Federal budget deficit grows $92B to nearly $2T even as Trump tariffs increase revenue

Fox Business ^ | September 12, 2025 | Eric Revell

[fluorescence]

The federal government's budget deficit reached $2 trillion for the current fiscal year as the deficit has widened by nearly $100 billion from last year.

The nonpartisan Congressional Budget Office (CBO) released its monthly budget update for August, which showed the deficit reached $1.989 trillion in the first 11 months of fiscal year 2025. That amounts to a $92 billion increase in the deficit when compared with the first 11 months of fiscal year 2024.

Overall, federal spending was up by $391 billion from a year ago, an increase of 5%, while tax receipts rose $299 billion, or 7%, in the first 11 months of fiscal year 2025.

The increase in federal tax receipts was largely attributable to the Trump administration's tariffs, which increased import taxes for many goods since February.

[snip]

The federal government spent $6.7 trillion in the first 11 months of fiscal year 2025, and much of the $395 billion increase from last year was driven by mandatory spending programs like Social Security and Medicare, as well as the rising cost of debt service.

[snip]

CBO noted that the federal government will record a spending reduction of about $130 billion in September that stems from changes made to federal student loan programs in the Trump administration's One Big Beautiful Bill Act.

Taking that budgetary move into account with the rest of its analysis, the CBO is currently estimating that the final budget deficit for fiscal year 2025 will total $1.9 trillion.

That would rank as the third-largest budget deficit in U.S. history, trailing only the fiscal year 2020 and Fiscal year 2021 deficits incurred during the COVID-19 pandemic.

[Adder]

That amounts to a $92 billion increase in the deficit

How does THAT happen?

Oh yeah...both parties spend money we don’t have on stuff we don’t need.

[ComputerGuy]

...federal government will record a spending reduction of about $130 billion in September...

Nowadays that's considered chump change.

[Right_Wing_Madman]

Trump is about many things, but not reducing the deficit. This is what enraged Elon.

Oh well, Japan's debt to GDP ratio is around 275%. The US debt/GDP ratio is about 125%. We still have several more years until bankruptcy.

[nathanbedford]

This news comes at a time that is critical for Trump's efforts to save our economy from bankruptcy with tariff policy.

Trump has never been a candidate whose claim to office rests on a call for austerity. As the nation rushes headlong toward a fiscal cliff, President Trump has not attempted to trim the life-threatening deficit by cutting spending, rather he wants to grow our way out of of deficits. The principal means to that end, presumably available to any president, is to deploy tariffs.

This fundamental decision to opt for growth rather than austerity was reflected in Donald Trump's first administration and is even more clearly evident today. The heartbreaking failure of DOGE to effect any meaningful cut in federal spending confirms the impossibility in today's political environment to cut spending sufficiently, even as we, and Congress, stare into the abyss.

Senator Rand Paul and Elon Musk found the courage to tell us that the "big beautiful bill" was certainly big but hardly beautiful. It was the product of our politics when Congress is grotesquely dysfunctional. Even as I deplored the profligacy of the law, I warned that its passage was a matter of economic life and death. Donald Trump himself campaigned for the bill as the key to economic prosperity with scant reference to deficit or debt. We were going to grow our way out of debt and deficits into prosperity.

As the big beautiful bill was debated it was not the time to break ranks because the bill as a spending bill was wrong on austerity. At that time our only option was to support it or face disintegration.

What was a president to do? Apart from one (or perhaps two) chances to get legislation through a dysfunctional Congress, there was no hope of effecting spending cuts. But there was one tool that only Donald Trump as president recognized: tariffs. Congress had passed laws that facially permitted the executive to impose tariffs: (1)Tariff Act of 1930, § 338 (19 U.S.C. § 1338); (2) Trade Expansion Act of 1962, § 232 (19 U.S.C. § 1862; (3)Trade Act of 1974, § 301 (19 U.S.C. §§ 2411–2420; (4)International Emergency Economic Powers Act (IEEPA) of 1977 (50 U.S.C. §§ 1701–1707.

Armed with these statutes, President Trump embarked on a campaign, not just to redress unfair trade balances with tariffs but to use tariffs to bludgeon foreign corporations to transfer their manufacturing facilities to the United States, both to avoid tariffs and to avail themselves entry into the huge American consumer market. With much fanfare the president heralded trillions of dollars of foreign investment committed to America. Happy days were here again.

With these announcements it looked like Donald Trump had miraculously found solutions to our desperate fiscal condition but then the Court of Appeals held that many of the tariffs must be enjoined. With this ruling the entire edifice of the Trump administration for the American economy is threatened with ruin. The matter now is scheduled to be taken up shortly by the Supreme Court. We shall see.

If the Supreme Court denies the president's policy of restructuring the American economy by using tariffs, then the criticisms of Sen. Rand Paul, for example, must be reconsidered. In any event, Congress will have to find the fortitude to act contrary to what it was put on earth to do, to stop giving borrowed money away and to start imposing austerity. The implications for the Republican party and the 2026 midterm elections are ominous. Worse, the implications for the American way of life are equally ominous.

A final word about tariffs, the benefits for a nation that imposes tariffs are limited and mixed. Their ability to carry a nation to financial prosperity as a mercantilist nation is limited by size of its own internal market and the capacity of foreign markets to accept those goods that prosper behind tariff barriers. In other words, like all matters, reversion to the Aristotelian mean over time is the prudent course.

[BigFreakinToad]

Money is 1’s and 0’s now. Guess that is why gold and silver are going up bigly.

[USCG SimTech]

Fiscal years.

The funding, budget and fault (or credit) lies with the approved spending. That happens to currently be the BIDEN ADMINISRATION until 30 September.

We won’t see the downstream effects of a yet-to-be-voted-on-and-passed Trump administration budget for several months after it has been passed.

[Hyman Roth]

Wow. Nice stat. I thought the Japs were a little better than we are with money.

[C210N]

Money is 1’s and 0’s now.

Elon told us he found 14 "Magical Money Computers".

If the Trump Admin is now uncovering these counterfeiters in the government, and tallying them in with the "spending", that'd make the deficit balloon for sure.

[trebb]

Politicians are addicted to spending for their own purposes instead of just doing what the Constitution allows for...they have perverted the very system that created their positions.

[wbarmy]

I do not agree. The fact is that President Trump has been trying to reverse this and the previous administration pushed so much money out the door, which is causing this. The DoE pushed that much money out in the 76 days between the election and the turnover. Without any business plans or accountability. Let’s see what the budget looks like next fiscal year before counting the dead chickens.

[dangus]

Incredibly deceitful headline!

August's deficit was $35 billion narrower than August '24.

The problem is that the fiscal year started during mid-campaign season, not after the election. In October '24, the first month of the fiscal year, the MONTHLY deficit grew $191 BILLION... again, in ONE MONTH!!!!

In November, it grew $53 billion.

In January, still Biden's watch, it grew $127 billion.

[Redmen4ever]

Sorry, Nathan. Tariffs have only a limited ability to raise revenue. Maybe 2 percent of GDP (approx. what tariffs raised through the 1920s). The reason the revenue potential of tariffs is modest is because as you raise tariffs, you cut off imports.

Economists don’t oppose moderate tariffs (even though these give a degree of protection to domestic industry). The reason economists don’t oppose moderate tariffs is because moderate tariffs raise revenue. Indeed, many economists have argued that the lowering of tariffs to near zero was the underlying reason for the rise of non-tariff barriers to trade during the GATT/WTA period.

Economists are mostly united in opposing high tariffs as these don’t raise revenue.

Let me back up. There was a time when the climate alarmists said we were going to both soon run out of oil AND cause a spike in global temperature due to emissions of CO2. Both of these things couldn’t be true at the same time; and, the assertion of both revealed we were dealing with emotional “thinking,” not scientific thinking.

Same thing with tariffs. You can’t have a tariff that both raises a lot of revenue AND fully-protects domestic industry from foreign competition.

We have a deficit of 6 percent of GDP that we need to bring down to 2 percent of GDP at a minimum, and a moderate tariff can only do about half the job. Doge-like economies in spending and cutting entitlements to illegal aliens might get us the rest of the way. So, in spite of everything, we have something of a plan. Yeah, maybe growth is also part of the mix.

[Zathras]

One man can’t fix this problem.
It was created by decades of Uniparty spending.

[econjack]

If Trump and other politicians were serious about reducing the debt, we would be hearing a lot of debate about instituting the Line Item Veto. This would give the President the power to cut the pork out of the budget. However, re-election feeds on pork and that’s why it hasn’t got a snowball’s chance to be implemented.

[Robert DeLong]

Well, if I am not mistaken, I believe Congress appropriates the money, and Congress has also made it law that whatever money they have appropriated must be spent. In other words, Congress has usurped Article 2 authority of the president that is clearly stated in the Constitution.

So, who is really to blame for this?

If you say Trump, how can you possibly come to that conclusion? It's not logical.

The blame has to fall on Congress for not doing their job for decades now.

In addition, if an agency doesn't spend the money it has allocated, it may find its budget reduced, so agency heads make sure they do not end up with a surplus.

Will Trump do pocket rescissions or impoundments and then fight Congress & the Courts for not spending the allocated funds as the law compels him to do?

We shall see.

[BigFreakinToad]

Really? In all the DOGE stuff that came out I missed that one. Is there an article somewhere?

[Jarhead9297]

If the economy is not on the right footing come midterms, Trump’s 2nd term has officially ended.

[Shady]

Is this spending that President Trump has signed on to or ongoing from the #JihadJunta?

[thegagline]

Fiscal conservatism is dead.