Where the Money Went: Fiscal 2026 in Ten Charts

00The Year in Ten Charts

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01How the Deficit Built Up, Month by Month

Here is fiscal 2026 as a running total against the two years before it. Fiscal 2025 ran ahead from November through May. Fiscal 2026 edged in front at the end of June, opened a wide lead in July, slipped just behind at the end of August and finished $217 billion on top.

The year opened with the longest government shutdown in history, 43 days from October 1 to November 12, 2025, and still posted the largest October deficit on record, $284.3 billion. That one is partly a calendar quirk: November 1 fell on a Saturday, so about $105 billion of November's benefit payments went out in October. The same thing happened in July, when August 1 also fell on a Saturday, and July's $432.3 billion was the biggest July deficit ever recorded. April was the only surplus month, $215.0 billion, because that is when individual tax payments come due.

Deficit (red) or surplus (green) in each month of fiscal 2026. Source: US Treasury, Monthly Treasury Statement, September 2026.

By the end of July, ten months in, the government had already run up a $1.80 trillion deficit, more than the whole of fiscal 2025. September closed with a small deficit of $26.9 billion; a year earlier September had shown a $197.9 billion surplus, partly because Labor Day moved some September payments into August; without that shift it would have been a surplus of about $110 billion, according to CBO. If you want to see the spending day by day, the Daily Federal Spending Tracker tracks every Treasury business day.

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02Where Each Dollar Went

Cents of each dollar of fiscal 2026 federal outlays, by budget function. "Everything else, net" is all other functions after subtracting offsetting receipts such as rents and royalties. Source: US Treasury, Monthly Treasury Statement, September 2026.

Social Security is still the biggest single line, at 22.5 cents of every dollar. Medicare took 14.5 cents, health programs led by Medicaid 13.9 cents and national defense 13.1 cents. Net interest on the debt took 14.2 cents, more than defense. Put the four big ones together, Social Security, Medicare, Medicaid and the rest of health, and interest, and you have about two-thirds of everything the government spent. The full breakdown by agency and program lives on the Where Tax Dollars Go page.

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03The Biggest Programs, This Year Against Last

Fiscal 2026 outlays by budget function. The black tick marks fiscal 2025. Source: US Treasury, Monthly Treasury Statement, September 2026.

Social Security grew by $86.4 billion, the biggest dollar increase of any program, on a 2.8% cost-of-living increase in January 2026 and more people collecting; you can see what that means for your own check with the Social Security Calculator. Medicare added $75.9 billion and Medicaid, which sits inside the health line, rose from $668.1 billion to $723.0 billion. Defense was up $48.5 billion to $965.2 billion; the Defense Spending History page has every year back to 1925.

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04What Grew Fastest

Percentage change in outlays from fiscal 2025 to fiscal 2026, by budget function. Source: US Treasury, Monthly Treasury Statement, September 2026.

Education looks like the runaway winner, up 51%, but that is accounting rather than new spending. In September 2025 the government booked a one-time $131 billion reduction in the estimated cost of student loans after the 2025 reconciliation law changed the loan programs, which pulled fiscal 2025's education number down, according to the Congressional Budget Office. Veterans' benefits grew 10%, from more people receiving them and higher payments per person.

Income security was the one big category that shrank, down 1%. SNAP, the food stamp program, fell from $106.3 billion to $95.4 billion, which CBO puts down largely to lower caseloads.

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05Interest Now Costs More Than Defense

This is the chart I would show anyone who asks why the deficit keeps growing. Net interest on the debt was $345.5 billion in fiscal 2020. In fiscal 2026 it was $1.05 trillion, roughly three times as much, and it passed defense spending in fiscal 2024 ($879.9 billion against $873.5 billion) and has stayed ahead since. In fiscal 2026 it beat defense by $86.6 billion.

There is more than one way to count interest. The figure above is Treasury's net interest budget function. The Congressional Budget Office uses net interest on the public debt, which leaves out other interest the government collects, such as on student loans. On that measure interest came to $1.14 trillion, up 11%, and unlike on Treasury's measure it cost more than Medicare ($1.07 trillion, net of premiums and other offsetting receipts). Counting the interest it owes its own trust funds, and before subtracting interest it collects, Treasury recorded a record $1.36 trillion of interest expense on its securities. The average interest rate on its marketable debt was 3.52% on September 30, 2026, up from 3.41% a year earlier. I went through where that money actually ends up in Where the Interest on the National Debt Actually Goes.

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06Where the Money Came From

Fiscal 2026 receipts by source. The black tick marks fiscal 2025. Source: US Treasury, Monthly Treasury Statement, September 2026.

Revenue hit a record $5.40 trillion, up 3%. Individual income taxes did the heavy lifting, up $189.5 billion to $2.85 trillion, and payroll taxes added $63.5 billion. Corporate income taxes went the other way, down 16% to $381.4 billion, which CBO attributes to the bigger investment write-offs in the 2025 reconciliation law, the One Big Beautiful Bill Act. Corporate refunds alone rose by about 80%, from $34 billion to $61 billion. Estate and gift taxes rose to $38.7 billion from $29.5 billion. Your own slice of the individual and payroll lines depends on where you live; the Paycheck Calculator works it out by state.

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07Tariffs, Then the Refunds

Net customs duties (collections minus refunds) in each month of fiscal 2026. Source: US Treasury, Monthly Treasury Statement, September 2026.

Customs had the strangest year of any line in the budget. The government collected a record $317.8 billion of duties, more than in any year before, then paid back $144.6 billion in refunds, leaving $173.2 billion, less than fiscal 2025's $194.9 billion.

The turn came on February 20, 2026, when the Supreme Court ruled 6-3 in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act does not authorize tariffs. That struck down the 2025 "reciprocal" and fentanyl tariffs; tariffs under Section 232 and Section 301 were not affected. Refunds started flowing in May, and for three months in a row, May, June and July, the government paid out more in customs refunds than it collected. CBO estimates about $130 billion of the fiscal 2026 refunds were for the struck-down tariffs. The Tariff Revenue Tracker follows the monthly numbers as they come in, and the US Tariff History page has every rate back to 1890.

Net customs duties by fiscal year. Source: US Treasury, Monthly Treasury Statement.

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08The Third-Largest Deficit on Record

Federal deficit (red) or surplus (green) each fiscal year, 2000 to 2026, in dollars not adjusted for inflation. Fiscal 2026 in black. Sources: OMB Historical Tables, Table 1.1 (FY2027 Budget) for 2000 to 2025; US Treasury for 2026.

At $1.99 trillion, fiscal 2026 ran the third-largest deficit in dollars after the pandemic years, fiscal 2020 ($3.10 trillion) and fiscal 2021 ($2.77 trillion), and it was $217 billion bigger than fiscal 2025, an increase of 12%. As a share of the economy it is a different picture: the Treasury estimates it at 6.2% of GDP, about the same as fiscal 2024, below the 2009 to 2012 years after the financial crisis and the two pandemic years. The last surplus was fiscal 2001, $128.2 billion; the Deficits and Surpluses History page has every year since 1940.

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09The Debt Passes $40 Trillion

Total public debt outstanding on September 30 of each year, in trillions of dollars. Source: US Treasury, Historical Debt Outstanding and Debt to the Penny.

Total debt rose $2.53 trillion over the fiscal year, from $37.64 trillion to $40.17 trillion, about $6.9 billion a day. It crossed $40 trillion on August 18, 2026. Of the year-end total, $32.43 trillion was debt held by the public and $7.75 trillion was owed to government trust funds such as Social Security's.

The debt limit, raised by $5 trillion to $41.1 trillion in July 2025, had about $1.12 trillion of room left on September 30. The Bipartisan Policy Center projected in June 2026 that the government would reach it sometime between late winter and mid-summer 2027. The US Debt Clock runs in real time, and I traced how long each trillion took in How Long It Took to Add Each Trillion.

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10Who Holds the Debt

Debt held by the public on September 30, 2026 ($32.43 trillion). Foreign holdings are Treasury's August 2026 estimate, released October 16, 2026; Federal Reserve holdings are for September 30, 2026. Sources: US Treasury (TIC data, Debt to the Penny); Federal Reserve H.4.1.

Foreign holdings rose in dollars, to $9.33 trillion, but fell as a share of the pile: 28.8% of the debt held by the public in August, down from 30.5% a year earlier. Japan is still the biggest holder, though it cut $121 billion. The United Kingdom added $147 billion and passed $1 trillion. China cut another $108.5 billion, to $590.7 billion.

The Federal Reserve stopped shrinking its Treasury holdings on December 1, 2025, and ended the year holding $4.56 trillion, up about $368 billion. The Who Owns America's Debt page has every country and the monthly changes, and I wrote about China's selling in How Much US Debt China Has Sold.

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→What Comes Next

Fiscal 2027 started on October 1 on a continuing resolution that funds the government through December 11, 2026, with none of the 12 regular spending bills enacted by then. CBO's February 2026 baseline projected a fiscal 2027 deficit of $1.89 trillion and debt held by the public reaching 106% of GDP in 2029, tying the record set in 1946, and 108% in 2030. That projection came before the tariff refunds; CBO said in August that tariff changes since February, mostly the loss of the struck-down tariffs, add about $0.9 trillion to deficits over 2027 to 2036. The Recession Dashboard keeps an eye on the other side of the ledger, the economy that pays the taxes.

§Sources

• US Treasury, Monthly Treasury Statement, September 2026 (released October 16, 2026), Tables 1, 4 and 9
• Congressional Budget Office, Monthly Budget Review: September 2026 (October 8, 2026)
• Office of Management and Budget, Historical Tables, FY2027 Budget, Tables 1.1 and 3.1
• US Treasury, Debt to the Penny, Historical Debt Outstanding and Average Interest Rates
• US Treasury, Major Foreign Holders of Treasury Securities (August 2026 data, released October 16, 2026)
• Federal Reserve, H.4.1 Factors Affecting Reserve Balances, October 1, 2026
• Congressional Budget Office, The Budget and Economic Outlook: 2026 to 2036 (February 2026)
• Supreme Court of the United States, Learning Resources, Inc. v. Trump (February 20, 2026)
• US Census Bureau, population estimate for July 1, 2026

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