Washington’s spending addiction just reached a new record. According to the Congressional Budget Office, the federal deficit for the fiscal year ending on September 30 will hit a stunning $2.1 trillion. This number, confirmed in the CBO’s August monthly budget review, is the highest deficit recorded outside of the years of emergency COVID spending.
The numbers say something that neither political party wants to broadcast. Even with the economy improving, federal spending jumped 5% while revenue only grew 3%. Adding to the structural imbalance, interest on the national debt jumped by 14% compared to the previous year. Spending on defense, Social Security, Medicare, and Medicaid is also up. The government borrowed $431 billion in the month of July alone — an average of $6 billion every single day.
“We’ve borrowed an astounding $1.8 trillion this fiscal year, with $431 billion in the month of July alone, equating to nearly $6 billion per day,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “We’re on track to surpass $2 trillion in borrowing this fiscal year despite not being in a recession. That is not normal.”
The CBO’s original estimate was $1.9 trillion — revised upward by $200 billion largely because the Supreme Court struck down tariff authorities in February, cutting expected revenue by $250 billion. About $100 billion has already been refunded to companies under court orders. Even with new tariffs imposed since, the fiscal math still does not add up.
The Medicaid waiver system shows just how embedded the waste is. Congress baked a budget-neutrality requirement — Section 71118 — into last year’s reconciliation law, requiring that starting January 2027, no Medicaid waiver can be approved without a certification it will not increase federal spending. States have spent years exploiting these waivers to extract billions beyond what their programs justify. A 2014 Government Accountability Office audit found $778 million in excess spending on a single Arkansas Medicaid waiver — money the Obama administration used to bribe the state into expanding Obamacare.
Hellbound and Down 