CBO on CrossGov.com

CBO Says Rates 1.5 Points Higher Would Add $6 Trillion to Deficits by 2036, With the 10-Year Yield Already at 5.2%

Tue, 20 Oct 2026 00:00:00 +0000

The Congressional Budget Office published two higher-interest-rate scenarios on October 8, and the bond market is already more than halfway to the worse one. CBO’s February baseline assumed the 10-year Treasury yield would average 4.3% from 2026 to 2036. The yield closed at 5.2% on October 1.

A scenario that looked like a stress test in February now sits close to where the market trades.

We covered the headline numbers when they came out, in our post on interest costs topping defense and Medicare. This post looks at how the scenarios are built, what the market has already priced, and what Treasury’s final numbers for fiscal 2026 add.

Social Security Sets a 3.6% COLA for 2027, the Largest Since 2023, as CBO Puts the Retirement Fund Out of Money in 2032

Tue, 20 Oct 2026 00:00:00 +0000

The Social Security Administration announced on October 14 that benefits will rise 3.6% in 2027, the largest cost-of-living adjustment since 2023. The increase applies to about 72 million Social Security beneficiaries from January and to about 7.3 million people on Supplemental Security Income from December 31. Counting people who get both, SSA puts the total at about 76 million Americans.

For the average retired worker, the monthly check goes from $2,095 to $2,170, a rise of $75. An aged couple both receiving benefits goes from $3,238 to $3,355. The SSI federal payment standard rises from $994 to $1,029 a month for an individual and from $1,491 to $1,544 for a couple.

Iran War Costs Reach $43.6 Billion by the Pentagon's Count as Congress Stalls on Funding and Interceptor Stocks Run Low

Sat, 10 Oct 2026 00:00:00 +0000

The Pentagon’s latest estimate puts the cost of the war with Iran at $43.6 billion as of September 3. Of that, $11.2 billion has been spent on operations and $32.4 billion is the cost of replacing munitions and equipment, which hasn’t been funded. The figure leaves out repairs to bases in eight countries.

Every estimate so far has been overtaken by the next. The Defense Department’s inspector general counted $33.4 billion through June. Defense Secretary Pete Hegseth told Congress in July the war would cost $37.5 billion through September. CBO, in a letter on September 15, put the cost through August 1 at about $38 billion, with $2 billion to $3 billion more each month.

Highway Trust Fund Runs Dry in 2028, CBO Says, as the House's $580 Billion Highway Bill Stalls Short of the Floor

Fri, 09 Oct 2026 00:00:00 +0000

CBO projects the Highway Trust Fund’s highway account will run out of money in fiscal 2028 and its transit account in 2027. Congress hasn’t passed a bill to replace the 2021 infrastructure law, which expired on September 30.

Federal highway and transit programs are running on the stopgap signed on September 2, Public Law 119-103, which also funds the government. It extends trust fund programs to December 11 at prorated 2026 levels. It doesn’t continue the infrastructure law’s advance appropriations, the extra general fund money that sat on top of the trust fund. The National League of Cities puts the cut at $36.8 billion, spread across BUILD grants, Safe Streets and Roads for All, the bridge formula program, rail grants and others, 35 programs in all, which lost that money on October 1. The effect on transit agencies is covered in our post on transit fiscal cliffs.

Interest on US Debt Hits $1.14 Trillion in FY2026, More Than Defense or Medicare, With the Debt Limit $800 Billion Away

Fri, 09 Oct 2026 00:00:00 +0000

The federal government spent $1.143 trillion on net interest in fiscal 2026, according to the Congressional Budget Office’s monthly review of October 8. That’s $115 billion, or 11%, more than in fiscal 2025. It’s more than the Defense Department spent on the military, $916 billion, and more than Medicare, $1.069 trillion. Only Social Security, at $1.654 trillion, cost more.

Interest now takes about 15 cents of every federal dollar spent, and about 21 cents of every dollar collected.

US Tariff Revenue Falls to $172 Billion in FY2026 as IEEPA Refunds Turn Customs Receipts Negative for Three Months

Fri, 09 Oct 2026 00:00:00 +0000

For three months in 2026, the US government collected less in customs duties than it paid back. Net customs receipts were minus $0.04 billion in May, minus $25.56 billion in June and minus $8.55 billion in July, according to Treasury’s monthly statements. In June alone, refunds reached $49.18 billion.

The refunds followed the Supreme Court’s ruling in February that the President couldn’t impose tariffs under the emergency powers law. Importers had paid about $166 billion under those tariffs. By September, Customs and Border Protection had certified about $122 billion in refunds, including interest.

Golden Dome: CBO Puts the Cost at $1.2 Trillion Over 20 Years While 97% of Next Year's Money Waits on Reconciliation

Mon, 05 Oct 2026 00:00:00 +0000

On September 29, 2026, Gen. Michael Guetlein told a Senate Armed Services subcommittee that an initial version of Golden Dome, the planned national missile defense system, could be ready by 2028, built from existing radars and interceptors. Six weeks earlier he had put it more bluntly to an audience in Huntsville: if the funding doesn’t come, there’s no Golden Dome.

Golden Dome is the defense program where the gap between ambition and money is widest. The President announced it in May 2025 at $175 billion, to be fully operational within about three years. Congress gave it $24.4 billion through the July 2025 reconciliation law. The rest depends on bills that haven’t passed.

Fannie Mae and Freddie Mac IPO Stalls as Treasury's $234 Billion Claim Grows and Shares Fall More Than Half

Fri, 02 Oct 2026 00:00:00 +0000

Fannie Mae and Freddie Mac, the two companies that guarantee about half of US mortgages, remain in government conservatorship 18 years after the 2008 crisis. A public offering the administration floated in 2025, at a combined valuation of $500 billion or more, hasn’t happened. No banks have been mandated and no timetable announced.

The shares, which trade over the counter, fell more than 23% and 25% in September. They’re down more than half this year.

CBO Projects US Debt at 120% of GDP by 2036 and 175% by 2056 as Interest Costs Overtake Defense

Thu, 24 Sep 2026 00:00:00 +0000

Between October 2025 and May 2026, the federal government spent $722.7 billion on net interest and $630.9 billion on national defense, according to Treasury’s monthly statements. Interest beat defense by $92 billion in eight months. In fiscal 2025 the two were close: $970 billion on interest, $917 billion on defense.

That crossover is the most concrete sign of what the Congressional Budget Office’s projections have been saying for years. The debt is now large enough that paying for it competes with everything else the government does.

US Debt Limit of $41.1 Trillion Expected to Bind in 2027: How Denmark, Germany and the EU Handle Borrowing Limits

Tue, 22 Sep 2026 00:00:00 +0000

The US federal debt limit stands at $41.1 trillion. The July 2025 budget reconciliation law raised it by $5 trillion. That bought about two years. The Congressional Budget Office’s February 2026 outlook says the Treasury will reach the limit sometime in 2027. The Bipartisan Policy Center expects it between late winter and mid-summer of 2027, with the Treasury’s accounting maneuvers, known as extraordinary measures, adding another six to nine months.

CBO Prices the Navy's Battleship Program at $275 Billion for 15 Ships, With the Lead Ship at $23 Billion

Sun, 13 Sep 2026 00:00:00 +0000

CBO estimates the Navy’s planned nuclear-powered battleships would cost about $275 billion in 2026 dollars for 15 ships bought between 2028 and 2056. Its report, published on August 5, puts the lead ship at $23.4 billion and the rest at about $18 billion each.

The Navy’s own budget put the lead ship at $15.1 billion. That figure was for a conventionally powered ship, and the Navy has since chosen nuclear propulsion. The gap between the two numbers is the first thing Congress will have to settle before it pays for the ship.

National Guard in US Cities After Trump v. Illinois: Troops Leave Chicago, LA and Portland but Stay in DC Until 2029

Sun, 06 Sep 2026 00:00:00 +0000

On December 23, 2025, the Supreme Court refused, by 6 to 3, to let the administration deploy federalized National Guard troops in Illinois. The Court read the law the President relied on, 10 U.S.C. 12406, narrowly. It allows the Guard to be federalized when the President can’t execute the laws with the “regular forces.” The Court said that means the active-duty military, so the Guard can be sent in only where active-duty troops would be insufficient and could lawfully do the job themselves.