The US posted its largest-ever July budget deficit, spending $432 billion more than it collected, according to the Treasury Department’s Monthly Treasury Statement released Wednesday.
The government took in $334 billion and spent $766 billion, led by Medicare at $174 billion, Social Security at $141 billion, and net interest at $104 billion. Tariff refunds of $33 billion — fallout from the Supreme Court striking down Trump’s emergency tariffs — cut into revenue.
The gap pushed the 10-month fiscal 2026 deficit to $1.8 trillion, already surpassing all of fiscal 2025’s $1.775 trillion shortfall with two months left. Gross interest expense has climbed past $1.17 trillion this year — more than the $890.6 billion Congress authorized for national defense, and by some analysts’ count, more than Medicare spending too.
Sen. Rand Paul wrote, “We shouldn’t be spending $432B — that we don’t have — in a single month,” calling on Washington to shrink government and crack down on fraud. Former UN Ambassador Nikki Haley pointed to the interest-versus-defense comparison and urged Republicans to make spending cuts a midterm priority.
Florida Gov. Ron DeSantis used the report to renew a familiar complaint about Elon Musk’s Department of Government Efficiency. “DOGE fought the Swamp and the Swamp won,” he said — a line he’s used in nearly identical form at least three times before, most recently at an American Enterprise Institute panel in June.
Musk’s original $2 trillion savings target never came close; the initiative’s own website claimed $215 billion when it went dark, Congress codified just $9.4 billion of that into law, and DOGE stopped functioning as a unified operation in November 2025.
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