U.S. Budget Deficit Tops $1 Trillion As Tariff Revenue Surges

The U.S. federal budget deficit surpassed $1 trillion during the first five months of the fiscal year, though the shortfall remains lower than the same period in 2025, according to Treasury Department data released Wednesday.

Through February, the deficit totaled about $1.004 trillion. That figure is roughly 12 percent smaller than last year as government revenues increased faster than federal spending. The deficit for February alone reached $308 billion.

U.S. deficit tops $1 trillion through February but runs below year-ago pace https://t.co/UiQZCF7XZd

— CNBC (@CNBC) March 11, 2026

A major factor behind the improved fiscal picture was a sharp rise in tariff collections. Customs duties brought in $151 billion so far this fiscal year, nearly four times higher than the same period last year.

Meanwhile, corporate tax revenue declined by $27 billion compared with a year earlier. Tariff income has now exceeded corporate tax receipts, an unusual shift in federal revenue sources.

Rising interest payments on the national debt also continue to weigh on government finances.

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tippinsightsTIPP Staff