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The US national debt just passed another milestone: $35 trillion
The U.S. national debt hit a psychologically important milestone of $35 trillion in recent days and has increased by $1 trillion since January — increasing by nearly $5 billion every day so far in 2025.
This last barrier was formally broken last Friday. That was when a Treasury Department Daily Tabulationwhich was compiled and released on Monday night, showed a gross debt level of $35.001278 trillion.
“This is madness,” Tesla (TSLA) CEO Elon Musk noted in a post on X in a quick response to the news.
The United States’ deficit has increased by more than 75% during the Trump and Biden administrations, and yet the issue has been relegated to the back burner during the 2024 campaign season.
Furthermore, deficit advocates warn, the problem has often been sidelined in favor of ideas that would increase the debt even further.
“Debt continues to advance recklessly and relentlessly,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement.
“Despite all the risks and warning signs, these alarms seem to be falling on deaf ears,” she added.
At the Republican National Convention earlier this month, the question arose in moderation. Something similar is expected to happen in a few weeks when Democrats gather in Chicago.
Washington policymakers have taken some steps to limit deficits in recent years, with debt now at 120% of GDP after peaking at more than 125% in 2020 — a period that marked the height of COVID-era spending.
But a ratio of over 120% of GDP represents a level of debt never seen before. since the end of World War IIwith the Congressional Budget Office projecting high interest costs that could increase debt to will account for 166% of US GDP by 2054.
Earlier this year, the cost of interest payments on debt exceeded the cost of America’s Defense Spending.
Limited conversation in an election year
Some lawmakers reacted this week to the passage of the $35 trillion cap. Retiring Sen. Mitt Romney of Utah marked the milestonehow did you do Senator Cynthia Lummis of Wyoming.
Lummis, coming right after an appearance last weekend at a Bitcoin 2024 conference alongside other politiciansis also promoting her idea of a “strategic bitcoin reserve” that she says could help with the debt problem.
Her proposal would have the government acquire 1 million bitcoins using existing funds from the Federal Reserve System and the U.S. Treasury Department.
But it’s an idea that faces an uphill climb in Congress and would require the price of cryptocurrency to rise faster than the costs of borrowing that money.
The story continues
The debt increased by nearly $8 trillion during former President Donald Trump’s time in the Oval Office. President Joe Biden is on track to oversee a similar increase. In total, the national debt has increased due to new spending as well as these obligations that date back decades.
In a statement, White House spokesman Jeremy M. Edwards said the Trump administration “has not signed a single deficit reduction bill” and praised Biden’s deficit reduction efforts, adding that “President Biden’s budget would reduce the deficit by $3 trillion, making billionaires and the largest corporations pay their fair share and cutting spending for special interests.”
Former President and 2024 Republican presidential candidate Donald Trump walks onstage after accepting his party’s nomination on the final day of the 2024 Republican National Convention in Milwaukee on July 18. (PEDRO UGARTE/AFP via Getty Images) (PEDRO UGARTE via Getty Images)
A looming tax debate that could make matters worse
Indeed, Washington has taken some limited steps in recent years to gain at least some level of control over the debt.
The Fiscal Responsibility Act of 2023, which ended the debt limit impasse that year, was negotiated between Biden and then-House Speaker Kevin McCarthy.
It imposed spending limits that helped at least stabilize government deficits, though budget advocates often talk of many other measures needed to fully address the problem.
But a looming tax debate in 2025 could increase political pressure to raise deficits further.
Major individual provisions of Trump’s 2017 tax cuts are set to expire at the end of next year, meaning taxpayers could face an effective tax hike if Washington fails to act.
President Joe Biden boards Air Force One in Houston on July 29 after a trip to Texas. (BRENDAN SMIALOWSKI/AFP via Getty Images) (BRENDAN SMIALOWSKI via Getty Images)
But avoiding that effective increase could mean trillions more in debt in the coming years.
Trump has repeatedly promised to extend tax cuts across the board. That could add between $4 trillion and $5 trillion if not offset, estimates the Committee for a Responsible Federal Budget.
The Democratic plan, first articulated by Biden but recently underscored by the presumptive Democratic nominee, Vice President Kamala Harris, would extend the cuts to those earning less than $400,000 a year. Even that could still cost more than $2 trillion if not offset.
Democrats have offered plans to pay for at least some of that through tax increases elsewhere, such as an effort to impose a 25% minimum tax on billionaires.
Trump has offered far fewer details when asked about the national debt. He often responds by saying he could take care of it by drilling for oil — which he calls “liquid gold” — without elaborating on exactly how that would work.
This post has been updated.
Ben Werschkul is a Washington correspondent for Yahoo Finance.
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