The federal government’s total debt has climbed past $40 trillion for the first time, according to Treasury Department figures published on Wednesday, August 19, a milestone that budget analysts had been watching for weeks.
The Treasury’s daily statement of cash and debt balances put total public debt outstanding at $40.047 trillion as of Tuesday. That figure combines $32.266 trillion in Treasury securities held by the public and $7.782 trillion in intragovernmental holdings, which are largely debts the government owes to its own trust funds, Reuters reported in a story carried by NBC News.
The new mark arrived roughly five months after the national debt first topped $39 trillion in March, NPR reported. CNBC noted that the total stood about four and a half years removed from crossing $30 trillion.
More than doubled in under a decade
When President Donald Trump took office for his first term in January 2017, the debt totaled $19.95 trillion. It has since more than doubled. According to Reuters, about a third of that increase came during two years of heavy pandemic borrowing under Trump and former President Joe Biden, while policy choices by both administrations and long-standing gaps between spending and revenue account for the rest.
Public debt rose by $7.8 trillion during Trump’s first term and by $8.4 trillion during Biden’s term. Since Trump returned to the White House in January 2025, the debt has grown by another $3.8 trillion. The Congressional Budget Office has estimated that the One Big Beautiful Bill Act, Trump’s signature second-term legislative package, will add $4.7 trillion to the debt.
The government now spends more than $2 trillion a year beyond what it collects, NPR reported. Revenue has grown 3% so far this fiscal year, but spending has risen faster.
A large July deficit
Treasury’s most recent monthly report showed a deficit of about $432 billion for July. CNBC said that was the largest monthly shortfall since March 2021, and Reuters described it as the fourth-highest monthly deficit on record. Refunds of tariffs struck down by the Supreme Court pushed customs receipts below zero for a third consecutive month, according to Reuters, and NPR reported that the ruling forced the Treasury to return more than $100 billion in import taxes.
The deficit for the first 10 months of fiscal 2026 has already surpassed the gap for all of fiscal 2025, with two months still remaining in the fiscal year.
Interest becomes a top expense
Paying interest on the debt now costs the government more than $1 trillion a year. In the first 10 months of the 2026 fiscal year, interest expenses overtook Medicare outlays to become the second-largest item in the federal budget, behind only Social Security. NPR reported that interest costs over that period ran 15% higher than in the same stretch a year earlier.
Investors have been demanding higher returns to lend to Washington. The yield on the 30-year Treasury bond reached a 19-year high this week, and CNBC noted that yields have surged since late June. On Wednesday, Treasury Secretary Scott Bessent announced the department would double the size of its buybacks of 10-year to 30-year Treasuries to at least $4 billion per operation, an effort to bring long-term yields down.
Foreign investors, who hold close to a third of all Treasuries, have reduced their demand over the past year, according to John Canavan, lead financial market analyst at Oxford Economics, as cited by Reuters. Higher long-term rates tend to ripple through the economy. The average 30-year mortgage rate approached 6.7% last week, according to Freddie Mac.
Warnings and responses
Margaret Spellings, who leads the Bipartisan Policy Center, said the nation’s finances were on an unsustainable path. “Our current fiscal trajectory is plainly unsustainable, and that’s the best-case scenario,” she said, as quoted by NPR. “Federal debt is already raising the cost of living and choking out other spending and investment, threatening our economy and Americans’ long-term prosperity.”
Carolyn Bourdeaux, executive director of the fiscal responsibility group Concord Action, told NPR that “$40 trillion should be a wake-up call. But neither Congress nor the president have a credible plan to stop it from growing.”
The White House pointed to its spending efforts. “President Trump pledged to clean up Joe Biden’s fiscal mismanagement,” spokesman Kush Desai said in a statement reported by 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.”
The U.S. government spends roughly $7 trillion a year, and about 60% of that goes to mandatory programs such as Social Security, Medicare, Medicaid and veterans’ care, which generally rise automatically with costs and enrollment.
