The National Debt Crosses $40 Trillion Months Ahead of Schedule — Driven in Part by the Tariff Revenue the Supreme Court Took Away — and the Treasury Secretary Says "There's Nothing Magic About the $40 Trillion Number"
On August 19, 2026, the Treasury Department reported that total federal debt outstanding had crossed $40 trillion for the first time, finishing the day at $40,047,425,768,420.22 — roughly $32.3 trillion held by the public and $7.8 trillion in intragovernmental holdings. The milestone arrived months earlier than the Congressional Budget Office had projected. The government borrowed $1.8 trillion in the first ten months of fiscal 2026 — more than in all of fiscal 2025 — and the gap widened after the Supreme Court struck down Trump's "Liberation Day" tariffs, costing an estimated $250 billion in revenue and forcing Treasury to refund more than $100 billion in import taxes it had already collected. The debt has doubled in under a decade, having stood at just under $20 trillion at the end of the Obama administration. Republicans who control both chambers reacted with alarm rather than a plan. House Budget Chairman Jodey Arrington (R-Tex.) called the debt "an existential threat" and renewed his call for an Article V constitutional convention. Senate Majority Leader John Thune (R-S.D.), whose chamber had just left town for August recess without acting on Trump's demand that it address the debt ceiling, told reporters "$40 trillion in debt — seems to me that should get our attention." Sen. Chuck Grassley (R-Iowa) posted that voters had "40 trillion reasons 2 reject unaffordable socialist policies," drawing ridicule from critics who noted he had voted for the tax and spending bills that produced it. Sen. Rick Scott (R-Fla.) called it "bad" and demanded a balanced budget. Democrats pointed at the majority. Rep. Brendan Boyle (D-Pa.), ranking member on the Budget Committee, said Republicans "only care about 'fiscal responsibility' when it's time to cut your health care." House Democratic Leader Hakeem Jeffries (D-N.Y.) said "The Republican economy is a disaster. Vote them all out in November." The administration's answer was growth. Treasury Secretary Scott Bessent told CNBC the next morning that "there's nothing magic about the $40 trillion number, and we can grow our way out of that," and said there was a "very good chance" the deficit under Trump had already peaked.
“There’s a very good chance the U.S. budget deficit under President Trump has peaked.”