US national debt hits $39 trillion amid war in Iran
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The U.S. national debt surpassed a record $39 trillion on Wednesday, just weeks into the U.S.-Israeli war in Iran, highlighting the growing tension between competing fiscal priorities.
The milestone comes amid efforts to pass a massive tax law, boost defence spending, strengthen immigration enforcement, and address the debt itself — a goal former President Donald Trump had promised to achieve both as a candidate and while in office.
The Government Accountability Office has warned that rising government debt impacts ordinary Americans, including higher borrowing costs for mortgages and vehicles, lower wages as businesses have less capital to invest, and more expensive goods and services. Advocates for a balanced budget caution that continued borrowing will force Americans to confront tougher fiscal tradeoffs in the future.
“We must recognize this alarming rate of growth and the significant financial burden we are putting on the next generation,” said Michael Peterson, chair and CEO of the Peter G. Peterson Foundation, a nonprofit created to raise awareness of America’s long-term fiscal challenges.
The trajectory of federal debt remains concerning. It has surged under both Republican and Democratic administrations, recently driven by wars, pandemic spending, and tax cuts. The debt reached $38 trillion five months ago and $37 trillion two months earlier, with projections indicating it could hit $40 trillion before this fall’s elections if the current pace continues.
White House economic adviser Kevin Hassett estimated on Sunday that the ongoing war in Iran has already cost the U.S. over $12 billion, though the timeline for its conclusion remains unclear.
A White House spokesman, Kush Desai, highlighted 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 $7.01 trillion, against total revenue of $5.23 trillion, resulting in a deficit of $1.78 trillion, a $41 billion decrease from the previous fiscal year.
Desai attributed the decline to higher individual tax revenue, a “government right-sizing” initiative that reduced federal employment to its lowest level since 1966, and an aggressive crackdown on federal welfare fraud. He added that as these measures continue, America’s deficit and debt-to-GDP ratios are expected to trend in the right direction.
