The United States is staring at a ballooning fiscal deficit, with the Treasury Department reporting a shortfall of over $1.3 trillion in just the first six months of fiscal year 2025 — a figure that marks the second-highest midyear deficit in four decades of recordkeeping.
This staggering number, spanning the transition from President Joe Biden to President Donald Trump, reflects federal spending from October through March. Only fiscal year 2021 saw a higher six-month deficit — $1.7 trillion — during the peak of COVID-19 emergency spending.
Spending has surged across multiple areas, a Treasury official told the Associated Press on condition of anonymity. Contributing factors include elevated Social Security payouts due to cost-of-living adjustments, increased spending on Medicare and Medicaid, disaster relief allocations via FEMA, and heightened expenditures by the Defense Department.
Meanwhile, the Trump administration has pointed to its push for fiscal reform through the newly created Department of Government Efficiency (DOGE), led by tech billionaire Elon Musk. The agency aims to slash wasteful government spending — though its initial savings estimate of $1 trillion has since been revised downward.
Speaking from the Oval Office on Thursday, Musk said, “DOGE expected to achieve $150 billion in savings during the next fiscal year by reducing waste and fraud,” calling such inefficiencies “very common.”
The Treasury’s latest figures show government borrowing between January and March rose $41 billion compared to the same stretch in 2024. Federal outlays during the first quarter of 2025 alone jumped $139 billion year-over-year.
Republicans in the House have advanced a budget plan that outlines $4.5 trillion in tax cuts while demanding at least $1.5 trillion in spending reductions — proposals that remain divisive even within the party. Some lawmakers are pushing for deeper spending cuts, while others want broader tax relief.
DOGE’s blueprint includes laying off a large chunk of the 2.4 million civilian federal employees, scrapping entire agencies such as the Department of Education, and scaling back federal programs.
Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, offered a stark warning: “The numbers are undeniable. We are racking up debt at an alarming pace, and it’s unlikely to end any time soon. In fact, lawmakers seem hellbent on adding to that sum with trillions of unpaid-for tax cuts and spending increases.”
She urged a course correction before the situation becomes irreversible. “We need to correct the unsustainable course we are on and start focusing on fixing our nation’s finances before it is too late,” MacGuineas said.
Treasury Secretary Scott Bessent echoed concerns over the growing deficit earlier this month, telling Bloomberg Television that the US could approach the statutory debt ceiling — or "X-date" — as soon as this summer. “We are going to go onto the warning track sometime in May or June,” Bessent noted.
This staggering number, spanning the transition from President Joe Biden to President Donald Trump, reflects federal spending from October through March. Only fiscal year 2021 saw a higher six-month deficit — $1.7 trillion — during the peak of COVID-19 emergency spending.
Spending has surged across multiple areas, a Treasury official told the Associated Press on condition of anonymity. Contributing factors include elevated Social Security payouts due to cost-of-living adjustments, increased spending on Medicare and Medicaid, disaster relief allocations via FEMA, and heightened expenditures by the Defense Department.
Meanwhile, the Trump administration has pointed to its push for fiscal reform through the newly created Department of Government Efficiency (DOGE), led by tech billionaire Elon Musk. The agency aims to slash wasteful government spending — though its initial savings estimate of $1 trillion has since been revised downward.
Speaking from the Oval Office on Thursday, Musk said, “DOGE expected to achieve $150 billion in savings during the next fiscal year by reducing waste and fraud,” calling such inefficiencies “very common.”
The Treasury’s latest figures show government borrowing between January and March rose $41 billion compared to the same stretch in 2024. Federal outlays during the first quarter of 2025 alone jumped $139 billion year-over-year.
Republicans in the House have advanced a budget plan that outlines $4.5 trillion in tax cuts while demanding at least $1.5 trillion in spending reductions — proposals that remain divisive even within the party. Some lawmakers are pushing for deeper spending cuts, while others want broader tax relief.
DOGE’s blueprint includes laying off a large chunk of the 2.4 million civilian federal employees, scrapping entire agencies such as the Department of Education, and scaling back federal programs.
Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, offered a stark warning: “The numbers are undeniable. We are racking up debt at an alarming pace, and it’s unlikely to end any time soon. In fact, lawmakers seem hellbent on adding to that sum with trillions of unpaid-for tax cuts and spending increases.”
She urged a course correction before the situation becomes irreversible. “We need to correct the unsustainable course we are on and start focusing on fixing our nation’s finances before it is too late,” MacGuineas said.
Treasury Secretary Scott Bessent echoed concerns over the growing deficit earlier this month, telling Bloomberg Television that the US could approach the statutory debt ceiling — or "X-date" — as soon as this summer. “We are going to go onto the warning track sometime in May or June,” Bessent noted.
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