August 11, 2026 - The federal budget deficit totaled $1.8 trillion in the first 10 months of fiscal year 2026, CBO estimates. That amount is $169 billion more than the deficit recorded during the same period last fiscal year. Revenues rose by $139 billion (or 3 percent), and outlays increased by $308 billion (or 5 percent).

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Total Outlays: Up by 5 Percent in Fiscal Year 2026

Outlays in the first 10 months of fiscal year 2026 were $6.3 trillion, CBO estimates, $308 billion (or 5 percent) more than during the same period last year. If not for the timing shifts noted above, outlays so far in fiscal year 2026 would have been $209 billion (or 4 percent) greater than outlays during the same 10 months in fiscal year 2025. The discussion below reflects adjustments to exclude the effects of the timing shifts.

Outlays for the three largest mandatory spending programs rose by $181 billion (or 7 percent):

■ Spending for Social Security benefits rose by $70 billion (or 5 percent) because of increases in average benefits and in the number of beneficiaries. That increase would have been greater but for a significant set of onetime retroactive payments that began in March 2025 and stemmed from the Social Security Fairness Act of 2023, which was enacted in January 2025.

■ Medicare outlays increased by $66 billion (or 8 percent) because of increased enrollment and higher payment rates for services.

■ Medicaid outlays increased by $45 billion (or 8 percent) largely because of rising costs per enrollee.

Other areas with large increases were the following:

■ Outlays for net interest on the public debt rose by $117 billion (or 14 percent) because the debt was larger than it was in the first 10 months of fiscal year 2025 and because of higher long-term interest rates. Declines in short-term rates partially mitigated the overall rise in interest payments.

■ Spending by the Department of Defense for military activities was $39 billion (or 5 percent) greater than in the same period in fiscal year 2025; the largest increases were for military personnel and for research and development.

■ Outlays from the Department of Veterans Affairs increased by $34 billion (or 11 percent), primarily because more people received veterans’ benefits and spending per person rose.

■ Outlays of the Department of Housing and Urban Development rose by $17 billion (or 43 percent) largely because in June 2025 that agency recorded a downward revision to the estimated costs of outstanding housing loan guarantees. No such revision has been recorded this fiscal year.

■ Outlays of the Small Business Administration increased by $10 billion (to nearly six times last year’s amount) mostly because in June 2026 the agency recorded an increase of $10 billion in the estimated costs of its outstanding disaster loans.

Source: CBO