The national debt has grown by $1 trillion in just three months, with Democrats and Republicans blaming each other for the soaring budget deficit. While the GOP is set to fight the Biden administration over federal funding plans, bipartisan groups noted the unsustainable trajectory the U.S. was on.
The U.S. federal government’s gross national debt has surpassed $34 trillion for the first time. This record high comes just weeks ahead of Congressional deadlines to agree to new federal funding plans to improve America’s balance sheet.
A recently published Treasury Department report showed that the “total public debt outstanding” has risen to $34.0001 trillion. This national debt figure amounts to the total outstanding borrowing the U.S. federal government has accumulated over U.S. history.
Debt dividing D.C.
U.S. finances have become a source of friction in a politically divided Washington that has the potential to see parts of the government shut down with no annual budget in place.
A year to go
In June 2023, Republican lawmakers and the White House agreed to a temporary lift of the nation’s debt limit, preventing the risk of a historic default. Their agreement lasts until January 2025.
Hot on the heels
The new debt milestone comes just three months after national debt surpassed $33 trillion, following a ballooning budget deficit—the difference between U.S. government expenditure and what it receives in taxes.
A new low
Fiscal watchdog Committee for a Responsible Federal Budget president Maya MacGuineas called the record figure ‘a truly depressing ‘achievement.’ “Though our level of debt is dangerous for both our economy and national security, America just cannot stop borrowing,” she said in a statement reacting to the news.
Rising debt, strong economy
There are also concerns that the national debt is increasing when the economy is performing well, with low unemployment, which is regarded as a good time to rein in the federal deficit. The government regularly increases spending during weaker economic periods and high unemployment to stimulate growth.
Debt causing arguments
The soaring national debt has led to significant disagreements between Republicans and Democrats, worsening standoffs over the federal budget that periodically threaten to shut down the government.
Democrats and Republicans are both part of the problem
The national debt has soared under both parties in the past decade. Republicans argue the Biden administration’s federal spending programs are too expensive, while the Democrats say Republican-backed tax cuts in 2017 have reduced revenue. Costly federal COVID-19 relief packages passed by the Trump and Biden administrations have also contributed to the increased debt.
White House blames GOP
Michael Kikukawa, a White House spokesperson, said the rising debt was “driven overwhelmingly by repeated Republican giveaways skewed to big corporations and the wealthy,” leading to cuts to Medicare, Medicaid, and Social Security that hurt ordinary Americans.
Biden targets oil and pharmaceutical companies
Kikukawa spoke of President Joe Biden’s plan to reduce the deficit by $2.5 trillion by “making the wealthy and big corporations pay their fair share and cutting wasteful spending on special interests.” This would include large oil and pharmaceutical companies.
Situation could worsen anytime
Bipartisan Policy Center director of economic policy Shai Akabas said, “There is growing concern among investors and rating agencies that the trajectory we’re on is unsustainable—when that turns into a more dire situation is anyone’s guess.”