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Fiscal 2025 tariff revenues rise to record $195 billion

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Department of Education bears brunt of Trump's spending

cuts

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Outlays on Social Security, health care, interest on debt

continue to climb

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Treasury Department reports monthly surplus of $198

billion in

September

By David Lawder

WASHINGTON, Oct 16 (Reuters) - The U.S. budget deficit

shrank by $41 billion to $1.775 trillion in the 2025 fiscal

year, despite a $118 billion increase in revenues from President

Donald Trump's tariffs, the Treasury Department reported on

Thursday.

The results for the year ended September 30, which include

nearly nine months of Trump's second term in the White House,

compared to a $1.817 trillion deficit in fiscal 2024. It was the

first time the annual deficit had fallen since 2022, when the

unwinding of COVID-19 relief programs brought spending down.

The smaller deficit was aided by a record $195 billion in

net customs receipts for the fiscal year, an increase of $118

billion from the prior year as new Trump tariffs rolled in.

Customs receipts in September reached a new record high of $29.7

billion, but the pace of increase slowed from August, when $29.5

billion was collected.

Total receipts for fiscal 2025 were a record $5.235

trillion, up $317 billion, or 6%, from the $4.918 trillion in

fiscal 2024.

Fiscal 2025 outlays also were a record at $7.01 trillion, up

$275 billion, or 4%, from the $6.735 trillion in the prior

fiscal year.

TREASURY REPORTS RECORD SURPLUS FOR MONTH OF SEPTEMBER

A U.S. Treasury official said the department calculated an

estimated deficit-to-GDP ratio of 5.9% for fiscal 2025, but

declined to say what GDP estimate was used. This figure compares

to an actual 6.3% deficit-to-GDP ratio for fiscal 2024.

For the 2025 fiscal year's final month of September, the

Treasury reported a record surplus of $198 billion, up $118

billion, or 147%, from the same month in the prior year.

September is often a month of surplus due to quarterly tax

filing deadlines for companies and individuals.

Receipts last month were up $17 billion, or 3%, to $544

billion, while outlays were down $101 billion, or 23%, to $346

billion.

The latest monthly surplus was boosted by a $131 billion

cut to the Department of Education budget that was mandated in

the spending and tax-cut bill passed by the

Republican-controlled Congress in July. For September, the

education outlays were $123 billion lower than in September

2024.

For the full 2025 fiscal year, the Department of Education

suffered the biggest cut in outlays, down $233 billion, or 87%

from the prior year to just $35 billion.

That cut and the higher customs receipts masked continued

increases in outlays for the Social Security retirement plan,

the Medicare and Medicaid healthcare programs and interest on

the U.S. federal debt.

The interest expenditure reached a record $1.216 trillion

for the full fiscal year, up $83 billion, or 7%, from fiscal

2024, making it the second-largest expenditure item after Social

Security. Expenses for that program reached $1.647 trillion, up

$127 billion, or 8%, from the prior fiscal year.