The U.S. federal government's budget deficit reached 1.97 trillion U.S. dollars in the first 11 months of fiscal 2026 through the end of August, one of the highest levels on record for the period, according to data released by the Department of the Treasury of the United States on Friday.
The figure has already exceeded the full-year deficit of 1.775 trillion dollars in the previous fiscal year. The deficit for August alone was 166.8 billion dollars, down 52 percent year on year, but the decline does not signal an improving fiscal picture.
As August 1 fell on a Saturday this year, payments such as Social Security that are normally made on the first of the month were moved into July, artificially reducing August outlays. Adjusted for those calendar shifts, the August deficit was 248 billion dollars, up 7 billion dollars from a year earlier, the Treasury said, indicating that underlying fiscal pressure persists.
September, the final month of the fiscal year, typically records a surplus as corporate income tax payments come due, but it is unlikely to change the full-year trajectory.
Meanwhile, rising interest rates have pushed net interest payments on government debt above 1 trillion dollars, now exceeding national defense and most other major federal spending categories.
Only Social Security and the Department of Health and Human Services, which oversees Medicare and other programs, rank higher.
With large volumes of low-interest Treasury debt maturing and being refinanced at higher costs, that figure is expected to keep climbing, putting the U.S. debt burden on a path that could set historic records in the coming years.
US federal deficit hits 1.97 trln USD in fiscal 2026
A Canadian House of Commons petition calling for the removal of U.S. Ambassador to Canada Pete Hoekstra has garnered more than 260,000 signatures, the latest sign of increasingly strained ties between the two neighboring countries.
Trade rows between the U.S. and Canada escalated Tuesday as U.S. President Donald Trump announced new import bans and tariff adjustments on Canadian products.
Trump had imposed 50-percent tariffs on about 20 billion U.S. dollars' worth of Canadian goods on Aug. 22, prompting Canada to retaliate with tariffs on an equivalent value of U.S. imports, which took effect Tuesday.
Amid heightened trade tensions, Trump signed an executive order last month directing the Department of the Interior to rename Lake Ontario "Lake America."
"It is shocking, it is draining, it is exhausting, to wake up every day and see that your home country is the source of most of the world's breaking news and generally not in very positive ways," said Tyeshia Redden, a U.S. citizen now living in Toronto.
Views of Trump and the U.S. administration are also not sitting well with people in Canada. In July, a petition calling for the expulsion of U.S. Ambassador Hoekstra was submitted by a Calgary resident and sponsored in the House of Commons by Green Party leader Elizabeth May. The petition accuses Hoekstra of making repeated statements "undermining the Canada-U.S. diplomatic relations" and normalizing U.S. administration's threats to annex Canada as the "51st state."
It calls on the Canadian government to formally declare Hoekstra persona non grata and request his removal as U.S. ambassador to Canada, while urging a parliamentary committee to review "U.S. diplomatic interference in Canadian domestic affairs." The petition is scheduled to close on Nov. 18.
Jon Allen, a former Canadian ambassador to Israel, said the U.S. ambassador could have been much more diplomatic.
"His job is to promote the policies of his President and of the administration in the United States. But in the normal course, a diplomat does what diplomats do, tries to make the best of a complicated, difficult situation, tries to understand the other side without frankly giving up the positions that he's paid to advance," said Allen.
Allen conceded that the chances of Hoekstra being removed from Canada due to the petition are near zero, but he expressed hope that Hoekstra will receive the message and tone down the rhetoric.
"We had thought the Prime Minster had made that clear in the White House when he said 'Mr. President, you are a real estate developer. You understand sometimes you can buy property and sometimes you can't. Well Canada is not for sale,'" said Allen.
As for Redden, despite the tension between the two countries, she said she still feels welcome in Canada.
"I find that many Canadians are very empathetic and understanding and I haven't experienced any friction with anyone," she said.
Over 260, 000 Canadians sign petition to expel US envoy
