In July, the U.S. budget deficit surged, reaching its highest level since March 2021

The U.S. budget deficit jumped to the highest monthly level in more than five years amid a sharp increase in Medicare spending and continued pressure on the country’s finances from interest payments on federal debt, the Treasury Department said on Wednesday. In addition to the significant one-month spike, the cumulative deficit for the first 10 months of the government’s fiscal year rose to nearly $1.8 trillion. The deficit in July totaled $432.3 billion, about 48% higher than in the same period a year earlier, and the largest monthly deficit since March 2021.

Medicare spending for the month totaled $174 billion, up from $103 billion in June. These were the largest one-time outlays in July, far exceeding the $141 billion spent on Social Security and $104 billion in net interest payments on the national debt. Tariff refunds also hit the budget, costing $33 billion. In addition, the budget took a $99 billion hit because the first day of the month was a non-business day, which accelerated various benefit payments as well as payments for Supplemental Security Income and Medicare.