“BALANCED BUDGET!!! DJT” Donald Trump posted that promise on February 7, 2025, the 18th day of his current presidential term. During the 2024 campaign, he had promised even more: the elimination of the entire national debt in a single term of office.
Trump insisted that he could reach his budget goals without disagreeable spending cuts. At a rally in St. Cloud, Minnesota, in July 2024, Trump pledged to make “not one penny” in cuts to Social Security and Medicare. He repeated that “not one penny” promise countless times through 2024, including in the Republican platform. Instead, he proposed eliminating deficits and debt with magic money from growth, from crypto, and—above all—from tariffs. Tariffs would generate so much revenue that they might replace the income tax, maybe even finance a $2,000 dividend for every American taxpayer.
Basic budget math contradicted Trump’s fantasies. The United States imported about $3.3 trillion in goods in 2024. The budget deficit for that year was about $1.8 trillion. To imagine that tariffs could eliminate the budget deficit required believing that the Trump administration would impose a 55 percent tariff on all imports—including oil, natural gas, and electricity—and that consumers would pay this tariff without altering their buying behavior at all. That was all obviously absurd.
[Martha Gimbel: Americans are already paying dearly for the national debt]
But there was a Plan B to balance the budget! Let Elon Musk do it! At a rally in New York’s Madison Square Garden in October 2024, Musk boasted that he could save $2 trillion in wasteful spending. That was the genesis of the Department of Government Efficiency, Musk’s guerrilla war against the U.S. government. This adventure not only likely violated the Constitution but also almost certainly worsened the deficit. DOGE reduced the IRS auditing staff by nearly one-third. The Yale Budget Lab estimates that the ensuing collapse in federal enforcement efforts will cost the Treasury more than $860 billion in revenue over the next decade.
Fast-forward to the present. The budget deficit for the fiscal year that ended on September 30 is about $2 trillion, or about $160 billion more than in Joe Biden’s last complete year as president. Next year’s deficit is likely to be even bigger. When Trump spoke of eliminating the national debt, total debt stood at nearly $35 trillion. On the current trajectory, total debt could reach $45 trillion by 2028.
To put that another way: The U.S. debt reached $10 trillion for the first time during the financial crisis of 2008. That once seemed a crushing burden. Now an extra $10 trillion in debt is the cost of just four years of Trump’s fiscal recklessness.
Some highlights of how this record was achieved: In 2025, Trump and the Republican-led Congress passed a tax bill that made the 2017 tax cuts permanent—and added more tax reductions on top of them. The tax legislation will directly reduce government revenues by $4.5 trillion over the coming decade. Trump’s cuts to food stamps and Medicaid reduced spending by $1.1 trillion. Altogether, Trump’s budget plans netted out to $3.4 trillion in direct costs over the decade ahead—a sum that grows to $4.1 trillion because of the rising costs of debt service in the Trump era.
Trump’s biggest budget idea was to substitute tariffs for other government revenue sources. This plan proved not only economically unrealistic but also illegal. Tariffs are taxes, and taxes must be voted for by Congress, according to the Constitution. Congress delegated some emergency tariff authority to the president, but not enough to create a permanent new scheme of revenue. The Supreme Court confirmed this basic rule in February 2026.
[Read: Congress might be about to hand Trump sweeping tariff powers]
The situation will continue to get worse. The Trump administration estimates that the Iran war has cost about $45 billion. That figure covers operational costs such as fuel and munitions. But in March, the Pentagon requested an additional $200 billion to meet a wider range of war-related needs, and Trump’s fiscal budget for 2027 seeks $1.5 trillion for the U.S. military, up 44 percent from pre-Iran-war levels.
Trump’s One Big Beautiful Bill Act reduced income taxes on Social Security benefits, and Trump’s inflation has driven increases in Social Security’s cost-of-living adjustment. The Social Security trust fund is now projected to be exhausted in 2032, forcing either big tax increases or big benefit cuts.
An early warning that Trump’s monetary promises should not be trusted came at that same 2024 St. Cloud rally where Trump promised no cuts to Social Security, when Trump stiffed the town with $209,000 in event fees. As the midterm elections near, Trump has accused the Democrats of threatening the country’s economy with socialism and communism. Yet his administration has managed to wreck the country’s finances worse than any government in U.S. history, without the excuse of an economic crisis or a successful major war. October 1 marked the start of America’s fiscal new year. A new Congress will face a new fiscal reality.