The federal government posted a $129 billion budget deficit for January, up sharply from an unusually low $22 billion deficit in January 2024 due to benefit payment calendar shifts and higher outlays for Social Security, Medicare, interest and other costs, the U.S. Treasury said on Wednesday.
The January budget results, the last reflecting fiscal management of former president Joe Biden's administration, showed that January receipts to grew 8% or $36 billion from a year earlier, to $513 billion.
January outlays rose 29% or $143 billion from a year earlier to $642 billion.
Excluding the calendar shifts, including the payment of $87 billion worth of February benefits at the end of January, the Treasury said the adjusted deficit increase for the month would have been $21 billion instead of the reported $107 billion.
A U.S. Treasury official said there were no plans at this stage to include any details on savings found by Elon Musk's unofficial Department of Government Efficiency drive to slash federal spending in the Monthly Treasury Statement.
Thus far, there is little evidence of tangible savings from the DOGE efforts and a Musk team's access to the Treasury's vast payments system sparked an outcry before a judge issued a temporary restraining order that excludes Treasury Secretary Scott Bessent.
The Treasury reported a record $840 billion U.S. deficit for the first four months of fiscal 2025, which started on October 1. That was up 58% or $308 billion from a year earlier, an increase that a Treasury official said was due partly to the prior year tax receipts being inflated by some $85 billion deferred tax payments from the previous fiscal year.
Year-to-date receipts came in at $1.596 trillion, up 1% or $11 billion from the same period a year earlier, while outlays totaled $2.436 trillion, up 15% or $319 billion from the prior year period.
Both outlays and receipts for the first four months of fiscal 2025 also were records for the period, the Treasury official said.
FEMA SPENDING IMPACT
Tax receipts for the fiscal year year-to-date showed a 6% increase for individual withheld taxes, but substantial declines for non-withheld and corporate tax receipts. Weather-related tax deferrals in 2023 pushed many payments into the first months of fiscal 2024, inflating the prior-year comparison.
Customs receipts for the first four months of fiscal 2025 were up $3 billion, or 12%, but the official said this does not reflect any of President Donald Trump's imposition of a new 10% tariff on Chinese imports, which went into effect in Feb. 4.
Year-to-date outlays were up 43% or $12 billion for the Department of Homeland Security due to increased hurricane and California wildfire relief expenses, while the Treasury's public debt interest expenses rose 10% or $35 billion to $392 billion.
Military spending in the year-to-date period rose 13% or $35 billion to $318 billion, while outlays for Social Security, the largest single expense item rose 8% or $41 billion to $529 billion.
