Despite greater revenues from tariffs, the US government recorded one of the highest budget deficits ever:
The Federal government took in a record amount of tariff revenue in October. It also ran the highest October budget deficit on record.
The Trump administration spent $284.35 billion more than it took in to kick off fiscal 2026. That was about 10 percent higher than last year’s October deficit and about $200 million more than the previous October record set in 2020 during the pandemic lockdown era.
The deficit was inflated by the shifting of some November benefit payments back into October. If we factor out those calendar effects, the deficit would have been $180 billion. While a 29 percent reduction from last year’s October deficit, it would still rank in the top four highest October shortfalls on record.
Keep in mind that Uncle Sam ran this massive deficit while the government was “closed.” A Treasury Department official told Reuters that it was unclear how much spending was reduced by the government shutdown, but estimated it was less than five percent of total outlays.
Salaries and other outstanding obligations that were not paid during the shutdown are now due, as the government is fully operational again. That means we could see a spike in spending in November.
Houston: We Have a (Spending) Problem
The federal government took in $404 billion in October. That was a healthy 24 percent revenue increase from October 2024.
Record monthly tariff receipts totaled $31.4 billion. That was a 330.1 percent increase in customs receipts compared to October 2025.
It should be clear that claims that the federal government is going to use tariff revenue to pay a “dividend” to poor and middle-class taxpayers and pay down the national debt are nothing but political rhetoric. Math is the great enemy of this ambitious plan.
Last year, the U.S. government ran the fourth-largest budget deficit on record despite a 142 percent increase in tariff revenue.
It should also be clear that the U.S. government doesn’t have a revenue problem. It has a spending problem.
The Trump administration blew through $688.72 billion last month. That represents a 17.9 percent year-on-year increase.
