Dorothy

The Treasury's latest daily cash and debt balances statement showed total public debt outstanding at $40.047 trillion on Aug. 18, a total that includes Treasury securities held by the public of $32.266 trillion and intra-governmental debt holdings of $7.782 trillion.

The exact debt figure as of Tuesday was $40,047,425,768,420.22. The debt held by the public, which most analysts consider a more important yardstick of fiscal health, stood at about $32.2 trillion.

Roughly one-third of that increase occurred during two years of frantic government borrowing to fund the COVID-19 pandemic responses undertaken by Trump and former President Joe Biden, while the fiscal policy choices of both presidents combined with long-running tax-and-spending imbalances to account for the rest.

The debt has exploded over several presidential administrations, as the nation’s leaders spend more money than it collects in taxes. In recent memory, the multi-year COVID-19 pandemic shut down much of the U.S. economy, where the federal government borrowed heavily during President Trump’s first term and under former President Joe Biden to stabilize the economy and support a recovery.

Budget watchdog groups have been anticipating the crossing of the threshold for weeks and have issued stark warnings that a full-blown debt crisis could erupt unless lawmakers confront an unsustainable fiscal outlook and raise taxes, cut spending or both.

"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," said Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget.

Trump has branded his second presidency as one focused on cost-cutting, marked by early federal agency job cuts ordered by the non-governmental Department of Government Efficiency. But much of his spending reductions has targeted so-called "discretionary" programs, the smallest portion of the federal budget. The U.S. spends roughly $7 trillion annually, and 60% of it is earmarked for so-called "mandatory" programs, including payments for Social Security, Medicare, Medicaid and veterans' care, that generally grow to keep pace with living costs.

Kush Desai, a White House spokesman, said 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.”