The Congressional Budget Office (CBO) confirms that the U.S. federal deficit will reach $2.1 trillion for fiscal year 2026, up from the $1.9 trillion forecast in February, representing a $200 billion deterioration tied to tariffs. The Supreme Court invalidated the Trump administration’s IEEPA-based tariff program on February 20, causing a 60% drop in customs-duty collections and triggering roughly $100 billion in refunds on duties collected under the invalidated authority. During the first ten months of fiscal 2026, the deficit already totaled $1.8 trillion, with July alone posting a $431 billion shortfall, a $140 billion increase year-over-year. The United States is approaching the milestone of $40 trillion in gross national debt, as analysts warn of fiscal deterioration without a recession.
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