The U.S. gross national debt surpassed $40 trillion last month for the first time in the nation’s history, even as the federal government continues to add to borrowing at an accelerating pace. The milestone comes as fiscal pressures build for political leaders in office now and for candidates in upcoming elections, since the choices made over the next few years will affect a budget already strained by rising interest costs and long-term entitlement spending.

Earlier this year, the annual report of the Social Security and Medicare Trustees said the main Social Security trust fund is on track to be depleted in 2032, at which point automatic benefit cuts of 22% would take effect. At the same time, the rise in the national debt, combined with higher interest rates, has pushed the cost of servicing the debt sharply higher, making it one of the fastest-growing parts of the federal budget and larger than the defense budget.

Michael A. Peterson, CEO of the Peter G. Peterson Foundation, told FOX Business that the increase in debt "is an urgent problem, and to me, $40 trillion is enough stealing from our next generation and it's time to act. It has a negative effect on the economy, on wages, on affordability, but also on specific governmental programs."

"In just six years, our Social Security system's trust fund will run out and be fully depleted. And at that point, if Congress does nothing, we will have an automatic, across the board, immediate 22% cut to all benefits for all the beneficiaries," he said. "Obviously, that makes no sense, that's benign neglect of our retirees here, and we need to get at it."

US NATIONAL DEBT HITS $40 TRILLION FOR FIRST TIME EVER

With Social Security insolvency projected six years from now, any senator elected in this fall’s midterm elections and the next president elected in 2028 would serve terms that extend into 2032, when the trust fund is expected to be exhausted. That timeline places the issue squarely in the policy window of the current Congress and the next administration, even as debt-service costs and mandatory spending continue to shape annual budget negotiations.

Social Security, along with Medicare and interest expenses, are the fastest-growing drivers of the annual U.S. budget deficit, which is currently projected to exceed $2 trillion for fiscal year 2026, ending at the close of this month. Deficits are expected to widen in the years ahead as debt rises, interest costs continue to increase and the U.S. population ages.

"We're basically taking $2 trillion from our future, we're spending it now, and we're saddling our kids and grandkids with $2 trillion of debt, plus all the interest on top of it," Peterson said, adding that "interest is our fastest growing program, it's going to double in the next 10 years."

FEDERAL BUDGET DEFICIT ON TRACK TO SURPASS $2T THIS FISCAL YEAR AS SPENDING OUTPACES REVENUE

Peterson said that, unlike geopolitical challenges around the world — including China, Russia, Iran and others — the U.S. government has the ability to set its own budget policies in ways that could stabilize or reduce deficits and, in turn, the national debt.

"The solutions are well-known. We have a whole series of revenues coming in the door through our tax policy. There are many changes we can make to that over time that would bring in more money, that would lower these deficits. And on the spending side, there's a whole host of programs and different possibilities," Peterson said.

US NATIONAL DEBT SURPASSES SIZE OF THE ECONOMY FOR FIRST TIME SINCE WORLD WAR II

He said the Peter G. Peterson Foundation created the Solutions Initiative, which brought together seven think tanks from across the political spectrum to develop proposals aimed at stabilizing the national debt as a share of gross domestic product. The debt-to-GDP ratio reached 100% this year for the first time since 1946 and is projected to approach 200% over the next 25 years, underscoring how debt growth now intersects with the broader size of the economy.

"It really comes down to what your ideology is, how much revenue you want to bring in, how much spending cuts you're willing to tolerate, and what combination of that makes sense to you," Peterson explained, adding that all seven think tanks' plans stabilized the debt.

"The good news is there are many combinations, many opportunities right in front of us. We don't need to reinvent the wheel, we just need to have some political courage to get started."

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"Of course, this feels politically dangerous because you might involve more taxes or less spending. But at the end of the day, I think Americans are ready for this solution because they know this isn't sustainable, and it's not good for their long-term future," Peterson said.