remain above the 1966-2024 median of 117.05% of revenues through that year.
Adjusted for inflation, President Trump has overseen a larger total increase in federal debt than any president in history, surpassing Barack Obama’s two-term record of $13.2 trillion.
The central questions are whether Congress will act on spending or revenue, how growth affects future projections and how investors respond as interest costs and debt continue to rise. The fiscal effect of the war with Iran has yet to be set out in the figures cited here.
Comments (0)