US national debt hits record $37 trillion — years early

The United States has crossed a historic and alarming fiscal milestone: the national debt has climbed past $37 trillion, a record sum reached years earlier than experts had anticipated. The figure, published Tuesday in a Treasury Department report, underscores the pace at which federal borrowing has accelerated — and the growing burden of interest costs on the economy.

In January 2020, the Congressional Budget Office (CBO) projected the gross federal debt would not exceed $37 trillion until sometime after fiscal 2030. Instead, the threshold was breached far sooner, as deficits swelled in the wake of pandemic spending, tax policy changes, and sustained budget shortfalls.

Tax Cuts, Spending, and Accelerated Borrowing

The debt surge comes on the heels of new legislation signed earlier this year by former President Donald Trump — dubbed the “Big Beautiful Bill” — which extends and enhances tax cuts first enacted in 2017. The CBO estimates the measure will add $4.1 trillion to the national debt over the next decade.

A senior Trump administration official argued the plan will spur enough economic growth and tariff revenue to offset the debt trajectory, echoing Treasury Secretary Scott Bessent’s assertion that current spending is “unsustainable” but that tax cuts will not worsen deficits.

Bessent has maintained that tariff revenues — which the administration says have tripled from $7 billion late last year to about $25 billion in July — will provide substantial fiscal relief. Officials project these new tariffs could generate $1.3 trillion in revenue by the end of the term, and $2.8 trillion through 2034.

Pandemic Spending and the Biden Era

Much of the debt’s rapid climb reflects emergency measures taken during the COVID-19 crisis. Under both Trump and President Joe Biden, the government borrowed heavily to stabilize the economy during widespread shutdowns.

A Biden administration official noted that the public debt grew 30% during Biden’s term, attributing soaring interest costs in part to “inflationary policies of the last administration,” while touting recent signs of fiscal improvement — including the first June budget surplus in years.

A Trillion Every Five Months

The pace of debt accumulation is accelerating. Federal records show:

• $34 trillion in January 2024
• $35 trillion in July 2024
• $36 trillion in November 2024
• $37 trillion in August 2025

That’s an additional $1 trillion roughly every five months — more than twice the average rate of the past 25 years, according to Michael Peterson, CEO of the Peter G. Peterson Foundation. At the current daily pace, another $1 trillion could be added in less than 180 days.

Economic Risks and Rising Interest Costs

Economists warn that sustained borrowing puts upward pressure on interest rates, raising the cost of mortgages, car loans, and business financing. This can crowd out private investment, slow wage growth, and contribute to higher prices for goods and services.

The Government Accountability Office (GAO) notes that a growing share of the federal budget is being consumed by interest payments — creating a cycle of borrowing to cover both current expenses and prior debts.

Structural Budget Pressures

The federal government has run chronic annual deficits for decades, fueled by:

• Rising Social Security and Medicare costs as baby boomers retire
• Health care expenses that grow faster than inflation
• Tax revenues that lag behind commitments, especially after tax cuts

Major shocks — including wars, the 2008 financial crisis, and the pandemic — have added sudden, large amounts to the debt.

With debt compounding and interest rates elevated, policymakers face mounting pressure to address what Peterson calls “a damaging cycle of more borrowing, more interest costs, and even more borrowing.”