U.S. federal debt tops $40 trillion for first time as Congress faces debt limit fight

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‘Unsustainable’ Fiscal Path, Debt Limit Fight Awaits Congress

Publication Date: September 8, 2026 By: Paul M. Krawzak

Treasury Secretary Scott Bessent holds a printout of a proposed $250 bill featuring a picture of President Donald Trump during a White House press briefing on May 28. (Tom Williams/CQ Roll Call)

A grim new milestone for U.S. debt and surging interest rates have not yet sparked much urgency for a new round of deficit cutting on Capitol Hill. However, with federal debt topping $40 trillion for the first time last month, lawmakers will likely have to lift the $41.1 trillion statutory debt ceiling within the next year or so. That task usually involves a debate over curbing deficits, even if the default in recent years has been to do little to nothing.

Some Republicans have floated raising the debt limit as soon as the post-election lame-duck session through budget reconciliation — a difficult lift even at a simple-majority vote threshold. A flip in party control of either chamber in November would effectively remove reconciliation as a tool lawmakers can use next year for a debt-limit bill that would not require 60 Senate votes.

That would leave a bipartisan agreement as the only path forward, short of eliminating the legislative filibuster — a step neither party has shown an appetite for so far. With few exceptions, both parties have generally retreated to familiar talking points that are only palatable to their own sides when it comes to cutting deficits.

• For Republicans: Spending cuts without touching Medicare and Social Security benefits.
• For Democrats: Raising taxes and increasing spending — except for defense, which many in that party believe should be cut.

Both sides have become “populist parties,” former Speaker Paul D. Ryan, R-Wis., said Thursday on CNBC. “And populists believe things like debt reduction, entitlement reform is unpopular. Therefore we don’t have anything close to the politics we need to get this stuff done.”

Debt Limit ‘Weapon’

The most bipartisan idea when it comes to the debt limit may be to remove it completely as a leverage point, given the economic fallout that could ensue if Congress does not act in time to raise or waive the ceiling.

Breaching the limit would mean massive, immediate spending cuts and unpaid interest on the debt — which would be perceived by much of the world as an unprecedented “default” on U.S. obligations, making it harder to borrow in the future. Stock markets could crash.

President Donald Trump, as well as top Democrats, have mused about eliminating the debt limit altogether or at least giving it a radical makeover.

The top Democrats on the House and Senate Budget panels introduced bills last year that would allow the Treasury secretary to suspend the debt limit for up to two years at a time, unless Congress clears — and the president signs — a filibuster-proof joint resolution of disapproval.

In an interview, House Budget ranking member Brendan F. Boyle, D-Pa., who is in line to chair that committee if Democrats take control in the midterms, said he would insist on his proposal or a similar one as part of any debt-limit increase.

Boyle (Bill Clark/CQ Roll Call file photo)

“At the very least we need to make sure that we take this powerful weapon permanently off the table,” Boyle said, citing past debt-ceiling episodes where Republicans tried to extract big spending cuts as their price for raising the cap.

“I’m not going to just vote for a temporary … extension so that then the next time there’s a Democrat in the White House, Republicans can again cynically use the debt ceiling,” he said.

Unwelcome Records

(The article continues with additional context on fiscal records and the debt limit debate.)