This photo taken on Aug. 19, 2026 shows the U.S. national debt surpassing 40 trillion U.S. dollars, in New York, the United States. (Xinhua/Zhang Fengguo)

WASHINGTON, Aug. 19 (Xinhua) -- The U.S. national debt has surpassed 40 trillion dollars for the first time in history, according to data released by the Treasury Department on Wednesday.

The data shows that debt held by the public and intragovernmental holdings stood at 32.266 trillion dollars and 7.782 trillion dollars, respectively, bringing total public debt outstanding to 40.047 trillion dollars as of Tuesday.

The milestone, reached months earlier than expected, reflects the U.S. federal government's persistent budget deficits, as spending continues to exceed revenue, adding to the national debt.

The federal government has spent trillions of dollars in response to the COVID-19 pandemic and subsequently pursued tax cuts and increased military spending. As a result, U.S. federal debt has grown rapidly in recent years, raising concerns in the bond market and pushing Treasury yields higher. Rising interest payments have further driven up the total size of the national debt.

A monthly report from the Treasury Department shows that the federal government recorded a fiscal deficit of 1.367 trillion dollars in the first nine months of fiscal year 2026, which began on Oct. 1, 2025. During that period, net interest payments totaled 827 billion dollars, exceeding defense spending of 713 billion dollars and ranking second only to social security spending, which amounted to 1.244 trillion dollars.

U.S. federal government debt surpassed 30 trillion dollars in January 2022, exceeded 39 trillion dollars in March 2026, and hit 39.7 trillion dollars in July 2026.

Local media described the national debt surpassing 40 trillion dollars as an ominous milestone for an economy resting on an increasingly shaky fiscal foundation.

Warning signs are flashing "with debt held by the public recently exceeding the size of our economy, the deficit-to-GDP ratio running twice as high as where it should be, and interest costs exceeding our national defense budget," Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said Wednesday in a statement.

"Forty trillion dollars of debt doesn't exist solely on the government's ledgers; it is felt throughout the economy and finds its way to the pocketbooks of people one way or another," MacGuineas said. "The more we borrow, the more we exacerbate inflation, squeeze out other priorities in the budget, and leave ourselves vulnerable to emergencies at home and turmoil abroad."

"Our current fiscal trajectory is plainly unsustainable," said Margaret Spellings, president and CEO of the Bipartisan Policy Center. "Even in the rosiest scenarios, we're speeding toward a cliff and refusing to turn the wheel."

"Federal debt is already raising the cost of living and choking out other spending and investment, threatening our economy and Americans' long-term prosperity," she added.

"Forty trillion dollars should be a wake-up call. But neither Congress nor the president have a credible plan to stop it from growing," said Carolyn Bourdeaux, executive director of Concord Coalition and Concord Action Fund. "We owe the next generation better than this crushing debt and another hollow promise that someone else will deal with it later."

In a statement responding to the troubling milestone, White House spokesman Kush Desai said U.S. President Donald Trump had pledged to clean up former President Joe Biden's fiscal mismanagement. "That's why the Trump administration has been focused on slashing waste, fraud, and abuse in federal spending while accelerating economic growth to get America's debt-to-GDP ratio trending in the right direction again."