*

Trump's first full month in office sees 4% deficit

increase

*

Outlays at $603 billion in February, receipts at $296

billion

*

Tariff increases may show up in March receipts, official

says

*

Figures show little impact from Trump spending cuts so far

(Adds details on fiscal-year-to date deficit record, prior

record in paragraphs 1-3, 7-9)

By David Lawder

WASHINGTON, March 12 (Reuters) -

The U.S. budget deficit for the first five months of fiscal

2025 hit a record $1.147 trillion, the Treasury Department said

on Wednesday, including a $307 billion February deficit for

President Donald Trump's first full month in office that was up

4% from a year earlier.

The October-February deficit, which included nearly four

months until January 20 under former president Joe Biden, topped

the previous record $1.047 trillion from October 2020 to

February 2021 - a period marked by high COVID-19 relief spending

and pandemic-constrained revenues.

The Treasury said February's deficit rose $11 billion

from the same month in 2024, as outlays for debt interest,

Social Security and health care benefits swamped growth in

revenues.

The results showed little impact from Trump's initial import

tariffs on major trading partners and his administration's

efforts to slash government spending so far.

February receipts totaled $296 billion, a record for that

month. That figure was up 9%, or $25 billion, compared with the

year-earlier period. But outlays in February totaled $603

billion, also a record for that month, and up 6%, or $36

billion, from a year earlier.

After calendar adjustments for both receipts and outlays,

the adjusted deficit would have been $311 billion, matching the

record February reported budget deficit in 2021, which was

driven by COVID-19.

The Committee for a Responsible Federal Budget, a fiscal

watchdog group, said government borrowings so far this fiscal

year work out to about $8 billion a day.

"What needs no confirmation is that we are almost

halfway through the fiscal year and yet we have done nothing in

the way of making progress toward getting our skyrocketing debt

under control," the group's president Maya MacGuineas said in a

statement.

Fiscal year-to-date receipts rose 2%, or $37 billion, to

a record $1.893 trillion, but outlays grew 13%, or $355 billion,

to a record $3.039 trillion.

Including calendar shifts of benefit payments, the adjusted

year-to-date deficit would have been $1.063 trillion - still a

record - up 17%, or $157 billion, from the prior-year period.

EFFECTS OF TARIFFS, DOGE

Trump imposed an additional 10% tariff on Chinese imports on

February 4, but that increase did not materially impact customs

receipts last month and will likely start showing up in March

data, a Treasury official said. Trump increased the extra duty

on Chinese goods to 20% on March 4.

Net customs receipts totaled $7.25 billion in February, down

from $7.34 billion in January but up from $6.21 billion in

February 2024.

The budget results for February did not show an appreciable

change in overall outlays as a result of Trump's drive to slash

the federal workforce and government spending through the

informal Department of Government Efficiency, known as DOGE, led

by billionaire entrepreneur Elon Musk.

The Department of Education, a major target of DOGE for

cuts, saw its outlays fall to $8 billion last month from $14

billion in the year-earlier period. The Treasury official

attributed the decline to reductions in outlays for elementary

and secondary education programs.

The U.S. Agency for International Development, which the

Trump administration is attempting to dismantle, still showed an

outlay of $226 million for February, compared to $542 million in

the year-earlier period.

Driving the spending growth in February and year-to-date

periods were higher spending on Treasury's interest on the

public debt, outlays for Child Tax Credit payments and increased

Social Security payments due in part to a 2.5% cost-of-living

adjustment for 2025.

For the year-to-date period, Treasury's interest costs for

the public debt came to $478 billion, up about 10%, or $45

billion, from a year earlier and outstripping military outlays

of about $380 billion. Social Security outlays grew 8% to about

$663 billion.