One month ago, when looking at the latest US Treasury income and spending, or as it is better known, deficit, data we found something shocking: the last months of the Biden admin were marked by spending unlike anything ever seen before, in fact, spending in the first six months of fiscal 2025 surpassed even the crisis 2020 and 2021 when the US injected trillions into the economy.
Then Elon Musk's DOGE came on the scene... and thing changed quickly.
Earlier today the Treasury published its revenue and spending report for the month of March, the first month when DOGE was fully operational, and the results were interesting. As shown in the chart below, in March total US government receipts were $368 billion, while spending totaled $528 billion.
The difference between how much money the US brought in vs how much it spent, means that in March the US budget deficit was $161 billion. Which sounds like a lot (it is) until you realize that in February the deficit was almost twice as much, or $307 billion. And compared to the $236 billion deficit a year ago, 2025 was a solid 32% lower.
How come? Well, first of all receipts rose 10.7% to $367.6BN. Which is good. But what was great is that spending, which has traditionally been the real problem, actually shrank by 7.1% to $528.2BN.
And this is where DOGE came in.
While various mandatory spending categories posted continued gradual increases - after all, these require an act of Congress to be revised - there was a huge, $45 billion drop in Income Security, from $105 billion in February to $60 billion in March, the largest one month decline since June 2021 as Elon ripped up much of the massive fraudulent fund flow network Democrats had established over the past few decades and covered up simply as 'income security' when it really was a giant slush fund used for everything from graft, to corruption, to bribes, to paying leftist media for favorable coverage.
The result: the March US deficit was the lowest since 2020 before the covid crash, and down $76 billion from a year ago.
That's the good news. The bad news is that despite the sharp drop in the March deficit, the longer-term trendline in spending vs income remains unsustainable as the following chart shows.
And another way of showing it: yes, the blue line (income security), dropped but everything else continues to rise...
... and especially interest expense, which as of the end of Biden's admin, at Dec 2024, hit a new record high of $1.124 trillion LTM, which is more than double where it was when Biden walked into the White House in Q1 2021.
Bottom line: While March was the first month in which we saw the budget-busting effect of DOGE finally come to the fore, the Sisyphean challenge for the Dept of Government Efficiency is just starting, because while a $50BN drop in "Income Security" and a $76 billion decline in the deficit YoY is a terrific start, the reality is that this is a mere drop in the bucket for the unsustainable trajectory which the US is on, and if Trump, Musk, DOGE and the majority of Americans truly hope to rightsize the US balance sheet, a lot more work - and as the last few days have shown - a lot more pain is coming.
