Red ink is the one thing Washington produces with absolute consistency. Every few years, we get a new face in the Oval Office, and every few years, the national debt clock just keeps spinning faster. Honestly, if you're trying to figure out the increase in deficit by president, you've probably noticed that the math is never as simple as a campaign slogan. It’s a mess of "emergency" spending, shifting tax codes, and the relentless creep of interest rates.
Basically, the deficit is the gap between what the government brings in and what it hauls out the door in a single year. When that gap grows, the debt—our cumulative tab—explodes.
Right now, in early 2026, the numbers are staggering. The Treasury Department just confirmed that we’ve already hit a $602 billion deficit for the first three months of fiscal year 2026 alone. Think about that. We are borrowing roughly $6.5 billion every single day.
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The Trump-Biden-Trump Rollercoaster
To understand how we got here, you have to look at the handoffs.
During Donald Trump’s first term, the deficit was already climbing thanks to the 2017 Tax Cuts and Jobs Act. Then COVID-19 hit. The world stopped, and the government started printing money to keep the lights on. By the time Joe Biden took over, the deficit had spiked to a record $3.1 trillion in 2020.
Biden didn't exactly slam on the brakes. While the annual deficit technically dropped as pandemic programs expired, his administration added trillions in new "long-term" debt through the American Rescue Plan, the Infrastructure Act, and the PACT Act. The Committee for a Responsible Federal Budget (CRFB) notes that Biden’s policies added significantly to the baseline, even as he claimed to be "reducing" the deficit from its pandemic peak.
Now, back in the second Trump term, the strategy has shifted toward tariffs and deregulation to bridge the gap. In 2025, the government ran a $1.8 trillion deficit. That was actually a tiny bit lower than the year before, but don’t start celebrating yet.
Why the Numbers Are So Stubborn
There are three big reasons why the increase in deficit by president feels like an unwinnable game:
- Interest Payments: This is the silent killer. Because the debt is so high, and interest rates haven't returned to the basement levels of the 2010s, we are spending nearly $1 trillion a year just to pay the interest on what we already borrowed. It’s the ultimate "minimum payment on a credit card" trap.
- The Aging Population: Roughly 10,000 Baby Boomers reach retirement age every day. That means Social Security and Medicare outlays are growing automatically. No president wants to touch these "third rails" of politics, so the spending stays on autopilot.
- Tariff Volatility: The current administration is betting heavily on customs duties. In the first quarter of FY 2026, tariff revenue jumped to $91 billion—up from just $21 billion the year before. While that helps the bottom line today, experts at the CBO warn that these revenues are volatile and can lead to higher consumer prices or reduced trade volume down the road.
The Reality of "One Big Beautiful Bill"
In July 2025, President Trump signed the "One Big Beautiful Bill" (OBBB) Act. It was a massive piece of legislation aimed at preventing tax hikes and addressing "waste, fraud, and abuse."
The logic was simple: keep taxes low to stimulate growth and use tariffs to pay the bills.
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Does it work? Well, it’s a mixed bag. Individual tax collections are up because wages are higher, and the student loan reforms in the OBBB actually booked some "savings" on paper. But corporate tax receipts dropped by about $78 billion in 2025 because the bill allowed companies to take bigger deductions for investments.
It's a classic trade-off. You give up tax revenue now, hoping the economy grows fast enough to make it up later. Sometimes it does; often, it doesn't.
The Shutdown Factor
We can't talk about the 2026 deficit without mentioning the late 2025 government shutdown. It was the longest in history. Paradoxically, the deficit looked "better" for a few weeks because the government literally wasn't allowed to spend money on certain things, like disaster relief or farm loans.
But that’s a mirage. Once the government reopened in mid-November, the spending didn't vanish—it just got delayed.
Actionable Insights: What This Means for You
The macroeconomics might feel distant, but the federal deficit hits your wallet in three specific ways:
- Inflation Pressure: When the government borrows and spends at this level, it can keep inflation higher for longer. If you've noticed your grocery bill hasn't dropped back to 2019 levels, this is a big reason why.
- Borrowing Costs: The more the government borrows, the more it competes with you for capital. This keeps mortgage rates and car loan rates higher than they would be if the budget were balanced.
- Future Tax Volatility: Eventually, the bill comes due. Whether it’s through "stealth taxes" like inflation or actual rate hikes 10 years from now, a growing deficit is a future tax liability for everyone currently in the workforce.
To keep your own finances stable in a deficit-heavy economy, focus on reducing your own high-interest debt and looking into inflation-hedged investments like Treasury Inflation-Protected Securities (TIPS) or diversified equities. The government might not be able to balance its books, but you still have to balance yours.
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Next Steps for Monitoring the Deficit:
- Track the Monthly Treasury Statement (MTS) released around the 10th of every month to see if revenue from tariffs is actually offsetting the spending.
- Watch for the CBO’s Updated Budget Outlook due in the coming weeks; it will provide the first long-term "score" of how recent tax changes and tariff policies affect the 10-year deficit projection.
- Monitor the Department of Government Efficiency (DOGE) announcements for any specific cuts to discretionary spending that might signal a shift in fiscal priority.