The last balanced budget for the U.S. federal government occurred in fiscal year 2001, which recorded a surplus of approximately $130 billion. This budget was influenced by a conflict between Republican members of Congress and Democratic President Bill Clinton, who had differing views on spending and taxation. Since then, the federal government has consistently run a structural deficit, currently estimated at around $2 trillion annually.
For fiscal year 2025, the government reported revenues of $5.23 trillion against expenditures of $7.01 trillion, resulting in a budget deficit of $1.78 trillion. The national debt has increased significantly, standing at over $39.2 trillion, which translates to more than $114,800 per American resident. Daily interest payments on this debt exceed $2.8 billion, with debt servicing costs for fiscal 2025 reaching approximately $970 billion.
Key factors contributing to the rising debt include military expenditures related to the Global War on Terror, which began after the September 11 attacks, and significant spending during the Great Recession and the COVID-19 pandemic. The Costs of War Project estimates that military actions linked to the war on terror have cost the U.S. around $5.8 trillion over two decades.
Additionally, structural deficits have been exacerbated by entitlement programs such as Social Security and Medicare, which are projected to increase in cost. The Government Accountability Office reported that total federal debt managed by the Fiscal Service rose from $18.1 trillion in fiscal year 2015 to $37.6 trillion in fiscal year 2025. Despite ongoing discussions about the sustainability of these deficits, there has been a lack of decisive action from political leaders to address the issue effectively.