The U.S. national debt soared past $39 trillion this week amid growing concerns over the cost of the Iran war.
The figure, published by the Bureau of the Fiscal Service, consists of over $31.3 trillion in public debt, on top of over $7.6 trillion in intragovernmental holdings or debt that is held by the government.
Since his first presidential campaign dating back to 2015, President Donald Trump has vowed, on several occasions, to reduce the national debt.
Before his first term, Trump claimed he would be able to eliminate the entirety of the debt, which at the time stood at over $19 trillion, in just eight years.
“I’m renegotiating all of our deals, the big trade deals that we’re doing so badly on,” he said as a Republican candidate in April 2016, pointing towards reshaping U.S. trade and foreign policy as a tool to clear the sum, should he win the election.
In 2022, months before his announcement to run in the 2024 presidential race, Trump said that the idea of “Trumpism” included “tariffs and taxes on other countries who have taken advantage of the United States and which will make the USA rich and debt-free again.”
Since the President’s inauguration last year, national debt has climbed by around $2.8 trillion. Trump’s One Big Beautiful Bill, which was signed into law last Independence Day, was heralded as a way to reduce the debt. “Trump’s proven economic formula… will slash our debt down to just 94% of Gross Domestic Product (GDP),” the White House claimed.
The President also argued that his hardline tariff policy would contribute to eating away at the debt tally. While floating the idea of providing qualifying Americans with a $2,000 dividend acquired from the U.S.’ tariff earnings, Trump suggested that the money left over from the stimulus check scheme would be used to “substantially pay down national debt.”
The Congressional Budget Office projected in late November that tariffs enacted in 2025 would reduce debt (including interest) by $3.0 trillion through the Fiscal Year 2035.
But the possibility of utilizing tariff earnings took a significant blow when the Supreme Court ruled in February that the majority of Trump’s tariffs were unlawful—a result the President called “deeply disappointing.”
Now, amid the U.S. debt passing the $39 trillion mark, there are rising concerns about the cost of the Iran war, which is currently in its 20th day with no clear end in sight.
On Sunday, Kevin Hassett, Director of the National Economic Council, said $12 billion had already been spent on the Iran war.
The implications of the conflict are already being felt by U.S. consumers.
Due to Iran effectively blocking the flow of oil and gas that typically transits the Strait of Hormuz, energy prices have surged. The price of crude oil topped $97 per barrel Thursday morning.
Since the U.S. and Israel launched strikes against Iran on Feb. 28, American families are paying nearly 80 cents more per gallon for gas every time they fill up. Tickets for certain flights have also gone up, as airlines battle with the reality of rising fuel costs. Australian carrier Qantas told TIME on Wednesday that it is increasing fares “in response to rising costs including the significant increases in jet fuel prices.”
Higher fuel costs, plus a likely rise in the price of fertilizer due to the disruption of global trade, are expected to impact grocery bills in the coming weeks and months for American families, too.
Research conducted by TIME, based on publicly available data, found that the $12 billion already spent on the Iran war could have been spent on health care for 1.3 billion Americans.
As the conflict continues to escalate, Defense Secretary Pete Hegseth confirmed on Thursday that the Pentagon has sent the White House a request for $200 billion in additional funds, though he emphasized that the figure “could move.”
A number of Democrat lawmakers have already voiced strong opposition to the war and its cost.
“It is so much worse than you thought,” said Sen. Elizabeth Warren of Massachusetts following a closed-door briefing on the Iran war last week.
“Trump has not given a single clear reason for the war and has no plan to end it,” she said.
Furthermore, the high level of spending on the conflict is set to significantly boost profits for a number of defense and weaponry contractors.
TIME – by Callum Sutherland. Reporter, Mar 19, 2026 10:20 AM ET. Link to article