US budget deficit balloons to highest in five years

The US budget deficit grew to almost US$2 trillion over the past year, government data showed Friday, reaching its highest level since 2021 despite President Donald Trump's promises to cut public spending and red ink. The deficit, which occurs when government spending exceeds its revenues, rose to US$1.99 trillion in fiscal year 2026, the Treasury Department said. This marked a 12-percent increase from the prior year, when the shortfall came in at US$1.78 trillion. A key driver of expenditures was the rising interest paid on public debt, which jumped US$144 billion, to a record US$1.36 trillion. Interest costs on around US$32 trillion in publicly held US debt have been ballooning in recent years, and climbing bond yields have fuelled further concerns. Meanwhile, an expected influx of revenue from Trump's sweeping tariffs failed to fully materialise during his second term. The Supreme Court struck down his global duties in February, triggering a wave of refunds. Treasury data released Friday reflected US$145 billion in customs refunds over the year — primarily due to tariffs — erasing significant gains from Trump's duties. Overall, government revenues climbed by three percent to US$5.40 trillion in the latest fiscal year, which ended September 30. But spending was much higher, rising by six percent to US$7.40...