Spending Watch is The Investigative Journal’s weekly review of federal outlays, contract awards, and oversight findings, drawn from public records. Figures below are sourced to original government documents wherever possible.
The week’s federal spending news converged on a single, uncomfortable theme: the rising cost of the debt itself, and a widening campaign to recover money the government concedes it should never have paid out. On June 11, the Government Accountability Office published its annual assessment of the nation’s fiscal health and reported a milestone that would have been unthinkable a generation ago — for the first time since the years after World War II, debt held by the public has briefly matched the size of the entire U.S. economy. Days earlier, the Congressional Budget Office had pegged the deficit for the first eight months of fiscal 2026 at $1.2 trillion. Against that backdrop, the Department of Labor moved to penalize states over unemployment fraud, the House cleared a stack of anti-fraud bills, and the Pentagon kept signing nine- and ten-figure contracts, some of them without competition.
Below are eight developments from the week of June 23, 2026, that bear watching, each measured against the public record.
1. GAO: Interest on the debt now outruns defense spending
The GAO’s June 11 report, The Nation’s Fiscal Health (GAO-26-108610), states that publicly held debt reached $31.3 trillion as of April 2026 — “roughly equal to the size of the country’s economy.” The agency’s accompanying release noted that this marked the first time since the aftermath of World War II that publicly held debt had “temporarily surpassed the size of the entire U.S. economy.” GAO projects that debt held by the public will hit its historical high of 106 percent of GDP by 2029 and climb to 251 percent of GDP by 2056 if current revenue and spending policies hold.
The detail with the most immediate budgetary bite is buried in GAO’s “Fast Facts”: government spending on net interest in fiscal 2025 exceeded federal spending on national defense, and is projected to keep growing. In other words, the carrying cost of past borrowing has now overtaken the single largest discretionary line item in the budget. GAO identifies net interest as the fastest-growing portion of federal spending under current policy.
The report also flags a hard deadline that no appropriations cycle can paper over: GAO’s analysis assumes the Social Security and Medicare trust funds will be depleted in 2032 and 2033, respectively. GAO has recommended every year since 2017 that Congress adopt a long-term fiscal plan; it renewed that recommendation here. The findings are nonpartisan and structural, reflecting drivers — interest, Social Security, and federal health programs — that have accumulated across administrations of both parties.
2. CBO: Deficit hits $1.2 trillion eight months into the fiscal year
The Congressional Budget Office’s Monthly Budget Review for May 2026, released June 8, estimates the federal deficit at $1.2 trillion through the first eight months of fiscal 2026. That is $116 billion less than the shortfall over the same period a year earlier — but CBO cautions that the comparison is distorted by timing shifts in certain payments. Adjusting for those shifts, CBO says the deficit would have been only about $19 billion smaller than the comparable fiscal 2025 figure.
Underneath the headline number, revenues rose $174 billion (about 5 percent) while outlays grew $57 billion (about 1 percent) year over year. The relatively modest growth in outlays is the kind of figure that warrants tracking through the back half of the fiscal year, when spending typically accelerates. CBO’s most recent Budget and Economic Outlook projects a full-year fiscal 2026 deficit in the neighborhood of $1.9 trillion, a trajectory consistent with the structural imbalance GAO describes.
3. GAO: F-35 sustainment costs climb $13.7 billion as readiness falls
Also on June 11, GAO released F-35 Sustainment (GAO-26-108113), examining the most expensive weapons system the Pentagon has ever fielded. According to the report, the F-35 Joint Program Office estimated in October 2025 that the U.S. military services will need roughly $13.7 billion in additional sustainment funding between fiscal 2026 and fiscal 2031. GAO’s breakdown attributes about half of that — $7.3 billion — to spare parts, with $3.1 billion for procurement and $3.3 billion for operation and maintenance.
The spending is rising even as performance falls. GAO found that the F-35’s full mission capable rate — the share of the fleet ready to perform all assigned missions — slid from 38 percent in fiscal 2021 to 25 percent in fiscal 2025. GAO warned that constrained industrial capacity could limit the program’s ability to deliver the parts the new strategy depends on, and made three recommendations, including that the Department of War develop risk-mitigation plans and structure future sustainment contracts so that incentives better track actual performance.
The figure invites a historical comparison: GAO has flagged F-35 sustainment costs as a concern repeatedly since at least 2021, and the program’s life-cycle sustainment estimate has run well over $1 trillion. The pattern of rising cost paired with declining availability is precisely the kind of trend that merits sustained oversight rather than a one-time headline.
4. Pentagon contract awards: an $880 million sole-source deal leads the week
The Department of War’s daily contract announcements — published for awards valued at $7.5 million or more — included several large obligations on June 18. The Boeing Co. received an $880 million firm-fixed-price and cost-plus indefinite-delivery/indefinite-quantity contract to procure, modernize, and sustain P-8A Poseidon aircrew and maintenance training systems, with work running through June 2031. The award notice states plainly: “This contract was not competed.”
A second notable award went to Huntington Ingalls Industries’ Mission Technologies unit, which received a $417,692,575 contract to maintain and repair aircraft-carrier and amphibious-ship elevator support units. The notice records that the contract “was competitively procured with one offer received” — competitive in form, but with a single bidder. The same day, General Dynamics Land Systems received a $43.5 million modification tied to Abrams M1A2 SEPv3 tank production, and two NAVFAC architectural-engineering contracts worth $249 million each drew ten offers apiece, illustrating the wide variation in competitive intensity across a single day’s awards.
Sole-source and single-offer awards are lawful and often justified by proprietary systems or incumbency, but they reduce the price discipline competition is meant to provide. When the largest award of the week is non-competed and the second-largest draws a lone bidder, the awards warrant a closer look at whether the government is capturing fair value — exactly the kind of question USAspending.gov records and contract files are designed to let the public ask.
5. Labor Department threatens to withhold funds over unemployment fraud
On June 17, Acting Secretary of Labor Keith Sonderling sent letters to the governors of 53 states and territories demanding action on fraud, waste, and abuse in the unemployment insurance system. According to the department’s announcement, the Labor Department — working with its Office of Inspector General — will, for the first time, consider withholding administrative funds from states to force compliance.
The department’s release cites stark examples: California, it says, owes more than $20 billion to the federal government after years of fraud and improper payments, while New York is described as losing roughly $2 million per day, with an improper payment rate exceeding 20 percent. Sonderling, whom the department identifies as a member of the administration’s task force on fraud, framed the problem as the product of outdated technology, weak identity verification, and lax controls.
The move lands against a long-running backdrop: GAO reported that the federal government made an estimated $236 billion in improper payments in fiscal 2023 — about 74 percent of them overpayments — and an estimated $2.7 trillion over the prior two decades. Pandemic-era unemployment programs have been among the largest sources of those errors. Whether the threat to withhold administrative funds translates into actual recoveries, rather than another round of warnings, is the test worth following.
6. House passes a stack of anti-fraud bills
On June 10, the House passed several measures aimed at curbing improper payments. The Fraud Prevention and Accountability Act (H.R. 8312) cleared the chamber 240–181; according to its text and the House Oversight Committee, it would establish a Treasury Department Inspector General for Fraud, Accountability, and Recovery, expand the government-wide “Do Not Pay” system, and create a permanent fraud-analytics and data-sharing program. The Stopping Fraudulent Payments Act (H.R. 8464) passed 218–206 and would bar agencies from disbursing payments they have flagged as carrying an elevated risk of fraud, while giving Treasury authority to return such requests.
The House Oversight Committee said the chamber passed eleven bills in total targeting fraud in federal programs, citing GAO estimates that the government loses between $233 billion and $521 billion annually to fraud — a separate and broader category than the improper-payment totals above. The votes split largely along party lines on the two highest-profile bills, a dynamic worth noting given that fraud-prevention measures have historically drawn bipartisan support; the bills now await Senate action, where their fate is uncertain.
7. A veteran appropriator’s earmarks for nonprofits he founded
Roll Call reported on June 12 that Rep. Harold “Hal” Rogers (R-Ky.), the 88-year-old former chairman of the House Appropriations Committee, has directed more than $30 million in earmarks since 2021 to three nonprofits he helped launch, and is seeking another $22.5 million for two of them in fiscal 2027 appropriations bills. The largest single item, according to the reporting, is a $20 million fiscal 2026 earmark to The Center for Rural Development, which Rogers said would fund grants for local law-enforcement technology upgrades; he has requested another $20 million for the group in fiscal 2027. The reporting also describes at least $5.9 million directed to Operation UNITE, an anti-drug nonprofit Rogers founded in 2003, and funding for a third organization, Eastern Kentucky PRIDE.
Earmarks — formally “community project funding” — are a legal, publicly disclosed part of the appropriations process, and a member’s sponsorship of directed spending is not by itself evidence of wrongdoing. Rogers has long and openly championed federal investment in his economically distressed Eastern Kentucky district; in January he publicly applauded a funding package containing nearly $40 million in community project funding for the region. The records nonetheless illustrate why the revived earmark system invites scrutiny: when a single lawmaker repeatedly steers money to organizations he helped create, the public interest lies in transparent reporting of where the funds go and what they achieve. Rogers’ office can be contacted for comment, and the requests remain disclosed line items subject to the appropriations process.
Patterns worth watching
Four threads from this week deserve deeper investigation. First, the structural one: with net interest now exceeding defense spending, every future appropriations fight occurs in the shadow of a cost that compounds automatically and answers to no program manager. Second, defense procurement competition — the week’s largest award was sole-source and its runner-up drew a single bidder, a recurring feature of the contract notices that USAspending.gov data can help quantify over time. Third, the gap between anti-fraud rhetoric and recovered dollars: the Labor Department’s threat to withhold funds and the House’s bills are measures of intent, not yet of results, and the improper-payment totals will show whether they bite. Fourth, the earmark system’s transparency, now that directed spending has fully returned. The Investigative Journal will track each of these in the weeks ahead, against the public record.
Sources
- U.S. Government Accountability Office, The Nation’s Fiscal Health: Urgent and Sustained Action Needed to Improve the Fiscal Outlook (GAO-26-108610), June 11, 2026
- U.S. Government Accountability Office, GAO Urges Immediate Action to Address America’s Unsustainable Fiscal Path, June 11, 2026
- Congressional Budget Office, Monthly Budget Review: May 2026, June 8, 2026
- U.S. Government Accountability Office, F-35 Sustainment: Actions Needed to Ensure Updated Strategy Improves Persistent Readiness Challenges (GAO-26-108113), June 11, 2026
- U.S. Department of War, Contracts for June 18, 2026
- U.S. Department of Labor, US Department of Labor demands immediate action from governors on unemployment insurance fraud, June 17, 2026
- U.S. Congress, H.R. 8312, Fraud Prevention and Accountability Act and H.R. 8464, Stopping Fraudulent Payments Act
- House Committee on Oversight and Government Reform, House Passes 11 Oversight Committee Bills to Stop Fraud in Federal Programs
- U.S. Government Accountability Office, Federal Government Made $236 Billion “Improper Payments” Last Fiscal Year (GAO-24-106927)
- Roll Call, Rogers earmarks money for nonprofits he helped launch, June 12, 2026