The Treasury last week reported the fourth-highest monthly deficit in U.S. history — $432 billion for July — as tariff refunds turned customs receipts negative for the third month in a row and outlays for Social Security and Medicare benefits for seniors continued to grow. The deficit for the first 10 months of fiscal 2026 has already exceeded the total gap for all of fiscal 2025 with two months to go in the current fiscal year.
Trump has largely ignored the dwindling number of fiscal hawks in his Republican Party, championing heavy spending across his two terms. Public debt rose by $7.8 trillion during Trump's first term, with more than half of it accumulating during the pandemic response over his last nine months in office.
Since Trump took office a second time in January 2025, the U.S. debt load has increased by $3.8 trillion, for total growth of $11.6 trillion across his two terms so far.
Public debt increased by $8.4 trillion during Biden's term, also marked by heavy COVID-19 recovery spending, but driven as well by big-ticket outlays for infrastructure investment, clean energy subsidies and other priorities championed by his Democratic Party.
The Committee for a Responsible Federal Budget estimates that the policy choices of Trump and Biden have increased the federal debt trajectory beyond what would have accumulated under the existing spending statutes when each took office.
For instance, Trump's landmark second-term legislative package — the One Big Beautiful Bill Act — will add another $4.7 trillion in debt, according to the Congressional Budget Office, the nonpartisan bookkeeper for federal lawmakers.
Trump has branded his second presidency as one focused on cost-cutting, marked by early federal agency job cuts ordered by the non-governmental Department of Government Efficiency. But much of his spending reductions has targeted so-called "discretionary" programs, the smallest portion of the federal budget. The U.S. spends roughly $7 trillion annually, and 60% of it is earmarked for so-called "mandatory" programs, including payments for Social Security, Medicare, Medicaid and veterans' care, that generally grow to keep pace with living costs.
Another $1.1 trillion pays the interest on U.S. borrowing, the cost of which rises as the debt pile grows and as interest rates climb. The 2025 fiscal-year budget marked the first time debt service costs exceeded Pentagon funding. In the first 10 months of the 2026 fiscal year, interest costs have eclipsed Medicare healthcare outlays to become the second-largest line-item in the federal budget, behind the Social Security pension system.
The U.S. is spending more to fund the retirement and healthcare costs of the "baby boom" generation, straining the trust funds behind Social Security and Medicare even as payroll and income tax revenues fall short of covering federal costs.
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