US national debt hits record $34 trillion as Congress gears up for funding fight

The federal government’s gross national debt has surpassed $34 trillion, a record high that foreshadows the coming political and economic challenges to improve America’s balance sheet in the coming years.

The US Treasury Department issued a report on January 2 logging US finances, which have become a source of tension in a politically divided Washington that could see parts of the government shutdown without an annual budget in place, AP News reports.

Republican lawmakers and the White House agreed last June to temporarily lift the nation’s debt limit, staving off the risk of what would be a historic default. That agreement lasts until January 2025. 

The national debt does not appear to be a weight on the US economy right now, as investors are willing to lend the federal government money. This lending allows the government to keep spending on programs without having to raise taxes.

But the debt’s path in the decades to come might put at risk national security and major programs, including Social Security and Medicare, which have become the most prominent drivers of forecasted government spending over the next few decades. Government dysfunction, such as another debt limit showdown, could also be a financial risk if investors worry about lawmakers’ willingness to repay the US debt.

The debt equates to about $100,000 per person in the US That sounds like a lot, but the sum so far has not appeared to threaten US economic growth.

Both Democrats and Republicans have called for debt reduction, but they disagree on the appropriate means of doing so.