The federal government logged a $1.8 trillion budget deficit for the 2025 fiscal year, little changed from 2024 despite a surge in tariff revenues, according to the Congressional Budget Office.

The shortfall for the year that ended Sept. 30 was just $8 billion less than 2024, the nonpartisan Congressional Budget Office said in a release on Wednesday.

While the Treasury Department issues the official tally for monthly and annual budget figures, plans for publishing the September monthly and 2025 fiscal-year data may be affected by the current federal government shutdown. A spokesperson for the Treasury didn’t respond to a request for comment on the timing of the report.

Meantime, the CBO estimates offer a look at a fiscal picture that economists say is troubling at a time of economic expansion. The agency said that while revenues climbed by $308 billion, or 6%, spending advanced by an estimated $301 billion, or 4% — propelled by categories including interest on the public debt, which surpassed $1 trillion for the first time.

President Donald Trump’s tariff hikes helped generate $195 billion in customs duties for the 2025 fiscal year, the CBO estimated. That’s up from $77 billion the prior year.

Corporate taxes

Receipts from corporate income taxes decreased 15% compared to 2024, in part due to Trump’s signature tax and spending plan passed by Congress this summer. That legislation, which was enacted in July, allows corporations to take larger deductions for certain investments in 2025, which reduced some estimated payments, according to CBO.

A deferral of some revenue from 2023 to 2024 also accounted for some of the relative drop in corporate receipts for 2025, the CBO said.

Spending for Social Security benefits rose by $121 billion — or 8% — in large part due to cost of living adjustments and legislation enacted in January 2025 that allowed some public sector employees to receive full Social Security benefits.

In contrast, spending on the Department of Education decreased by $234 billion, or 87%. Much of the plunge was related to changes in student-loan accounting. Trump also signed an executive order in March ordering the shuttering of many of the DOE’s functions.

Tariff take

The tariffs imposed by Trump’s trade policies, which have seen elevated duties imposed on dozens of countries since he returned to office in January, began to take effect in earnest this summer after being subject to a 90-day pause after they were first announced in April.

Bessent has said he expects the tariff revenue to grow month-over-month through the end of the year, potentially heading toward an $500 billion annual pace. He also has described the potential loss of tariff revenue through an adverse ruling at the Supreme Court as “terrible” for the Treasury but has also suggested the administration will find ways to implement similar duties through other authorities the president has at his disposal.

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Wednesday’s CBO report didn’t offer an estimate of the deficit as a ratio of gross domestic product – a key gauge for monitoring fiscal sustainability — and official data for GDP for the quarter ending in September have yet to be released. But using the CBO’s September forecast for last-quarter GDP, the fiscal deficit ratio would come in at 5.9%.

That figure compares with a 6.4% ratio for the previous fiscal year. Treasury Secretary Scott Bessent wants it to shrink dramatically toward 3% by 2028, Trump’s final year in office. The ratios seen in recent years are unprecedented in modern U.S. history outside of crises or economic downturns.

(With assistance from Alex Tanzi.)

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