The US national debt reached a new historic milestone of $33 trillion, just three months after the federal government's gross debt topped $32 trillion. This surge came shortly after the US almost faced a default due to surpassing its earlier debt ceiling of $31.4 trillion in January 2023. Notably, the first time the US national debt passed the $31 trillion threshold was in October 2022. Between April and May this year, Washington was debating the issue of raising the debt ceiling. The US administration saw a divide, with Democrats and Republicans offering differing solutions. However, the two sides managed to reach a compromise that was later approved by US President Joe Biden. Treasury Secretary Janet Yellen had previously emphasized the need to address this issue by June 2023 to ensure the nation's fiscal obligations were met. Initially, Republicans suggested raising the ceiling by $1.5 trillion while proposing spending cuts of $4.5 trillion. Democrats, in contrast, wanted an unconditional ceiling raise. In the eventual resolution, the government suspended the debt limit and agreed upon reduced expenditures. As per the ratified legislation, the debt ceiling will remain unchanged until at least January 2025. The coming years are set to witness tighter spending. What is more, the government is planning to redirect unspent money from COVID-19 programs to support other sectors.
