WASHINGTON: US national debt has surpassed $40 trillion for the first time, according to the Treasury Department, as rising government spending, interest costs and persistent budget deficits deepen concerns over the country’s long-term fiscal position.
Treasury data showed total public debt outstanding reached $40.047 trillion on Tuesday. The figure includes $32.266 trillion in debt held by the public and $7.782 trillion in intragovernmental holdings.
The US debt has more than doubled from approximately $19.95 trillion in January 2017, when Donald Trump first took office. A significant portion of the increase occurred during the COVID-19 pandemic, when the Trump and Biden administrations undertook extensive borrowing to finance emergency economic support and recovery programmes.
Why has US debt risen so sharply?
The latest increase reflects a combination of long-running budget imbalances, higher government spending, pandemic-era borrowing and rising costs for programmes such as Social Security and Medicare.
The US recorded a $432 billion federal budget deficit in July, according to Treasury data. The deficit during the first 10 months of fiscal year 2026 has already exceeded the total deficit recorded during the whole of fiscal year 2025, with two months remaining.
Interest payments have also become a growing burden. The government is now spending roughly $1.1 trillion annually on interest costs, with debt-servicing expenses rising as the overall debt stock and borrowing costs increase.
During the first 10 months of fiscal 2026, interest costs surpassed Medicare spending, making debt interest the federal government’s second-largest budget item after Social Security.
How much debt has accumulated under Trump and Biden?
US public debt increased by approximately $8.4 trillion during Joe Biden’s four-year presidency, driven by pandemic recovery spending as well as major investments in infrastructure, clean energy and other federal priorities.
During Trump’s first term, public debt rose by about $7.8 trillion, with more than half of that increase occurring during the final months as the administration responded to the COVID-19 pandemic.
Since Trump returned to office in January 2025, the debt has increased by another $3.8 trillion, bringing the combined increase across his two terms to approximately $11.6 trillion.
Trump’s second-term spending legislation, known as the One Big Beautiful Bill Act, is projected by the Congressional Budget Office to add about $4.7 trillion to federal debt, further intensifying debate over the sustainability of US fiscal policy.
Meanwhile, longer-term Treasury yields have risen as investors demand greater returns for holding US government debt. Higher yields can feed into borrowing costs for households and businesses, including mortgages, automobile loans and commercial credit.
US Treasury Secretary Scott Bessent has responded by announcing larger Treasury buybacks aimed at supporting the market for longer-dated government bonds. Trump, meanwhile, has continued to call for lower interest rates, arguing that a strong US economy should support cheaper borrowing.
The $40 trillion milestone has renewed warnings from fiscal watchdogs that Washington will eventually have to confront the widening gap between government revenues and expenditures through some combination of spending reductions, higher revenues or structural reforms.