The uptick in borrowing comes as longer-term US obligations linked to social security and health care have been growing, while interest payments have climbed as well.
Total public debt outstanding stood at US$40.05 trillion at the close of business on Tuesday, according to data released by the US Treasury Department on Wednesday.
This stands in contrast to an earlier forecast by the Congressional Budget Office that overall borrowing would hit US$39.4 trillion by the end of fiscal year 2026.
Rising US debt comes as concerns over inflation, war in the Middle East and government spending have been driving investor worries, and the cost of borrowing has grown.
Yields on long-term Treasury bonds rose on Tuesday to the highest level since 2007, reflecting growing price pressures due to war in the Middle East and anxiety over US deficit spending.
The increase forces the US government to refinance debt at the highest rates since before the 2008 global financial crisis.
The US Treasury Department moved to steady the long-term bond market early on Wednesday, sending yields lower.
The federal government operates at a deficit and borrows money to help cover its obligations, including its war spending and tax cuts.
“It’s been well known for a while that the United States government was on a pretty unsustainable path with deficits,” said Jessica Riedl, a budget and tax fellow at the Brookings Institution.
“Over the last few years, the United States has moved into roughly US$2 trillion deficits, even during peace and prosperity,” she added.
While deficits of three percent to four percent of GDP used to worry financial markets, she noted that levels are closer to six percent to seven percent of GDP now.
“That has made markets more nervous,” she said.
As inflation pushed interest rates higher, interest costs on the debt have risen as well, and costs linked to an ageing population are pushing up deficits. (AFP)
