Treasury Department Releases Monthly Budget Statement

The US Treasury Department released its monthly budget statement, showing a decline in the budget deficit for the first time in two years. The deficit fell to $360 billion in June, compared to $413 billion in June 2022. This decrease is attributed to increased government revenue and reduced spending.

The US Treasury Department recently released its monthly budget statement for June 2025, revealing a significant decline in the budget deficit for the first time in two years. The deficit fell to $360 billion, compared to $413 billion in June 2022. This decrease is primarily attributed to increased government revenue and reduced spending.

The Treasury Department reported that revenues totaled $4 trillion during the first nine months of fiscal year 2025, representing a 7% increase from the same period in 2024. This growth was driven by a 6% increase in amounts withheld from workers' paychecks, a 7% increase in nonwithheld income and payroll taxes, and a substantial 89% increase in customs duties. The increase in customs duties is largely due to the administration's tariff policies, which have been in place since February 2025 [1].

Outlays for the first nine months of fiscal year 2025 amounted to $5.3 trillion, a 6% increase from the same period in 2024. The largest increases were observed in Social Security benefits, Medicare, Medicaid, and the Department of Defense. However, spending by the Department of Education decreased by 50%, primarily due to lower spending for the Education Stabilization Fund and student loans [2].

The Congressional Budget Office (CBO) estimates that the federal budget deficit for the first nine months of fiscal year 2025 totaled $1.3 trillion, $65 billion more than the deficit recorded during the same period last year. The CBO attributes this increase to the timing of outlays and the enactment of H.R. 1, the 2025 reconciliation legislation, which increased the debt limit by $5 trillion [2].

The decline in the budget deficit indicates a shift in government fiscal policy, driven by increased revenue from tariffs and other sources. However, the ongoing impact of the tariff policies remains to be seen, as the administration has announced further tariffs on various goods, including semiconductors and pharmaceuticals. The Treasury Department is expected to release more detailed data on tariff collections in the coming months.

References:
[1] https://www.business-standard.com/world-news/us-could-collect-300-bn-in-tariff-revenue-this-year-says-treasury-chief-125070901560_1.html
[2] https://www.taxnotes.com/lr/resolve/tax-notes-today-federal/cbo-estimates-fiscal-2025-deficit-of-$1-3-trillion-through-june/7srcz