The Blubber

US Budget Deficit Hits Record $1.147 Trillion in First Five Months of Fiscal 2025

The U.S. budget deficit for the first five months of fiscal 2025 surged to a record $1.147 trillion, according to data released by the Treasury Department on Wednesday. This includes a $307 billion shortfall in February, President Donald Trump's first full month in office, marking a 4% increase from a year earlier.

The October-February deficit—which includes nearly **four months under former President Joe Biden until January 20—**surpassed the previous record of $1.047 trillion set from October 2020 to February 2021, a period marked by pandemic relief spending and constrained revenues.

Spending Outpaces Revenue Growth

The Treasury reported that February’s $11 billion increase in the deficit was driven by higher outlays for debt interest, Social Security, and health care benefits, which outpaced revenue growth.

• February receipts: $296 billion (a record for the month), up 9% ($25 billion) from February 2024.
• February outlays: $603 billion (also a record), up 6% ($36 billion) from a year earlier.

After adjusting for calendar effects, the real February deficit was $311 billion, matching the record set in February 2021, which was driven by COVID-19 relief spending.

Debt Growing at $8 Billion Per Day

The Committee for a Responsible Federal Budget, a fiscal watchdog group, warned that government borrowing so far this fiscal year equates to approximately $8 billion per day.

"We are almost halfway through the fiscal year and have made no progress toward getting our skyrocketing debt under control," said Maya MacGuineas, the group’s president.

So far, fiscal year-to-date:

• Receipts: $1.893 trillion, up 2% ($37 billion).
• Outlays: $3.039 trillion, up 13% ($355 billion).
• Adjusted year-to-date deficit: $1.063 trillion, up 17% ($157 billion) from the previous year.

Tariffs & DOGE’s Impact

The Trump administration imposed an additional 10% tariff on Chinese imports on February 4, but the Treasury indicated it did not materially impact customs revenue for the month. Trump increased the tariff to 20% on March 4, with the impact expected to show in March data.

• Net customs receipts in February: $7.25 billion, down slightly from $7.34 billion in January but up from $6.21 billion in February 2024.

Despite Trump’s push to cut government spending through the Department of Government Efficiency (DOGE)—an informal initiative led by Elon Musk—no significant reductions in overall federal outlays were observed in the February budget report.