U.S. Treasury must borrow over $2 trillion this year to keep operating—more than $166 billion each month

(SeaPRwire) –   The U.S. Treasury is projected to borrow over $2 trillion by the conclusion of the current fiscal year, according to the latest forecasts from the Executive Office of the President—a figure that budget experts have labeled “beyond scary.”

On Wednesday, the department led by Scott Bessent published its latest Quarterly Refunding Documents, which outline updates to debt management strategy, financing projections from both the Treasury and bond market participants, and upcoming bond issuance schedules.

The report indicates that as of April 2026, the Office of Management and Budget (OMB) anticipates a $2.06 trillion deficit for the 2026 fiscal year, exceeding the projections previously issued by the Congressional Budget Office (CBO).

With the federal fiscal year concluding on September 30, the OMB estimates the deficit will reach $2.17 trillion for FY2027.

Consequently, the government is issuing debt at a rate exceeding $166 billion per month for the current fiscal year. Starting in October, that monthly average is expected to rise to approximately $181 billion.

In contrast, the CBO had previously forecast a deficit of $1.85 trillion for this fiscal year and $1.89 trillion for the following year.

These figures arrive as the national debt continues to climb, nearing the $39 trillion threshold. Treasury data shows the current national debt stands at $38.91 trillion.

Interest costs on this debt have grown so substantial that they now rival the combined federal spending on defense and education. Preliminary CBO data from last month indicates that the Treasury spent nearly $530 billion on debt servicing between the start of the fiscal year in October 2025 and March 2026. This amounts to more than $88 billion in monthly interest payments, or over $22 billion each week.

“$2 trillion deficits were once unheard of, occurring only during severe recessions—it is deeply alarming that such deficits have now become the standard,” stated Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “Markets will not tolerate our unsustainable borrowing indefinitely; the danger of a fiscal crisis grows daily. We require immediate deficit reduction.”

Frederick Kempe, president and CEO of the non-partisan Atlantic Council, echoed these concerns. In a blog post yesterday, Kempe noted: “Trust does not vanish overnight. It erodes gradually until the conditions under which the United States borrows, invests, and exercises leadership begin to shift.

“While many Americans view this debate as abstract, it is anything but. If mismanaged, higher debt leads to increased interest rates on business and mortgage loans. It can divert resources away from future national investments toward servicing the past, precisely as global competition with China intensifies.”

3% deficit target

A $2 trillion annual deficit significantly exceeds the threshold proposed by advocates of a 3% deficit-to-GDP limit.

The movement to cap deficits at 3% of GDP has gained bipartisan traction in recent years. Some policymakers argue that even an agreed-upon target is insufficient, suggesting that a mandate should be enshrined in the Constitution. Even a 3% benchmark is roughly half of current deficit levels and would necessitate significant budgetary adjustments. Achieving this target by 2036 would require approximately $10 trillion in deficit reduction over the next decade.

MacGuineas added: “As leaders and policymakers increasingly support the goal of aligning deficits with 3% of GDP, today’s figures highlight the significant distance we have to cover. A $2 trillion deficit represents more than 6% of GDP—double the 3% target—and the situation is deteriorating rather than improving.”