U.S. national debt surpassed $40 trillion, more than double its level a decade earlier, as borrowing continued to cover federal spending, CNBC reported in an Oct. 30 broadcast.
The government ran another nearly $2 trillion deficit despite continued economic growth. Annual net interest costs now exceed $1 trillion, leaving less room to cover new expenses during a crisis.
The figures appeared in CNBC Television’s “Why The Midterms May Not Change America’s $40 Trillion Debt.” No speaker was identified by name in the supplied transcript.
The Trump administration is counting on stronger economic growth, helped by artificial intelligence, to improve federal finances. That approach leaves open whether growth can close the gap between spending and revenue.
Federal spending reached about $7.4 trillion in fiscal 2026, which ended in September, while revenue totaled about $5.4 trillion. The resulting deficit equaled about 6.2% of gross domestic product, a measure of the economy’s total output.
Social Security and the Medicare and Medicaid health programs were among the biggest spending drivers. An aging population has pushed those costs higher over time.
Tax cuts passed last year also reduced revenue as companies requested refunds under retroactive provisions. Higher military spending added to federal expenses.
Continued borrowing increases interest costs as the government issues new debt and replaces older borrowing. Inflation and Federal Reserve policy also influence the interest rates Washington pays.
Growth alone would need to reach 7.2% annually for a decade to balance the budget, the Committee for a Responsible Federal Budget estimated. Its analysis put the annual growth needed to hold debt steady relative to the economy at 3.3%.
Artificial intelligence could help raise revenue, but the size of that contribution remains uncertain. Wells Fargo Investment Institute modeled a hypothetical increase in annual productivity growth of half a percentage point.
That scenario could produce about $625 billion in additional annual federal revenue by the tenth year. Congress would still have to decide whether to use the money to reduce deficits.
Changes to taxes and major spending programs would require agreement in Congress. Divided government could make that harder, leaving unresolved whether lawmakers will change the budget after the midterm elections.
Lawmakers face a nearer deadline when federal government funding expires on Dec. 11. Agreement to keep the government funded would leave the broader choices over taxes and spending unresolved.
Federal debt held by the public will rise from 100% of economic output to 120% by 2036 under current law, the Congressional Budget Office projected in February. The agency projected annual deficits of about $3.1 trillion, or 6.7% of economic output, by that year.
Investors continue to finance U.S. borrowing. The dollar’s use around the world supports demand, while borrowing in its own currency gives the government an advantage in repaying its obligations.
