Estimated FY2026 Budget Deficit

From CBO. Source: CBO. Notes: Solid light purple is FY2024, solid dark purple is FY2025, dashed black is FY2026 estimate for cumulative deficit. As of 2026Q2, we re nearly a percentage point above full employment, according to CBO s estimate of potential GDP. Shouldn t the deficit be shrinking, rather than increasing, as a share of GDP?