US Budget Deficit Jumped 48 Percent in July to a Five Year High

The US Treasury Department said on Wednesday, August 12, 2026 (21 Mordad 1405), according to Bourse News, that the federal budget deficit reached 432.3 billion dollars in July, about 48 percent higher than a year earlier and the largest monthly shortfall since March 2021. The report said a sharp rise in Medicare program costs and continued pressure from federal debt interest payments were the main drivers; Medicare spending reached 174 billion dollars in July, up from 103 billion dollars in June.

The cumulative deficit for the first ten months of the current fiscal year reached nearly 1.8 trillion dollars, exceeding the total for the same period in 2025. Net interest costs on US debt over the same period reached 931 billion dollars, compared with 1.01 trillion dollars a year earlier. Refunds of tariffs the US Supreme Court had ruled unlawful added another 33 billion dollars to July's budget pressure.