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U.S. Government Shuts Down as Debt Reaches $37.5 Trillion in Fight Over Entitlements

Analysts say the standoff sidesteps structural deficits rooted in long‑running entitlement growth.

Overview

  • Senate Democrats blocked a clean continuing resolution that would have extended December 2024 spending levels, triggering a federal shutdown.
  • Treasury data show total federal debt at about $37.5 trillion, up roughly $2 trillion over the past year.
  • Democratic negotiators are reported to be seeking roughly $1.5 trillion in new or permanent entitlements, including making expanded Affordable Care Act premium credits permanent.
  • Tax Foundation analysis finds proposed tariff revenue would barely alter the fiscal path, with debt-to-GDP still projected to exceed 124% by 2035 even if all “emergency” tariffs are collected.
  • Other stress signals include taxpayers now covering an estimated 93% of ACA premiums and a Cato tally of 2,623 federal benefit and subsidy programs, with “Deficit Day” falling on Sept. 21 this year.