*

October deficit impacted by delayed payments due to

government

shutdown

*

Calendar shift pushed $105 billion in November benefits

into

October

*

Record customs duties drive revenue increase in October

*

Trump says tariff revenues to 'skyrocket,' CBO lowers

estimate

of impact on deficits

By David Lawder

Nov 25 (Reuters) - The U.S. government posted a higher

$284 billion deficit for October in a report delayed and

impacted by the recent federal government shutdown and

reflecting record tariff revenues offset by a shift of some

November benefit payments into last month's data, the Treasury

Department said on Tuesday.

The budget results for the first month of the 2026 fiscal

year were delayed by a 43-day shutdown of many federal agencies,

which caused delays of some payments, such as for salaries of

government employees, a Treasury official said.

The deficit last month was up $27 billion, or 10%, from the $257

billion deficit posted in October 2024, largely due to the shift

of some $105 billion worth of November benefit outlays for some

military and healthcare programs into October.

Adjusting for these shifts, the October deficit would have been

about $180 billion, a 29% reduction from an adjusted October

2024 deficit of $252 billion.

Outlays for October, including the November benefit payments,

totaled $689 billion, up 18% from the $584 billion in October

2024. The Treasury official said the department did not have a

precise estimate of how much outlays were reduced by the

shutdown-delayed payments from various agencies, but that the

Treasury believed the reduction was less than 5% of total

outlays.

Federal law requires any unpaid salaries and other

obligations during government shutdowns to be fully paid when

funding is restored.

Receipts for October totaled $404 billion, a record for the

month and a 24% increase from the $327 billion collected in

October 2024.

TARIFF REVENUES HIT RECORD MONTHLY HIGH

Net custom duties were among the biggest revenue drivers in

October, reaching a new all-time monthly record of $31.4 billion

because of new import tariffs imposed by President Donald Trump

since he returned to the White House in January. This inflow

beat the previous record of $29.7 billion in September and is

more than four times the $7.3 billion recorded in October 2024.

Trump said on Monday that tariff revenues would soon "skyrocket"

to new records, arguing that businesses have largely depleted an

inventory buildup of imported goods prior to his tariffs and

would have to now import goods at higher rates. His comments on

the Truth Social site appeared to be aimed partly at the U.S.

Supreme Court, where justices earlier this month cast doubt on

the legality of tariffs Trump imposed under an emergency law.

"I look so much forward to the United States Supreme Court's

decision on this urgent and time sensitive matter so that we can

continue, in an uninterrupted manner to, MAKE AMERICA GREAT

AGAIN!" Trump wrote.

Meanwhile, the Congressional Budget Office said last week that

recent tariff reductions brought about by U.S. trade deals with

partner economies had caused the agency to cut its estimate for

how much Trump's tariffs would reduce U.S. budget deficits over

the next decade by 25% to $3 trillion, including interest costs,

from the $4 trillion the agency projected in August.

Also driving revenues higher was the $80 billion in non-withheld

tax receipts for individuals received in October, which was an

increase of $35 billion, or about 75%, from October 2024. The

Treasury official said this increase largely reflected payments

delayed by wildfires in California, where affected residents

were allowed until October 15 to file and pay taxes.

Withheld individual income tax receipts rose $16 billion,

or 6%, from the year-ago period to $279 billion. But October

corporate tax receipts were flat at $18 billion, and the

Treasury official attributed the lack of growth to corporate tax

breaks contained in the Republican-passed tax-cut and spending

bill enacted this year.

The U.S. Treasury's interest costs hit $104 billion in

October, up $22 billion, or 27%, from October 2024, reflecting a

higher debt load and slightly higher weighted average interest

rate of 3.36%, the Treasury official said.