WASHINGTON — The U.S. national debt surpassed $40 trillion Wednesday, reaching a record level as federal spending continues to exceed government revenue by more than $2 trillion annually.
The Treasury Department reported the new debt total in its daily financial update, about five months after the national debt crossed $39 trillion.
Margaret Spellings, president of the Bipartisan Policy Center, said the country’s current fiscal path remains unsustainable.
“Our current fiscal trajectory is plainly unsustainable, and that’s the best-case scenario,” Spellings said. “Even in the rosiest scenarios, we’re speeding toward a cliff and refusing to turn the wheel.”
Federal revenues have increased 3% during the current fiscal year, but spending has grown faster. The debt-to-gross domestic product ratio has also worsened since President Donald Trump returned to office.
The government now spends more than $1 trillion annually on interest payments, making interest the second-largest federal expense after Social Security. Interest costs during the first 10 months of the fiscal year were 15% higher than during the same period last year.
The Supreme Court’s decision to strike down many of Trump’s tariffs also increased pressure on the Treasury, which must refund more than $100 billion in import taxes collected under the tariffs.
The administration has defended its fiscal policies, pointing to efforts to reduce federal waste and increase economic growth.
Meanwhile, financial markets have reflected concerns about government borrowing. The yield on 30-year Treasury bonds reached a 19-year high this week, contributing to higher borrowing costs across the economy.
The average 30-year mortgage rate approached 6.7% last week, according to Freddie Mac.
Carolyn Bourdeaux, executive director of Concord Action, said the $40 trillion milestone should prompt Congress and the administration to address the growing debt.
“$40 trillion should be a wake-up call. But neither Congress nor the president have a credible plan to stop it from growing,” Bourdeaux said.
