WASHINGTON — The United States national debt crossed a record $40 trillion on Wednesday, a milestone reached just five months after the country hit $39 trillion in March and $38 trillion last October.
The figure underscores mounting pressure from defense spending, Social Security and Medicare, and rising interest payments on the deficit, which now make up an outsized share of federal outlays. It also reflects competing priorities within the Trump administration, from sustaining a nearly six-month-old war in Iran to lowering the cost of gas and groceries for American households.
White House spokesman Kush Desai defended the administration’s fiscal approach, saying it « has been focused on slashing waste, fraud, and abuse in federal spending while accelerating economic growth to get America’s debt-to-GDP ratio trending in the right direction. »
But economists warn the swelling debt is already hitting consumers. Higher borrowing costs for mortgages and auto loans, depressed wages from cash-strapped businesses, and more expensive goods and services are among the consequences being felt across the economy.
« If we want to improve our living standards, today and for the next generation, now is the time for lawmakers to put our nation on a more affordable and sustainable path, » said Michael A. Peterson, CEO of the Peter G. Peterson Foundation, a think tank focused on U.S. fiscal policy.
The debt has grown across multiple administrations as the government routinely spends more than it collects in taxes. Heavy borrowing during the COVID-19 pandemic — under both Trump’s first term and former President Joe Biden — helped stabilize the economy, and additional spending followed last year’s Republican tax-cut and spending legislation signed by Trump.
Margaret Spellings, president and CEO of the Bipartism Policy Center, said the long-term trajectory of borrowing more and paying more in interest will force Americans into harder fiscal tradeoffs.
« The federal debt is already raising the cost of living and choking out other spending and investment, threatening our economy and Americans’ long-term prosperity, » Spellings said. « Our current fiscal trajectory is plainly unsustainable, and that’s the best-case scenario. AI disruption, a recession, global war, or any number of other events could quickly push us over the edge from a challenge into a full-blown crisis. »
Congress sets the statutory debt limit, and the Bipartism Policy Center estimates the U.S. will most likely hit the $41.1 trillion ceiling sometime between late winter and mid-summer of 2027, forcing lawmakers to again vote on whether to raise or suspend it.
According to recent analysis by the Organization for Economic Co-operation and Development, the United States now has the worst fiscal position among developed nations.