Background

The federal budget deficit is the difference between government spending and revenue in a fiscal year. The last time it went to $0 was during the Clinton Administration. During Trump's first term (2017-2021), the deficit increased from $665 billion in FY2017 to $3.1 trillion in FY2020 (largely due to tax cuts and COVID-19 spending) and $2.8 trillion in FY2021. According to the latest Monthly Budget Review from the Congressional Budget Office (CBO), the current budget deficit is $838 billion.

Trump's second term will run from January 20, 2025, to January 20, 2029, with fiscal years spanning from October 1 to September 30. What will the federal budget deficit be at the end of the last fiscal year of his presidency?

Key factors that may influence the deficit during Trump's second term include:

• Proposed tax policies, including potential extensions of the 2017 Tax Cuts and Jobs Act provisions set to expire in 2025

• Tariff policies and their impact on trade and revenue

• Spending priorities across defense, infrastructure, and social programs

• Economic growth rates and their effect on tax revenues

• Interest rates and the cost of servicing the national debt, which has surpassed $35 trillion

Resolution Criteria

This market will resolve to the federal budget deficit for the last complete fiscal year of Trump's second administration (e.g. FY2029, ending September 30, 2029), as officially reported by the Congressional Budget Office in the Monthly Budget Review publication published for that month. If the Congressional Budget Office no longer exists or is no longer estimating the budget deficit on a monthly basis, the best suitable nonpartisan source will be found.

If Trump does not complete his term or if his administration extends beyond the current second term, the market will resolve based on the deficit for the fiscal year in which his presidency ends.

The deficit will be the official figure as initially reported, not including any subsequent revisions.