July U.S. budget deficit hits 432.3 billion, highest since March 2021

WASHINGTON - The U.S. budget deficit climbed to 432.3 billion in July, the largest monthly shortfall since March 2021, the Treasury Department reported.

The July figure was about 48 percent higher than the same month a year earlier, CNBC reported from the official data. For the first 10 months of the federal fiscal year, the cumulative deficit reached nearly 1.8 trillion and surpassed the same period in 2025.

Medicare was the single largest July outlay at 174 billion, up from 103 billion in June and 955 billion for the year to date. Social Security spending was 141 billion for the month. Net interest on the national debt was 104 billion in July.

Tariff refunds also weighed on the books. The Treasury recorded 33 billion in rebates tied to levies the Supreme Court ruled illegal. Calendar timing added pressure as well. Because the first of the month fell on a nonbusiness day, about 99 billion in benefits and related payments, including Supplemental Security Income and Medicare, shifted into July.

Debt service remains a structural cost. For the fiscal year to date, the United States has paid 1.17 trillion in interest on a national debt of about 39.9 trillion, of which 32.1 trillion is held by the public. That interest total is up from 1.01 trillion in the same period a year earlier. Net interest, after interest the government receives, was 931 billion year to date.

Interest costs now trail only Social Security and Medicare among major expense categories for the year. The report is a scorekeeping document. It does not by itself change tax law or benefit formulas.

Households on Medicare and Social Security are not seeing an automatic cut from this monthly report. The numbers do show how health program costs and higher debt service shape the federal balance sheet as Congress and the White House debate fiscal policy.