See how the national debt grew to $31 trillion
The United States owes $31 trillion. Washington now spends about $1 trillion more each year than it collects in revenue, forcing the Treasury Department to borrow to make up the difference. Which means the national debt is still growing.
Without big changes, the debt will soon be bigger as a share of the economy than when it peaked at the end of World War II. Most of that debt has accumulated over the past 20 years. In 2001, the nation actually had a cash surplus — the Treasury collected more in taxes than it spent on government services.
Since then, four presidents, 10 sessions of Congress and two wars have contributed to the tide of red ink. Thanks in part to policy decisions made generations ago, Social Security and Medicare are growing in cost, also adding to the debt. Although interest payments remain low by historical standards as a share of the nation’s economy, that could change quickly.
More recent decisions — budget-busting tax cuts, bipartisan spending deals and staggering sums to cope with the coronavirus pandemic — have all forced the nation to sink more deeply in debt. Here are nine key moments that show how we got here.
The Bush tax cuts | June 7, 2001
President George W. Bush signs the first of two major tax cuts into law, slashing rates on ordinary income as well as on capital gains and dividends. In 2012, the Congressional Budget Office estimated that the Bush tax cuts added roughly $1.5 trillion to the national debt. The majority of these tax cuts would later be made permanent in a deal between congressional Republicans and President Barack Obama, adding to their cost.
Wars in Iraq and Afghanistan | March 19, 2003
After the Sept. 11, 2001, terrorist attacks, the United States invades Iraq. America would go on to spend roughly 20 years fighting wars in the Middle East, leading to a surge in spending on the Pentagon and veterans. A Harvard analysis has found that the conflicts in Iraq and Afghanistan cost the nation between $4 trillion and $6 trillion.
Prescription drug expansion | Jan. 1, 2006
Medicare Part D — a major expansion of Medicare that offered prescription drug coverage to seniors — goes into effect nearly three years after being signed into law by Bush. Republicans who controlled Congress did not pay for the popular, but expensive, initiative.
2008 recession and response | Feb. 17, 2009
A crisis in financial markets triggers the Great Recession, the worst downturn since the Great Depression. This dramatically expands the national debt in two ways: First, there is a sharp drop in tax collections. Second, there is a big jump in spending on increased unemployment benefits and other programs to help people weather the downturn. Congress and the Obama administration also approved a major economic stimulus package. Brian Riedl, an economist at the Manhattan Institute, estimates the Bush and Obama administrations together enacted about $2 trillion in emergency measures to respond to the financial crisis and the ensuing recession.
Obama-Republican deal to extend Bush tax cuts | Jan. 1, 2013
With the Bush tax cuts set to expire amid a sluggish recovery, Obama agrees to make almost all of them permanent, extending tax relief for all but the very richest Americans. Congressional Republicans, in turn, agree to extend some economic stimulus measures. At the time, the Congressional Budget Office estimated the deal would cost roughly $4 trillion over 10 years.
The Trump tax cuts | Dec. 22, 2017
President Donald Trump signs a sprawling tax cut bill, centered on a plan to reduce the rate paid by large U.S. corporations from 35 percent to 21 percent. The law also cut taxes for most individual taxpayers. The Joint Committee on Taxation of Congress estimated the measure would cost roughly $1.5 trillion over 10 years. A later analysis by the Committee for a Responsible Federal Budget, a Washington think tank, found the cumulative impact of the law could be closer to $2.9 trillion if Congress votes to extend certain provisions, which are set to expire in different years throughout this decade.
Bipartisan spending deals under Trump | Aug. 1, 2019
Democrats and Republicans in Congress agree to ramp up federal spending as Trump disregards Republican orthodoxy on shrinking the size of government. It is the second such deal in two years. The spending helps fuel a strong labor market but exacerbates budget deficits. The bills added a combined $2 trillion to the national debt, according to the Committee for a Responsible Federal Budget.
Congress spends trillions in coronavirus emergency response | Dec. 27, 2020
Trump signs into law the second of what will eventually be three major relief packages approved by Congress in response to the coronavirus pandemic. The first and most expensive is a bipartisan $3.4 trillion deal reached in March 2020, with the U.S. economy in a black hole. Another $900 billion follows in December 2020. In 2021, Democrats under Biden approve an additional $1.9 trillion with no Republican support.
The Biden economic agenda | Aug. 24, 2022
Biden announces a $400 billion plan to cancel student debt, which is quickly put on hold while awaiting review by the U.S. Supreme Court. Meanwhile, Biden pushes Congress to spend more on veterans health, physical infrastructure, and government agencies. Biden’s Inflation Reduction Act spends more on an array of other programs, including the Internal Revenue Service, but is projected to slow borrowing by imposing higher taxes on businesses.