The federal budget deficit is expected to reach $1.8 trillion in fiscal year 2025, according to a new report from the Congressional Budget Office, highlighting mounting pressures on the nation’s finances.
From October through August, the government spent $6.7 trillion and collected $4.7 trillion in revenue. Spending rose 6% over last year, while revenues grew 7%. The 11-month shortfall totaled $2 trillion, though CBO projects the full-year deficit will fall slightly due to cost-saving adjustments to federal student loan programs.
Mandatory spending on programs such as Social Security, Medicare, and Medicaid climbed $223 billion, an 8% increase, largely from higher benefits and more recipients. Interest payments on the national debt, now above $37 trillion, also rose 8%. Defense, Veterans Affairs, Homeland Security, and Agriculture together spent $121 billion more than a year earlier.
By contrast, the Department of Education cut spending by 44% following President Donald Trump’s March restructuring, reducing outlays by $110 billion. CBO credited that cut, along with $95 billion in tariff revenue, for lowering deficit estimates compared to January projections.
The Committee for a Responsible Federal Budget warned U.S. debt could exceed $53 trillion by 2035 without action.
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