Federal Budget Deficit Shrinks Under President Trump
21st January 2026
If there’s anything Republicans and Democrats can agree on, it’s how to spend money. Both parties created the federal budget deficit and contributed to the looming $38 trillion national debt, but President Donald Trump’s administration is actively working to close it.
Since the budget is essentially financed by taxpayers, closing the gap means reduced borrowing and interest payments, lower national debt, and boosted long-term economic growth all Americans can feel.
The Monthly Treasury Statement highlights fiscal year 2025, in which the federal government spent over $7 trillion in outlays and generated $5.2 trillion in receipts. Despite including President Joe Biden’s last four months in office, the budget deficit of approximately $1.8 trillion was still down 2% from fiscal year 2024.
Early data for fiscal year 2026 (October to December 2025) shows further fiscal responsibility. The cumulative deficit of $602 billion is approximately 15% lower than the same period in fiscal year 2025.
The deficit’s closure—or at least slowed rate of growth—under the Trump administration, can be attributed to a combination of receipt (revenue) increases and targeted outlay (spending) reductions.