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US National Debt Surpasses $40 Trillion, Sparking Fiscal Crisis Warnings
• The U.S. national debt has exceeded $40 trillion for the first time, more than doubling since early 2017.
• Debt service costs have now eclipsed Medicare spending, becoming the federal budget's second-largest line item.
• Bipartisan spending under Trump and Biden, including pandemic relief and major legislation, accelerated the debt trajectory.
• Waning foreign demand for Treasuries and rising bond yields signal growing market concern over U.S. fiscal health.
WASHINGTON — The United States has crossed a sobering fiscal milestone, with the Treasury Department confirming the national debt has surpassed $40 trillion for the first time. This figure, which includes securities held by the public and intragovernmental holdings, has more than doubled in less than a decade, escalating warnings from budget watchdogs that the nation is on an unsustainable course.
The rapid accumulation stems from a confluence of bipartisan policy decisions and systemic pressures. Since President Donald Trump’s first inauguration in 2017, the debt has ballooned from $19.95 trillion, with significant increases during both administrations. Major drivers include trillions in emergency COVID-19 response spending and substantial legislative packages, such as President Biden’s infrastructure and clean energy investments. According to the nonpartisan Committee for a Responsible Federal Budget, the choices of both presidents have pushed the debt far beyond the trajectory projected under existing laws when they took office. Notably, the debt surged from $39 trillion to $40 trillion in under five months.
This escalating debt burden is now directly straining the federal budget and the broader economy. For the first time in the 2025 fiscal year, interest payments on the debt exceeded Pentagon funding. In the current 2026 fiscal year, interest costs have surpassed Medicare outlays, becoming the government's second-largest expense after Social Security. "Forty trillion dollars of debt doesn't exist solely on the government's ledgers; it is felt throughout the economy," stated Maya MacGuineas, president of the Committee for a Responsible Federal Budget. She warned that excessive borrowing exacerbates inflation, crowds out other priorities, and increases vulnerability to economic shocks.
Market signals and international appetite for U.S. debt are flashing warning signs. Yields on long-term Treasury bonds recently hit multi-decade highs as investors demand greater compensation for risk, partly due to heavy government issuance. Concurrently, demand from foreign investors, who hold nearly a third of Treasuries, has been declining. This places more bonds with price-sensitive domestic buyers, potentially exacerbating market volatility. With the Congressional Budget Office projecting that recent legislation, including the Trump-era "One Big Beautiful Bill Act," will add trillions more to the debt, economists urge that lawmakers must soon confront the need for tax increases, spending cuts, or both to avert a full-blown fiscal crisis.