The U.S. national debt has exceeded $40 trillion for the first time, driven by tax reductions and increased spending during Donald Trump's presidency. The milestone was reached within the first 19 months of his second term, according to official data.
Federal borrowing has expanded by $8.4 trillion under Trump’s first-term tax cuts and an additional $4.7 trillion under his second-term tax and immigration law, figures from the Committee for a Responsible Federal Budget and the Congressional Budget Office show. The surge coincides with rising borrowing costs, with yields on some U.S. bonds nearing peaks not seen in nearly two decades.
The administration has sought to address fiscal pressures through efficiency measures, including a pledge by Elon Musk to identify $2 trillion in budget cuts via the Department of Government Efficiency. However, the initiative ultimately delivered only $110 billion in savings, with the Government Accountability Office citing reliance on overstated or unverifiable claims. The White House defended the effort, stating Trump was the first president to systematically target waste, fraud, and abuse in federal spending.
Critics argue the fiscal trajectory reflects broader policy choices. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, described Trump’s record as fiscally unsustainable, noting that tax cuts were not paired with corresponding spending reductions. Romina Boccia of the Cato Institute added that Republicans increasingly favor alternative revenue-raising methods to avoid politically sensitive entitlement reforms.
The debt milestone arrives ahead of the November midterm elections, which will determine whether Republicans retain control of Congress for the remainder of Trump’s term. High borrowing costs have also contributed to elevated mortgage rates, while inflation continues to outpace wage growth, straining household budgets.
Federal Reserve Chair Kevin Warsh highlighted broader economic strains at the G20 finance ministers’ meeting, noting that heavy investment in artificial intelligence and technology firms is competing for capital with government borrowing, pushing yields higher and complicating fiscal management.
