The fiscal deficit hit its highest monthly level since March 2021 as Medicare spending and debt interest payments surged.
The US posted a $432.3 billion budget deficit in July, a 48% jump from a year earlier and the largest monthly gap since March 2021. Medicare expenses led the increase, rising to $174 billion for the month and $955 billion year-to-date.
For the first 10 months of fiscal 2025, the cumulative deficit reached nearly $1.8 trillion, outpacing the same period last year. Net interest on the $39.9 trillion national debt totaled $104 billion in July, making it the third-largest government expenditure.
Tariff refunds and accelerated benefit payments due to a nonbusiness day start added $33 billion and $99 billion to the deficit, respectively. Social Security outlays stood at $141 billion for the month.