Total U.S. public debt outstanding surpassed $40 trillion for the first time on Tuesday, according to the Treasury Department’s daily cash and debt balances statement. The figure stood at $40.047 trillion, with $32.266 trillion held by the public and $7.782 trillion in intra-governmental holdings.
The milestone caps a period of rapid debt accumulation that began when Donald Trump took office in January 2017, when the debt stood at $19.95 trillion. During Trump’s first term, public debt rose by $7.8 trillion, more than half of which was added in the final nine months of his presidency amid pandemic-related spending. Under Joe Biden, debt increased by $8.4 trillion. Since Trump’s return to office in January 2025, the debt has climbed by an additional $3.8 trillion, bringing total growth across his two terms to $11.6 trillion.
Federal borrowing has continued to expand despite elevated interest costs. The U.S. Treasury paid $1.1 trillion in interest on its debt in the latest fiscal year, a figure that now exceeds annual Pentagon spending. The monthly budget deficit reached $432 billion in July, the fourth-highest on record, while the deficit for the first 10 months of fiscal 2026 already exceeds the total shortfall recorded for all of fiscal 2025.
Treasury borrowing costs have risen in tandem with the debt load. A $25 billion auction of 30-year Treasury bonds on Tuesday drew the highest yield since 2021, reflecting increased investor demand for compensation amid persistent inflation and fiscal imbalances. In response, Treasury Secretary Scott Bessent announced plans to double the size of buyback operations for 10- to 30-year Treasuries to at least $4 billion per operation, up from prior levels.
Foreign investors continue to hold nearly one-third of all outstanding U.S. government securities, underscoring the global reliance on Treasuries as a benchmark asset. Analysts warn that the trajectory of debt accumulation, combined with higher borrowing costs, risks crowding out discretionary spending and investment while pressuring long-term economic growth.
Margaret Spellings, CEO of the Bipartisan Policy Center, said the milestone highlights a structural imbalance in federal finances. 'Our federal programs spend much more than the government takes in, and the biggest-ticket items in the budget are running on autopilot,' she said. 'Federal debt is already raising the cost of living and choking out other spending and investment, threatening our economy and Americans' long-term prosperity.'
