But the Senate will have to agree to that increase, and it’s unclear at this point whether the Republican-led chamber will do so. GOP leadership in both the House and Senate continue to negotiate on a path forward, with the latest meeting Tuesday at the White House. The debate over the debt ceiling comes shortly after an internal battle that remains unresolved for Democrats over Senate Minority Leader Chuck Schumer’s handling of a government shutdown. Schumer voted to approve the GOP-led bill to avoid a shutdown along with nine other Senate Democrats, sparking outrage from within the party and some calls for him to step down in leadership.
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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.
What Would Happen Once the Cash and Extraordinary Measures Were Exhausted?
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.
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The Peter G. Peterson Foundation is a nonprofit, nonpartisan organization that is dedicated to increasing public awareness of the nature and urgency of key fiscal challenges threatening America’s future, and to accelerating action on them. To address these challenges successfully, we work to bring Americans together to find and implement sensible, long-term solutions that transcend age, party lines and ideological divides in order to achieve real results. Historically, the largest deficits were caused by increased spending around national emergencies like major wars or the Great Depression. But Republicans must work with us to protect Social Security, Medicare, and Medicaid,” said Pennsylvania Rep. Brendan Boyle, the ranking Democrat on the House Budget Committee. Given these consequences, Congress and presidents have always found a way, even at the last minute, to avoid a default.
federally-owned lands and cuts to the federal budget. Shortly thereafter, an economic
“I don’t want to speak for the White House, but I think there’s consensus,” Senate Majority Leader John Thune told reporters Tuesday after a meeting at the White House. «A nation saddled with debt will have less to invest in its own future,» the Peter G. Peterson Foundation said. The White House has also tried to blame Republicans for the astronomical rise in debt in recent years. Biden has repeatedly defended the spending by his administration and boasted about cutting the deficit by $1.7 trillion. Most federal debt is owed to domestic holders, but foreign ownership is much higher now than it was about 50 years ago. It would be one thing if our tax code was designed to fund all the promises we are making.
Payments are expected to triple from nearly $475 billion in fiscal year 2022 to a stunning $1.4 trillion in 2032. To put that into perspective, that will be more than the U.S. spends on Social Security, Medicare, Medicaid and all other mandatory and discretionary spending programs. The spike in the national debt follows a burst of spending by President Biden and Democratic lawmakers. «America’s fiscal outlook is more dangerous and daunting than ever, threatening our economy and the next generation,» said Michael Peterson, the CEO of the Peter G. Peterson Foundation that advocates for reducing the federal deficit. «This is not the future any of us want, and it’s no way to run a great nation like ours.»
FRED has several data series related to the US national debt, and today we analyze these series to reveal who holds that debt. But the uncertainty of the timing on the X-date and divisions over passing the reconciliation package could force the GOP to turn to Democrats for help raising the debt limit. Republicans in the House and Senate have been on separate paths to pass the reconciliation bill over the last two months, with the House pushing for a single bill while senators want to break the legislation into two pieces. The House included a $4 trillion increase to the debt ceiling as part of their budget bill that cleared the chamber earlier this year. Experts say that the higher the debt climbs, the more the U.S. is paying in interest costs each year. Those expenses can eclipse important public investments that fuel economic growth — areas like education, research and development and infrastructure.
It’s not yet clear how hard Democrats will fight Republicans to try to pull concessions if the GOP is unable to raise the ceiling through reconciliation. The consequences of failing to raise the ceiling are astronomical and could cause the government to miss payments on its debt once it runs out of funds through the “extraordinary measures” the Treasury Department has been taking. The $36 trillion gross federal debt equals debt held by the public plus debt held by federal trust funds and other government accounts. In very basic terms, this can be thought of as debt that the government owes to others plus debt that it owes to itself. When the federal government spends more than it takes in, it has to borrow money to cover that annual deficit.
- The US National Debt is the total amount of money that the federal government owes to creditors.
- 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.
- The CBO analysis noted that if the government’s borrowing needs are «significantly greater» than projections, the Treasury Department’s resources could be exhausted as early as late May or June.
Government payments to millions of families probably would go unpaid, including to national debt clock 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.
- Trump had previously demanded that a provision raising or suspending the debt limit — something that his own party routinely resists — be included in legislation to avert the last potential government shutdown.
- Those data aren’t currently available in FRED, but FRED does have the Fed’s financial account data, which reports the ownership of total marketable debt.
- 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.
- Experts say an extended default period could result in the loss of millions of jobs and an economic.
- As of the third quarter of 2024, debt held by the public was about $28 trillion, and intra-governmental holdings were about $7 trillion.
And Thune told reporters he’s hopeful lawmakers will be able to address the debt limit as part of the budget process. Those extraordinary measures provide the Treasury with additional room to borrow by limiting the amount of debt that would otherwise be outstanding. By law, the CSRDF, the PSRHBF, and the G Fund would eventually be made whole (with interest) after the debt limit was raised or suspended. 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. But the Senate has been pursuing a different budget measure that does not include a debt limit increase.
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As of the latest report by the Treasury, the total US National Debt stands at $loading trillion. Trump had previously demanded that a provision raising or suspending the debt limit — something that his own party routinely resists — be included in legislation to avert the last potential government shutdown. An analysis released on Monday by the Bipartisan Policy Center estimates that the U.S. could run out of cash by mid-July if Congress did not raise or suspend the nation’s debt limit.
The Treasury could also run out of resources sooner or later than projected if overall borrowing needs for the year differed significantly from the projected amount. Treasury Department reports the amount of debt outstanding at the end of the previous business day. Our formula uses that number, as well as debt projections from the Congressional Budget Office (CBO), to estimate the rate at which the debt is currently growing. Our estimates are updated each business day, reflecting the latest information from Treasury (the numbers are relatively constant because of the debt ceiling constraint). Simplifying, every year the United States Government collects revenue from taxes and spends it on its public programs and agencies. If in any given year it spends more than it earns, its yearly budget will result in a deficit.
The unrelenting increase is what prompted Fitch Ratings to issue a surprise downgrade of the nation’s long-term credit score in mid-2023. The agency cut the U.S. debt by one notch, snatching away its pristine AAA rating in exchange for an AA+ grade. In making the decision, Fitch cited alarm over the country’s deteriorating finances and expressed concerns over the government’s ability to address the ballooning debt burden amid sharp political divisions. Debt per person is calculated by dividing the debt outstanding by the population of the United States, as published by the US Census Bureau. Our society is aging as the large baby-boom generation begins to retire — 10,000 people will turn 65 every day through 2030. That is great news, but it means that we must prepare for the financial needs of longer retirement.
Raising the debt limit doesn’t greenlight new spending, but allows the government to pay what it already owes. If the debt limit is not raised or suspended before the extraordinary measures are exhausted, the government will be unable to pay all of its obligations.3 As a result, it would have to delay making payments for some activities, default on its debt obligations, or both. The US Treasury Bulletin provides a detailed breakdown of public debt holdings among private investors. Those data aren’t currently available in FRED, but FRED does have the Fed’s financial account data, which reports the ownership of total marketable debt. And since most US debt held by the public is marketable, this is a good approximation of public vs. private ownership.
The outlook for the federal debt level is bleak, with economists increasingly sounding the alarm over the torrid pace of spending by Congress and the White House. Interest payments on the debt for the government’s fiscal year, which begins in October, now exceed the costs of Medicare and the defense budget. The US National Debt is the total amount of money that the federal government owes to creditors.
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