The US government's gross national debt has crossed USD 37 trillion, setting a new record and underscoring the growing strain on America's balance sheet and the mounting cost burden for taxpayers.
The latest Treasury Department report, released Tuesday, records the nation’s daily finances and confirms the milestone. This threshold was reached years earlier than pre-pandemic projections. In January 2020, the Congressional Budget Office estimated that gross federal debt would not surpass USD 37 trillion until after fiscal year 2030. However, the debt accelerated sharply due to the multi-year COVID-19 pandemic, which began in 2020 and shut down much of the US economy.
In response, the federal government borrowed heavily under then-President Donald Trump and former President Joe Biden to stabilise the economy and support recovery.
Additional spending has since been approved, including Republicans’ tax cut and spending package signed into law by Trump earlier this year. According to CBO estimates, the law will add USD 4.1 trillion to the national debt over the next decade.
Michael Peterson, Chair and CEO of the Peter G. Peterson Foundation, warned that government borrowing increases pressure on interest rates, adding costs for consumers and reducing private sector investment. Within the federal budget, he said, the debt displaces other priorities and fuels a cycle of more borrowing, higher interest costs, and further debt accumulation.
Wendy Edelberg, senior fellow in Economic Studies at the Brookings Institution, noted that Congress plays a decisive role in shaping spending and revenue policy. She said the Republicans’ tax law means the US will borrow heavily throughout 2026 and 2027, with no slowdown in sight.
The Government Accountability Office has outlined the consequences of rising national debt for Americans, including higher borrowing costs for mortgages and car loans, reduced wages as businesses cut investment, and more expensive goods and services.
Peterson also highlighted the pace of debt growth, saying trillion-dollar milestones are “piling up at a rapid rate”. The national debt hit USD 34 trillion in January 2024, USD 35 trillion in July 2024, and USD 36 trillion in November 2024. “We are now adding a trillion more to the national debt every five months,” he said, noting this is more than double the average pace of the past 25 years. The Joint Economic Committee estimates that at the current daily growth rate, another USD 1 trillion will be added in roughly 173 days.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said she hopes this milestone will spur policymakers into action, stressing the need for urgent measures to address the issue.
With inputs from AP
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