Did Trump cut the federal budget in 2025? Spending rose, but deficit eased

In 2023, when he was campaigning to win back the White House, President Donald Trump said he would reduce the federal budget. "Instead of growing the size and scope of the federal government … we will shrink it each year with aggressive cost reduction targets for each federal department," he said in a video address.

Based on the final numbers for fiscal year 2025 ending Sept. 30, a majority of which occurred during Trump's second term, Trump's progress toward fulfilling this promise is mixed. Federal spending rose, but increased revenues meant that the deficit — how much spending exceeded revenues — was smaller than in the previous fiscal year.

Between fiscal years 2024 and 2025, overall federal spending rose by about 4%, from $6.7 trillion to just over $7 trillion. Mandatory spending on Social Security, Medicare and Medicaid drove the increase; collectively, spending on these programs rose by about 10%, according to the Congressional Budget Office. 

This increase occurred despite an effort by Trump's Department of Government Efficiency to slash federal agency spending. DOGE's online "wall of receipts" said it saved $215 billion, but there are reasons to doubt that figure, experts said. Several of its cost-cutting categories are not verifiable, and others have been "riddled with errors and overestimations," Dominik Lett, a budget policy analyst at the libertarian Cato Institute, told PolitiFact.

Meanwhile, fiscal year revenues increased from 2024 to 2025, CBO found. The two biggest sources of federal revenue — individual income taxes and payroll taxes — rose by 9.5% and 2.3%, respectively. And although they are a much smaller part of overall revenues, tariffs — a major focus of Trump's policies — rose by 153% from 2024 to 2025, reaching $195 billion in 2025.

Overall, this meant that the federal deficit shrank modestly from 2024 to 2025, from $1.817 trillion to $1.775 trillion.

It's premature to declare this effort a success based on one year, and so far, there's evidence of both progress and setbacks, depending on the metric used. For now, we rate this In the Works.