The US Treasury will be seen in Washington, DC on January 19, 2023.
Saul Roeve | AFP | Getty Images
The US government drifted further into red ink in May, exacerbating the burgeoning debt and deficit issues, the Treasury reported Wednesday.
After running a short-lived surplus in April thanks to tax season receipts, the deficit totaled over $316 billion for the month, bringing its total of $1.36 trillion year-over-year.
The annual tally was 14% higher than a year ago, but the total in May 2025 was 9% lower than the shortfall in May 2024.
The surge in fiscal costs has once again been a major contributor to the fiscal issue, with over $920 billion in interest in $36.2 trillion in debt. Net interest exceeded all other spending except Medicare and Social Security. Debt loans are expected to exceed $1.2 trillion this fiscal year, totaling $776 billion for the first eight months of the fiscal year.
Tax revenue is not an issue. Receipts rose 15% in May, up 6% from a year ago. Expenses have increased by 2% each month, up 8% from a year ago.
Tariff collection also helped offset some of the shortfall. The total tariffs for that month increased from $6 from the same month a year ago. Total customs tax collection for the year totaled $86 billion, an increase of 59% from the same period in 2024.
However, the yields have increased. After soaking in September last summer, they directly opposed the Federal Reserve’s interest rate cuts, eased at the beginning of the year and rose again following President Donald Trump’s April 2nd “liberation day” tariff announcement. The 10-year financial yield has not changed substantially from about 4.4% a year ago.
In recent weeks, including Wall Street leaders jpmorgan chain CEO Jamie Dimon, Black Rock CEO Larry Fink and Bridgewater Associates Ray Dalio have warned of the disruption that could result from the troublesome debt burden. The deficit currently operates more than 6% of gross domestic product, effectively unprecedented in the US economy in peacetime.
