‘We are in a dismal fiscal situation, and it just got worse’: Budget watchdog sounds the alarm even louder after Supreme Court erases Trump’s tariffs

Fortune

by Tristan Bove

February 20, 2026

AI-Generated Deep Dive Summary

The Supreme Court recently ruled that President Trump’s emergency tariffs were unconstitutional, a decision that while cheered by consumers and businesses, has significant implications for the U.S. government's finances. The ruling could result in trillions of dollars lost in government revenue over the next decade, further straining an already precarious fiscal situation. Maya MacGuineas of the Committee for a Responsible Federal Budget (CRFB) warned that this loss would push the country deeper into debt, with national debt projected to rise to 131% of GDP by 2036, up from the current 100%. This increase would significantly raise interest payments, potentially overshadowing spending on critical areas like Social Security and infrastructure. The tariffs were implemented under Trump’s trade policies as part of his "emergency" measures, which many opposed due to their impact on businesses and shoppers. The CRFB highlighted that these tariffs had generated substantial revenue for the government, but with the ruling, this income stream evaporates. Without addressing this loss, the U.S. faces a worsening fiscal crisis, with lawmakers needing to find alternatives such as border adjustment taxes or revised tariffs to offset the deficit. However, any solution would require navigating political and economic challenges, including potential resistance to new taxes or spending cuts. The implications of the ruling extend beyond immediate financial losses, threatening the government’s ability to manage debt and respond to future crises. With interest payments set to rise by nearly a trillion dollars over the next decade, balancing the budget becomes increasingly difficult. The CRFB emphasizes the urgency for Congress to act, whether through replacing tariffs with alternative revenue sources or revising existing policies. Without intervention,

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Originally published on Fortune on 2/20/2026