Economy

Fiscal 2026 Deficit Widens as Outlays Outpace Receipts

The Tip Desk · November 5, 2026 · 2 min read

The full-year federal deficit widened as outlays rose by more than receipts from the prior fiscal year.

The federal deficit widened to $1,992.5 billion in fiscal 2026 from $1,775.4 billion a year earlier, as outlays grew faster in dollar terms than receipts. Full-year receipts rose to $5,403.3 billion from $5,234.6 billion, while outlays increased to $7,395.8 billion from $7,010.0 billion.

September ended with a $26.9 billion deficit, a swing from a $197.9 billion surplus in the same month a year earlier and a narrowing from August’s $166.8 billion deficit. Receipts were $557.9 billion, up from $543.7 billion a year earlier and $360.0 billion in August. Outlays reached $584.8 billion, compared with $345.7 billion in September a year earlier and $526.8 billion in August.

Individual income taxes provided the largest dollar gain among the reported receipt sources for the full fiscal year, rising $189.5 billion to $2,845.5 billion from $2,656.0 billion. Corporation income taxes had the largest decline, falling $70.7 billion to $381.4 billion from $452.1 billion. Social insurance and retirement receipts rose $63.5 billion to $1,811.8 billion from $1,748.3 billion.

Customs duties declined $21.6 billion to $173.2 billion from $194.9 billion, while estate and gift taxes rose $9.3 billion to $38.7 billion from $29.5 billion. Miscellaneous receipts decreased $1.3 billion to $46.7 billion from $47.9 billion; excise taxes increased $0.1 billion to $106.0 billion from $105.9 billion.

On the outlay side, the Treasury Department had the largest dollar increase among the reported agencies, rising $122.1 billion to $1,581.0 billion from $1,458.9 billion. Health and Human Services followed with a $119.5 billion increase to $2,003.8 billion from $1,884.3 billion, while Social Security Administration outlays rose $87.3 billion to $1,733.9 billion from $1,646.5 billion.

Defense military program outlays increased $48.4 billion to $916.8 billion from $868.4 billion. Education outlays rose $40.5 billion to $75.2 billion from $34.7 billion, and Veterans Affairs outlays rose $39.0 billion to $415.6 billion from $376.6 billion. Undistributed Offsetting Receipts, a negative line that offsets total outlays, decreased $34.9 billion to -$372.7 billion from -$337.8 billion.

Environmental Protection Agency outlays fell $19.6 billion to $17.4 billion from $37.0 billion, a decline of 53.0%.