For the first time in U.S. history, the nation’s public debt has surpassed $40 trillion. The U.S. debt held by the public was $32.266 trillion and the intra-governmental debt was $7.782 trillion, for a total of $40.047 trillion of public debt outstanding, according to the Treasury Department’s latest daily cash and debt statement.
As of January 2017, the national debt has increased more than double since a decade ago from $19.95 trillion. The remaining 25% of the increase was due to the pandemic emergency borrowing under both the Trump and Biden administrations, while the remainder was due to structural tax and spending imbalances and large infrastructure spending bills.
Fiscal watchdog groups have alerted people to the economic peril of the debt path, because it took less than 20 years to increase the total debt to 4 trillion dollars after 1981 when it first hit the trillion-dollar mark. The debt markets were the other place where yields were recently at their highest in almost 20 years, due to increased demand for higher yields as the Federal government issues bonds at a brisk pace. To offset the market volatility, Treasury Secretary Scott Bessent said it would double the size of its buybacks of long-term Treasuries to at least $4 billion an operation.
The White House restated its hope for lower borrowing costs, saying that the strength of the economy would lower interest rates, while responding to queries about interest rates in the bond market.
This is the $40 trillion mark at the same time that monthly deficits are rapidly increasing. The federal government’s deficit climbed to a record $432 billion in July, partly because of net customs receipts that turned negative because of tariff refunds and higher amounts of benefits paid. The first ten months of FY26 shortfall has already exceeded the entire shortfall of FY25.
Projected deficits have continued to grow over time as a result of recent policy measures. According to nonpartisan analysis by the Congressional Budget Office, some of the big second-term legislative items such as the One Big Beautiful Bill Act will cost an additional $4.7 trillion to the national debt over the next decade.
Of the nearly $7 trillion in federal spending each year, mandatory programs make up about 60% of the total outlays. The requirements are largely carried out by the Social Security Administration for the retirement pensions and the Centers for Medicare & Medicaid Services for senior healthcare coverage, which are both expected to experience greater demands from the aging population.
At the same time, the net interest payments on the national debt have risen to $1.1 trillion a year. After overtaking spending on all defense programs in fiscal 2025, net debt service costs also are the second-largest federal program expenditure after Social Security for the first 10 months of fiscal 2026.
