US public debt tops $34 trillion as Congress heads into funding fight

U.S. dollar banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File photo

WASHINGTON  -The U.S. federal government’s total public debt has reached $34 trillion for the first time, the U.S. Treasury Department reported on Tuesday as members of Congress gear up for another series of federal funding battles in coming weeks.

The Daily Treasury Statement for Friday showed that the total public debt outstanding rose to $34.001 trillion from $33.911 on Thursday.

The debt that counts toward the federal debt ceiling rose to $33.89 trillion on Friday from $33.794 trillion on Thursday. This “debt subject to limit” category excludes the unamortized discount on Treasury bills and zero coupon bonds, debt issued by the Federal Financing Bank and guaranteed debt of certain other agencies.

The milestone comes shortly after the federal debt topped $33 trillion in September amid rising federal deficits fueled by falling tax revenues and rising federal expenditures.

READ: US CBO: debt ceiling bill to cut $1.5T from deficit over decade

Congress returns to Washington next week to tackle Jan. 19 and Feb. 2 deadlines for settling government spending through September, amid Republican demands to reduce fiscal 2024 discretionary spending below caps agreed in June. Lawmakers also hope to pass emergency aid for Ukraine and Israel, possibly with unrelated U.S. border security provisions attached.

Failure to approve the one-dozen fiscal 2024 spending bills would plunge Washington agencies into shutdown mode. But reaching compromise could become more difficult with November presidential and congressional elections coming quickly into focus.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a fiscal watchdog group, called the $34 trillion federal debt figure “a truly depressing achievement,” attributing it to political leaders’ unwillingness to make difficult fiscal choices.

“We remain hopeful that policymakers will take further measures to reduce our borrowing either by raising taxes, reducing spending, or creating a fiscal commission – or ideally by doing all of the above,” MacGuineas said in a statement.