The National Debt Hit $40 Trillion, But It’s Not an Issue in the Midterms

Council on Foreign Relations | James M. Lindsay

The United States national debt reached $40 trillion, pushing the debt-to-GDP ratio to 125 percent and surpassing the World War II record of 106 percent. This liability represents roughly $117,000 per resident as federal spending far outpaces revenues. The Congressional Budget Office projects an annual deficit of $2.1

trillion, or 6 percent of GDP, despite near-full employment. Fiscal choices carry severe strategic costs. Fifty percent of all debt accrued since Donald Trump was first elected, and 75 percent accumulated since Barack Obama took office. Annual interest obligations now exceed $1 trillion, matching total U.S. defense spending. Treasury Secretary Scott Bessent attempted to lower rising bond yields via buyback maneuvers, though investor Stanley Druckenmiller criticized the measure as insufficient compared to genuine fiscal restraint. Despite long-term risks, Gallup found that only 2 percent of Americans view the debt as a top issue ahead of upcoming elections.

Comment

Equalisation of sovereign debt servicing costs with the U.S. national defence budget creates structural headwind for long-term military modernisation. When interest payments reach parity with defence outlays, Congressional appropriations for discretionary procurement come under severe pressure during budget reconciliation. The trade-off directly threatens multi-year procurement commitments for major platform recapitalisation, including the Columbia-class ballistic missile submarine and the Sentinel intercontinental ballistic missile program.

This structural crowding-out mechanism operates primarily through statutory caps on discretionary spending. High debt-servicing requirements squeeze the top-line budget under future fiscal responsibility frameworks, forcing trade-offs between force readiness and capital-intensive development. Consequently, statutory debt obligations restrict the Pentagon's capacity to absorb cost overruns within the Next Generation Air Dominance procurement cycle.

Strategic Question for Discussion

If rising debt-servicing costs force discretionary budget caps, which pillar of the U.S. nuclear triad — such as the Sentinel ICBM or Columbia-class submarine program — faces greater structural vulnerability during Congressional appropriations, and why?

The available evidence points toward land-based modernisation under the Sentinel ICBM program bearing disproportionate budget risk compared to the sea-based leg. Given statutory funding prioritization mandated for sea-based strategic deterrence, Columbia-class submarine procurement is likely to preserve its capital allocations by forcing discretionary trade-offs onto air and land acquisition cycles.

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