US Treasury Chief Says Growth, Not Cuts Alone, Will Address $40 Trillion Debt

US Treasury Secretary Scott Bessent has said the country will need to "grow our way out" of its record $40 trillion national debt, signaling a reliance on economic expansion rather than austerity alone to address the fiscal challenge.

Speaking to reporters outside the White House, Bessent acknowledged the scale of the figure but noted that a substantial portion is held by government entities like social security funds. He reiterated plans to discuss a US growth strategy at the G20 and encourage global partners to follow suit.

Bessent also addressed recent market volatility, calling short-term bond movements "noise." He expressed confidence that markets would stabilize as the Treasury focuses on fiscal consolidation, particularly in thinly traded conditions. He attributed part of the recent deficit increase to substantial tariff refunds ordered by a court ruling, but said Section 301 tariffs would restore income to previous levels or higher.

The $40 trillion milestone comes just five months after the debt crossed $39 trillion, and five months after that, it had reached $38 trillion. The rapid increase reflects heavy federal spending on defense, social programs, and interest payments.

Bessent also defended the Treasury's expanded bond buyback program, which helped push longer-term yields lower. Global yields had earlier spiked due to rising oil prices linked to the conflict with Iran and concerns over government debt levels. Bessent suggested the administration's economic actions would eventually bring oil prices down.