The total national debt of the United States has hit $38 trillion, an unwelcome milestone that comes as lawmakers grapple with a looming fiscal reckoning.
The unwanted achievement comes amid a government shutdown and was reflected in the Treasury Department’s daily updates to the national debt. The federal debt per citizen has now climbed to over $110,000.
Republicans and some centrist Democrats have sounded the alarm about the growing debt and deficits, with the debt first crossing the $1 trillion mark in 1981. But lawmakers have done little to reduce debt and deficits, although Republicans have long called for spending cuts.
“Grow the economy and cut spending,” Sen. Steve Daines (R-MT) said in response to the Washington Examiner asking about what should be done given the new $38 trillion figure.
TIM SCOTT BALANCES SENATE POLICY AND GOP POLITICAL ROLES
Rep. Laurel Lee (R-FL) told the Washington Examiner: “Our national debt isn’t just a number — it’s a reflection of priorities. Too often, Democrats in Washington treat government spending as limitless, but that path threatens our long-term economic stability. It’s time to bring serious, responsible budgeting back to the forefront.”
Michael A. Peterson, CEO of the Peter G. Peterson Foundation, said that the national debt is on a worrying trajectory. He pointed out that the U.S. is adding debt at a fast pace, twice as fast as the rate of growth since 2000.
“Along with increasing debt, you get higher interest costs, which are now the fastest growing part of the budget,” Peterson said. “We spent $4 trillion on interest over the last decade, but will spend $14 trillion in the next 10 years. Interest costs crowd out important public and private investments in our future, harming the economy for every American.”
Indeed, earlier this month, the nonpartisan Congressional Budget Office estimated that the net interest on the public debt was $1.03 trillion in fiscal 2025, up from $949 billion in fiscal 2024. That marks the first time that interest payments have passed the $1 trillion level.
Sen. Dan Sullivan (R-AK) told the Washington Examiner on Wednesday that lawmakers need to make decisions that fiscally responsible. He also pointed out how interest payments have crossed $1 trillion.
“Think about a trillion dollars in debt — that’s not going to an icebreaker, a road in Alaska,” Sullivan said.
The CBO also estimated earlier this month that the federal budget deficit for fiscal 2025 was $1.8 trillion. Tax revenue increased by just over $300 billion, but spending also increased by about the same amount, according to the CBO.
At $1.8 trillion, the deficit is roughly 6% of GDP — a ratio that, before 2023, was never seen during peacetime, other than during the 2008 financial crisis and the onset of the pandemic.
Romina Boccia, director of budget and entitlement policy at the libertarian Cato Institute, said that the U.S. is growing debt at a “crisis pace.”
“Normally, debt doesn’t grow this fast unless we’re in the middle of a major financial crisis like the Great Recession, or doing a lot of emergency stimulus spending, like we did during the COVID-19 pandemic,” she told the Washington Examiner.
It is worth noting that while the government shutdown and situation with the national debt are not directly linked, there are tie-ins.
For instance, amid the shutdown, Democrats have been demanding the reinstatement of expiring Obamacare subsidies and are hoping to withhold their votes to reopen the government as leverage to get concessions from the GOP. Boccia said those subsidies are a small contributor to the growth of the national debt, to the tune of $400 billion over a decade.
Solutions to righting the country’s financial ship might be difficult. That is, in part, because any major solution would involve decisions that might be politically painful for the lawmakers involved, even if there have been some attempts at forming a bipartisan fiscal commission.
Additionally, while relatively marginal, the current government shutdown could actually increase the debt compared to the baseline.
GOVERNMENT SHUTDOWN WILL ADD TO THE FEDERAL DEBT
Mark Hamrick, senior economic analyst at Bankrate, said that there is “very little political will” in Washington to reverse the current trend.
“Essentially, Congress has been spending as if there is no tomorrow, and there is literally a bill to be paid for that,” Hamrick told the Washington Examiner.
