US budget deficit hits $1.147t in Oct. to Feb ’25

The US budget deficit reached a record $1.147 trillion in the first five months of fiscal 2025, the Treasury Department reported Wednesday. February’s deficit alone stood at $307 billion, up 4 per cent from the previous year, marking President Donald Trump’s first full month in office.

US Fiscal Year runs from October 1, 2024, to September 30, 2025.

The October-February shortfall surpassed the previous $1.047 trillion record set in 2021, a period heavily impacted by pandemic-related spending. February revenues hit a record $296 billion, up 9 per cent, but spending climbed 6 per cent to $603 billion, driven by rising debt interest, Social Security, and healthcare costs.

Despite Trump’s new tariffs on Chinese imports and spending cuts through the Department of Government Efficiency (DOGE), the budget showed little immediate impact. The Department of Education’s outlays fell to $8 billion from $14 billion a year earlier, while USAID spending dropped to $226 million from $542 million.

Debt interest costs soared 10 per cent to $478 billion year-to-date, surpassing military expenditures of $380 billion. Social Security spending increased 8 per cent to $663 billion.

Fiscal watchdogs warn of unsustainable borrowing, with the government adding about $8 billion in debt daily. Adjusted for calendar shifts, the year-to-date deficit remains at a record $1.063 trillion, up 17 per cent from the prior year.

Attribution: Reuters

Subediting: M. S. Salama