The US government’s debt has surpassed $34 trillion for the first time, just weeks before Congress must agree on new federal financing plans. According to Treasury Department data, “total public debt outstanding” reached $34.001 trillion on December 29. This figure, often known as the national debt, represents the total amount of outstanding borrowing by the United States federal government amassed during the country’s history. The achievement comes just three months after the US national debt reached $33 trillion due to a ballooning budget deficit — the difference between what the government spends and what it gets in taxes.
Republicans believe the Biden administration’s federal spending initiatives are too expensive
Maya MacGuineas, president of the fiscal watchdog Committee for a Responsible Federal Budget, branded the record amount “a truly depressing ‘achievement.'” “Though our level of debt is dangerous for both our economy and national security,” she said in a statement released Tuesday. The national debt has become a major bone of dispute between Republicans and Democrats, exacerbating budget battles that threaten to shut down the government regularly. Republicans believe the Biden administration’s federal spending initiatives are too expensive, while Democrats contend GOP-backed tax cuts have reduced revenue.
The escalating figure, according to White House spokesperson Michael Kikukawa, was “driven overwhelmingly by repeated Republican giveaways skewed to big corporations and the wealthy,” which resulted in cuts to Social Security, Medicare, and Medicaid that harmed average Americans. President Joe Biden, according to Kikukawa, has a proposal to lower the debt by $2.5 trillion by “making the wealthy and big corporations pay their fair share and cutting wasteful spending on special interests,” including large pharmaceutical and oil industries.
Whoever is to blame, America’s credit rating has already suffered as a result of growing debt and political brinksmanship
Whoever is to blame, America’s credit rating has already suffered as a result of growing debt and political brinksmanship. Fitch downgraded US sovereign debt to AA+ from AAA in August, while Moody’s warned in November that the US could lose its final flawless AAA rating. After the Senate agreed on a stopgap funding agreement to avert a government shutdown in November, lawmakers in Washington are facing deadlines for the passage of permanent department budgets in January and February. This measure extended financing for priorities such as military construction, veterans affairs, transportation, housing, and the Energy Department until January 19. The remainder of the government was funded till February 2. There was no further help for Ukraine or Israel.
“We remain hopeful that policymakers will take further measures to reduce our borrowing either by raising taxes, reducing spending, or creating a fiscal commission — or ideally by doing all of the above,” MacGuineas said. According to the Treasury, the debt that counts towards the debt ceiling — which limits how much the government is allowed to borrow and is also a frequent source of political brinksmanship — rose to $33.89 trillion. Rising government debt burdens in the United States and elsewhere have become a growing cause for concern because of a recent rapid rise in interest rates, which has made it much more expensive to service that debt.
The US government spends $2 billion every day on debt interest payments alone, according to the Peter G. Peterson Foundation, an American bipartisan nonprofit that pushes for fiscal responsibility. “America’s high and rising debt matters because it threatens our economic future,” the foundation stated Tuesday. It was stated that within ten years, the federal government will spend more on interest payments than it has in the past on R&D, infrastructure, and education combined.