According to CNBC analysts, the first month of Donald Trump's presidency has brought the growing issues of the national debt and the budget deficit into sharp focus. In February, the US federal deficit surpassed $1 trillion, a staggering figure, especially considering that the fiscal year is not even half over. The question now is what to expect by the end of the year. Urgent action is clearly required.
The US Treasury Department estimates that federal spending fell slightly from the previous month but still far outpaced revenues. In February alone, the budget deficit stood at $307 billion, nearly 2.5 times higher than in January 2025. It also marked a 3.7% increase over February 2024. The Treasury noted that both revenues and expenditures hit monthly records.
Over the first five months of fiscal year 2025, the deficit reached $1.15 trillion, up $318 billion from the same period in 2024. This represents a 38% increase, the sharpest rise for this period on record.
Meanwhile, net interest costs to finance the $36.2 trillion national debt dipped slightly to $74 billion in February. However, total net interest payments for the year to date surged to $396 billion.
The US budget deficit ballooned during President Joe Biden's last three years in office, growing from $1.38 trillion to $1.83 trillion. Addressing the deficit became one of the top priorities for newly elected President Donald Trump, who pledged to bring fiscal discipline back to Washington. Yet so far, that initiative appears to have stalled.
To help tackle the issue, Trump established the Department of Government Efficiency (DOGE), appointing Elon Musk to lead the effort. However, Treasury officials say that DOGE has yet to deliver any measurable results.
