The U.S. budget deficit ticked slightly lower this year - but it’s still massive.

The Treasury says the government ran a $1.78 trillion shortfall in fiscal 2025, about $41 billion - or 2.2 percent - less than last year.

What helped? Record-breaking tariff revenue.

President Trump’s tariffs brought in about 200 billion dollars - that’s a more than 140% jump from 2024 - offsetting some of the pain from sky-high interest payments on America’s $38 trillion national debt.

In fact, interest costs hit $1.2 trillion - another record - now topping defense spending and trailing only Social Security and Medicare.

Still, the deficit-to-GDP ratio is expected to dip to 5.9%, the lowest since 2022. Treasury Secretary Scott Bessent says the U.S. is “on its way” to reducing its debt burden.

The government’s fiscal year ended in September - the U.S. collected $5.2 trillion in revenue and spent just over $7 trillion.

Bottom line - we’re looking at a slightly smaller deficit, record tariff revenue, and record interest costs - a fiscal picture that’s improving on paper, but still deep in the red.

That’ll do it for your daily briefing. From the New York Stock Exchange, I’m Caroline Woods with TheStreet.

This story was originally reported by TheStreet on Oct 17, 2025, where it first appeared in the Video section. Add TheStreet as a Preferred Source by clicking here.