US Budget Deficit Tops $1 Trillion Through February

The U.S. federal budget deficit exceeded $1 trillion during the first five months of fiscal year 2026, reaching $1.004 trillion between October and February. Treasury data showed the deficit was roughly 12% lower than in the same period a year earlier.

In February alone, the monthly budget deficit totaled about $307.5 billion. While federal spending continued to outpace revenues, stronger tax collections helped narrow the year‑over‑year gap. Higher receipts from individual income taxes and payroll taxes contributed to the improvement in government revenues.

The U.S. fiscal year runs from October 1 to September 30. Since the start of fiscal 2026 in October 2025, federal outlays have remained elevated, with mandatory spending programs and rising interest costs continuing to weigh on the budget balance.

Despite the slower pace compared with last year, economists expect the deficit to remain large. The Congressional Budget Office projects the full‑year U.S. deficit could reach around $1.9 trillion in fiscal 2026, as higher interest payments and structural spending pressures continue to challenge the country’s fiscal outlook.