U.S. Government Starts 2025 Fiscal Year Deep in the Red

The U.S. government got off to a very bad start for its 2025 fiscal year. The U.S. Treasury Department reported that the federal government spent $257 billion more than it took in as revenue in October 2024. That is the second-worst figure ever recorded for the first month of the fiscal year. Only October 2020 has seen a bigger deficit.

Of course, October 2020’s deficit of $284 billion happened during 2020’s coronavirus pandemic. That was when government-mandated lockdowns shut down much of the U.S. economy. Those lockdowns shrank the U.S. government’s tax revenue by billions while it spent billions to compensate for their negative impact. That’s what it took to make the worst-ever start of a fiscal year for the U.S. government in the modern era.

There is no pandemic in October 2024. At $327 billion, the federal government’s tax collections are 37% higher than in October 2020. However, the U.S. government’s spending totaled over $584 billion, 12% higher than it spent in October 2020 during a national emergency.

The Treasury Department used the chart below to illustrate the U.S. government’s revenues, spending, and deficit for October 20:

The first month of the 2025 fiscal year follows a full year of excessive spending that delivered the federal government’s largest annual deficit since the pandemic.

The budget results for October, the first month of the 2025 fiscal year, come after President Joe Biden’s administration turned in a full-year fiscal 2024 deficit of $1.83 trillion, the largest outside the COVID-19 era.

Today, there is no national emergency that justifies the federal government spending so much money in October 2024. The pandemic effectively ended years ago. Why on earth is the U.S. government still spending money like the pandemic never ended?

This piece originally was posted by the Independent Institute.