CBO projects $1.85 trillion fiscal 2026 deficit as borrowing climbs

The Congressional Budget Office's annual Budget and Economic Outlook, published Feb. 11, 2026, projects a U.S. federal deficit in fiscal 2026 of roughly $1.85 trillion, equal to about 5.8 percent of gross domestic product. A separate CBO “Deficits” bulletin frames the same projection at $1.9 trillion and shows deficits continuing to widen through the decade, reaching roughly $3.1 trillion by 2036.

The report marks a meaningful upward revision from last winter's baseline. Compared with the agency's January 2025 projections, the CBO's current outlook raises the 2026 deficit by about $100 billion and increases cumulative borrowing across the 2026–2035 window by approximately $1.4 trillion. “CBO now projects $1.4 trillion more borrowing between 2026 and 2035 than it did last January,” noted the Committee for a Responsible Federal Budget in reviewing the CBO estimates.

CBO analysts said the baseline assumes slower growth than some administration estimates, pegging real GDP growth at about 2.2 percent in 2026 and averaging roughly 1.8 percent over the remainder of the decade. Administration officials have argued first-quarter 2026 growth could top 6 percent because of rising investment in factories and artificial intelligence data centers, but the CBO's lower growth path contributes to larger projected deficits and higher debt service costs.

The agency identified several policy drivers behind the rising shortfall. Changes in tax and spending policy collectively labeled in public commentary as the “One Big Beautiful Bill” account for about $4.7 trillion of additional deficits over the 10-year window, while reduced immigration adds roughly $500 billion. Offsetting those increases, the CBO estimates that tariff measures add revenue in its modeling and reduce deficits by about $3 trillion once economic effects and lower interest costs are included.

Those dynamics have implications beyond headline budget numbers. Higher federal borrowing and rising debt service crowd out fiscal space for discretionary programs and add pressure on entitlement spending. The CBO's baseline already assumes lower federal outlays for programs such as Medicaid under recent legislation, a change that state governments, community clinics and safety-net providers say could translate into higher uncompensated care burdens and reduced access for low-income people.

Public health experts and advocates warn that sustained, sizable deficits often lead policymakers to seek savings by tightening health, housing or social services budgets, measures that would disproportionately affect communities of color and low-income households. The CBO shows the deficit-to-GDP ratio averaging about 6.1 percent over the next decade and rising to roughly 6.7 percent by fiscal 2036, far above the roughly 3 percent target cited by Treasury Secretary Scott Bessent.

Lawmakers face a narrowing set of choices: raise revenue, reduce benefits and services, or accept higher borrowing and greater interest costs. Each path carries tradeoffs for health equity, access to care, and funding for public health systems that serve the most vulnerable.

Readers should note that CBO publications use different tables and presentation formats; the agency's Budget and Economic Outlook and its separate deficits bulletin present closely related but not identical line items and rounding conventions. Policymakers and advocates will be weighing the report's projections in the weeks ahead as budget debates resume on Capitol Hill.