Scott Bessent's Financial Tactics Mask $2 Trillion Deficit

WHO:

Fortune - Scott Bessent, Treasury Secretary

Yahoo Finance - Jon Hilsenrath, veteran Federal Reserve watcher and founder of Serpa Pinto Advisory

Yahoo Finance - Treasury Borrowing Advisory Committee (TBAC), a panel of senior bond dealers and investors

WHAT:

Fortune - The U.S. government faces a $1.45 trillion funding shortfall in fiscal 2027–28.

Yahoo Finance - The government has a roughly $2 trillion annual deficit.

Fortune - Rising interest costs drove a $120 billion increase in Treasury outlays this year.

Yahoo Finance - The government's total debt on interest alone exceeds $1 trillion annually.

WHERE:

Fortune - Washington, D.C.

WHEN:

Fortune - TBAC minutes were released on August 5.

Yahoo Finance - A new Fed committee is due to report on the balance sheet in December.

WHY:

Fortune - The strategy of leaning on short-term bills to finance the deficit was first initiated by Janet Yellen, Bessent's predecessor.

Yahoo Finance - Hilsenrath suggests that the growth in federal debt is a concern for the financial system.

HOW:

Fortune - The Treasury raises cash by selling debt at regularly scheduled auctions, utilizing T-bills and longer-dated notes and bonds.

Yahoo Finance - The three-month bill yielded around 3.8%, the 10-year Treasury yield was around 4.6%, and the 30-year yield was above 5%.

(UPDATED August 8, 2026 22:12 UTC)

The U.S. government is facing a staggering $1.45 trillion funding shortfall for the fiscal year 2027-28, with a current annual deficit of roughly $2 trillion. Rising interest costs have contributed to a $120 billion increase in Treasury outlays this year, pushing the government's total debt on interest alone to exceed $1 trillion annually. As the Treasury continues to raise cash through regular debt auctions, the yields on three-month bills are around 3.8%, while the 10-year Treasury yield is at approximately 4.6%, and the 30-year yield has surpassed 5%.