The United States' national debt has passed $40 trillion for the first time. Total public debt outstanding reached $40.047 trillion on August 18, according to the Treasury Department's Debt to the Penny data, up from just under $39.99 trillion a day earlier.
The threshold arrived faster than most forecasters expected. The debt has grown by roughly $1 trillion in the past five months and has more than doubled over the past decade, a run-up that spans administrations of both parties and reflects pandemic-era spending, tax cuts, and rising benefit and interest costs. CNBC reported that borrowing over the past year averaged more than $7 billion per day, and that this year's shortfall has been worsened by revenue lost when courts struck down a swath of tariffs the Trump administration had counted on.
Interest is now one of Washington's biggest bills
The cost of carrying the debt has become a budget item to rival the largest federal programs. Interest payments now exceed US defense spending and account for roughly 15 percent of all federal outlays. The Congressional Budget Office projects net interest costs of about $1 trillion in fiscal 2026, around 3.3 percent of gross domestic product, which would exceed the previous high set in 1991, and sees the figure more than doubling by 2036 as deficits of roughly $2 trillion a year persist.
Debt held by the public, the measure economists watch most closely because it excludes money the government owes itself, stood at $32.3 trillion, per the Treasury data.
Treasury doubles buybacks to steady the long end
The milestone landed on the same day Treasury Secretary Scott Bessent moved to support the market where the strain has been most visible: long-dated bonds. The department said that, effective September 9, it will double its liquidity-support buyback operations in the 10-to-30-year sector, raising the maximum size per operation from $2 billion to at least $4 billion and increasing their frequency for the remainder of the quarter, which runs through early November.
Markets read the move as a signal that the Treasury will lean against disorderly rises in long-term borrowing costs. Yields on longer-dated Treasuries fell after the announcement, with the 30-year bond, which had been trading near multi-year highs above 5 percent, rallying alongside the 10-year note.
A familiar fight, higher stakes
In Congress, the round number has sharpened a long-running argument rather than settled it. Republicans have introduced legislation that would tie any future increase in the debt limit to matching spending cuts, casting the milestone as proof that outlays are the problem. Democrats counter that recent tax cuts have drained revenue and that cuts of the scale proposed would fall on health care and benefits. Both parties have presided over large deficits in the past decade, and neither has advanced a plan that would stabilize the debt as a share of the economy.
What has changed is the price of inaction. With interest rates well above the levels that prevailed when the debt passed $20 trillion in 2017, each new trillion is more expensive to carry than the last, and the interest bill increasingly competes with everything else the government does.
