US national debt soars past record $37 trillion — years sooner than expected

New York Post

17 hours ago

The US national debt has climbed past $37 trillion — a record sum that shows how quickly the federal government's borrowing has accelerated and how rising interest costs are rippling through the economy.
The new figure appears in a Treasury Department report released Tuesday that tracks the government's daily finances and shows the nation reaching the staggering threshold years sooner than previously expected.
In January 2020, the Congressional Budget Office projected that gross federal debt would not exceed $37 trillion until after fiscal 2030. Instead, the milestone arrived far earlier as deficits piled up faster than anticipated.
4 The US national debt has climbed to a record $37 trillion, years ahead of earlier projections.
FiscalData.Treasury.gov
The soaring debt is forecast to be exacerbated in the coming years after President Donald Trump signed into law his 'Big Beautiful Bill' which extends and enhances many tax cuts that he initially codified back in 2017.
After Trump signed Republicans' tax cut and spending package into law earlier this year, the CBO estimated the measure would increase the national debt by $4.1 trillion over the next decade.
The rapid run-up reflects emergency spending during the multi-year COVID-19 crisis, when the government borrowed heavily under Trump and his successor, Joe Biden, to prop up a shuttered economy.
The combination of prior pandemic borrowing and new legislation has intensified concerns about the pace of red ink and the government's growing interest payments.
Fiscal watchdogs warn the trend is creating tangible costs. Michael Peterson, chair and CEO of the Peter G. Peterson Foundation, told Fortune that government borrowing pushes interest rates higher, 'adding costs for everyone and reducing private sector investment.'
'Within the federal budget, the debt crowds out important priorities and creates a damaging cycle of more borrowing, more interest costs, and even more borrowing,' Peterson told Fortune.
4 Rising federal debt is seen by economists as a looming danger for the American economy.
trekandphoto – stock.adobe.com
He noted that trillion-dollar milestones are 'piling up at a rapid rate.'
The recent cadence is stark. Federal ledgers show the US hit $34 trillion in January of last year, $35 trillion in July 2024 and $36 trillion in November 2024.
'We are now adding a trillion more to the national debt every 5 months,' Peterson said.
'That's more than twice as fast as the average rate over the last 25 years.'
At the current average daily pace, the Joint Economic Committee estimates another $1 trillion could be added in roughly 173 days.
Economists say the borrowing path is largely set by legislative decisions on taxes and spending.
4 The US national debt continues to weigh on taxpayers and future government budgets.
AFP via Getty Images
Wendy Edelberg, a senior fellow in Economic Studies at the Brookings Institution, said Congress's latest actions mean deficits will remain elevated.
The Republicans' tax law, she said, 'means that we're going to borrow a lot over the course of 2026, we're going to borrow a lot over the course of 2027, and it's just going to keep going.'
The Government Accountability Office has outlined how sustained federal borrowing can filter through to households and businesses.
As debt swells and interest rates reflect greater Treasury issuance, consumers can face higher costs to finance mortgages and car loans.
Every morning, the NY POSTcast offers a deep dive into the headlines with the Post's signature mix of politics, business, pop culture, true crime and everything in between. Subscribe here!
Businesses may invest less when capital is more expensive, a drag that can translate into slower wage growth. Prices for goods and services can also feel pressure from higher financing costs embedded in supply chains, the GAO notes.
Underlying forces have made the budget picture more challenging over time.
The federal government has run chronic annual deficits — when spending exceeds tax revenue — adding to the debt year after year.
Demographic trends intensify that mismatch: as the baby-boom generation retires, spending on Social Security and Medicare rises steadily.
4 The growing debt burden reflects decades of borrowing to cover persistent budget deficits.
freshidea – stock.adobe.com
Health-care costs, which have historically grown faster than general inflation, further swell outlays for Medicare, Medicaid, and other programs.
On the other side of the ledger, tax revenues have not kept pace with these commitments, particularly following recent tax cuts and through economic cycles that depress receipts during downturns.
As debt compounds, interest payments consume a larger share of the budget, leaving less room for other priorities and creating a feedback loop in which more borrowing is required simply to service prior obligations.
Major shocks — wars, the 2008 financial crisis, and the COVID-19 pandemic — have added large chunks to the total through emergency measures.
The Post has sought comment from the Treasury Department.