The U.S. deficit surged past the $1 trillion mark in February, just one month into President Donald Trump’s second term, as government spending continued to exceed revenue despite a slight monthly decline.
According to a Treasury Department report released Wednesday, the federal budget shortfall for February reached $307 billion, nearly 2.5 times the January deficit and 3.7% higher than in February 2024. Both receipts and expenditures set new records for the month.
For the first five months of fiscal 2025, the total deficit stands at $1.15 trillion, an increase of $318 billion (38% higher) compared to the same period in fiscal 2024—marking a record-high deficit for this point in the year.
Net interest costs to finance the $36.2 trillion national debt dipped slightly to $74 billion for the month. However, total interest payments for the year have climbed to $396 billion, trailing only national defense and healthcare spending. Social Security and Medicare remain the largest expenses in the federal budget.
The federal deficit had already expanded in the final three years of Joe Biden’s presidency, rising from $1.38 trillion to $1.83 trillion.
Since taking office, Trump has made tackling the budget deficit a priority, forming the Department of Government Efficiency (DOGE) under Elon Musk. The advisory panel has overseen widespread federal job cuts and early retirement incentives across multiple agencies.
A Treasury spokesperson acknowledged no immediate financial impact from DOGE’s cost-cutting efforts but deferred further comment to Musk’s panel.
While working to reduce spending, Trump is also pushing to extend the Tax Cuts and Jobs Act, originally enacted during his first term.
Though Trump argues the tax reductions will boost economic growth, independent think tanks estimate that renewing the law could add $3.3 trillion to the national deficit over the next decade.
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