US national debt tops $35 trillion, hitting new record
FILE - Pedestrians walk past a poster and electronic billboard displayed at 18th and K Sts NW that displays the U.S. National debt per person and as a nation at on July 5, 2023, in Washington, D.C. (Photo by Jemal Countess/Getty Images for the Peter
WASHINGTON - The U.S. national debt has topped $35 trillion for the first time in the nation's history.
Data shared by the Treasury Department showed that the gross national debt hit $35,001,278,179,208.67 on Monday. The milestone comes just months after the U.S. surpassed the $34 trillion threshold in early January 2024 – while the $33 trillion mark was reached in September 2023.
By comparison, the national debt hovered around $907 billion just four decades ago.
US national debt: What to know
The national debt enables the federal government to pay for important programs and services for the public, and the U.S. has carried debt since its inception, the Treasury Department states on its website. This includes debt incurred during the American Revolutionary War, which amounted to $75 million and was primarily borrowed from domestic investors and the French government for war materials.
Notable recent events that have triggered larger spikes in the national debt include the Afghanistan and Iraq Wars, the 2008 recession, and the COVID-19 pandemic, according to the Treasury Department.
From fiscal year 2019 to fiscal year 2021, spending increased by about 50% – largely due to the pandemic, the department notes on its website. This includes tax cuts, stimulus programs, increased government spending, and decreased tax revenue caused by widespread unemployment.
The U.S. topping $35 trillion in total debt comes as the debt held by the public – a metric favored by economists that excludes debt held in intragovernmental accounts like the Social Security trust funds – is projected to reach 99% of the size of the U.S. gross domestic product this year.
"This news is incredibly sobering – and incredibly unsurprising for anyone who has been following our fiscal trajectory," Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, said in a statement.
"Just last month the Congressional Budget Office warned Americans that debt held by the public is on its way to a new record share of the economy in three years. The deficit will be nearly $2 trillion this year and nearly $3 trillion in ten years," MacGuineas added.
The nonpartisan Congressional Budget Office (CBO) has projected the debt held by the public will reach a record level of more than 106% of GDP in 2027, breaking a nearly 80-year-old record set in 1946 when the U.S. was in the midst of the post-World War II demobilization.
From there, the debt-to-GDP ratio is projected to surge in the decades to come, according to FOX Business.
Federal budget deficits have widened in the last few years amid the rise in interest rates, which increases the net interest costs incurred by servicing the outstanding debt. Mandatory spending programs including Social Security and Medicare have exacerbated that trend, with the safety net programs facing rising costs amid the aging of America's population.
Congress and the winner of this year's presidential election will face a series of fiscal deadlines next year. The first will arrive on Jan. 1, 2025, with the current suspension of the debt limit set to expire – which will force lawmakers to debate another increase or suspension of the debt ceiling and potentially fiscal reforms while the Treasury Department uses "extraordinary measures" to avoid a default for a period of several months.
FOX Business contributed to this report.