The Latest: The US national debt hits a record $40 trillion

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The Latest: The US national debt hits a record $40 trillion

2026-08-20 23:29 Last Updated At：23:40

The United States' debt surpassed a record $40 trillion Wednesday, a staggering milestone as defense costs, social programs and interest on the burgeoning deficit make up an enormous share of federal spending.

The milestone figure was recorded just five months after the U.S. hit a record $39 trillion debt in March. It reached $38 trillion five months before that, in October.

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The first lady is partnering with IndyCar, the sanctioning body for U.S. auto racing, and Indiana and Purdue universities to fund the scholarships, her office says.

Both Indiana-based schools are joining about two dozen other institutions of higher learning to offer scholarships through Melania Trump’s “Fostering the Future” initiative benefiting young people in foster care.

A formal announcement is set for Thursday afternoon in the White House Rose Garden. The first lady will be joined by her husband and representatives from IndyCar and the universities.

The announcement comes just before Sunday’s Freedom 250 Grand Prix race in downtown Washington, which was organized by the president to help celebrate America’s 250th birthday.

The State Department said Thursday that it had given the green light for Qatar, a key U.S. partner in the Gulf, to buy four KC-46A aircraft along with assorted equipment, including turbofan engines, radar warning devices and countermeasure systems. The sale will also include trucks, training and assorted logistics services.

The sale “will increase Qatar’s capability to meet current and future threats by enhancing its defense capabilities and interoperability with U.S. and allied forces and reinforcing Qatar’s strategic role in regional security,” the department said.

Qatar, which hosts a major U.S. military base, has been a critical part of the war with Iran, including by trying to mediate an end to the conflict.

The launches come a day after North Korea shrugged off a U.S. decision to scale back military drills with South Korea in an apparent bid to resume diplomacy.

South Korea’s military said the launches of about 10 short-range ballistic missiles happened from North Korea’s capital region Thursday evening. The military said the missiles flew about 300 kilometers each toward North Korea’s eastern waters.

Trump ordered the Pentagon to “substantially reduce” the Ulchi Freedom Shield exercises just before they began Monday. The president cited what he said was a good relationship with North Korean leader Kim Jong Un and South Korea’s refusal to support him over the war in Iran.

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Braid was in charge of helping to shepherd Trump’s legislative agenda through a Congress where his Republican Party controlled both chambers.

Vice President JD Vance wrote on X that Braid “played a critical role in all of the administration’s achievements in Congress,” including the sweeping tax and spending legislation approved last summer.

Vance described Braid as “brilliant” and “one of the hardest workers you will ever meet.”

The vice president didn’t provide details of Braid’s next job, saying only that he was “very excited to see what he does next.”

The Asia-based USS George Washington aircraft carrier is now operating in the Middle East, the U.S. military said Thursday.

The Washington is relieving the long-deployed USS Abraham Lincoln after reports that sailors were facing mental health challenges and supply shortages while supporting the Iran war.

The Lincoln’s deployment has included a record-setting uninterrupted time at sea. Democratic lawmakers are pressing for accountability from the Pentagon over conditions aboard the carrier, which Defense Secretary Pete Hegseth has said were “completely misrepresented.”

The deployment of the Washington to the Middle East has left Asia without an American carrier strike group at a time when China shows more signs of aggression.

Secretary of State Marco Rubio has designated a U.S. citizen scholar jailed in China as “wrongfully detained” as Trump prepares to welcome Chinese President Xi Jinping to the White House next month.

The State Department said Thursday that Rubio had decided that Min Zin, who was arrested by Chinese authorities in June, is being unjustly held.

“We call on Beijing to release all U.S. citizens arbitrarily detained or exit-banned in China,” the department said.

The designation raises the profile of his case within the U.S. government and in the past has led to additional attention and resources being devoted to securing the release of wrongful detainees.

Min Zin, who writes about Myanmar and Chinese foreign policy, was arrested on suspicion of spying. He was a student activist in Myanmar’s 1988 uprising, a student-led movement that the government at the time reacted to with military force. He eventually sought asylum in the U.S.

The Democratic Congressional Campaign Committee said the expansion showcases the depth of its candidate bench as they try to wrest majority control of the House.

Chair Suzan DelBene said the candidates are “proven fighters” at a time when voters are “eager for leaders who will always put the well-being of their communities first, not rubber stamp Trump’s failed agenda.”

The candidates include retired Army Brigadier General Leela Gray in Florida, former federal prosecutor Zach Dembo in Kentucky, Maine state auditor Matt Dunlap, former Navy helicopter pilot Nancy Lacore in South Carolina and former Rep. Tom Perriello in Virginia. The “red to blue” program invests in promising candidates with funding and other support.

Democrats on Thursday narrowed the list of potential host cities for their 2028 presidential convention to Boston, Denver and Philadelphia as their party looks ahead to a wide-open primary to succeed President Trump.

Democratic National Committee Chairman Ken Martin said in a statement the cities put forward “incredibly strong bids,” and he promised the convention would be an “inspiring celebration of our party’s future nominee.”

A final decision is expected to be made later this year by party leaders. Republicans have already chosen Houston for the site of their 2028 convention.

The Democratic convention, scheduled for Aug. 7-10, 2028, traditionally gives the party a chance to formally introduce its nominee to the country, rally the base and kick-start the most intense period of campaigning ahead of the general election.

The party didn’t specify why Atlanta and Chicago, which was the site of the 2024 convention, were eliminated. Officials visited all five cities in April and May, considering logistical and fundraising capacity among other factors.

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Trump played White House tour guide on Wednesday, showing off the helipad he is building on the lawn before leaning over to autograph a piece of it and bragging about the ballroom he’s rushing to complete despite legal challenges.

Trump gushed for several uninterrupted minutes about granite being laid and said the chopper landing area would leave visiting foreign leaders “very impressed” — including Chinese President Xi Jinping, who is coming next month.

At times, he sounded almost like a construction manager, singing the praises of granite over asphalt in painstaking detail and noting for reporters he brought out for the show that the stone could withstand 35,000 pounds per square inch of pressure.

The president also revealed for the first time that he has replaced the walkway from the White House’s diplomatic entrance along with a portion of the asphalt driveway around the South Lawn with white granite.

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The national debt surpassed a record $40 trillion Wednesday, a staggering milestone as defense costs, social programs like Social Security and Medicare and interest on the burgeoning deficit make up an enormous share of federal spending.

The milestone figure was recorded just five months after the U.S. hit a record $39 trillion debt in March. It reached $38 trillion five months before that, in October.

The unprecedented $40 trillion figure highlights competing administration priorities, from boosting defense spending that the U.S. relies on to carry out President Donald Trump’s almost 6-month-old war in Iran to lowering the cost of gas and groceries.

Kush Desai, a White House spokesman, said the Trump administration “has been focused on slashing waste, fraud, and abuse in federal spending while accelerating economic growth to get America’s debt-to-GDP ratio trending in the right direction.”

However, experts say the exploding debt and the latest record milestone are already affecting Americans’ pocketbooks by raising borrowing costs for things like mortgages and cars, lowering wages from businesses that have less money available to invest, and creating more expensive goods and services.

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Pressure builds anew in the bond market as Walmart drags the US stock market lower

NEW YORK (AP) — A rise in oil prices on Thursday is sending worries about inflation and yields in the bond market higher, erasing some of the relief the U.S. Treasury Department created the day before. A drop for Walmart following its latest profit report helped drag the U.S. stock market lower.

The S&P 500 slipped 0.3% and is on track for a fourth loss in the five days since setting its all-time high last week. The Dow Jones Industrial Average was down 344 points, or 0.6%, as of 11:30 a.m. Eastern time, and the Nasdaq composite was 0.8% lower.

The bond market remains the center of action after yields charged higher through the summer on worries about high inflation, gargantuan government debts and other factors. Treasury Secretary Scott Bessent made a move Wednesday that jolted financial markets to at least double the size of his department’s planned purchases of longer-term Treasurys from Sept. 9 through Nov. 4.

That helped push yields down after the 10-year Treasury’s yield had hit its highest level in more than a year and the 30-year yield got back to where it was in 2007, before the Great Recession sent yields toward zero worldwide. It’s a big deal because high yields slow the economy by raising interest payments for people, companies and the government, and they can undercut prices for stocks and other investments.

But analysts had cautioned the effect may be short lived, given how small the purchases are relative to the overall size of the Treasury market and how they don't fix the fundamental concerns of investors that had driven up yields. Plus, more signals arrived quickly to push worries higher.

The U.S. government’s debt topped $40 trillion on Wednesday, a staggering record that arrived just months after the national debt first blew past the $39 trillion mark in April, because Washington continues to spend far more money than it brings in.

And on Thursday, the price for a barrel of Brent crude climbed 1.9% to $93.35 as uncertainty continues about when the war with Iran will allow oil tankers to freely exit the Persian Gulf again. President Donald Trump threatened Iran with “the MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST ANY COUNTRY” late Wednesday but provided few details.

That helped push the 10-year Treasury yield up to 4.70% from 4.65% late Wednesday. It’s almost back to its 4.71% level from late Tuesday, before the Treasury Department made its announcement.

A couple encouraging reports on the U.S. economy also helped push up longer-term Treasury yields, which move with expectations for the economy and inflation in coming years. One said fewer U.S. workers applied for unemployment benefits last week than economists expected, while another said manufacturing in the mid-Atlantic region appears to be much stronger than expected.

On Wall Street, Walmart was one of the heaviest weights on the S&P 500 and fell 9.4% even though it reported stronger profit and revenue for the latest quarter than analysts expected. Investors focused instead on how an important underlying measure of revenue growth at its stores slowed again. Its forecast for profit in the current quarter also fell short of analysts’ expectations.

Given its massive size, Walmart offers a look at how shoppers are doing across the United States. A surprisingly weak update on sales at U.S. retailers overall last month had raised worries that shoppers may be succumbing to pressure from high inflation and a job market that may be looking less solid.

Advance Auto Parts tumbled 23.1% after the retailer reported weaker revenue for the latest quarter, even though its profit topped expectations. CEO Shane O’Kelly said that “tighter household budgets constrained spending more than we anticipated, especially during the last four weeks of the quarter.”

Spending by U.S. consumers is the main engine of the economy, and a pullback by them could exacerbate what's already a slowdown in growth for the economy.

A pullback could also mean a double-whammy for travel companies, which would see fewer bookings when they have to pay higher prices for fuel. Norwegian Cruise Line Holdings fell 4.9%, while United Airlines sank 2.4% and American Airlines lost 2.5%.

Helping to keep Wall Street’s losses in check was Deere, which reported stronger profit and revenue for the latest quarter than analysts expected. It rose 8.7% as the company said order trends indicate the agriculture equipment business looks set to accelerate after this year.

Oil companies also rose with the gains for crude prices. Exxon Mobil added 2.1%, and ConocoPhillips climbed 3.6%.

In stock markets abroad, indexes were mixed in Europe following a stronger finish in Asia.

South Korea’s Kospi soared 5.9% for one of the world’s biggest moves after the two tech titans that dominate its market, Samsung Electronics and SK Hynix, jumped. Such swings have become more common for Seoul's market, which has borne the brunt of rising and falling worries that winning stocks in the artificial-intelligence boom may have shot too high.

AP Business Writers Chan Ho-him and Michelle Chapman contributed to this report.