U.S. budget deficit hits $1 trillion in five months of fiscal 2026. The Congressional Budget Office reports the deficit reached just over $1 trillion through February, down $142 billion or 14% compared to the same period last year. Federal spending climbed to $3.1 trillion while tax revenue jumped $206 billion to $2.1 trillion, driven by higher individual income taxes, payroll taxes, and a dramatic 308% surge in tariff collections. However, potential Supreme Court-ordered refunds of unconstitutional tariffs could reverse gains and increase deficits. Corporate income tax collections fell $33 billion due to new tax deductions. Mandatory spending on Social Security and Medicare continues rising as America's population ages.
