Cheap Bills, Big Burden: The Hidden $1.45T Treasury Shortfall

A Fortune report reveals the Treasury Borrowing Advisory Committee’s warning of a $1.45 trillion funding shortfall in fiscal 2027–28 as the government finances a roughly $2 trillion annual deficit. It notes that Scott Bessent has leaned on cheap short-term bills to keep borrowing costs down, but that approach leaves the government more exposed to inflation and rising rates. The piece ties this tactic to Janet Yellen’s prior policy and to economists Miran and Roubini, and warns of two looming waves of long-term debt as the Fed reduces its balance sheet, potentially stressing markets even as debt-service costs outpace major priorities like defense.