The total public debt of the United States (US) has crossed $40 trillion for the first time, US Treasury Department figures released on Wednesday showed. The national balance sheet reached $40.047 trillion on Tuesday, split between $32.266 trillion in Treasury securities held by the public and $7.782 trillion in intra-governmental holdings.
The national debt doubled in under ten years. In January 2017, when Donald Trump began his first presidential term, the debt stood at $19.95 trillion. Emergency spending during the COVID-19 pandemic under Trump and former President of US Joe Biden created roughly one-third of the current increase, alongside tax cuts, spending choices, and structural budget gaps.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, commented on the development directly following the release of the Treasury data. “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,” MacGuineas said.
“The more we borrow, the more we exacerbate inflation, squeeze out other priorities in the budget, and leave ourselves vulnerable to emergencies at home and turmoil abroad,” MacGuineas added.
The increase from $39 trillion to $40 trillion took under five months. Foreign investors, who hold nearly one-third of Treasuries, showed reduced demand over the past year.
Long-term bond yields hit their highest mark in nearly two decades on Tuesday following a $25-billion auction of 30-year Treasury bonds that posted the highest yield since 2021. In response, US Treasury Secretary Scott Bessent announced an increase in buyback amounts for 10- to 30-year Treasuries to at least $4 billion per operation to pull long-term yields down. Higher yields raise borrowing rates across mortgage, auto, and commercial loans.
When asked at the White House if Americans should worry about bond market volatility, Trump addressed the situation directly.
“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,” Trump said.
The Treasury logged a $432 billion deficit for July, marking the fourth-highest monthly deficit in US history.
Negative customs receipts from tariff refunds and rising spending on Social Security and Medicare drove the gap. The total deficit for the first 10 months of fiscal year 2026 surpassed the total deficit recorded for the entire 2025 fiscal year.
Public debt rose by $7.8 trillion across Trump’s first term, with over half accumulating during the final nine months of his administration during the pandemic response. Since Trump returned to office in January 2025, debt grew by another $3.8 trillion, bringing total debt growth under his two terms to $11.6 trillion.
Under Joe Biden’s single term, debt grew by $8.4 trillion, fueled by pandemic recovery efforts, infrastructure packages, and clean energy subsidies.
The Congressional Budget Office projects that Trump’s second-term legislative package, the One Big Beautiful Bill Act, will add $4.7 trillion to the total debt.
The administration launched job cuts across federal agencies through the Department of Government Efficiency, targeting discretionary spending. Discretionary spending represents the smallest segment of the annual $7 trillion federal budget. Mandatory spending programs like Social Security, Medicare, Medicaid, and veterans’ care account for 60 percent of the total budget.
Interest payments on US debt require $1.1 trillion annually. During the 2025 fiscal year, debt service costs surpassed Pentagon funding for the first time.
In the first 10 months of fiscal year 2026, interest costs surpassed Medicare spending, becoming the second-largest line item in the federal budget behind Social Security.
