U.S. national debt surpasses $34 trillion

Jan. 3 (UPI) — The U.S. national debt surpassed $34 trillion this week and continues to rise at a record pace under persistent annual deficits, according to the Treasury Department.

The nation added a staggering $1 trillion in debt in just the last three months, with budget negotiations stalled on Capitol Hill as lawmakers continue to tangle over how to keep the government fully funded and, at the same time, deflate the ballooning federal deficit.

Lawmakers return to Washington next week from the holiday break just as federal spending laws are set to expire on Jan. 19 and Feb. 2, which would shut down the government at least partially if Congress fails to pass funding extensions.

The U.S. Senate passed legislation in June that suspended the debt limit and imposed new spending caps, allowing the United States to avoid defaulting on its debt for the first time.

The dramatic rise in federal debt is expected to play a huge role in discussions about the 2017 GOP tax cut under former President Donald Trump, as several provisions from that law are scheduled to expire in 2025.

Meanwhile, the government is paying more to borrow money after the Federal Reserve raised interest rates over the past year to bring down inflation.

At the same time, the government is still spending more than it did before the COVID-19 pandemic, and the money collected from taxes went down last year — raising even more serious concerns about the nation’s financial health.

In a statement, Maya MacGuineas, president of the non-profit Committee for a Responsible Federal Budget, which monitors the government’s fiscal health, characterized $34 trillion in debt as a “truly depressing achievement.”

“Though our level of debt is dangerous for both our economy and for national security, America just cannot stop borrowing,” MacGuineas said. “There is not a single economic reason to add to the debt at the rate we are, but sadly our political leaders are unwilling to make the changes we need to turn the fiscal situation around.”

Other officials at the Washington-based non-profit warned that the enormous debt would spell trouble for the United States if the economy were to face challenging times in the months ahead.

“Hitting $34 trillion is another reminder of how unsustainable our fiscal situation is,” Marc Goldwein, senior vice president for the non-profit, told the Washington Post. “We’re adding $2 trillion to our debt every year at a time unemployment is near record lows … If we’re adding this much to the debt in good times, things may get really awful in bad times, and we can’t grow our debt faster than our economy forever.”

The nation’s total debt is $2 trillion more than it was at the beginning of 2022, while the Dow Jones Industrial Average has risen more than 9% in the past six months.

Economists hold differing views on the risk associated with massive federal debt, with some experts saying high debt threatens the economy, while others contend the federal government still has the ability to borrow substantially without triggering an economic crash.

The economy has expanded rapidly over the past several months, so the rise in the national debt is less concerning as borrowed dollars shake out as a relatively smaller chunk of the country’s overall economic activity.

President Joe Biden has cited GOP tax cuts as the reason for adding trillions to the deficit, while Republican lawmakers blame Biden’s spending policies, including massive amounts of foreign aid.

White House spokesman Michael Kikukawa said in a statement Tuesday that congressional Republicans were aiming to “double down on MAGAnomics with more than $3 trillion in giveaways skewed to the wealthy while forcing hardworking Americans to pay the price by cutting Social Security, Medicare and Medicaid.”

Recently, economic analysts with the Center for American Progress, a centrist policy institute based in Washington, reported that tax cuts implemented under Presidents George W. Bush and Trump, along with other bipartisan extensions, have added $10 trillion in new national debt.