U.S. national debt tops $40 trillion

The U.S. national debt has climbed past $40 trillion for the first time, Treasury Department data show, marking a new fiscal milestone as federal borrowing and interest costs continue to rise.

The Treasury Department’s daily financial report showed the nation’s debt reached $40.05 trillion on Aug. 18, more than double its level in 2017, according to CBS News. NPR reported that the debt crossed the $40 trillion mark Wednesday, just five months after it surpassed $39 trillion.

The debt has grown as federal spending has outpaced revenue, forcing the government to borrow to cover the gap. NPR reported that spending is exceeding revenue by more than $2 trillion a year. Government revenues have grown 3% this fiscal year, NPR reported, but spending has increased faster.

“We’ve been running deficits for the last 26 years, and we’ve basically ignored a lot of the structural challenges that exist in our budget that are very well known,” Michael Peterson, CEO of the nonpartisan Peter G. Peterson Foundation, told CBS News. “It’s clearly been accelerating because, like any debt problem, the longer you ignore it, the worse it gets.”

Interest payments are taking up a growing share of the federal budget. CBS News reported that net interest costs approached $1 trillion in 2025 and accounted for nearly 14% of federal spending. The U.S. government now spends more on servicing its debt than on national defense or Medicare, CBS News reported. NPR reported that the government is spending more than $1 trillion a year on interest and that interest is now its second-biggest expense, behind Social Security.

Interest costs in the first 10 months of this fiscal year were 15% higher than during the same period a year earlier, NPR reported, reflecting both the larger debt and higher interest rates demanded by investors. The yield on 30-year Treasuries reached a 19-year high this week, NPR reported, while the average 30-year mortgage rate neared 6.7% last week, according to Freddie Mac.

“If the Treasury rate is going up, that means your mortgage rate is going up, your car loan is going up, your credit card rates are going up,” Peterson told CBS News.

Analysts cite several causes for the rising debt. An aging population has increased the cost of Social Security and Medicare, while other spending, including interest payments, has also grown. CBS News reported that tax cuts over the last two decades have reduced federal revenue, and the Congressional Budget Office estimates that the Trump administration’s One Big Beautiful Bill, passed last year, will add $4.2 trillion to the national debt through fiscal year 2034.

CBS News also reported that larger economic crises, including the 2008 Great Recession and the COVID-19 pandemic, caused spikes in the debt. NPR reported that the deficit widened after the Supreme Court struck down many of President Trump’s tariffs, forcing the Treasury to refund more than $100 billion in import taxes that had been collected illegally.

The White House blamed the deficit on Democrats. “President Trump pledged to clean up Joe Biden’s fiscal mismanagement,” White House spokesman Kush Desai told NPR. “That’s why the Trump administration 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 again.” NPR reported that the debt-to-GDP ratio has worsened since Trump returned to the White House.

Some fiscal policy advocates warned that the debt trajectory could make the U.S. more vulnerable. “Our current fiscal trajectory is plainly unsustainable, and that’s the best-case scenario,” Margaret Spellings, president of the Bipartisan Policy Center, told NPR. In an email to CBS News, she said events such as “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.”

Others are less alarmed. Dean Baker, co-founder of the Center for Economic and Policy Research, told CBS News the more immediate economic threats are tariffs and the Iran war’s impact on prices. He said the strong U.S. economy should allow the government to keep carrying the burden and added, “the government debt isn’t the biggest factor, and probably not even a major factor” in the risk of foreign money leaving U.S. markets.

The Peterson Foundation estimates the debt could reach $50 trillion in six years without spending or tax reforms.