Say, Whatever Happened To All Those Devastating Spending Cuts We Were Warned About?
“U.S. deficit grows to $291 billion in July despite tariff revenue surge.” – CNBC
That and other headlines greeted the release of the latest monthly Treasury Department report last week, which showed that the July deficit was $47 billion higher than the year before – even though revenues came in $8 billion higher.
Turns out that, despite all the protests, the screaming, and purple-hair-pulling and nose-ring-wiping about President Donald Trump’s “devastating cuts,” spending in July was $55.5 billion higher than it was a year ago.
What’s more, there were jumps for outlays for agencies such as Veterans Affairs (up $3 billion year-over-year), Medicaid (up $15 billion), the EPA (up $195 million), the National Science Foundation (up $14 million) – all of which were supposedly being slashed and burned.
In fact, just five of the 15 Cabinet-level agencies spent less this July than they did last year.
As we’ve pointed out many, many times in this space, when it comes to spending cuts, both sides exaggerate what’s going on. Democrats do so because they want never-ending spending increases, and Republicans do so because they want to look like fiscal hawks.
The truth is that spending keeps growing, and growing, and growing. That is nowhere more true than when it comes to Medicaid, which as we exposed here (see “One Chart To Kill The Medicaid Lies For Good”), continues to climb at an unsustainable pace under the One Big Beautiful Bill.
But, don’t despair, because things are getting better under Trump.
First, cumulative deficits in the six months since Trump took office – that is, from February through July – are $196 billion lower than they were compared with the same months last year, when President Joe Biden’s autopen was still in charge.
Revenues are up $250.7 billion.
And, while spending is up, the total year-over-year increase in spending over those six months is relatively small – $54.5 billion.
Compare that to the last six months of Biden’s term.
From August 2024 through January 2025, cumulative deficits were $542 billion higher than the previous year, thanks to a $636 billion increase in spending and just $94 billion in revenue growth.
Trump and the Republican Congress have a lot more work to do before they can claim to have gotten the country’s fiscal house in order. But at least they’ve changed course a bit.
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