The federal budget deficit is now expected to surpass $2 trillion this fiscal year, which would be one of the largest shortfalls on record as spending growth continues to outpace tax receipts. That figure represents an increase of $169 billion when compared with the same 10-month period in fiscal year 2025. Federal spending increased $308 billion from a year ago, outpacing the $139 billion rise in tax receipts. CBO also noted it now estimates the budget deficit will rise to $2.1 trillion, up $200 billion from last fiscal year, for the full fiscal year 2026 based on information available through the end of July. Tax revenue from both payroll and taxes rose by a combined $202 billion, or 5%, compared with a year ago.