The U.S. federal debt has surpassed $40 trillion for the first time, marking another sign of growing pressure on the government’s finances as borrowing and debt-servicing costs continue to rise.
According to data from the U.S. Treasury Department, total federal debt reached about $40.047 trillion on Tuesday, after increasing by roughly $1 trillion in less than five months. The government has also recorded a $1.8 trillion deficit during the first 10 months of the current fiscal year.
The milestone came sooner than previously expected. In May 2023, the Congressional Budget Office projected that the United States would surpass $40 trillion in debt during fiscal year 2028.
Michael Peterson, president and CEO of the Peter G. Peterson Foundation, said in comments cited by CNN that the national debt could reach $50 trillion within six years if the country remains on its current fiscal path. He noted that the debt stood at about $20 trillion less than a decade ago.
What is driving the rising debt?
Part of the increase is linked to higher spending on Social Security and Medicare as the U.S. population ages and the number of retirees grows.
Congress has also approved tax cuts and spending increases over the years that have contributed to the rising debt, along with major spending packages introduced during the COVID-19 pandemic.
According to the Congressional Budget Office, the One Big Beautiful Bill Act, signed by President Donald Trump in 2025, is expected to add about $4.7 trillion to the national debt.
Interest costs surpass defense spending
The cost of servicing the debt has also become an increasing burden on the federal budget, with interest payments expected to exceed $1 trillion during the current fiscal year, according to estimates cited by CNN.
Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget, said in comments cited by CNN that interest payments have become the federal government’s second-largest expense after Social Security, surpassing national defense spending.
Goldwein said the rising cost of servicing the debt leaves the government with less room to fund other programs and priorities.
Rising bond yields add pressure
The $40 trillion milestone comes as yields on U.S. Treasury bonds have also climbed. The yield on the 30-year Treasury bond reached its highest level since 2007 on Tuesday, while the 10-year yield approached its highest level of President Donald Trump’s second term.
The 10-year Treasury yield influences borrowing costs across the U.S. economy, including mortgages, auto loans and business financing. Higher yields can therefore increase borrowing costs for households and companies.
The Treasury Department announced Wednesday that it would increase its purchases of long-term bonds, as markets continue to face elevated yields.
Moody’s also downgraded the United States’ credit rating in 2025, stripping the country of the last perfect credit rating it held.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement following the Treasury data that the size of the national debt affects the broader economy and Americans’ finances. She warned that continued borrowing could add to inflationary pressures, squeeze funding for other priorities and leave the U.S. more vulnerable to economic shocks.
The United States continues to borrow to cover the gap between government spending and revenue, while the rising cost of servicing the debt has become one of the federal government’s largest financial burdens.