Monthly Budget Review: April 2025

The federal budget deficit totaled $1.1 trillion in the first seven months of fiscal year 2025, the Congressional Budget Office estimates. That amount is $196 billion more than the deficit recorded during the same period last fiscal year. Revenues increased by $146 billion (or 5 percent), and outlays rose by $342 billion (or 9 percent).

The change in the deficit was influenced by the timing of outlays, which decreased the deficit during the first seven months of fiscal year 2024. Outlays in fiscal year 2024 were reduced by shifts in the timing of payments that were due on October 1, 2023, a Sunday. (The payments were made that September.) If not for those shifts, the deficit so far this fiscal year would have been $123 billion more than the shortfall at this point last year. In addition, part of the deficit increase in 2025 arises from the postponement of some tax deadlines from 2023 to 2024 (described below), which boosted receipts in 2024.

In January 2025, CBO projected a deficit of $1.9 trillion for fiscal year 2025, the same as the actual deficit for fiscal year 2024.

The statutory debt limit was reinstated on January 2, 2025, and set at $36.1 trillion, matching the amount of total debt that was outstanding on the prior day. On January 21, 2025, the Department of the Treasury announced a “debt issuance suspension period” and began taking “extraordinary measures” to continue financing government operations without breaching the debt limit. CBO estimates that if the debt limit remains unchanged, the government’s ability to borrow using extraordinary measures will probably be exhausted in August or September 2025.