The US budget deficit for the first five months of fiscal 2025 reached a record $1.147 trillion, according to the Treasury Department. This represents a 4% increase from the same period last year and breaks the previous record set in October 2020 to February 2021.
February’s deficit was particularly significant, reaching $307 billion and swamping growth in revenues due to increased spending on debt interest, Social Security, and healthcare benefits. Despite initial efforts by President Donald Trump’s administration to slash government spending, outlays for these areas continued to rise.
The Treasury reported that February’s receipts totaled a record $296 billion, but outlays reached a record $603 billion, up 6% from the same period last year. The Committee for a Responsible Federal Budget expressed concern over the rising debt, stating that no progress has been made in controlling it despite being almost halfway through the fiscal year.
Fiscal year-to-date receipts rose 2%, while outlays grew 13%. The adjusted deficit would have been $1.063 trillion, still a record and up 17% from the prior-year period. The Treasury’s interest costs for the public debt reached $478 billion, surpassing military outlays of about $380 billion.
President Trump’s administration has imposed tariffs on Chinese imports, but these did not significantly impact customs receipts in February. However, the effects may become apparent in March data. The Department of Education saw a decline in outlays due to reductions in elementary and secondary education programs, while the U.S. Agency for International Development still showed an increased outlay.
The rising budget deficit is attributed to higher spending on Treasury’s interest, Child Tax Credit payments, and increased Social Security payments, driven by a 2.5% cost-of-living adjustment for 2025.
Source: https://finance.yahoo.com/news/us-budget-deficit-trumps-first-181041003.html