America’s national debt soared past the $33 trillion mark for the first time ever, according to the Treasury Department, even as the Biden administration and the GOP-led House are on a collision course that may prompt the first government shutdown in nearly four years.
House Speaker Kevin McCarthy (R-Calif.) is at loggerheads with members of his caucus who are demanding steep spending cuts and crackdowns on illegal immigration in return for their support for a short-term spending measure that would keep the federal government operating.
According to Treasury Department data, the federal government has spent nearly a quarter of its budget — 23% — on Social Security in fiscal year 2023.
Health care swallows up 15% of federal spending while national defense, Medicare, and income security each take up 13% of Uncle Sam’s expenditures, according to the Treasury Department.
In fiscal year 2022, the federal government spent $6.27 trillion, which represents one-fourth of gross domestic product ($25.02 trillion).
In the last 100 years, the US national debt has ballooned from $408 billion in 1922 to $33 trillion in the present day.
Just four decades ago, the total stood at $907 billion.
Earlier this summer, administration officials were taken aback when Fitch Ratings downgraded the US government’s credit rating.
Fitch cited rising debt at the federal, state, and local levels and a “steady deterioration in standards of governance” over the past two decades.
The rating was cut one notch to AA+ from AAA, the highest possible rating.
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The new rating is still well into investment grade.
Fitch said worsening political divisions around spending and tax policy was a key reason for its decision.
It said US governance has declined relative to other highly rated countries and it noted “repeated debt limit standoffs and last-minute resolutions.”
It’s only the second time in the nation’s history that its credit rating has been cut.
In 2011, the ratings agency Standard & Poor’s stripped the US of its prize AAA rating after a prolonged fight over the government’s borrowing limit.
The Government Accountability Office, in a 2012 report, estimated that the 2011 budget standoff raised Treasury’s borrowing costs by $1.3 billion that year.
At the same time, the huge size of the US economy and historic stability of the federal government has kept its borrowing costs low.
Global investors often flock to Treasury securities during periods of economic turmoil, lowering the interest rate paid by the US government.
With Post wires
