The US budget deficit for the first five months of fiscal 2025 has reached a record $1.147 trillion, according to the Treasury Department. This represents an increase of 4% from the same period last year, driven mainly by higher outlays for debt interest, Social Security benefits, and healthcare costs.
February’s deficit was particularly noteworthy, with outlays reaching $603 billion – a new record for that month. Despite Trump’s efforts to slash government spending, the February deficit rose $11 billion from the previous year, largely due to increased spending on Treasury’s interest payments and Child Tax Credit payments.
The Committee for a Responsible Federal Budget warns that the country is “almost halfway through the fiscal year” with little progress made towards controlling its skyrocketing debt. The group’s president, Maya MacGuineas, stated that the current trajectory is unsustainable.
In contrast, February’s net customs receipts showed no significant impact from Trump’s import tariffs on Chinese goods, which are expected to show up in March data. Other government agencies, including the Department of Education and the U.S. Agency for International Development, also saw reduced outlays due to budget cuts.
The Treasury’s interest costs for the public debt increased by 10% compared to last year, while Social Security outlays grew 8%. The record-breaking deficit is a pressing concern for policymakers as they navigate the fiscal year ahead.
Source: https://www.reuters.com/world/us/us-budget-deficit-trumps-first-full-month-office-reaches-307-billion-2025-03-12