The US national debt has reached a new historic milestone, as it hits a record of $33 trillion for the first time. The US national debt has reached this new milestone just weeks before the federal government faces a potential closure over lack of authorization for funding.
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This debt represents the amount borrowed by the federal government to cover its operational expense, and has reached a new high of $33.04 trillion, according to the Treasury Department. As per the reports, a 50% increase in the federal spending between 2019 and 2021 contributed to the debt reaching $33 trillion.
Stimulus programs, tax cuts, and decreased tax collection during the COVID-19 pandemic were the major factors behind the rising federal borrowings. These numbers highlight the pace of increase in the US national debt which stood at $31.4 billion in June, and now hits a new record of $33 trillion.
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Standstill in the Congress
The rising debt issue is at the center of a standstill in the congress on top of a funding bill that would support the government until the next funding cycle. There has been a major distress between the republicans and democrats over the federal spendings.
Republicans are taking a stance of spending less, while on the other hand, Democrats are backing President Joe Biden’s spending programs, such as the Inflation Reduction Act. According to the University of Pennsylvania, these programs are expected to cost more than a trillion dollars over the next decade to the United States treasury.
On Sunday, House Republicans had announced their bill to fund the federal government till the end of October, that includes an 8% cut on domestic spending. Though the bill has not proposed any cuts to the defense budget, it is highly unlikely to pass through the democrat-led Senate.
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The White House
A White House spokesperson while talking to the press held previous Republican governments in the past 20 years for this debt increase. He accused Republicans for giving trillions of dollars in tax relief to the wealthy and big corporations over the past two decades.
Speaking to CNBC, Treasury secretary Janet Yellen said that while the interest cost still remains manageable, policy makers should take strict measures to avoid a default in future.
Michael Kikukawa, Assistant press secretary for White House said that “Republicans want to extend the tax cuts introduced by President Donald Trump to big corporations and business houses and repeal the corporate tax reforms introduced by President Biden.”
He further added that by following Biden’s policies to levy fair share of taxes on large corporations and business owners, the deficits could be reduced by $2.5 trillion.
