If there’s anything Republicans and Democrats can agree on, it’s how to spend money. Both parties created the federal budget deficit and contributed to the looming $38 trillion national debt, but President Donald Trump’s administration is actively working to close it.
Since the budget is essentially financed by taxpayers, closing the gap means reduced borrowing and interest payments, lower national debt, and boosted long-term economic growth all Americans can feel.
The Monthly Treasury Statement highlights fiscal year 2025, in which the federal government spent over $7 trillion in outlays and generated $5.2 trillion in receipts. Despite including President Joe Biden’s last four months in office, the budget deficit of approximately $1.8 trillion was still down 2% from fiscal year 2024.
Early data for fiscal year 2026 (October to December 2025) shows further fiscal responsibility. The cumulative deficit of $602 billion is approximately 15% lower than the same period in fiscal year 2025.
The deficit’s closure—or at least slowed rate of growth—under the Trump administration, can be attributed to a combination of receipt (revenue) increases and targeted outlay (spending) reductions.
Tariffs are a sure method to generate federal government receipts which drove the deficit down. Beating economists’ projections, tariff revenue soared to nearly $200 billion in Trump’s first year of his second term.
In just the last three months, custom duties boasted $90 billion—an increase of over 330% from the comparable prior period. These tariffs targeted communist Chinese imports—among others—allowing the U.S. to decouple from the Asian giant and boosting government income amid broader economic growth.
Individual income tax revenue surged as wage increases outpaced inflation. These receipts rose from $518 billion in fiscal year 2025 to $606 billion in fiscal year 2026 (17% growth), which contributed to a shrinking deficit. And with Trump’s “One Big, Beautiful Bill” tax cuts taking effect in 2026, Americans can expect to feel greater financial relief.
On the spending side, budget outlays contracted from the previous period. In an unprecedented opportunity created by the Democrat-engineered October government shutdown, Trump and his team worked hard to cut waste, fraud, and abuse.
Trump axed thousands of unnecessary government workers and programs, a decision that contributed massively to efficiency and fiscal savings. Partnering with Treasury Secretary Scott Bessent, the two oversaw financial reallocation and halted billions in wasteful programs.
Office of Budget and Management Director Russell Vought made substantial Reductions in Force (RIFs) in health, education, environment, and other agencies with unfavorable political agendas—cutting spending and saving taxpayers billions.
For example, federal outlays for the Department of Agriculture fell by 18%, the Department of Education by 26%, the Environmental Protection Agency by 81%, and International Assistance Programs by 82%.
Shrinking the public sector tackles the affordability crisis created by the fiscally undisciplined Biden administration. Four years of prices rising faster than wages and inflation reaching 40-year highs encouraged voters to elect Trump who promised to balance the budget—and not just in rhetoric, but in decisive action.
The combination of reducing Treasury outlays and increasing receipts reduces the budget deficit and may lead to lower inflation, stabilized prices, and supply side private sector growth—all of which will usher in a golden era of affordability for Americans.
Biden is certainly responsible for the economic woes felt by voters today, but Trump continues to make meaningful progress in reducing stubbornly high prices.
In a recent Bureau of Labor Statistics report, overall, the 12-month adjusted consumer price index estimated 2.7%. Core inflation fell to a remarkable 2.6%, the lowest since March 2021, with price reductions driven by gains across most grocery groups, used vehicles, gasoline, communications, and energy.
With data reflecting broader disinflationary trends, further cooling may even influence the Federal Reserve to cut rates, making the cost of borrowing cheaper and interest on credit cards or loans lower.
So long as regulations continue to be cut, tax rates are reduced, brakes are put on government spending, and government revenue is generated in a sustainable manner, there’s hope for the American taxpayer.
Rather than feed the government machine and widen the federal budget deficit, Trump is putting Washington on a diet, eating inflation, and cooking up a private sector boom—the real drivers of economic expansion which will provide relief to all Americans.