As America’s national debt nears a staggering $37 trillion and annual federal budget deficits exceed $2 trillion, confronting this fiscal crisis is critical.
At a Glance
- The U.S. national debt has reached $36.56 trillion as of March 2025
- The federal budget deficit is projected at $1.9 trillion for fiscal year 2025
- Interest payments on the national debt are expected to total $952 billion in 2025
- A bipartisan fiscal commission has been proposed to address the debt crisis
- Public support for deficit reduction through spending cuts and revenue increases stands at 84%
Mounting Debt and Deficit Challenges
The United States is facing a fiscal reckoning as the national debt has climbed to $36.56 trillion by March 2025. Meanwhile, the federal deficit is projected to hit $1.9 trillion this fiscal year, or 6.2% of the country’s GDP.
Equally alarming is the interest burden: in 2025 alone, the U.S. will spend $952 billion just on debt interest. That figure threatens to overtake major federal programs and edge out public investments that fuel long-term economic growth.
Watch a report: “The Debt Crisis is Here” – Peter G. Peterson Foundation.
Lawmakers Under Pressure
Fiscal policy experts and business leaders are warning that inaction could trigger catastrophic consequences—including a potential default on U.S. obligations. One proposed solution: a bipartisan congressional commission on fiscal responsibility to forge actionable reforms.
Economists Dana M. Peterson and Lori Esposito Murray emphasized the urgency, stating, “The Debt Crisis is here—not down the road.” They noted that “business supports its establishment,” reflecting strong private-sector momentum for responsible fiscal management.
Reform or Recession?
Experts argue any meaningful solution must target both spending and revenue. Recommendations include raising the top marginal tax rate from 37% to 39.6%, removing the Social Security wage cap, and adjusting Medicare eligibility and payment structures.
There is also broad public backing: a 2024 survey found 84% of Americans favor either cutting spending, increasing taxes, or both to rein in deficits. Proposals for COLA reform, retirement age shifts, and capital gains tax adjustments are gaining traction as economists warn of declining living standards and weakened global competitiveness if action is delayed.
