Total U.S. public debt surpassed $40 trillion for the first time, reaching $40.047 trillion on Tuesday according to the Treasury Department. The milestone arrives less than five months after hitting $39 trillion, driven by ongoing deficits, tax cuts, and rising costs for social safety-net programs and interest payments.
The federal government’s mounting financial obligations have more than doubled in less than a decade, jumping from $19.95 trillion when President Donald Trump took office in January 2017. Roughly one-third of that rapid expansion stems from two years of emergency borrowing during the COVID-19 pandemic under both Trump and former President Joe Biden. The remainder is fueled by long-running structural imbalances between federal tax revenues and spending, alongside policy choices from both administrations.
Tracking the $11.6 Trillion Debt Growth Across Two Trump Terms and Biden’s Presidency
Public debt rose by $7.8 trillion during Trump’s first term in the White House, with more than half of that accumulation occurring during the final nine months of pandemic response spending. Since Trump returned to office in January 2025—noted in Reuters reporting as his second term beginning in January 2025—the debt load has expanded by an additional $3.8 trillion, bringing his total accumulated debt growth across two terms to $11.6 trillion.
During Joe Biden’s four-year term, public debt increased by $8.4 trillion. That period featured heavy recovery spending from the pandemic alongside expensive outlays for infrastructure investments and clean energy subsidies championed by Democrats. Meanwhile, the nonpartisan Committee for a Responsible Federal Budget notes that the policy choices of both leaders pushed the debt trajectory well past the baseline of existing spending statutes.
Trump has largely ignored the dwindling faction of fiscal hawks within his Republican Party, championing high spending across his time in office. According to the Congressional Budget Office, Trump’s landmark second-term legislative package, the One Big Beautiful Bill Act, is projected to add another $4.7 trillion to the national debt.
Fiscal Watchdogs Sound Alarms Over Deficits and Running on Autopilot
Budget watchdogs spent weeks anticipating the milestone, warning that an unsustainable fiscal outlook could trigger a full-blown debt crisis unless lawmakers step in to raise taxes, cut spending, or enact both.
“Forty trillion dollars of debt doesn’t exist solely on the government’s ledgers; it is felt throughout the economy and finds its way to the pocketbooks of people one way or another.”
Maya MacGuineas, president of the Committee for a Responsible Federal Budget
MacGuineas added that the $40 trillion figure was reached less than five months after crossing the $39 trillion threshold, noting that the national debt has quadrupled in less than 20 years after taking until 1981 to reach its first trillion. At the Bipartisan Policy Center, CEO Margaret Spellings pointed to systemic structural problems in the federal ledger.
“Our federal programs spend much more than the government takes in, and the biggest-ticket items in the federal budget are all running on autopilot.”
Margaret Spellings, CEO of the Bipartisan Policy Center
Spellings warned that federal debt is already raising the cost of living and choking out vital economic investments.
Bond Market Pressures and Rising Yields on Long-Term Treasuries
Global creditors are showing signs of hesitation as massive U.S. bond issuance hits the market. Foreign investors, who hold nearly one-third of all Treasuries, have reduced their demand over the past year. This shift leaves more debt absorption to price-sensitive buyers, a dynamic that can amplify market volatility according to John Canavan, lead financial market analyst at Oxford Economics.
The strain showed clearly in recent auction results. Following a $25 billion auction of 30-year Treasury bonds that cleared at the highest yield since 2021, yields on long bonds hit their highest levels in nearly two decades as investors demanded greater compensation for holding government debt. Concurrently, the term premium for 10-year Treasuries rose to a more than twelve-year high.
To counter the climbing yields, U.S. Treasury Secretary Scott Bessent announced a decisive intervention, doubling the size of buybacks for 10- to 30-year Treasuries to at least $4 billion per operation.
Record Deficits and the Clash Over Interest Rates
The soaring debt load runs parallel to mounting monthly deficits. The Treasury reported that July brought the fourth-highest monthly deficit in U.S. history at $432 billion. Customs receipts turned negative for the third month due to tariff refunds, while benefit outlays for Social Security and Medicare continued their steady climb. The deficit for the first 10 months of fiscal 2026 has already surpassed the entire gap recorded for fiscal 2025 with two months remaining.
Higher yields at the long end of the Treasury curve directly influence borrowing expenses for mortgages, commercial loans, and automobiles. Yet when asked at the White House whether Americans should be concerned about bond market volatility and elevated borrowing expenses, Trump dismissed the threat.
“I don’t think so at all. I think we have a very powerful country, and we’re powering through these ridiculous interest rates — they’re ridiculous. Look, when our country is strong, interest rates should go down.”
Donald Trump
While the administration highlights its cost-cutting efforts through the nongovernmental Department of Government Efficiency, those reductions focus primarily on discretionary programs—the smallest slice of federal spending—leaving the massive mandatory autopilot outlays untouched.
