The U.S. national debt has surpassed $40 trillion, a significant increase since President Donald Trump took office, coinciding with rising borrowing costs on U.S. debt.
In the first 19 months of his second term, federal spending has grown, and the cost of servicing the national debt has increased as yields on some U.S. bonds have reached their highest levels in nearly two decades. Budget experts warn that this fiscal trajectory could necessitate politically difficult decisions in the future, such as raising taxes or reducing social safety net programs like Social Security.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, stated, "There is no scenario in which one could look at the record of President Trump in both this term and the previous term, and declare it a fiscal success." She added that while the initial path to the current fiscal situation was not solely his responsibility, the lack of subsequent action to improve it falls on lawmakers, with the president playing a central role in setting the agenda.
The milestone debt figure comes ahead of the November midterm elections. While voters may not immediately focus on fiscal issues until they manifest as benefit cuts or tax increases, the economic impact is felt through high mortgage interest rates and inflation outpacing wage growth.
Trump's administration has seen increased spending. His first-term tax cuts are estimated by the Committee for a Responsible Federal Budget to have added $8.4 trillion to the debt, while his second-term tax and immigration law added an estimated $4.7 trillion, according to the Congressional Budget Office. The White House, however, maintains that Trump's administration took steps to reduce waste, fraud, and abuse within the federal government through workforce reductions and program eliminations.
While Trump and congressional Republicans achieved a marginal reduction in the annual deficit in 2025, the overall national debt continued its upward trend. The notes also indicate a broader context of decades of deficit expansion, with both Republican and Democratic administrations contributing through tax cuts, wars, and stimulus packages. Demographic shifts, including the retirement of the baby boomer generation, are also placing strain on programs like Social Security and Medicare.
President Trump's administration has also shifted the U.S. revenue structure, with increased reliance on tariffs and lower corporate tax rates. This has, according to congressional budget officials, made government revenue more dependent on taxes affecting workers and households, and less on businesses and investors, at a time when a rapidly retiring workforce and global financial shifts are impacting economic output.
Romina Boccia, director of budget and entitlement policy at the Cato Institute, noted a trend where Republicans have become more inclined to explore alternative revenue-raising methods to avoid politically challenging entitlement reforms.
Conservatives have historically advocated for lower taxes and reduced government oversight to spur economic growth, a strategy Trump has continued to promote. He has suggested that economic growth could outpace the national debt. However, Federal Reserve Chair Kevin Warsh has indicated that high investment in sectors like artificial intelligence is driving up interest rates, exacerbating government financing challenges.
During his campaign, Trump proposed pairing tax cuts with significant spending reductions and established the U.S. Department of Government Efficiency, led by Elon Musk. This initiative reported $110 billion in savings, though the Government Accountability Office raised questions about the verifiability of these claims. MacGuineas commented, "It’s not that you can’t cut taxes. You can, but you have to pair that with spending cuts, and they haven’t been."
Former administration officials argue that the White House deserves more credit for economic improvements aimed at easing consumer prices, which they believe would bolster the country's fiscal standing. However, William Emmons, former vice president of the Federal Reserve Bank of St. Louis, contends that Trump's policies have worsened an already difficult fiscal situation, stating, "He inherited bad momentum. It’s not a surprise to anyone that it was a challenging budget environment... He made a bad situation worse."