U.S. Congressional Budget Office: Last fiscal year's budget deficit was $1.8 trillion, nearly unchanged from fiscal year 2024.

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According to a report released Wednesday by the U.S. Congressional Budget Office (CBO), despite a significant increase in tariff revenue, the U.S. federal government recorded a budget deficit of $1.8 trillion for the 2025 fiscal year ending September 30, a decrease of only $8 billion from 2024, virtually unchanged.

It should be noted that the U.S. Treasury Department is responsible for releasing official monthly and annual budget data, but due to the current federal government shutdown, the final release dates for September and fiscal year 2025 data may be affected.

Meanwhile, CBO estimates show that, despite the U.S. economy being in an expansion phase, the fiscal situation remains concerning. The agency said, U.S. fiscal revenue increased by $308 billion, or 6%, but spending also rose by about $301 billion, or 4%, mainly driven by rising interest payments on government debt. Public debt interest payments surpassed the $1 trillion mark for the first time.

U.S. President Trump's increased tariffs policy brought about $195 billion in tariff revenue to the federal government in fiscal 2025, according to CBO estimates, which is much higher than the previous year's $77 billion.

Corporate income tax revenue fell by 15% compared to 2024, partly due to a landmark tax and spending bill passed by Congress this summer and signed by Trump. This bill allows companies to enjoy higher deductions for certain investments in 2025, thereby reducing some estimated tax payments. The CBO noted that some companies deferred 2023 revenues to 2024, which also contributed to the relative decline in corporate tax revenue for 2025.

Social Security spending increased by $121 billion, or 8%, mainly due to cost-of-living adjustments and legislation passed in January 2025 that allows some public sector employees to receive full Social Security benefits.

Department of Education spending fell by $234 billion, or 87%, mainly related to changes in the accounting method for student loans. Trump's executive order in March to shut down many functions of the Department of Education also caused a sharp decline in spending.

Since Trump resumed office as U.S. President in January this year, U.S. trade policy has imposed higher tariffs on dozens of countries and regions. These tariffs, announced in April, underwent a 90-day grace period and officially took full effect this summer.

U.S. Treasury Secretary Scott Bessent said he expects tariff revenue to continue rising month by month for the rest of the year, with the potential to reach an annualized rate of $500 billion. He also warned that an unfavorable Supreme Court ruling reducing tariff revenue would be a "serious blow" to the Treasury but hinted that the Trump administration might use other presidential powers to impose similar tariffs to maintain fiscal resources.

The CBO report did not provide the ratio of the deficit to U.S. gross domestic product (GDP)—a key measure of fiscal sustainability. As the official Q3 GDP data has not yet been released, the CBO cited September forecast data and estimated the deficit-to-GDP ratio at 5.9%.

This ratio is slightly lower than last fiscal year's 6.4%. Bessent hopes that by 2028, the final year of Trump's term, the deficit ratio will be sharply reduced to about 3%. Recent deficit ratios are extremely rare in modern U.S. history except during crises or recessions.

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