The United States’ gross national debt crossed $39 trillion on Tuesday, a grim new threshold that a prominent fiscal watchdog says reflects decades of irresponsibility from both Republicans and Democrats — with no signs that Washington is ready to change course.
“Surpassing $39 trillion in gross debt is an embarrassing milestone that both parties have helped build over decades, and neither seems particularly interested in addressing it before we hit $40 trillion,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget (CRFB), in a statement released Wednesday.
The figure, confirmed by the U.S. Treasury, marks a rapid escalation in the nation’s fiscal slide. The debt stood at $38 trillion as recently as late October of last year — meaning Washington added a full $1 trillion in gross debt in less than five months. Debt held by the public, the measure most closely tracked by economists, has separately surpassed $31 trillion for the first time.
The numbers paint a portrait of a government living far beyond its means. Annual deficits are approaching $2 trillion, and deficits as a share of the economy are running at roughly twice the 3%-of-GDP target that economists and bipartisan policymakers have long identified as a sustainable benchmark.
“No matter what metric one chooses to examine our fiscal trajectory, we are clearly headed in the wrong direction,” MacGuineas said.
The milestone arrives at a turbulent moment for the U.S. economy. Conflict with Iran has sent oil prices spiking, and some lawmakers have floated a gas tax holiday in response — a move that CRFB analysts estimate would cost billions of dollars per month and further balloon the deficit. Meanwhile, the CRFB recently warned that unilateral executive tax cuts under consideration could add hundreds of billions more to the debt.
MacGuineas argued that the consequences of the country’s fiscal drift are already being felt — and will get worse. “Higher debt exacerbates inflationary pressures, squeezes out investment in our economy, allows interest costs to dominate our defense spending, leaves us vulnerable to emergencies and geopolitical turmoil, and could even provoke a fiscal crisis,” she said.
The CRFB chief also flagged market risk as an underappreciated danger. “Markets are paying close attention to our fiscal situation, and every time we hit a new milestone, we risk spooking them,” MacGuineas warned. That concern is particularly acute given the geopolitical uncertainty already weighing on investor sentiment.
Bipartisan solutions have been floated but have yet to gain traction. The Fiscal Contingency Preparedness Act, introduced by Rep. Ben Cline (R-VA) and Rep. Jared Golden (D-ME), has built some momentum in the House, though it has not moved toward a floor vote. Former Sen. Mark Udall, a Colorado Democrat, and former Rep. Bob Beauprez, a Colorado Republican, have separately called for action on Social Security solvency — one of the key drivers of long-term debt.
MacGuineas outlined a list of concrete steps she said Washington must take: committing to no new borrowing, adopting a Super PAYGO rule requiring new costs to be paid for twice over, establishing a fiscal commission to broker a bipartisan debt deal, and shoring up the nation’s underfunded trust funds. She also called for a “Break Glass” emergency plan to be put in place in case a financial shock hits before legislators act, as the CRFB has recently recommended.
For now, $40 trillion — once unthinkable — is drawing into view. At the current pace of borrowing, it may not be far off.
For this story, Fortune journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing.
