US national debt hits record USD 40 trillion as spending pressures mount

The US national debt crossed USD 40 trillion as government spending stayed elevated. Economists warn the surge is lifting borrowing costs and narrowing future fiscal choices.Stock photo used for illustrationThe United States' national debt crossed a record USD 40 trillion on Wednesday, underlining the pressure on federal finances as defence costs, social programmes such as Social Security and Medicare, and interest payments on the growing deficit account for a large share of government spending.The latest milestone came just five months after the US debt touched USD 39 trillion in March. It had earlier reached USD 38 trillion five months before that, in October, showing the pace at which the debt has risen.The USD 40 trillion figure also reflects competing priorities for the administration, from increasing defence spending that the US relies on to carry out President Donald Trump's nearly six-month-old Iran war to lowering the cost of gas and groceries.Kush Desai, a White House spokesman, said 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." However, experts said the rising debt and the latest record level are already affecting Americans by pushing up borrowing costs for mortgages and cars, lowering wages as businesses have less money available to invest, and making goods and services more expensive.Advocates of a balanced budget have also warned that the long-term pattern of borrowing more and paying more in interest will force tougher fiscal choices in the future. "The federal debt is already raising the cost of living and choking out other spending and investment, threatening our economy and Americans' long-term prosperity," said Margaret Spellings, president and CEO of the Bipartisan Policy Center. "Our current fiscal trajectory is plainly unsustainable, and that's the best-case scenario. AI disruption, a recession, global war, or any number of other events could quickly push us over the edge from a challenge into a full-blown crisis," Spellings said in a statement.The US is subject to a statutory debt limit, which Congress has the authority to set, adjust or abolish. The Bipartisan Policy Center has estimated that the country will most likely hit the debt limit of USD 41.1 trillion sometime between late winter and mid-summer of 2027, which would require Congress to again vote on whether to raise or suspend it. Recent data analysis from the Organisation for Economic Co-operation and Development also showed that the US fiscal position is the weakest among developed countries, underscoring the scale of the challenge as debt continues to climb.With PTI Inputs- EndsPublished By: India Today Web Desk Published On: Aug 20, 2026 02:56 IST