(Mike Maharrey, Money Metals News Service) This is your monthly reminder that the U.S. government still has a massive spending problem.
The federal government’s Debt Black Hole got a little bigger in March, as Uncle Sam ran yet another big budget deficit.
According to the Monthly Treasury Statement, the Trump administration spent $164.1 billion more than it took in last month. That was about 2 percent bigger than last year’s March deficit, despite a significant increase in revenue.
Halfway through fiscal 2026, the federal budget deficit stands at 1.17 trillion.
For context, the biggest deficit run by the Obama administration was $1.41 trillion in 2009.
The relentless monthly budget deficits keep pushing the national debt higher. After eclipsing $38 trillion in October, it blasted through the $39 trillion mark last month.
The good news is the 2026 deficit is down about 11 percent from the same period last year, thanks to a big boost in revenue, primarily generated by tariffs.
The bad news is that federal spending is still out of control.
The Money Is Flowing
Uncle Sam took in $384.86 billion last month. That was up 5 percent from March ’25 and set a March record.
Through the first six months of fiscal 2026, the federal government has collected $2.48 trillion, 10 percent more than the same period in fiscal 2025.
Much of the revenue increase derives from tariffs, but customs receipts are softening.
The U.S government collected $22.2 billion in tariffs last month. That was up over 170 percent compared to March 2025. But customs receipts were down from $26.6 billion in February and from an average of $30 billion per month late last year.
So far in fiscal 2026, the federal government has collected $173 billion in customs duties.
Spending Like Drunken Sailors
Meanwhile, the Trump administration continues to spend money hand over fist.
The government blew through another $548.96 billion last month. That was up 4 percent over the same period last year.
The March data did not reflect the full costs of the Iran War. Military spending was up, but just by $2 billion (3 percent) over February. According to Reuters, “A Treasury official told reporters that many war-related outlays, such as for replacing expended weapons, would come in later months.”
Administration officials estimate the war cost around $11.3 billion just through the first six days.
In total, Uncle Sam has spent $3.65 trillion through the first half of fiscal 2026. That’s up about 2 percent over the same period in fiscal ‘25.
A 2 percent increase in spending might not sound significant. But weren’t we told there would be spending cuts?
In fact, there were some cuts.
The increased spending comes despite cuts to the EPA and the Department of Education budget that are now showing up in the data. Lower disaster spending also helped moderate spending levels through the first two months of fiscal ’26.
Looking at the big picture, the spending trajectory is up. Even with all the hype about DOGE and some lip service to cutting spending during the early days of the Trump administration, the U.S. government spent just over $7 trillion last year. That’s an average of $583.3 billion per month or $19.2 billion per day.
And now there’s a war.
Despite some non-specific talk about “spending cuts,” there seems to be little to no commitment to dealing with the runaway spending substantially.
The Big Beautiful Bill trimmed some spending but increased it in other areas. Furthermore, those “cuts” were from projected spending increases. Actual expenditures will still go up, just not as fast as originally planned. The bottom line is that even with the Big Beautiful Bill, spending will increase on an absolute basis. We’re seeing it now.
And all that waste uncovered by DOGE? Virtually none of it was removed from the budget.
This is par for the course. It’s a lot easier to talk about spending cuts than it is to actually cut spending.
You might recall that President Biden promised that the [pretend] spending cuts would save “hundreds of billions” with the debt ceiling deal (aka the [misnamed] Fiscal Responsibility Act).
That never happened.
Supporters of the Big Beautiful Bill expect economic growth stimulated by tax cuts to boost revenue and narrow the deficit. However, history casts significant doubt on this claim.
The ugly truth is the government isn’t committed to cutting spending in any meaningful way, and it always finds new reasons to spend even more, whether for “crises” at home or wars overseas.
Debt Is Expensive
Uncle Sam must pay interest on the nearly $40 trillion debt. Interest expense has grown into the second-largest spending category in the federal budget behind only Social Security.
In March, the Treasury forked out $102.64 billion on interest payments alone. That pushed interest expense to $622.6 billion through the first half of fiscal 2026. That was up 6.9 percent compared to the same period in fiscal ’25.
Interest on the national debt cost $1.2 trillion in fiscal 2025. That was up 7.3 percent over 2024.
Net interest (interest expense – interest receipts) was $94 billion in February.
Through the first half of the fiscal year, the federal government spent more on interest on the debt than it did on national defense ($519 billion) or Medicare ($502 billion). The only higher spending category is Social Security ($818 billion).
Much of the debt currently on the books was financed at very low rates before the Federal Reserve started its hiking cycle. Every month, some of that super-low-yielding paper matures and must be replaced by bonds yielding much higher rates.
When people say the spending is unsustainable, it feels like an understatement. In fact, it’s fair to call the federal government insolvent.
However, very few people in the political class seem the least bit interested in tackling the problem. The bad news is that at some point, the problem is going to tackle them.
Mike Maharrey is a journalist and market analyst for Money Metals with over a decade of experience in precious metals. He holds a BS in accounting from the University of Kentucky and a BA in journalism from the University of South Florida.
