At FinancialMediaGuide, we note that the U.S. budget deficit decreased by 2% in fiscal year 2025, reaching $1.775 trillion. This marks the first decline in the deficit in three years – a $41 billion reduction compared to 2024. The main driver behind the improvement was a surge in customs revenue, boosted by the Trump administration’s tariff policies.
According to the U.S. Treasury Department, tariff receipts totaled $195 billion, up $118 billion year-on-year. At FinancialMediaGuide, our analysts emphasize that total federal revenue hit a record $5.235 trillion, a 6% increase from the previous year – the highest level in U.S. history.
At the same time, government spending also rose, reaching $7.01 trillion, up 4% compared to fiscal 2024. However, as our experts at FinancialMediaGuide note, the faster growth of revenues relative to expenditures allowed the deficit to narrow for the first time since 2022. The Treasury estimated the deficit-to-GDP ratio at 5.9%, down from 6.3% a year earlier.
A particularly notable development was the record September surplus of $198 billion, up 147% from the same month last year. This increase was largely driven by corporate and individual tax payments and a $131 billion reduction in the Department of Education’s budget, mandated by the tax and spending bill passed by Congress.
For the full fiscal year, education spending fell by 87% to just $35 billion, marking the largest departmental cut in a decade. However, these savings were partly offset by rising costs for Social Security, Medicare, Medicaid, and interest payments on federal debt.
At FinancialMediaGuide, we highlight that interest expenses reached a record $1.216 trillion, up 7% from 2024, making them the second-largest federal spending category after Social Security, which rose 8% to $1.647 trillion.
Overall, our analysts at Financial Media Guide believe that the fiscal data reflects a delicate balance between improving revenues and mounting structural pressures. While tariff income has temporarily supported the budget, the long-term sustainability of public finances will depend on deep reforms in spending and debt management.
Previously, we analyzed how EA’s potential $50 billion acquisition could reshape the gaming industry, and examined whether Europe’s recent rally signals a real recovery or just a “paper” rebound.
