Federal Budget Deficit - The federal budget deficit exceeded $1 trillion in the first five months of fiscal year 2026, although it decreased by $142 billion or 14% compared to the same period in fiscal year 2025 [1] Federal Spending and Revenue - Federal spending reached just over $3.1 trillion, an increase of $64 billion or 2% from the previous year [2] - Federal tax revenue rose by $206 billion or 11%, totaling nearly $2.1 trillion [2] Tax Revenue Sources - The increase in federal tax receipts was primarily due to higher collections from individual income taxes and payroll taxes, which accounted for about two-thirds of the increase [3] - Individual income tax collections increased by $99 billion or 10%, while payroll tax collections rose by $34 billion or 5% [6] Tariff Collections - Customs duties, including tariffs, totaled $144 billion, up $109 billion or 308% from the previous year [6] - Some tariff collections may be refunded due to a Supreme Court ruling on the constitutionality of certain tariffs, which could impact future revenue [7] Corporate Tax Revenue - Corporate income tax collections decreased by $33 billion or 23% due to increased tax deductions from the 2025 reconciliation bill [8] Mandatory Spending Programs - Spending on Social Security increased by $48 billion or 8% to $676 billion, driven by cost-of-living adjustments and expanded eligibility [9] - Medicare spending rose by $34 billion or 9% to $475 billion, attributed to higher enrollment and increased payment rates [10] - Medicaid spending also increased by $22 billion or 8% to $285 billion [11] Interest Expenses - Net interest costs on the national debt totaled $433 billion, an increase of $31 billion or 8% from the previous year, due to a larger national debt and higher interest rates [12] Departmental Spending Changes - Spending on the Department of War rose by $14 billion or 4%, and the Department of Veterans Affairs increased by $11 billion or 7% [13] - The Environmental Protection Agency (EPA) saw a significant decrease in spending by $20 billion or 74% due to a lack of comparable outlays from the previous year [13] - The Department of Homeland Security experienced a spending decline of $12 billion or 23% due to reduced disaster spending [14]