After a summer of reorganizing national debt, the Treasury borrowed more than $100 billion a week in October

The U.S. Treasury's financial situation in October 2026 was more dire than in the previous year, according to the Congressional Budget Office's (CBO) first budget report of the 2027 fiscal calendar year. The CBO estimated that the federal government incurred a deficit of $409 billion in October 2026, a stark $125 billion increase from October 2025. This deficit was primarily driven by a $36 billion drop in revenues and a $89 billion jump in outlays, when compared to the same month the previous year.

The increased deficit was partially attributed to the reorganization of federal payments that were otherwise scheduled for November 1, a date that fell on a weekend in 2025 and 2026, pushing those payments into October of each year. This situation has sparked debates among fiscal hawks, questioning whether Treasury Secretary Scott Bessent's recent actions were merely rearranging deck chairs on the economic Titanic.

Bessent referred to these actions as a "Treasury twist," which involves purchasing longer-dated Treasuries with the sale of shorter-term debt. However, the strategy has not been officially confirmed by the Treasury. Critics, like JPMorgan's James Sullivan, argue that this approach is akin to paying off a mortgage with a credit card. While it has helped to temporarily lower borrowing costs, it may not be a sustainable long-term solution for the U.S. fiscal trajectory.

The CBO's budget review indicated that for the fiscal year of 2026, the deficit was 6.2% of the nation's GDP, up from 5.8% in 2025. This percentage exceeds the 50-year average of 3.8% and has only been matched or exceeded eight times since 1946. The total deficit for 2026 was $1.9 trillion, with $1.14 trillion spent on interest on the public debt. Despite an increase in government income to $5.4 trillion, total outlays rose by $217 billion, primarily due to increased spending in Social Security, Medicare, and Medicaid.