The U.S. Treasury will likely have borrowed more than $2 trillion by the end of the fiscal year, according to the latest estimates out of the Executive Office of the president—a figure described as “beyond scary” by budget hawks.
Yesterday, the department headed by Scott Bessent released its latest Quarterly Refunding Documents, which communicate any changes in debt management policy, as well as financing estimates from Treasury and bond market participants. The documents also share bond issuance plans.
The presentation showed that as of April 2026, the Office of Management and Budget (OMB) expected the 2026 fiscal year to run at a deficit of $2.06 trillion, higher than estimates from the Congressional Budget Office (CBO).
The federal fiscal year will end on September 30, with the OMB projecting a deficit of $2.17 trillion for FY2027.
This means that for every month of the current fiscal year, the government will have issued more than $166 billion in debt. From October, that average will increase to approximately $181 billion a month.
The CBO, by comparison, had estimated a deficit of $1.85 trillion for the current fiscal year and $1.89 trillion for next year.
It comes as national debt—being added to month after month—creeps closer to the $39 trillion mark. At the time of writing, the U.S. national debt sits at $38.91 trillion, per Treasury data.
The interest payments on that debt are now so huge that they rival government spending on both education and defense combined. The CBO’s preliminary estimates released last month show the Treasury paid out nearly $530 billion on service payments between October 2025, when the fiscal year starts, and March 2026. This equates to more than $88 billion in interest payments a month, or more than $22 billion a week.
“$2 trillion deficits used to be unheard of, and then they only occurred during major recessions—it’s beyond scary that $2 trillion deficits are now the norm,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “Markets will only tolerate our unsustainable borrowing for so long; the risk of a fiscal crisis gets higher as the days pass. We need deficit reduction urgently.”
MacGuineas was echoed by Frederick Kempe, president and chief executive officer of non-partisan think tank the Atlantic Council. Kempe wrote in a blog post yesterday: “Trust doesn’t collapse overnight. It slips incrementally until the terms on which the United States borrows, invests, and leads begin to change.
“This debate still strikes most Americans as abstract; it is anything but. Higher debt, if mismanaged, means higher interest rates on mortgages and business loans. It can shift resources away from investments in our national future toward paying for the past at a time when the global competition with China is accelerating.”
3% deficit target
A deficit of $2 trillion for the year sits well above the level set by those calling for a 3% deficit-to-GDP limit.
The push to anchor deficits to 3% of GDP has garnered bipartisan support in recent years. Some policymakers believe that even an agreed-upon target would be too lax—a mandate should be written into the constitution. Even a 3% benchmark is roughly half the level of current deficits, and would on its own require budgets to meaningfully shift. It would require approximately $10 trillion in deficit reduction over the next decade for the target to be reached by 2036.
MacGuineas added: “As policymakers and thought leaders are increasingly gravitating toward the idea that we need to put deficits on track towards 3% of GDP, today’s news shows just how far we have to go. A $2 trillion deficit is more than 6% of GDP—about twice the 3% target—and things are getting worse, not better.”
