Donald Trump’s pledge to impose fiscal restraint has been overtaken by a surge in US government borrowing, with the national debt passing $40 trillion as rising bond yields increase the cost of servicing it.
Treasury figures showed total public debt outstanding reached about $40.05 trillion on 18 August, a milestone recorded less than five months after the $39 trillion threshold was crossed. The debt ceiling is set at roughly $41.1 trillion, a level the Treasury is expected to approach early next year.
The development comes before November’s midterm elections, when voters will decide whether Republicans retain control of Congress for the second half of Mr Trump’s final term. It also places renewed pressure on lawmakers to address deficits that have continued to widen despite promises to reduce government spending.
Mr Trump returned to the White House promising to shrink the federal government, end costly foreign wars and rely on faster economic growth to bring the deficit under control. Instead, federal spending has risen and the cost of borrowing has increased as investors demand higher returns on US government bonds.
Yields on longer-term Treasury securities have reached their highest levels in years. That has consequences beyond Washington, since government borrowing costs help influence mortgage rates and other consumer lending costs across the US.
The Committee for a Responsible Federal Budget estimates that legislation approved during Mr Trump’s first term added $8.4 trillion in projected borrowing over a decade. The Congressional Budget Office has separately estimated that his 2025 reconciliation law would add roughly $4.5 trillion to deficits over the following ten years once higher interest costs are included.
Mr Trump’s administration has defended its record, pointing to the dismissal of thousands of federal workers and efforts to eliminate what it describes as wasteful programmes. However, a Government Accountability Office review found that the Department of Government Efficiency’s reported $110 billion in savings included figures that were incorrect, unsupported or difficult to verify.
The agency said it could not validate 96 per cent of the savings claimed from grants because DOGE had not supplied enough information about its calculations. In one case, DOGE reported $1.7 billion in savings from a Defence Department contract even though no action had been taken to terminate the agreement or reduce its value.
Rising borrowing costs add to US debt pressure
Budget specialists warn that the combination of large deficits, higher interest rates and rising spending commitments will leave Congress facing increasingly difficult choices. Those could include tax increases or reductions to programmes such as Social Security and Medicare, which have long been politically sensitive.
The administration has argued that stronger growth will improve the fiscal outlook. Critics say tax reductions have not been matched by sufficiently large spending cuts, leaving the United States more exposed to higher interest payments and weakening confidence in its ability to stabilise the debt.
With the national debt now above $40 trillion, the issue is expected to become harder to avoid as the election approaches and the government moves closer to the statutory borrowing limit.
