According to figures from the Treasury Department, the US government deficit jumped to $291 billion (€248 billion) in July, a 19% rise from the same month the previous year and one of the largest increases in recent memory. Although several other months, especially during the height of the COVID-19 stimulus, saw significantly higher outlays overall, this July spending figure is the highest ever recorded.
Although the nation is now generating more revenue from tariffs —a fourfold increase in customs receipts from around $7.1 billion (€6.06 billion) in July 2024 to about $27.7 billion (€23.7 billion) this year —this increase is insufficient to offset the significant rise in spending.
The July deficit reached a record high as spending grew due to greater defense, education, and healthcare programs, larger Social Security benefits, higher Medicare and Medicaid expenditures, and higher interest payments on the national debt.
The return to a significant deficit in July highlights a more general budgetary situation. In other words, even if tariffs have brought in tens of billions of dollars for the Treasury in recent months, the underlying disparity between revenue and spending has not been altered. Even in the face of robust customs revenue, spending has continued to exceed collections.
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