Washington paid out $1.654 trillion in Social Security benefits during fiscal 2026, the Congressional Budget Office estimates, which is $86 billion more than it spent on the program a year earlier.
CBO’s Monthly Budget Review for September, released October 8, lists benefit spending at $1,654 billion for the fiscal year that ended September 30, up 5 percent from $1,569 billion in fiscal 2025. The agency labels the fiscal 2026 numbers preliminary, so small revisions are possible when final accounts arrive.
Nothing in the report changes what any individual beneficiary is paid. The figure measures how fast the largest single program in the federal budget is growing, and that matters to retirees for a plain reason: the same budget has to cover Social Security, Medicare and a rapidly growing interest bill, and the sections below show how the $86 billion increase compares with each of them.
CBO’s next Monthly Budget Review will give the first count of Social Security spending in the new fiscal year, which began October 1.
Get the next update the morning it lands →
What drove the $86 billion increase
CBO attributes the growth to two things: “increases in average benefits and in the number of beneficiaries.” Those are the ordinary mechanics of the program. Each year a larger group of people reaches the age to claim, and the benefits already being paid are adjusted upward, so spending rises even when no law changes.
The comparison year also matters. CBO says fiscal 2025 included a significant set of onetime retroactive payments that began in March 2025. Those lump sums sit in the base year, which makes the 5 percent gain for fiscal 2026 smaller than it would have been against a year without them.
One dollar in five, growing slower than the whole
Total federal outlays reached $7,396 billion in fiscal 2026, up $386 billion, or 6 percent. Social Security’s $1,654 billion works out to about 22 percent of that, a little more than one dollar in every five. Its 5 percent growth rate came in under the 6 percent rate for spending as a whole.
Other large lines moved faster. Medicare, counted net of offsetting receipts, rose $77 billion, or 8 percent, to $1,069 billion, which CBO ties to increased enrollment and higher payment rates for services. Medicaid rose $55 billion, also 8 percent, to $723 billion, largely because of rising costs per enrollee. Net interest on the public debt climbed $115 billion, or 11 percent, to $1,143 billion. Defense spending rose $48 billion, or 5 percent, to $916 billion.
Seen that way, the Social Security increase is the largest single dollar jump among the programs most retirees deal with directly, but the interest bill grew faster in percentage terms, and health programs grew faster too.
The deficit the benefits sit inside
CBO puts the fiscal 2026 deficit at $1,993 billion, which the agency rounds to $2.0 trillion. That is $218 billion, or 12 percent, more than the $1,775 billion gap in fiscal 2025. Revenues rose $169 billion, or 3 percent, to $5,403 billion, so spending grew roughly twice as fast as income.
Payroll taxes, which fund Social Security and part of Medicare, brought in $1,815 billion, up $67 billion, or 4 percent. Individual income taxes did more of the lifting, rising $188 billion to $2,844 billion. Corporate income taxes moved the other way, falling $70 billion, or 16 percent, to $382 billion, which CBO links to the 2025 reconciliation act’s larger deductions for certain investments.
The borrowing shows up in Treasury’s Debt to the Penny data: total public debt stood at $40.273 trillion on October 6, of which $32.440 trillion was held by the public. CBO’s companion report on interest-rate risk puts debt held by the public at 100.6 percent of the economy in 2026, rising to 120.2 percent in 2036 under its baseline.
September’s swing is mostly a calendar effect
The last month of the year looks alarming on its face. CBO reports a $28 billion deficit for September 2026, against a $198 billion surplus in September 2025, a difference of $226 billion. September outlays were $585 billion, up $240 billion, or 69 percent.
The reason is timing. Because September 1, 2025, fell on a holiday, certain federal payments were shifted into August of that year, which emptied September 2025 of spending it would normally have carried. After adjusting for those shifts, CBO says outlays rose $152 billion, or 35 percent, and the gap between the two Septembers narrows to $138 billion. Monthly swings of this kind are one reason the full-year total is the better yardstick for a program like Social Security.
Reading the next budget report for Social Security
The free source for all of these numbers is CBO’s own September budget review page, which carries the summary and links to the full tables. The line to find is “Social Security benefits” in the outlays table. It shows the prior-year amount, the current-year amount and the change, so the 5 percent figure can be checked directly.
When the next monthly report arrives, the useful comparison is against the same months a year earlier rather than against the month before, because holiday timing can move payments across month boundaries. Anyone tracking the program should also watch whether the growth rate stays near 5 percent as the base year’s onetime retroactive payments drop out of the comparison.
CBO’s own table is the last word on the size of the change: $1,654 billion in fiscal 2026, against $1,569 billion in fiscal 2025.
More Financial Reading
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- 17 Ways Retirees Are Tapping a Record $14.9 Trillion in Home Equity
This article was produced with AI assistance and reviewed by The Financial Wire’s editorial team.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
