The Congressional Budget Office released its February 2026 Budget and Economic Outlook on February 11, projecting a $1.9 trillion federal deficit for fiscal year 2026 — a figure that represents 5.8 percent of gross domestic product and arrives as the government has not run a budget surplus in a quarter century. The baseline, which assumes no changes to current law, documents a trajectory in which the federal government's structural gap between what it collects and what it spends does not narrow; it accelerates.
The CBO's projections carry legal weight in Washington: they form the budget scoring baseline that congressional committees use to measure the cost of proposed legislation. When a tax cut or spending increase is evaluated on Capitol Hill, it is measured against this baseline. The February 2026 report — covering the 2026 to 2036 window — projects that deficits will total $24.4 trillion over the next decade, averaging 6.1 percent of GDP. That average is more than twice the 2.9 percent of GDP average seen over the 50 years prior to the pandemic.
What the CBO Baseline Shows
The February 2026 baseline is the agency's first comprehensive 10-year projection since its January 2025 outlook, and the revision moves in one direction. The FY2026 deficit of $1.9 trillion is approximately $100 billion — or 8 percent — higher than the $1.8 trillion projected in the January 2025 forecast. The upward revision reflects a combination of factors: higher mandatory spending on Social Security and Medicare as the baby boom cohort ages further into retirement, elevated interest costs as the Treasury refinances maturing debt at post-2022 market rates, and reduced revenue projections tied to changes in tariff policy and economic growth assumptions.
The FY2025 deficit registered at $1.8 trillion, according to data tracked by the Federal Reserve Bank of St. Louis (FRED series FYFSD), which aggregates annual surplus and deficit data sourced directly from the Office of Management and Budget. That figure represented 6.4 percent of GDP — above the CBO's previous projection, driven in part by emergency supplemental appropriations and higher-than-projected interest costs.
Deficits are projected to average more than 6 percent of gross domestic product over the 2026–2036 period — more than twice the average deficit as a share of the economy seen over the past 50 years.
— Congressional Budget Office, Budget and Economic Outlook: 2026 to 2036, February 2026
The structural nature of the deficit is what distinguishes the current fiscal environment from the large but temporary deficits of the 2008–2009 financial crisis or the 2020 pandemic response. Those deficits were driven by emergency spending that wound down. The deficits projected through 2036 are driven by the arithmetic of mandatory spending — Social Security, Medicare, Medicaid, and net interest — programs that grow automatically under existing law without any new appropriations from Congress.
The 10-Year Deficit Trajectory
The cumulative 10-year shortfall of $24.4 trillion is a figure that strains comprehension at a human scale, but its composition is more useful for understanding the pressure points. CBO projects that mandatory spending — primarily Social Security and major health programs — will account for the largest share of outlays throughout the window. Net interest on the federal debt is projected to be the fastest-growing category, as elevated interest rates combine with a continuously expanding debt base to drive debt service costs higher each year.
Averaging 6.1% of GDP annually — CBO Budget and Economic Outlook, February 2026
The annual deficit is projected to rise from $1.9 trillion in FY2026 to $3.1 trillion by FY2036 — representing 6.7 percent of GDP at that horizon. Under CBO's current-law baseline, the federal government would add roughly $2.4 trillion more to the national debt each year by 2036 than it is adding today, absent any legislative changes. The Treasury's Monthly Treasury Statement — updated through January 2026 — reflects an early FY2026 deficit consistent with the CBO's full-year trajectory, as mandatory outlays and interest costs continue to track above year-prior levels in the first quarter of the fiscal year.
Federal Debt on Track for a Peacetime Record
The cumulative effect of sustained deficits is an accelerating national debt. CBO projects federal debt held by the public — the measure that excludes intragovernmental holdings such as the Social Security trust fund — will reach a record 120 percent of GDP by the end of 2036. That would surpass the previous all-time high of approximately 106 percent of GDP recorded in 1946, at the conclusion of World War II. Unlike 1946, which was followed by decades of declining debt-to-GDP ratios as the economy grew and spending normalized, the CBO baseline contains no comparable mechanism for relief: deficits remain above GDP growth throughout the 10-year window.
The debt-to-GDP ratio at the end of FY2025 stands at approximately 98 percent of GDP, itself historically elevated. The path from 98 percent to 120 percent over 10 years represents a structural deterioration in the government's fiscal position — the ratio is rising not because of a discrete crisis but because the annual deficit consistently exceeds nominal GDP growth, meaning the debt stock grows faster than the economy's capacity to service it. Readers can track live debt metrics on the GTP Data Dashboard — Debt tab.
A Trajectory That Keeps Being Revised Higher
The $100 billion upward revision from January 2025 to February 2026 is notable for what it reveals about the consistency of the error direction: CBO's projections have been revised upward — in the direction of higher deficits — repeatedly over the past five years. The agency projected in 2021 that the debt-to-GDP ratio would reach 102 percent by 2031; the latest baseline places it above 107 percent by that year. Each successive revision reflects a combination of higher interest rates, higher mandatory spending growth, and lower-than-projected revenue.
The pattern has implications for how policymakers and analysts should treat the February 2026 figures. The $24.4 trillion 10-year deficit total is a current-law baseline, not a worst-case scenario. Any legislation that reduces revenue — including extensions of tax provisions set to expire under current law — would produce deficits above this baseline. Any legislation that increases mandatory spending would do the same. The CBO's February 2026 outlook, in other words, is a floor, not a ceiling.
All deficit and debt figures cited in this article are drawn directly from the CBO Budget and Economic Outlook: 2026 to 2036 (February 2026) and from the FRED series FYFSD, which sources annual surplus/deficit data from the Office of Management and Budget. Monthly fiscal year-to-date data is sourced from the U.S. Treasury Monthly Treasury Statement (MTS), updated through January 2026. Debt-to-GDP figures use CBO's projections for debt held by the public, which excludes intragovernmental holdings (e.g., Social Security trust fund). All values are in nominal US dollars unless otherwise noted.