The U.S. fiscal year 2026 budget deficit is approaching $2 trillion, as Trump's spending cuts face setbacks.

BlockBeats news, October 17, according to The New York Times, U.S. Treasury Department data shows that the U.S. federal budget deficit rose to $1.99 trillion in fiscal year 2026, up from $1.78 trillion in fiscal year 2025, the highest level since the pandemic. Although the Trump administration promised to cut spending, rising military spending, Social Security outlays and national debt interest, combined with falling corporate tax revenue, further widened the fiscal deficit.

Data shows that total U.S. government spending rose 6% year-on-year to $7.4 trillion in fiscal year 2026, while tax revenue rose 3% year-on-year to $5.4 trillion. Among these, rising long-term interest rates increased national debt interest payments by more than $100 billion compared with 2025; in addition, the U.S. Supreme Court ruled that tariffs imposed by Trump on national security grounds were illegal, and the government needs to refund more than $100 billion in tariff revenue this year.

Total U.S. national debt surpassed $40 trillion in August. As inflationary pressure persists and Treasury yields rise to 20-year highs, the government's financing costs have further increased. U.S. Treasury Secretary Bessent had previously hoped to reduce the deficit as a share of GDP to 3%, but that ratio rose back above 6% in fiscal year 2026. International Monetary Fund Managing Director Georgieva said that although economic growth helps, it cannot complete the necessary fiscal adjustment quickly enough.