Federal Budget: Q1 2025 – DOGE has not Moved the Needle

Federal Budget

The Federal Government publishes the spending and revenue numbers on a monthly basis. The charts and tables below give an in depth review of the Federal Budget, showing where the money is coming from, where it is going to, and the surplus or deficit.

The government fiscal year closes at the end of September, but this analysis will look at the calendar year budget. As shown below, the last three months were all deficits exceeding -$100B with February showing worse than -$300B.

Figure: 1 Monthly Federal Budget

On average, January and February were much worse than history.

Figure: 2 Current vs Historical

We can look at the quarter in aggregate using the Sankey diagram below that shows the $596B deficit which means the US has a quarterly shortfall of revenue equal to 33.6% of expenses!

DOGE has been unable to move the needle despite all the blustering. Looking at the diagram below, DOGE is not even going after any of the big items: Social Security, Health, Medicare, Net Interest, Income Security, and National Defense. Without going after these massive spending programs, DOGE will only make a lot of noise without accomplishing anything.

Figure: 3 Quarterly Federal Budget Sankey

This latest quarter was not as bad as Q4 2024, but was still a very bad quarter.

Figure: 4 Quarterly Historical Deficit/Surplus for Previous Five Years

The next two charts show the quarterly revenue and costs broken down by expense type. You can see how the most recent quarter generated a little bit more revenue than last quarter. This was mainly driven by an increase in Individual Income Taxes.

Figure: 5 Quarterly Receipts

On the flip side, you can see that spending was slightly below last quarter, but not in a meaningful way.

Figure: 6 Quarterly Outlays

Interest Expense has ballooned higher to $941B.

Figure: 7 TTM Interest Expense

Historical Perspective

Zooming out and looking over the history of the budget back to 1980 shows a complete picture. The change since Covid is quite dramatic.

Figure: 8 Trailing 12 Months (TTM)

The next two charts zoom in on the recent periods to show the change when compared to pre-Covid. These charts show spending and revenue on a trailing 12 month basis period over period. While the last 12 months was a record revenue number, but spending is still growing faster.

Figure: 9 Annual Federal Receipts

Figure: 10 Annual Federal Expenses

Finally, we finish with a Sankey showing TTM Deficit was $2.07B which is a massive issue going forward, representing 29% of all government spending. The government cannot afford to keep printing such massive debt figures.

Figure: 11 TTM Federal Budget Sankey