The nonpartisan Congressional Budget Office (CBO)<\/a> on Thursday released its monthly budget review for the month of June, which showed the FY2026 deficit was $1.373 trillion through the first nine months of the fiscal year.<\/p>\n That represents a $35 billion increase in the budget deficit compared with the same period a year ago. The larger deficit was the result of a larger increase in federal spending, which is up $178 billion from a year ago while tax receipts have risen $142 billion.<\/p>\n Increased spending was primarily driven by the cost of servicing the federal government’s more than $39 trillion national debt as well as rising expenses for the government’s three largest mandatory spending programs \u2013 Social Security, Medicare and Medicaid.<\/p>\n US NATIONAL DEBT SURPASSES SIZE OF THE ECONOMY FOR FIRST TIME SINCE WORLD WAR II<\/a><\/p>\n The federal budget deficit for FY2026 surpassed the prior year’s shortfall in the CBO’s June budget update. (Kevin Carter\/Getty Images)<\/p>\n Net interest on the national debt<\/a> was the largest category of increased spending in the first nine months of FY2026 and rose $98 billion compared with the same period a year ago, an increase of 13%. This was caused by the growth in the size of the national debt, as well as higher long-term interest rates \u2013 though some declines in short-term rates mitigated some of the total increase.<\/p>\n Social Security<\/a> was the next largest driver of the increased spending, with benefit payments up $62 billion, or 5%, from a year ago due to higher average benefits and a larger number of beneficiaries. The CBO noted the increase would’ve been larger but for onetime retroactive payments that began in March 2025 under the Social Security Fairness Act.<\/p>\n Medicare<\/a> spending rose $58 billion from a year ago, an 8% increase, due to higher enrollment and higher payment rates for healthcare services provided through the program. Medicaid spending was up $49 billion, or 10%, which was largely attributed to rising costs per enrollee.<\/p>\n FEDERAL BUDGET DEFICIT PROJECTED TO HIT $2 TRILLION THIS FISCAL YEAR, RANKING AMONG LARGEST IN US HISTORY<\/a><\/p>\n Increased tax revenues<\/a> were driven mostly by higher receipts of individual income and payroll taxes, which combined to rise by $169 billion, or 5%, despite income tax refunds rising by $31 billion, or 10%, due to the One Big Beautiful Bill Act.<\/p>\n Customs duties \u2013 a category which includes tariffs<\/a> \u2013 were up $55 billion from a year ago. That amounts to an increase of 51%, which CBO attributed to President Donald Trump’s executive actions that raised tariffs on U.S. trading partners.<\/p>\n However, tariff refunds began to be paid following a Supreme Court<\/a> ruling in February that struck down some of the tariffs, which reduced tariff revenues by about $70 billion in May and June.<\/p>\n Tariff refunds were paid out in May and June that decreased the funding the federal government received from import taxes. (STR\/AFP\/Getty Images)<\/p>\n US NATIONAL DEBT BREACHES $39 TRILLION MILESTONE FOR FIRST TIME AMID SPENDING SURGE<\/a><\/p>\n Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget (CRFB), noted in a statement that this year’s deficit has now surpassed the prior year’s deficit and it’s “likely to stay that way for the rest of the fiscal year.”<\/p>\n “We will likely borrow $2 trillion or more this fiscal year \u2013 an astounding figure given that the economy keeps growing<\/a> and unemployment is low,” she explained. “This is likely the tip of the iceberg; borrowing will soar if policymakers fail to get our entitlements under control, enact further unpaid-for tax cuts or spending increases, and otherwise ignore the need to cut spending and increase revenues.”<\/p>\n MacGuineas noted that Social Security and Medicare are within seven years of exhausting their trust funds, which would trigger across-the-board benefit cuts to both programs, and urged lawmakers to take steps to rein in federal budget deficits.<\/p>\n GET FOX BUSINESS ON THE GO BY CLICKING HERE<\/a><\/p>\n “None of this is normal. Policymakers should instead be targeting a much more sustainable deficit at 3% of GDP, putting together a bipartisan commission to address our fiscal situation and entitlements, and perhaps most importantly, being honest with the public about the grave dangers we face by remaining on this unsustainable path<\/a>,” she added.<\/p>\n","protected":false},"excerpt":{"rendered":"The Big Money Show co-host Dagen McDowell discusses the deeply flawed memorandum regarding Iran, highlighting how the American…\n","protected":false},"author":2,"featured_media":756092,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[28],"class_list":["post-756091","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/756091","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=756091"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/756091\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/756092"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=756091"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=756091"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=756091"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"People](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/07\/us-capitol-july-4-2026-america-250.jpg\")
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