WASHINGTON — The United States has achieved a historic milestone as its national debt surpassed $33 trillion for the first time, just under two weeks before the federal government potentially faces a shutdown due to a lack of funding authorization.
The debt, equivalent to the amount borrowed by the federal government to cover operational expenses, reached $33.04 trillion on Monday, as reported by the Treasury Department.
A significant increase of approximately 50% in federal spending between fiscal years 2019 and 2021 played a key role in pushing the national debt beyond the $33 trillion mark, according to the department.
Tax cuts, stimulus programs, and reduced tax revenue resulting from widespread unemployment during the Covid-19 pandemic all contributed to the government's record-breaking borrowing levels.
The issue of the national debt is currently the focal point of a deadlock in Congress concerning a spending bill that would fund the government until the next funding cycle.
Republican lawmakers are advocating for reduced spending, whereas Democrats support President Joe Biden's initiatives, including the Inflation Reduction Act, which is estimated to cost over $1 trillion over the next decade, according to a budget model from the University of Pennsylvania.
On Sunday, House Republicans introduced their own bill to fund the government until October 31 in exchange for an 8% reduction in domestic programs, with exceptions made for national security, as reported by NBC News.
However, it is unlikely that this bill will pass in the Democrat-controlled Senate.
A spokesperson from the White House informed CNBC that the increase in debt is primarily attributed to trillions of dollars in tax cuts enacted by Republican administrations, which were skewed in favor of the wealthy and large corporations over the past two decades.
"Congressional Republicans want to extend President (Donald) Trump's tax cuts and repeal President Biden's corporate tax reforms, effectively doubling down on trickle-down economics," said Michael Kikukawa, a White House assistant press secretary.
Kikukawa also added that if approved, President Biden's policies aimed at ensuring that the wealthy and large corporations pay their fair share in taxes and reducing subsidies to the oil and pharmaceutical industries could reduce deficits by $2.5 trillion.
Congress has until September 30th to pass a spending bill.
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