The U.S. federal budget deficit for July 2025 surged 19% year-on-year to $292 billion, driven by record government spending that outpaced modest revenue gains. Outlays rose 10% to $630 billion, marking the highest July spending on record, while receipts increased just 2% to $338 billion. The Treasury noted that fewer business days this year lowered revenue figures; adjusting for the calendar difference would place the monthly deficit closer to $271 billion.
A major revenue boost came from customs duties, which climbed to $27.7 billion in July from $7.1 billion a year earlier due to higher tariffs imposed by President Trump. Year-to-date customs collections totaled $135.7 billion, up 116% from last year. However, economists pointed out that these tariffs are paid by importers, often pushing prices higher for consumers, and that a backlog of goods in bonded warehouses could cause a temporary surge in future duties once released.
Despite the tariff windfall, rising costs in other areas outweighed the gains. Healthcare programs such as Medicare and Medicaid grew 10% to $1.557 trillion in the first 10 months of the fiscal year, while Social Security outlays climbed 9% to $1.368 trillion. Interest payments on the national debt hit $1.01 trillion, up 6% due to higher rates and borrowing levels.
For the fiscal year-to-date, the deficit reached $1.629 trillion, up 7% from the same period in 2024, with receipts at a record $4.347 trillion and outlays also at a record $5.975 trillion.
