Fiscal year 2026 is over, and the books are closed. The Congressional Budget Office puts the deficit just shy of $2 trillion: $218 billion more than the year before, in a year with no pandemic and no recession.

Spending grew twice as fast as revenue. Outlays rose $386 billion to $7.4 trillion. Revenue rose $169 billion to $5.4 trillion. Corporate tax receipts fell 16 percent even as corporate income went up. And net interest on the debt hit $1.14 trillion, now the second-biggest line in the federal budget behind only Social Security. That works out to about $3.1 billion a day.

Host Steve Ellis is joined by TCS Director of Research and Policy Josh Sewell to close the books: what came in, what went out, and who left the tab open. They dig into why the promised tariff windfall turned into roughly $130 billion in refunds after the Supreme Court ruling, why cutting IRS funding costs more in lost collections than it saves, and what higher Treasury rates do to the interest bill. Then a year of receipts: the One Big Beautiful Bill Act’s deficit promises, GAO’s review of DOGE’s “Wall of Receipts,” roughly $4 billion paid to offshore wind developers to walk away from their leases, and the $810 million pocket rescission that closed out the fiscal year.

Plus: Josh turns the tables on Steve. Is this a both-parties problem or a 119th Congress problem? And what belongs on the lame-duck to-do list before the December 11th deadline.

The books on fiscal year 2026 are closed. The tab is still open.

It's the last week of fiscal year 2026, and for once there's no shutdown drama. A continuing resolution runs through December 11. But late Friday, the White House sent Congress $810 million in "pocket rescissions." That's money Congress appropriated and the president signed into law, which the administration now plans to hold until it expires at midnight Wednesday. Congress won't vote on it. The calendar will decide instead.

TCS President Steve Ellis and Director of Research and Policy Josh Sewell go through what's in the package, including $567 million in HHS programs and grants at Education and Justice. They explain how the 1974 Impoundment Control Act's 45-day clock is supposed to work, and what last year's Supreme Court ruling decided and what it left open. They also cover why GAO calls the move illegal. Two Republicans on Senate Appropriations disagree: Sen. John Kennedy attacks the programs, while Chair Susan Collins attacks the process. Josh and Steve also test the principle by asking what happens when a future president in the other party does the same thing to shipbuilding or highways. Then they look ahead to what taxpayers should watch from GAO, the courts, and a lame-duck Congress after the midterms.

This week, three numbers, one fiscal year. The Congressional Budget Office projects $1.1 trillion in net interest on the national debt in fiscal year 2027. The Pentagon is asking for $1.5 trillion. And in Dallas on September 9th, the president promised every adult citizen $5,000 if Republicans hold Congress. Multiply it out and that is roughly $1.2 trillion, about the size of the interest bill.

Host Steve Ellis is joined by TCS Director of Research and Policy Josh Sewell and policy analyst Gabe Murphy. Josh explains what net interest is, why it is climbing, and what $3 billion a day crowds out. Gabe breaks the Pentagon request into its three parts, scores what Congress has actually done with it, and walks through the top items in the TCS and Project on Government Oversight report identifying more than $500 billion in cuts: Golden Dome, the Sentinel ICBM, and the Trump-class battleship.

Plus: what tariffs have actually brought in, how a $1.5 trillion Pentagon baseline feeds the interest bill, and what taxpayers should watch for when the continuing resolution expires December 11th in a lame-duck Congress.

Two of those numbers Congress gets to vote on. The third one, we all just pay.