U.S. deficit tops $1 trillion through February but runs below year-ago pace

The U.S. budget deficit surpassed $1 trillion for the fiscal year through February but was sharply lower than the same period a year earlier, Treasury Department data showed Wednesday.

Outlays exceeded receipts by $308 billion in February, roughly in line with the deficit recorded in the same month a year ago.

For the fiscal year to date, the deficit totaled $1.004 trillion, about 12% lower than the comparable period in 2025, as government revenues rose faster than spending.

Helping narrow the gap was a sharp increase in tariff collections. Customs duties totaled $151 billion through the first five months of the fiscal year, up about $113 billion, or 294%, from a year earlier.

The recent Supreme Court decision striking down many of President Donald Trump's tariffs has not shown up in the data yet. Economists say that could reflect duties collected earlier still being processed, a possible surge in imports ahead of the ruling, and lingering questions over whether and to what extent the U.S. will need to issue refunds on tariffs already collected.

Moreover, Trump has imposed additional tariffs since the decision that could continue to boost customs revenue.

Corporate tax revenue also declined sharply, falling $27 billion, or 17%, from a year earlier. For the fiscal year to date, tariff revenues have actually exceeded corporate tax receipts, an unusual shift.

Elevated interest rates also continued to weigh on the federal fiscal picture.

Net interest payments on the nearly $39 trillion national debt totaled $79 billion in February, more than any category except Social Security, income security — which includes programs such as unemployment insurance, housing assistance and food aid — and health care.