U.S. Budget Deficit Widens Amid Tax Breaks and Relief Payments

The U.S. Treasury revealed on Friday that the federal budget deficit for March rose by $4 billion, or 2%, hitting $164 billion compared to last year. This rise is attributed to increased individual and corporate tax refunds spurred by new tax breaks, alongside enhanced relief payments to farmers.

Contrary to expectations, spending on the Iran war did not significantly impact the deficit. Military spending increased by a mere $2 billion, reaching $65 billion in the war's first month. A Treasury official mentioned that greater war-related expenses, like replenishing weapons, are projected for subsequent months.

Meanwhile, the government's customs revenue weakened following the annulment of global tariffs by the Supreme Court. March collections were $22.2 billion, a decline from $26.6 billion in February. Nevertheless, total receipts rose to $385 billion, while outlays hit $549 billion, indicating both increased income and spending compared to March 2025.