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businesspress > Blog > Business > US Expenditure Reaches Record Highs in July, While Tariff Income is Unable to Reduce the Deficit
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US Expenditure Reaches Record Highs in July, While Tariff Income is Unable to Reduce the Deficit

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Last updated: August 14, 2025 8:10 am
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Published August 14, 2025
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Together with greater interest payments on the national debt, larger Social Security payouts, and more expensive Medicare and Medicaid, spending soared, and the July deficit reached a new high. The substantial hole that returned in July highlights a larger budgetary reality. Specifically, tariffs have contributed tens of billions to the Treasury in recent months, but they haven’t altered the systemic disparity between revenue and spending. Notwithstanding a robust customs revenue stream, spending has continued to exceed collections.

The July deficit reached a record high as spending grew due to costlier defense, education, and healthcare programs, more expensive Medicare and Medicaid, larger Social Security benefits, and higher interest payments on the national debt. Due in part to new import taxes and the peculiarities of the fiscal calendar, the July result comes after a period of instability in the federal government’s monthly balances.

Despite June’s short-term surplus, the government still has a significant deficit because one-time revenue increases from tariffs are insufficient to offset the effects of sustained, widespread expenditure rise. Even months of record customs receipts haven’t slowed the rate of red ink, according to Treasury data.

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Reading: US Expenditure Reaches Record Highs in July, While Tariff Income is Unable to Reduce the Deficit
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