U.S. national debt has passed $33 trillion for the first time — while lawmakers scramble to avoid a government shutdown at the end of the month.
The Treasury Department noted the nation’s debt reached $33.04 trillion Monday, meaning it spiked by $1.58 trillion since lifting the debt ceiling in early June.
After several years of extreme spending, the country reached its debt ceiling of $31.4 trillion in January. Months later, in May, President Joe Biden and Speaker of the House Kevin McCarthy agreed to suspend the cap until January 2025.
Although the debt ceiling is now lifted, Congress must continue to develop ways to fund the government. Funding is established through September 30; however, beyond that, new legislation will be necessary.
That solution will require bipartisan support from Congress, as there are still some House Republicans who are unlikely to approve any government extension of spending. Sunday, a half dozen members of the GOP announced a proposal to fund the government until October 31 temporarily.
The proposal requires government agencies — except for the Department of Veterans Affairs and Defense Department — to have their budgets cut by 8% until the end of October.
It was sponsored by conservative House Freedom Caucus members and the Main Street Caucus, but several conservatives were already opposed. The Democrat-controlled Senate will also likely defeat the bill because it requires border provisions and spending cuts.
Treasury Secretary Yellen: Deficits need to be kept under control, but she isn’t worried about the high number
However, Treasury Secretary Janet Yellen said on Monday that although deficits must be controlled, she isn’t particularly worried about the $33 trillion figure.
“The statistic or metric that I look at most often to judge our fiscal course is net interest as a share of GDP, and even with the rise we have seen in interest rates, that remains at a very reasonable level of around 1%,” said Yellen.
The $33 trillion federal debt comprises $26 trillion in debt held by the public and $7 trillion in debt in Treasury securities, including the Social Security Trust Fund and U.S. government pension funds.
“The United States has hit a new milestone that no one will be proud of: our gross national debt just surpassed $33 trillion,” wrote the president of the Committee for a Responsible Federal Budget, Maya MacGuineas, in a press release.
“Debt held by the public, meanwhile, recently surpassed $26 trillion. We are becoming numb to these huge numbers, but it doesn’t make them any less dangerous,” said MacGuineas.
Every year since 2001, the government has had a running deficit of about $1 trillion. This includes spending on debt interests, military funding, and social safety net programs. More recently, national debt soared as a result of the pandemic. The latest findings of the Congressional Budget Office suggest that the national debt will likely double in size over the next three decades.
“As lawmakers drift from one short-term fiscal crisis to the next, our national debt just keeps piling up, trillion after trillion,” said the CEO of the Peter G. Peterson Foundation, Michael Peterson, in a statement.
“After the debt ceiling showdown in June, we crossed the $32 trillion debt milestone. As we stare down a potential government showdown just three months later, we have raced past $33 trillion in red ink,” said Peterson.