The U.S. federal budget recorded a $164 billion surplus in September – thanks in large part to President Donald Trump’s tariff policy and One Big Beautiful Bill Act, the nonpartisan Congressional Budget Office (CBO) reported Wednesday.
Since February, the Trump Administration has imposed “reciprocal tariffs” on many imported goods in order to offset the onerous tariffs some countries are charging on U.S. exports. Then, in July, President Trump signed the One Big Beautiful Bill (reconciliation) Act, which institutes federal student loan program reforms saving $307 billion.
Both measures greatly helped boost September’s budget surplus, while also reducing the deficit for full Fiscal Year 2025, which ended September 30, the CBO explains in its report:
- September’s surplus more than doubled from the September 2024 surplus, surging from $80 billion to $164 billion.
- Revenues were $8 billion higher than last September.
- Tariff-driven customs duty revenue was $22 billion higher – a 310% increase.
- Outlays were $76 billion lower than year-ago.
- Adjusted for payments that were due in FY2024, but paid in FY2023, the government would have realized a $76 billion surplus in September, compared to a $0.370 billion surplus a year earlier.
Customs duties are comprised of revenue from tariffs and taxes imposed on goods transported across international borders. “Since February, the Administration has increased tariffs on most imported goods,” the CBO notes, explaining the 310% increase in this source of revenue.
September’s $76 billion decline in outlays was “attributable largely to modifications to the federal student loan program that were authorized in the 2025 reconciliation act,” the CBO reports.
For the full fiscal year (FY2025), the federal budget deficit was $1.8 trillion, $8 billion less than the shortfall recorded in fiscal year 2024:
- Revenues increased by $308 billion (+6%) from FY2024.
- Receipts from customs duties (including tariffs) increased by $118 billion (+153%). relative to fiscal year 2024.
- Outlays rose by $301 billion (+4%).
- Outlays decreased for federal student loan programs, deposit insurance, and by the Small Business Administration.
- Outlays were higher in several areas, including the largest benefit programs and net interest on the public debt (which, for the first time, surpassed $1 trillion).
Just as it was for the month of September, the deficit for the full fiscal year was influenced by the timing of outlays in Fiscal Year 2024, which were reduced because payments that were due on October 1, 2023, a Sunday, were shifted into Fiscal Year 2023 (they were made in September 2023).
If not for those shifts, the FY2025 deficit would have been $80 billion (4%) less than FY2024’s deficit, instead of $8 billion lower.
