Even with DOGE cuts, the U.S. has spent $166 billion more than last year
Even as President Donald Trump and the efficiency-geared U.S. DOGE Service seek to cut programs and dramatically reduce the size of the government workforce, the federal deficit increased by $196 billion so far this fiscal year, as spending on social safety-net services and defense programs continue to climb.
The government spent $342 billion more in the fiscal year that began Oct. 1 than it did in the same period during the previous fiscal year, the Congressional Budget Office, lawmakers’ nonpartisan bookkeeper, reported Thursday. It also brought in $146 billion more, including a 7 percent boost in individual income tax that far outpaced officials’ projections.
From January through April, the first three and a half months of Trump’s term, spending increased by $166 billion.
The figures underscore long-standing dynamics in the nation’s fiscal health, and also the White House’s aggressive priorities from Trump’s first 100 days.
Defense spending increased by $39 billion compared with fiscal 2024, CBO found. Spending on the Department of Homeland Security, which the administration has supercharged in attempts to deport 1 million immigrants in the calendar year, jumped by $18 billion.
But the largest drivers of the spending are the items that traditionally weigh on the U.S. balance sheet: Social Security, Medicare and Medicaid.
As baby boomers reach peak retirement age, they are drawing down benefits in the Social Security and Medicare trust fund faster than they can be replenished. The two programs combined have spent nearly $1.5 trillion in the fiscal year, up $70 billion from the past year.
The bleak spending picture has factored into the rhetoric surrounding Trump and Republicans’ massive tax, immigration and energy package, legislation that the president and his allies have dubbed their “big, beautiful bill.”
Fiscal hard-liners are seeking guarantees of at least $2 trillion in spending cuts as part of the measure, which seeks to make permanent trillions more dollars in tax cuts from Trump’s 2017 Tax Cuts and Jobs Act.
Republicans are struggling to meet that mark. Trump on Wednesday asked House Speaker Mike Johnson (R-Louisiana) to allow tax rates to go up on filers earning more than $2.5 million a year in taxable income, which would lower the cost of the legislation, but the GOP also plans to use an accounting maneuver to write-off the cost of extending expiring policies that are already in place.
On paper, that would hold the deficit steady, but it could drive up borrowing costs regardless, experts say, because the federal government would still have to borrow the money to finance the reduction in tax revenue.
“Instead of continuing to add to our record high national debt with trillions in unpaid-for tax cuts and spending increases, lawmakers should come together to seriously address our unsustainable fiscal outlook,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a Washington think tank, said in a statement. “Our fiscal outlook is on a destructive path, and it is about time we do something to fix it.”