President Trump’s first full year back in the White House ended with a $2 trillion deficit, as Uncle Sam’s budget woes deepened.
The final tally saw the government collect $5.4 trillion in revenue — up about 3% from the previous year. But it spent $7.4 trillion, or 6% more than in fiscal 2025.
The result was the first $2 trillion deficit since the end of the COVID-19 pandemic.
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And there’s little sign that the situation will improve, with the government’s biggest programs showing no sign of slowing their demand on federal taxpayers.
The big social safety net programs of Social Security, Medicare and Medicaid all grew faster than revenue. And so did spending on veterans, as both the number of veterans needing care and the cost per person rise.
Interest payments on the public debt now account for more than $1.1 trillion a year and are rising fast, eating up a significant chunk of the government’s income.
By contrast, military spending rose only 6%, or about the government average, despite the start of a war with Iran.
The sea of red ink left some lawmakers claiming a pox on both parties.
“The government has become completely unaccountable to taxpayers,” said Sen. Rick Scott, Florida Republican. “Congress has failed to do its job as a responsible fiscal steward for the American people. Our federal debt is the leading reason why everything costs you so much more.”
As of Wednesday, the federal debt held by the public was $32.5 trillion, and total government debt, including intragovernmental IOUs, stood at $40.3 trillion.
Deficits are the difference between income and spending. The accumulation of deficits is the debt.
The fiscal year ran from Oct. 1 to Sept. 30.
The deficit for fiscal 2025 was $1.8 trillion, as it was in 2024. In both of those years, revenue increases outpaced new spending.
The worst year on record remains 2020, when COVID-19 first slammed into the economy, and the government opened up the spigot and poured money into programs to bolster businesses and the unemployed.
Even so, total spending that year was still just $6.6 trillion, which is less than the government spent in 2026.
One headwind for Mr. Trump was the loss of his first broad package of tariffs, which the Supreme Court invalidated in February.
The government had to refund the money collected under those tariffs. Customs duty refunds grew by about $137 billion for the fiscal year.
Even so, the government still netted $173 billion in customs duties, thanks to Mr. Trump’s second round of tariffs.
That’s down from $195 billion a year earlier.
Treasury Department officials said military spending rose $48 billion, but there’s no clear connection to the Iran war. The increases were across several categories, tracking with a general spending rise.
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