U.S. national debt surges past US$39 trillion just weeks into war in Iran

Director of the White House National Economic Council Kevin Hassett stands before a television interview of the White House, Friday, March 6, 2026, in Washington. (AP Photo/Alex Brandon)

WASHINGTON — The U.S. national debt surpassed a record US$39 trillion on Wednesday, a milestone that comes just weeks into the U.S.-Israeli war in Iran.

The unprecedented figure highlights competing administration priorities, from passing a massive tax law and boosting defence spending and immigration enforcement to chipping away at the debt itself — the latter of which Donald Trump promised to do as both a candidate and as president.

The Government Accountability Office outlines some of the impact of rising government debt on Americans — including higher borrowing costs for things like mortgages and cars, lower wages from businesses having less money available to invest, and more expensive goods and services. Advocates for a balanced budget also warn that the long-term trend of borrowing more and paying more in interest will force Americans to face tougher fiscal tradeoffs ahead.

Michael Peterson, chair and CEO of the nonprofit Peter G. Peterson Foundation, created to raise awareness of America’s long-term fiscal challenges, said in a statement that “we must recognize this alarming rate of growth and the significant financial burden we are putting on the next generation.”

The trajectory of the rising costs is also a concern. The federal debt has surged under both Republican and Democratic presidents, most recently fueled by wars, large-scale pandemic spending and tax cuts.

The U.S. national debt hit US$38 trillion five months ago — and US$37 trillion two months before that.

“At the current growth rate, we will hit a staggering US$40 trillion in national debt before this fall’s elections,” Peterson said. “Borrowing trillion after trillion at this rapid pace with no plan in place is the definition of unsustainable.”

White House economic adviser Kevin Hassett estimated on Sunday that the war in Iran had cost the U.S. more than US$12 billion so far. It is unclear when the war will end.

Kush Desai, a White House spokesman, pointed to a decline in the federal deficit during Trump’s first year back in office.

According to Treasury’s Fiscal Data website, total government spending in fiscal year 2025 was US$7.01 trillion and total revenue was US$5.23 trillion, resulting in a deficit of US$1.78 trillion, which is a decrease of US$41 billion from the previous fiscal year.

Desai said the decrease in the deficit is attributable to raising individual tax revenue and a “government right-sizing push that has reduced federal employment to its lowest level since 1966, and aggressive crackdown on federal welfare fraud. As these and other initiatives continue taking effect, America’s deficit and debt-to-GDP ratios will continue trending in the right direction.”

Fatima Hussein, The Associated Press