by Ethan Faverino | Oct 22, 2025 | Economy, News
By Ethan Faverino |
The U.S. Treasury and the Joint Economic Committee released the Monthly Fiscal Update last week, highlighting a 2.8% reduction in the federal deficit for Fiscal Year 2025 (FY2025), totaling $1.776 trillion compared to $1.828 trillion in FY2024.
The decrease was driven by record-setting tariff collections, increased tax receipts, and modifications to the student loan program approved in the 2025 reconciliation act.
September 2025 concluded with a notable surplus of $197.950 billion, reflecting strong fiscal performance with net outlays of $345.713 billion and net receipts of $543.663 billion for the month.
In FY2025, total federal net outlays reached $7.010 trillion, a 3.91% increase from $6.746 trillion in FY2024. Net receipts rose to $5.235 trillion, up 6.42% from $4.919 trillion in the prior fiscal year.
Despite the robust revenue growth, 25.33% of FY2025 outlays were not covered by revenues, resulting in the federal government spending $1.34 for every dollar received. The Congressional Budget Office (CBO) projects continued growth in outlays and receipts, forecasting net outlays of $7.294 trillion in FY2026, $7.622 trillion in FY2027, and $8.019 trillion in FY2028, with deficits projected at $1.713 trillion, $1.687 trillion, $1.911 trillion, respectively, over the same period.
Outlays by Category
Social Security remained the largest federal expenditure in FY2025, totaling $1.581 trillion (22.5%), followed by Income Security and Veterans Benefits at $1.079 trillion (15.4%), Medicare at $996.72 billion (14.2%), and Net Interest at $970.66 billion (13.8%).
Defense spending accounted for $868.41 billion (12.4%), while Medicaid outlays were $668.14 billion (9.5%). Foreign Aid and other outlays represented smaller shares, at $32.21 billion (0.5%) and $814.75 billion (11.6%), respectively.
Receipts by Category
Individual Income Taxes were the largest revenue source in FY2025, contributing $2.656 trillion (50.7%), followed by Social Insurance and Retirement Taxes at $1.748 trillion (33.4%).
Corporation Income Taxes added $452.09 billion (8.6%), while Customs Duties, boosted by record setting tariff collections, reached $194.87 billion (3.7%). Other receipts totaled $183.31 billion (3.5%).
Despite the deficit reduction, net interest payments on the national debt hit a record high of nearly $971 billion in FY2025, a $100 billion increase from FY2024. The Committee for a Responsible Budget projects that by 2051, interest payments will become the largest federal expense, surpassing Social Security.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
by Corinne Murdock | Oct 6, 2021 | Education, News
By Corinne Murdock |
Governor Doug Ducey refused to heed the Biden Administration’s warning that two of his programs rewarding mask-free schooling couldn’t be using federal COVID-19 relief funds. Almost immediately after receiving the Department of Treasury’s (USDT) request to pull back his programs, Ducey issued a public statement that he would continue to defend parents’ choice. He also questioned why President Joe Biden opposes programs designed to help children who fell behind due to COVID-19 measures such as school shutdowns, mask mandates, forced quarantines, and distanced learning.
“Here in Arizona, we trust families to make decisions that are best for their children. It’s clear that President Biden doesn’t feel the same. He’s focused on taking power away from American families by issuing restrictive and dictatorial mandates for his own political gain. After the many challenges of last year, it should be our top priority to get our kids caught up. That’s exactly what this program does — it gives families in need the opportunity to access critical educational resources. Why is the president against that?”
American Federation for Children’s Arizona State Director, Steve Smith, asserted that he stood by Ducey’s response. He pointed out that public schools with mask mandates have access to an overwhelming majority of the federal relief funds; essentially, Ducey’s two programs are a drop in the funds bucket.
“I applaud Governor Ducey for doing all he can to provide more education options for Arizona families through this unprecedented time. It is alarming that anyone, especially elected officials whose responsibility it is to advocate for Arizonans, would not only oppose these options but then actively lobby the federal government to take these resources away from families,” said Smith. “It’s all the more frustrating considering the fact that 97 percent of the $190 billion in federal relief funds have gone to public schools that in many cases, are still sitting on it.”
Ducey’s response addressed a letter issued Tuesday by USDT Deputy Secretary Adewale Adeyemo. He told Ducey it wasn’t permissible to use federal relief funds for either the $10 million school voucher program that covers $7,000 of tuition or other educational costs at schools without mask mandates, or the $163 million grant program in which only schools without mask mandates are applicable for the grant funds.
“The purpose of the [Coronavirus State and Local Fiscal Recovery Funds] SLFRF funds is to mitigate the fiscal effects stemming from the COVID-19 public health emergency, including by supporting efforts to stop the spread of the virus. A program or service that imposes conditions on participation or acceptance of the service that would undermine efforts to stop the spread of COVID-19 or discourage compliance with evidence-based solutions for stopping the spread of COVID-19 is not a permissible use of SLFRF funds.”
Adeyemo warned Ducey that he had a 30-day deadline to respond with proposals for remediation. Otherwise, USDT said it would recoup the funds.
Prior to his appointment, Adeyemo worked within the high ranks of BlackRock: the world’s largest and arguably most powerful multinational investment management corporation. Adeyemo served as senior advisor and chief of staff to CEO Larry Fink.
USDT began investigating Ducey’s programs at the request of Representative Greg Stanton (D-AZ-09) in mid-August. Stanton wrote to USDT Secretary Janet Yellen to issue an opinion on the programs.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
