Washington Ends Fiscal 2026 With a $1.99 Trillion Deficit, Up $217 Billion

The federal government spent $1.99 trillion more than it took in during fiscal 2026, which ended September 30, according to the Treasury Department’s final Monthly Treasury Statement for the year. That is $217 billion more than the $1.78 trillion deficit of fiscal 2025.

Receipts for the year came to $5.40 trillion, up $169 billion, or 3.2 percent. Outlays came to $7.40 trillion, up $386 billion, or 5.5 percent. Spending grew faster than revenue, and the gap widened.

Third-largest on record

Only two years have run larger deficits, according to Treasury’s year-end statements and the federal budget’s historical tables: fiscal 2020, at $3.13 trillion, and fiscal 2021, at $2.77 trillion. Both were pandemic years. The deficit was $1.38 trillion in fiscal 2022, $1.70 trillion in 2023 and $1.83 trillion in 2024 before dipping in 2025 and rising again this year.

September, a quarterly tax month, did not help. Washington ran a $26.9 billion deficit in September 2026, compared with a $197.9 billion surplus in September 2025.

What it means for Texas

A deficit has to be borrowed, and every dollar of it adds to a federal debt that Texans help carry through their federal taxes. No one in Austin voted on this year’s $1.99 trillion, and no Texas official can stop next year’s.

Texas runs on a different rule. Under Article III, Section 49a of the Texas Constitution, the Legislature may not pass a budget that spends more than the comptroller certifies the state will take in. Washington has no such limit, and the last six years show what happens without one.

Washington has not run a deficit smaller than $1.3 trillion since 2019. The question for Texans is how long they want their money managed by that government rather than by the one in Austin that is required to balance its own.