US Budget Gap Shrinks 17% for First Third of 2026 Fiscal Year

Tariff revenue helped shrink the US budget deficit by 17% in the first four months of the fiscal year, showcasing one of the stakes for the administration as the Supreme Court weighs whether President Donald Trump had the authority to impose most of his duties.

The budget deficit fell to $697 billion for the four months through January from $840 billion for the same period the year before — a 17% decline. After adjusting for differences in the calendar, the deficit for fiscal 2026 so far declined 21%.

Revenues are climbing faster than spending, as receipts climbed 12% while outlays ...