Investing.com -- The US federal budget deficit expanded to $1.99 trillion for the 2026 fiscal year ending in September, according to Treasury Department data released Friday. The figure represents a 12% increase from the $1.78 trillion deficit recorded in fiscal 2025.

Government spending climbed more than 5% to $7.4 trillion, while receipts grew roughly 3% to $5.4 trillion during the period.

Treasury Secretary Scott Bessent attributed the wider deficit partly to tariff refunds following the Supreme Court's February ruling that invalidated most of President Donald Trump's tariff increases from his second term. The administration is working to establish new tariffs through alternative legislation.

The deficit marks the fourth consecutive year at approximately $2 trillion. The gap represented roughly 6% of gross domestic product, which economists consider elevated for a period of relatively low unemployment.

The previous year's deficit appeared narrower due to an accounting measure. The 2025 Republican tax act imposed tighter limits on student loans, which the Treasury recorded as a spending reduction for that fiscal year.

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