US national debt tops $40 trillion for first time
US public debt has crossed $40 trillion, doubling in under a decade amid pandemic spending, tax cuts, and rising interest costs.
The total US public debt has surpassed $40 trillion for the first time, according to the Treasury Department's latest daily statement. The figure stood at $40.047 trillion on Tuesday, comprising $32.266 trillion in securities held by the public and $7.782 trillion in intra-governmental holdings.
The milestone marks a doubling of the federal debt in less than ten years, from $19.95 trillion when President Donald Trump first took office in January 2017. Roughly a third of that increase came from emergency borrowing during the COVID-19 pandemic under both Trump and former President Joe Biden. The rest stems from long-running gaps between government spending and revenue, compounded by tax cuts that have limited income.
Fiscal watchdog groups had anticipated the crossing for weeks and warn of a brewing crisis. Margaret Spellings, CEO of the Bipartisan Policy Center, said the milestone underscores a fundamental mismatch between what federal programs spend and what the government collects. She noted that major budget items are on autopilot, raising living costs and crowding out other investment.
Market signals suggest growing investor caution. Yields on long-term Treasury bonds recently hit levels not seen in nearly two decades, and the term premium for 10-year notes rose to its highest in over a dozen years. Foreign investors, who hold nearly a third of US debt, have reduced their purchases over the past year, potentially increasing market volatility.
In response, Treasury Secretary Scott Bessent announced a doubling of buyback sizes for 10- to 30-year Treasuries to at least $4 billion per operation.
The debt has grown by $11.6 trillion across Trump's two terms, including $3.8 trillion since his return to office in January 2025. Biden's single term added $8.4 trillion, driven by pandemic recovery, infrastructure, and clean energy spending.
The Congressional Budget Office estimates Trump's second-term tax and spending package, the One Big Beautiful Bill Act, will add another $4.7 trillion. Interest payments now exceed Medicare outlays, making debt service the second-largest federal budget line item after Social Security.