Current Federal Debt and Deficit
Every month the U.S. Treasury releases data on the federal budget, including the current deficit or surplus. The following contains budget data for May 2025, the eighth month of fiscal year (FY) 2025.
Current Federal Deficit
$316B
Federal Budget Deficit for May 2025
$347B
Federal Budget Deficit for May 2024
The federal government reported a deficit of $316 billion in May 2025, a decrease of $31 billion from the $347 billion deficit recorded in May 2024. However, June 1 fell on a Saturday in 2024 and 2025, causing certain payments to be shifted into the respective previous months. That effect was slightly larger in FY25, so adjusting for those timing shifts, the May 2025 deficit would have been $36 billion less than the same month in the previous year.
Spending in May 2025 was $16 billion more than in May last year. Adjusting for the timing shifts, spending was $12 billion above last year’s corresponding total. Driving that growth was a $17 billion increase in outlays for mortgage loan programs in the Department of Housing and Urban Development due to a $16 billion downward revision in estimated costs reported last May. Other categories that experienced significant increases were Social Security outlays ($10 billion compared to May 2024), Veterans Affairs ($8 billion), and Medicare ($7 billion). Offsetting those and other increases was a $31 billion decrease in outlays by the Small Business Administration because the agency recorded $33 billion in estimated costs for disaster loans in May 2024. Receipts were up by $48 billion in May 2025 compared to the year before – individual income and payroll taxes increased by $17 billion; customs duties collections rose by $17 billion; and corporate income taxes rose by $13 billion.
Cumulative Federal Deficit
$1.4T
Cumulative FY25 Deficit
$1.2T
Cumulative FY24 Deficit (through May 2024)
Through the first eight months of the fiscal year, the cumulative deficit was $162 billion above last year’s level. However, October 1, 2023, fell on a weekend, thereby causing certain federal payments to be shifted into the previous fiscal year (FY23) and artificially reducing the deficit in FY24. Additionally, the aforementioned monthly effect inflated May 2025 spending compared to last year. Without those effects, the deficit for FY25 through the end of May would have been $86 billion more than last year’s adjusted total.
For the first eight months of FY25, total outlays were $4.8 trillion, $356 billion higher than the same period in the previous year. Adjusting for the timing shifts, spending was $279 billion above the same period last year. That increase was driven mainly by three categories: Social Security spending was up by $80 billion, stemming from cost-of-living adjustments and some retroactive payments; net interest rose by $63 billion; and Medicare outlays increased by $45 billion (adjusted for timing shifts). Partially offsetting those and other increases was a $66 billion decrease in outlays by the Federal Deposit Insurance Corporation related to the resolution of bank failures that occurred last year and the $31 billion decrease in outlays from the Small Business Administration.
Revenues through the first eight months of FY25 were $194 billion above collections from a year ago, driven by a $122 billion increase in individual income taxes. Receipts were boosted last year by deferred collections of payments from taxpayers in locations that suffered natural disasters. If not for those postponed payments (about $35 billion), the difference in revenues in the first eight months of 2025 relative to the prior year would have been larger. In addition, payroll taxes were higher in 2025 by nearly $40 billion and customs duties were up by $32 billion, mostly because of higher tariffs.
National Debt
$28.8T
Debt Held by the Public at the end of May 2025
$27.5T
Debt Held by the Public at the end of May 2024
Fiscal year 2025 at its two-thirds mark shows an annual deficit that is above last year's total to date. The federal debt is approaching its post-World War II high as a percentage of gross domestic product and is on track to continue rising rapidly, which is unsustainable. As the Administration and Congress work out the details of the reconciliation legislation, it’s important that it “do no fiscal harm” to the already unsustainable outlook.