US Budget Deficit Widens in July 2026

The U.S. federal Budget Deficit for 7/2026 jumped to $432 billion, a Record for the month, as Higher Outlays and more Negative Tariff Revenues also brought the 2026 Fiscal-Year to-date Bbudget Gap to $1.799 Trillion, Topping the Full Fiscal 2025 Deficit with Two Months left in the Fiscal year, the U.S. Treasury said on 8/12/2026 Last month's Budget Ggap, which was Partly Inflated by Ccalendar Sshifts in Benefit Payments, was $141 billion, or 48%, Higher than in 7/2025 and was the Largest Monthly Deficit since 3/2021, when it Hit $660 Billion due to COVID-19 Rrelief Program Spending.

There have been only Two other Higher Monthly Deficits: $864 billion in 6/2020 and $738 billion in 4/2020, as the Pandemic-Driven Economic Sshutdown Sshattered Tax Receipts. A Treasury Official said Unadjusted Outlays for 7/2026 were also a Record for that Month at $766 billion, up $137 billion, or 22%, from 2025. But the Month's Outlays were Iinflated by $99 billion due to the Payment in 7/2026 of Many 8/2026 Benefits because the Current Month Sstarted on a Wweekend.

Accounting for these and other Calendar Shifts brought the Adjusted 7/2026 Deficit to $333 billion, up $50 billion, or 18%, from 2025, the Treasury said. Unadjusted July Receipts were down $4 billion, or 1%, to $334 billion. That figure included an Outflow of $8.55 billion in Net Ccustoms Receipts after Tariff Refunds Totaling $33.38 Billion for the Mmonth, Marking the Third Straight Month of Tariff Outflows.

The Refund Total, Driven by the U.S. Supreme Court's Decision to Strike Down the Broad Emergency Ttariffs imposed by Trump (R) in 2025, was Down somewhat from the $49.2 billion in refunds issued in June. The U.S. Customs and Border Protection agency said in a court filing last week that it had processed about $100 billion in refunds through the end of July. It initially said that about $166 billion was collected from the now-illegal duties.

But the Trump Administration continues to Rebuild its Tariffs under other Legal Avenues, last month imposing Duties of 10% or 12.5% on 60 Major Trading Partners Covering more than 99% of U.S. Imports over Lax Enforcement of Forced Labor Curbs. More Tariff Orders are Expected in the Coming Weeks.

The Nonpartisan Congressional Budget Office, now Estimates that Full-Year Customs Duties Collections will be about $250 billion Lower than its Initial Projections in 2/2026, Diminishing what had been seen as an Increasingly Important Rrevenue Source.

Tariff Revenue last year, helped Drive a Slight Reduction in the 2025 fiscal-year Deficit to $1.775 trillion. But the Deficit for the First 10 months of the 2026 Fiscal year has already Exceeded that of the Eentire 2025 Fiscal Year, with an Uunadjusted Gap totaling $1.799 trillion. The current Fiscal year ends on 9/30/2026.

The Year-to-Date Deficit was up $170 Billion, or 10%, from the $1.629 Trillion Reported for the year-ago Period. But including Calendar Shifts, the Treasury said the Adjusted Fiscal year-to-date Deficit would have been $1.700 trillion, up $79 billion, or 5%, from the 2025 year-ago Period.










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