On February 12, 2026, the Trump administration delivered a one-two punch to Washington: a sweeping rollback of climate regulations and a fresh round of warnings about the nation’s mounting fiscal woes. The nonpartisan Congressional Budget Office (CBO) released its 10-year outlook just a day earlier, projecting worsening federal deficits and a ballooning national debt—developments that, combined with the administration’s latest deregulatory actions, have set off alarm bells across the political spectrum.
According to the CBO’s new projections, the deficit for fiscal year 2026—President Donald Trump’s first full fiscal year back in office—will be about 5.8 percent of GDP, mirroring the previous year’s $1.775 trillion shortfall. But the grim news doesn’t stop there. Over the next decade, the deficit-to-GDP ratio is expected to average 6.1 percent, climbing to 6.7 percent by fiscal 2036. Total deficits from 2026 through 2035 are now projected to be $1.4 trillion higher than last year’s estimate, and debt held by the public is on track to soar from 101 percent of GDP to a staggering 120 percent—shattering historical records.
Much of this fiscal deterioration, the CBO notes, is driven by increased spending on Social Security, Medicare, and debt service payments. The Trump administration’s signature “One Big Beautiful Bill Act,” along with higher tariffs and a crackdown on immigration that includes deporting millions, have also been factored into the latest outlook. While higher tariffs are expected to generate $3 trillion in additional federal revenue, the CBO cautions that they will also fuel higher inflation from 2026 to 2029, delaying the Federal Reserve’s ability to hit its 2 percent inflation target until 2030.
The economic forecasts from the CBO are notably more restrained than those coming from the White House. Whereas Trump officials have projected robust growth—sometimes as high as 6 percent in the first quarter of 2026, thanks to investments in factories and artificial intelligence data centers—the CBO pegs real GDP growth at just 2.2 percent for 2026, with an average of about 1.8 percent for the remainder of the decade. The CBO’s models assume that current tax, spending, and tariff policies remain unchanged for the next ten years.
Jonathan Burks, executive vice president of economic and health policy at the Bipartisan Policy Center, put it bluntly: “Large deficits are unprecedented for a growing, peacetime economy,” though he added, “the good news is there is still time for policymakers to correct course.” Michael Peterson, CEO of the Peterson Foundation, called the CBO’s latest budget projection “an urgent warning to our leaders about America’s costly fiscal path.” He argued, “This election year, voters understand the connection between rising debt and their personal economic condition. And the financial markets are watching. Stabilizing our debt is an essential part of improving affordability, and must be a core component of the 2026 campaign conversation.”
In response to the growing deficit, President Trump launched a new Department of Government Efficiency, aiming to cut $2 trillion in waste, fraud, and abuse. However, budget analysts estimate that the actual savings have ranged from just $1.4 billion to $7 billion, achieved largely through workforce reductions.
While fiscal anxieties mount, the Trump administration’s environmental policy shift has drawn fierce criticism from experts, former officials, and lawmakers. On February 12, the administration repealed the 2009 endangerment finding—a landmark scientific determination that greenhouse gases are harmful to public health and welfare. This finding had served as the legal backbone for Environmental Protection Agency (EPA) regulations limiting climate-heating pollution from vehicles, power plants, and other industrial sources.
Gina McCarthy, former EPA administrator and current chair of America Is All In, did not mince words: “This EPA would rather spend its time in court working for the fossil fuel industry than protecting us from pollution and the escalating impacts of climate change.” John Kerry, former secretary of state and climate envoy, called the move “un-American” and warned, “Repealing the Endangerment Finding takes Orwellian governance to new heights and invites enormous damage to people and property around the world. Ignoring warning signs will not stop the storm. It puts more Americans directly in its path.”
California Governor Gavin Newsom predicted dire consequences if the decision survives in court, stating, “It will lead to more deadly wildfires, more extreme heat deaths, more climate-driven floods and droughts, and greater threats to communities nationwide—all while the EPA dismisses the overwhelming science that has protected public health for decades.” Rachel Cleetus, senior policy director at the Union of Concerned Scientists, charged that “Administrator Zeldin has fully abdicated EPA’s responsibility to protect our health and the environment.”
President Trump, for his part, dismissed the endangerment finding as “the legal foundation for the green new scam,” claiming it had been used by the Obama and Biden administrations “to destroy countless jobs.” When pressed about warnings from climate scientists, Trump replied, “I tell them, ‘don’t worry about it’… it has nothing to do with public health. This was all a scam, a giant scam.” EPA Administrator Lee Zeldin echoed this sentiment, arguing that the determination had “steamrolled into existence a left wing wishlist of costly climate policies, electric vehicle mandates and other requirements that assaulted consumer choice and affordability.”
The administration’s aggressive approach to immigration and border security was also on display this week. At a raucous outdoor news conference in Otay Mesa, California, Homeland Security Secretary Kristi Noem claimed that US Customs and Border Protection had seized a vault containing “1.7 billion lethal doses of narcotics, of fentanyl and cocaine” near San Diego—a figure she equated to “1.7 billion lives saved.” The event was marred by blaring sirens and chants of “Shame! Shame! Shame!” from protesters, making it difficult for reporters to hear Noem’s remarks.
Meanwhile, Tom Homan, Trump’s “border czar,” announced that the surge of federal immigration enforcement in Minnesota was coming to an end. The crackdown, which had included unprecedented cooperation from local law enforcement and access to county jails, drew sharp criticism after fatal shootings of two American citizens and weeks of protests. Minnesota Governor Tim Walz acknowledged the pain caused but said, “the long road to recovery starts now.”
On Capitol Hill, political divisions deepened as Senate Democrats blocked a funding bill to keep the Department of Homeland Security (DHS) open. The measure failed to reach the required 60 votes, falling along party lines, with the stopgap set to expire on February 14 and a DHS shutdown now looming. The failed bill, which had previously been rejected by Senate Democrats, was at the heart of negotiations over guardrails on Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP) following the controversial Minnesota crackdown.
Elsewhere in Washington, a US judge blocked the Pentagon from reducing Senator Mark Kelly’s retired military rank and pension pay after he urged troops to reject unlawful orders. Judge Richard Leon, a George W. Bush appointee, wrote that Defense Secretary Pete Hegseth had “trampled” on Kelly’s First Amendment rights and “threatened the constitutional liberties of millions of military retirees.” Leon admonished Hegseth, writing that officials “might reflect and be grateful for the wisdom and expertise that retired servicemembers have brought to public discussions and debate on military matters in our nation over the past 250 years.”
The week’s headlines also included controversy surrounding Commerce Secretary Howard Lutnick, who admitted to visiting Jeffrey Epstein’s private island in 2012 with his family—contradicting earlier claims of distancing himself from Epstein after 2005. And in an unusual twist, the Department of Homeland Security’s official social media account engaged in a public spat with rapper Cardi B over comments related to ICE and Epstein, drawing further public attention to the agency’s communications strategy.
With fiscal, environmental, and political crises converging, the nation faces a pivotal moment. The choices made in the coming months will shape not only the federal balance sheet but the country’s health, safety, and standing in the world for years to come.