The additional room created by that measure is temporary and is lost once the required benefit payments are made. Of the total amount of outstanding debt subject to the statutory limit, four-fifths is debt held by the public; the remaining one-fifth is debt held by government accounts. The Treasury has already reached the current debt limit of $36.1 trillion, so it has no room to borrow under its standard operating procedures other than to replace maturing debt. To avoid breaching the limit, the Treasury has begun using extraordinary measures to continue to borrow additional amounts for a limited time. President Donald Trump has pushed Republicans in Congress to include a provision raising the debt ceiling in the reconciliation package being debated in the House and Senate, which would not require any Democratic votes to pass. Leadership in both chambers has expressed openness to the idea but may face fierce resistance from budget hawks that are typically opposed to raising the limit without significant cuts to government spending.
Democrats have pushed Republicans to work across the aisle to raise the debt ceiling and pushed for them to negotiate. “This is the leverage they’ve got, maybe with the exception of the next big budget bill, this may be their best opportunity to try to extract something out of it. But the question is, Republicans know that the Democrats don’t want to tank the economy, so how much are they willing to give knowing that at least a number of Democrats are likely to come on board and protect the debt ceiling? Democrats have grown increasingly frustrated with their lack of ability to shape policy in the congressional minority and to combat the Trump administration and some parts of the party hoped to use the looming shutdown to gain policy concessions out of Republicans. However, that figure refers to a reduction in the national deficit between fiscal years 2020 and 2022; while the deficit did shrink during that time period, that is largely because emergency measures put into place during the COVID-19 pandemic expired.
The Congressional Budget Office said the U.S. will hit the “X-date,” when the country would run short of funds to pay its bills, sometime between August and September. That outlook facing several uncertainties like weaker revenue than expected and change the X-date to late May or early June. Another analysis released on Monday from the Bipartisan Policy Center estimates the U.S. will hit the X-date by mid-July. The clock’s first incarnation was installed in 1989 on Sixth Avenue between 42nd and 43rd Streets, one block away from Times Square, by New York real estate developer Seymour Durst, who wanted to highlight the rising national debt. In 2004, the clock was dismantled and a new one installed near 44th Street and Sixth Avenue.
USA National Debt GDP Over the Time
The debt limit—commonly called the debt ceiling—is the maximum amount of debt that the Department of the Treasury can issue to the public or to other federal agencies. The amount is set by law and has been increased or suspended over the years to allow for the additional borrowing needed to finance the government’s operations. Worldometer has developed an algorithm which calculates the current estimated rate of change of the amount of debt outstanding in between the daily US Treasury updates. The formula components are recalculated daily as the latest official US National Debt data is published, so that the algorithm continuously adjusts itself accordingly. In recent days, Republicans in Congress have been working to reconcile the two approaches as they look to make headway on the complicated process to implement the president’s agenda. House Speaker Mike Johnson and Senate Majority Leader John Thune met Tuesday afternoon with top tax leaders as they work to unite behind a plan on the path forward.
- Avi Lerner prepared the report with guidance from Christina Hawley Anthony and Barry Blom and with contributions from John McClelland and Joshua Shakin.
- After multiple rounds of quantitative easing, the Federal Reserve has become the largest single holder of US national debt.
- Worldometer has developed an algorithm which calculates the current estimated rate of change of the amount of debt outstanding in between the daily US Treasury updates.
- Last month, the House included a provision that would raise the debt ceiling by $4 trillion in its budget proposal, which serves as a blueprint for implementing President Trump’s agenda.
United States Debt as a percentage of GDP (1940-
Treasury will have to borrow money (by selling securities like Treasury bills, notes, bonds and savings bonds to the public), just like an individual who spends more than what he earns will have to borrow the missing amount from a credit card. Since then, the Treasury Department has stopped paying into certain accounts, including a slew of federal worker pension and disability funds, to make up for the shortfall in money. Treasury Secretary Scott Bessent has continued to notify Congress about the use of extraordinary measures in an effort to prevent a breach of the debt ceiling. The nation has been through several protracted debt ceiling fights between congressional Democrats and Republicans, including in 2011 and in 2023 when lawmakers suspended the debt limit through Jan. 1, 2025, rather than raising the ceiling by a dollar amount.
If borrowing this year diverged significantly from that historical pattern, the projected exhaustion date could be earlier or later than CBO is projecting. Conversely, if borrowing through July totaled 25 percent of the projected borrowing for the year, or about $500 billion, extraordinary measures might last through the end of September. In addition, the Treasury may use a short-term measure that allows it to redeem, in advance, securities held by the CSRDF and the PSRHBF in amounts equal to benefit payments that are due within a given debt issuance suspension period. CBO estimates that such payments would amount to about $8 billion per month for the duration of the current debt issuance suspension period.
Get a brief on the top business stories of the week, plus CEO interviews, market updates, tech and money news that matters to you. Even more worrisome is that the spike in interest rates over the past year and a half has made the cost of servicing the national debt more expensive. “This is the trickle-down debt — driven overwhelmingly by repeated Republican giveaways skewed to big corporations and the wealthy,” Michael Kikukawa, White House assistant press secretary, said in a statement provided to FOX Business after the debt surpassed $34 trillion. “This is a warning shot across the U.S. government’s bow that it needs to right its fiscal ship,” Sean Snaith, an economist at the University of Central Florida, told FOX Business. “You can’t just spend trillions of dollars more than you have in revenue every year and expect no ill consequences.” Economist Peter Morici breaks down what the national debt is, why it ballooned to more than $34 trillion and what it means for Americans.
The Congressional Budget Office estimates that if the debt limit remains unchanged, the government’s ability to borrow using extraordinary measures will probably be exhausted in August or September 2025. The projected exhaustion date is uncertain because the timing and amount of revenue collections and outlays over the intervening months could differ from CBO’s projections. Conversely, if borrowing needs fall short of the amounts in CBO’s projections, the extraordinary measures will permit the Treasury to continue financing government activities longer than expected. Such debt is held by individuals and businesses in the United States and other countries, the Federal Reserve System, mutual funds, financial institutions, foreign governments, and other outside investors.
Congress put on the clock to raise the debt ceiling to avoid default
- The clock’s first incarnation was installed in 1989 on Sixth Avenue between 42nd and 43rd Streets, one block away from Times Square, by New York real estate developer Seymour Durst, who wanted to highlight the rising national debt.
- In 2004, the clock was dismantled and a new one installed near 44th Street and Sixth Avenue.
- After the debt limit was reinstated in January, in one of her last acts as Treasury Secretary, Janet Yellen said Treasury would institute “extraordinary measures ” intended to prevent the U.S. from reaching the debt ceiling.
Our tool uses the latest and past records to provide a real-time US National Debt tracker. This tool uses official historical reports from the US Treasury to provide an accurate, real-time prediction of the total US National Debt. It also tracks the US government spending in real-time based on accurate prediction models. The House added a $4 trillion increase in the debt ceiling as part of a Republican budget plan that sets the stage for extending the individual tax cuts passed in Trump’s first term. The CBO estimate came after the Bipartisan Policy Center projected on Monday that the U.S. could default on its debt between July and October without congressional intervention. The Treasury Department is also expected to release a projected X-date in the coming weeks.
Americans are very frustrated with the federal government, Charlie Hurt says
In 2008, the U.S. national debt exceeded $10 (~$14.00 in 2023) trillion, one more digit than the clock could display. The lit dollar-sign in the clock’s leftmost digit position was later changed to the “1” digit to represent the ten-trillionth place. The latest findings from the Congressional Budget Office indicate that the national debt will grow to an astonishing $54 trillion in the next decade, the result of an aging population and rising federal healthcare costs. Similar to a home or car loan, interest payments represent the price we pay to borrow money.
Debt held by government accounts is issued to the federal government’s trust funds and other federal accounts for internal transactions. Trust funds for Social Security, military retirement, civil service retirement and disability, and Medicare account for most of that debt. If the debt limit was not raised or suspended, the Treasury would not be authorized to issue additional debt other than to replace maturing or redeemed securities. That restriction would ultimately lead to delayed payments for some government activities, a default on the government’s debt obligations, or both. Those actions could result in distress in credit markets, disruptions in economic activity, and rapid increases in borrowing rates for the Treasury.
Inadequate Revenues
By that time, the government would no longer have enough of a financial cushion to pay all its bills after exhausting its “extraordinary measures” the accounting maneuvers used to stretch existing funds. In August and September, the Treasury typically borrows more than it does in other months, in large part to finance new student loans that are originated in those two months. A wide range of government agencies hold US national debt; two major examples are Social Security funds and federal employee retirement funds. As of the third quarter of 2024, debt held by the public was about $28 trillion, and intra-governmental holdings were about $7 trillion. The National Debt Clock is a billboard-sized running total display that shows the United States gross national debt and each American family’s share of the debt. As of 2017update, it is installed on the western side of the Bank of America Tower, west of Sixth Avenue between 42nd and 43rd Streets in Manhattan, New York City.
Government payments to millions of families probably would go unpaid, including to Social Security beneficiaries, veterans and military families. “The Treasury has already reached the current debt limit of $36.1 trillion, so it has no room to borrow under its standard operating procedures,” according to the CBO report. The debt limit was reinstated Jan. 2, following its suspension by Congress in the Fiscal Responsibility Act of 2023. Washington would risk defaulting on its debt unless Congress and Republican President Donald Trump agree to lift the borrowing limit or abolish the debt ceiling concept altogether.
Foreign central banks and foreign private-sector entities also play a crucial role in absorbing the fast-growing US national debt. Our third FRED graph shows debt held by foreigners (red dotted line), which doubled from about $4 trillion in 2010 to over $8 trillion in 2024. The gold dashed line is total debt held by private investors minus debt held by private foreign investors, which equals debt held by private domestic investors. But taking a hard line against the debt limit if Republicans cannot pass it on their own, which comes with tremendous potential costs to the economy, is a much bigger risk than a government shutdown.
Most US debt held by government accounts is non-marketable, as is a relatively small fraction of debt held by the public, primarily through defined benefit pension plans for public sector workers. The so-called “X-date” marks when the government could run out of borrowing power and face an unprecedented default without action from Congress to address the debt limit, which caps how much the Treasury can borrow to pay the government’s obligations. The department is currently utilizing so-called “extraordinary measures” to delay a default for several months.
“The Congressional Budget Office estimates that if the debt limit remains unchanged, the government’s ability to borrow using extraordinary measures will probably be exhausted in August or September 2025,” the nonpartisan budget office said Wednesday. Some large, recurring disbursements—payments to Social Security recipients and outlays for benefits covered under Medicare Part A, for example—are financed by trust funds. Other large disbursements that may be irregular in amount and timing, such as outlays for bank resolutions supported by the Federal Deposit Insurance Corporation, are also financed by dedicated funds. In such cases, the Treasury obtains cash to make those payments by borrowing from the public, but the disbursements reduce the funds’ balances, which are held in the form of special-issue Treasury securities. Because of that reduction in intragovernmental debt, those payments do not affect the total amount of debt subject to limit. That is because as interest rates rise, the federal government’s national debt clock borrowing costs on its debt will also increase.
