National debt
The federal government owes about $40 trillion after decades of spending more than it collects. Interest on that debt is now one of the fastest growing costs in the budget. The choices come down to spending cuts, tax increases, faster growth, or some mix.
The basics
The national debt is the total the federal government has borrowed and not yet paid back. As of September 24, 2026, total federal debt was about $40.1 trillion1. About $32.4 trillion of that is owed to outside lenders who bought Treasury bonds, and about $7.7 trillion is owed to government trust funds such as Social Security's1.
The debt grows each year the government runs a deficit. CBO projects a $1.9 trillion deficit in fiscal year 2026, equal to 5.8% of the economy, growing to $3.1 trillion by 20362. It projects debt held by the public will rise from 101% of the economy this year to 120% in 2036, passing the record of 106% set in 19462.
Interest is a fast-growing cost. CBO projects net interest payments of $1.0 trillion in 2026, rising to $2.1 trillion in 20363. CBO says total spending will grow faster than the economy mainly because of Social Security, Medicare and interest2.
Recent decisions have pushed in both directions. CBO estimated the 2025 tax and spending law (Public Law 119-21) adds $4.1 trillion to deficits from 2025 to 2034, counting interest4. In February 2026, CBO also estimated that higher tariffs would cut deficits by $3.0 trillion over ten years2. That estimate came before the Supreme Court ruled on February 20, 2026 that an emergency powers law (IEEPA) does not let the President impose tariffs, striking down the tariffs based on it5.
The debt limit is a legal cap on how much the Treasury can borrow. The 2025 law raised it by $5.0 trillion, to $41.1 trillion6. In September 2026, total debt was about $1 trillion below that cap16.
Key terms
- Deficit vs. debt
- The deficit is one year's shortfall between spending and revenue. The debt is the running total of all past borrowing that has not been repaid.
- Debt held by the public
- Money the government owes to outside lenders, such as investors, banks and foreign governments. It was about $32.4 trillion in September 20261.
- Net interest
- What the government pays in interest on its debt, minus interest it earns. CBO projects $1.0 trillion in 20263.
- Debt limit (debt ceiling)
- A cap set by Congress on total federal borrowing. It is $41.1 trillion after a $5.0 trillion increase in July 20256.
- Mandatory vs. discretionary spending
- Mandatory spending, like Social Security and Medicare, runs automatically under existing law. Discretionary spending, like defense and most agencies, is set each year by Congress in spending bills.
In Texas
Unlike Washington, Texas must balance its budget. The Texas Constitution's pay-as-you-go limit, first approved by voters in 1942, bars the Legislature from spending more than the cash and expected revenue available7.
Federal budget choices land directly in Texas. About 4.8 million Texans received Social Security benefits in December 20248, and Texas military installations contribute an estimated $148.8 billion a year to the state economy9. Any plan to cut spending, raise taxes or slow the growth of these programs affects Texans in real ways.
How people see it
The strongest case for each view, in terms its supporters would recognize. We don't pick a side.
Cut spending sharply to balance the budget
Supporters say the debt threatens the country's future and that every year of delay makes the fix harder. They want a firm path to a balanced budget with every part of the budget on the table, including popular programs, so younger Americans are not stuck with the bill.
Cut spending but protect Social Security and Medicare
Supporters say Washington has a spending problem, not a revenue problem, and that there is waste to cut across federal agencies and programs. But they say seniors paid into Social Security and Medicare their whole working lives and should not see cuts.
A mix of spending cuts and tax increases
Supporters say the gap is too big to close with cuts alone or taxes alone. They argue a deal that asks something of everyone is fairer and more likely to pass Congress with votes from both parties.
Invest first; the debt matters less
Supporters say spending on education, infrastructure, research and health pays off through a stronger economy, which makes debt easier to carry. They argue sharp cuts would hurt families and could slow growth, making the debt picture worse.
The debt is not a pressing concern
Supporters say a country that borrows in its own currency is not like a household, and that the real limit on spending is inflation, not a dollar figure. They argue the government should spend what the country needs and worry about the debt only if it drives up prices.
Who decides
- U.S. Congress: Passes spending bills and tax laws, and sets the debt limit. Most debt decisions happen in yearly spending bills and in large budget bills.
- President: Proposes a budget each year and signs or vetoes spending and tax bills.
- Congressional Budget Office: Nonpartisan office that estimates what bills cost. It does not make policy.
- Texas Legislature: Writes the state budget, which must balance under the Texas Constitution.
Questions to ask a candidate
- Name one specific spending cut and one source of revenue you would support to reduce the deficit.
- Would you vote to raise the debt limit with no conditions, or only with spending changes attached?
- Should Social Security and Medicare be part of any deal to reduce the deficit? Why or why not?
- Do you support a balanced budget amendment to the U.S. Constitution?
Last reviewed 2026-09-26. Spotted something wrong? Every claim links to its source so you can check it yourself.
Sources
- Debt to the Penny (record for September 24, 2026)U.S. Department of the Treasury, Fiscal Data
- The Budget and Economic Outlook: 2026 to 2036Congressional Budget Office
- Director's Statement on the Budget and Economic Outlook for 2026 to 2036Congressional Budget Office
- Effects on Deficits and the Debt of Public Law 119-21 and of Making Certain Tax Policies in the Act PermanentCongressional Budget Office
- Learning Resources, Inc. v. Trump (case page)SCOTUSblog
- The Debt Limit (IF10292), updated December 5, 2025Congressional Research Service
- Texas spending limits may slow allocation of record fund balanceTexas 2036
- Congressional Statistics, December 2024: TexasSocial Security Administration
- Texas Comptroller Releases Military Installation Economic Impact AnalysisTexas Comptroller of Public Accounts