By Micah Jonah
January 14, 2026
The United States government recorded a $145 billion budget deficit in December, a 67 percent increase compared with the same month last year, as federal spending rose faster than revenue, according to figures released by the U.S. Treasury.
The deficit was driven by record government outlays, boosted by calendar shifts in benefit payments, while revenue growth from import tariffs showed signs of slowing.
Net customs receipts in December fell to $27.9 billion, down from the low $30 billion range recorded in recent months, though still far above the $6.8 billion collected in December 2024. This suggests that revenue gains from tariffs introduced under President Donald Trump may be leveling off.
For the first three months of fiscal year 2026, which began on October 1, total customs receipts reached $90 billion, compared with $20.8 billion in the same period a year earlier.
After adjusting for timing differences in payments and receipts, the Treasury said the December deficit would have been about $112 billion, representing an 11 percent decline from December 2024.
About $32 billion in benefit payments scheduled for January were paid in December because the new year began on a weekend, while $51 billion in December 2024 benefits had been shifted to other months. Even with these adjustments, the $145 billion shortfall remains the largest ever recorded for the month of December.
Military spending climbed sharply, with defense outlays hitting $98 billion in December, up $20 billion or 25 percent from a year earlier, partly due to the resumption of payments delayed by a government shutdown in October.
Despite the large December figure, the overall deficit for the first three months of fiscal 2026 fell to $602 billion, which is $109 billion lower than the same period last year, supported by record government receipts.
Total receipts for the first quarter of the fiscal year reached $1.225 trillion, up 13 percent from a year earlier, helped by the collection of tax payments delayed last year by California wildfires.
At the same time, total federal spending also hit a record, rising to $1.827 trillion, up 2 percent from the same period last year.
Spending growth was driven by higher costs for Social Security, healthcare programs, and interest on public debt. Interest payments alone rose by $46 billion, or 15 percent, to $355 billion in the first three months of the fiscal year.
Treasury officials said the rise in interest costs was largely due to the continued growth of the national debt rather than major increases in interest rates.
The average interest rate paid by the Treasury in December stood at 3.32 percent, slightly above the 3.28 percent recorded a year earlier.
Uncertainty remains over future tariff revenues as the administration has approved some tariff reductions on imports from China and South Korea, while the U.S. Supreme Court is expected to rule on legal challenges to the tariff policy. Any ruling against the tariffs could further reduce customs income in the coming months.
