Our weekly column is back in a shorter format—less than a 10-minute weekly read—with a nonpartisan rundown of key domestic and international developments. For additional nonpartisan resources go to TrillionsWeekly.com.
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August 24, 2026: The House of Representatives and Senate are in recess. The House returns Mon, Aug. 31 through Thursday Sept. 3. Both chambers then reconvene Mon, Sept. 14, 2026.
(1) THE DAY THE DEBT GOT NOTICED
$40 TRILLION DEBT: Last Tuesday, August 18, the U.S. Treasury surpassed $40 Trillion in gross debt. Gross debt includes debt owed to the public (about $32.3 Trillion) plus debt owed to the Social Security and other federal government trust funds (about $7.7 Trillion).
Federal trust funds hold a lot of debt because they are required by law to invest their surpluses in Treasury bonds for safekeeping. Social Security (the Old Age and Survivors Insurance, OASI, Trust Fund) in particular, holds a lot of Treasury debt because it ran surpluses from 1984 through 2017 in order to build up reserves to cover benefits for the retiring baby boomers. (However, payroll taxes and trust fund surpluses will be insufficient to pay full benefits beginning in the fourth quarter of 2032.)
The $40 Trillion debt milestone has no particular fiscal or economic significance other than drawing attention to the magnitude of the problem. It was “the day the debt got noticed” – which is a good thing only if it incentivizes the President and congressional leaders to negotiate long-term bipartisan deficit reduction agreements. (Deficit reduction negotiations frequently succeeded in making progress in the 1980s and 1990s; however, in 2011 and 2023, they did not.)
Should we be concerned about the debt? Absolutely. We now spend over $1 trillion per year on interest payments—more than defense. Interest is now one of the fastest growing parts of the budget and is deepening the debt so quickly that the U.S. is in a vicious cycle of debt—increasing interest—and more debt. The longer we wait to fix the problem, the more difficult the solutions become. If you want to see what a serious, bipartisan deficit reduction effort looks like, see the Domenici-Rivlin Debt Reduction Task Force report.
How did political leaders react to this debt milestone? As reported by The Economist: Ron DeSantis, Florida’s Republican governor, wished that Congress had passed a balanced-budget amendment to the constitution when it was proposed in the 1990s. Mark Kelly, a Democratic senator from Arizona, wrote on X that Donald Trump promised to pay off the debt before his first term. Rick Scott, a Republican senator from Florida, said that Congress needs to get “spending under control…” Last week Scott Bessent, the Treasury Secretary, told Newsmax “we did get it under control” before, apparently, events intervened.
Trillions Fact Check:
Passage of a Balanced Budget Constitutional Amendment in the 1990s would have had no impact since only spending cuts and/or tax increases enacted by Congress can reduce deficits. Courts lack the authority and the expertise to change spending or tax laws and a constitutional amendment is not self-enforcing.
Sen. Mark Kelly is correct that Donald Trump promised to eliminate the debt during his first campaign. In fact, he made the same promise during the 2024 campaign. However,
The debt increased during his first term from $19.9 trillion to $27.7 trillion. (To be fair, part of that debt increase was due to COVID spending. But prior to COVID, the debt was already increasing due to ongoing structural deficits and the 2017 tax cuts.)
20 months into his second term, President Trump has again added to the debt with another round of tax cuts and large increases in defense and deportation spending—adding $4 trillion to the debt over the next 10 years.
Sen. Rick Scott is correct that Congress needs to get “spending under control.” Where is his plan to close the $2.1 trillion annual budget deficit? He voted to add $4 trillion to the debt in last year’s mega-tax cut and spending bill, and this year voted to increase spending without offsets to pay for President Trump’s massive deportation operations.
Secretary Bessent claimed that “we did get it (the debt) under control,” but blames current debt levels on tariff refunds. This is nonsense. The Congressional Budget Office projects that this year’s deficit will be $2.1 trillion. CBO projects tariff refunds resulting from Trump’s illegal tariffs will amount to $166 billion. Therefore, more than $1.9 trillion of the FY 2026 deficit has nothing whatever to do with tariff refunds. Where is the Administration plan?
(2) OTHER FISCAL POLICY / FEDERAL BUDGET DEVELOPMENTS
NEW FISCAL YEAR BEGINS OCTOBER 1st BUT GOVERNMENT ISN’T FUNDED YET. Since none of the 12 regular appropriation bills for FY 2027 (which begins October 1st) have been enacted, Congress needs to enact a stopgap “continuing resolution (CR)” to avoid a government shutdown.
SENATE ACTION: On Saturday, August 8, 2026, the Senate passed 90-6 a continuing resolution (HR 6500) to continue funding the government on October 1 at current FY 2026 levels. The stopgap funding would continue through December 11, 2026.
HOUSE ACTION: On July 21, 2026, the House passed its own CR (HR 9770) to continue funding through December 4, 2026, with nearly all Democrats opposing the bill because there was no bipartisan negotiation and it did not address a Trump Administration proposal to put all federal grant decisions in the hands of political appointees.
MAJOR DIFFERENCES BETWEEN THE 2 BILLS: The Senate-passed CR contains two rebukes of Administration policy not included in the House CR: (1) A temporary ban through December 11 on implementation of the White House Office of Management and Budget (OMB) proposed rule that would effectively give political appointees veto authority over federal grants (section 157 of the CR); and (2) a bar on transferring additional funding to Customs and Border Protection.” The Senate bill also includes some special provisions (“anomalies”) requested by the Administration to begin or adjust funding of particular projects as FY 2027 begins.
OUTLOOK FOR THE CR: According to Politico, House Rules Committee Chair Virginia Foxx predicted a week ago that the Senate-approved CR would pass “swiftly and collaboratively” in the House under “suspension of the rules,” which requires a 2/3 vote.
However, Speaker Johnson has not yet said if he is willing to advance the Senate-passed CR without changes.
RETURN OF “POCKET RESCISSIONS”: With the end of the fiscal year approaching, GOP lawmakers are bracing themselves for a possible rerun of the White House’s “pocket rescission” gambit.
(3) TRUMP’S IRAN WAR – Day 178:
LATEST -- As the conflict approaches 6 months, 18 U.S. service members have been killed and 756 wounded; the war may already have cost as much as $120 billion; virtually all long-range precision strike missiles have been used; nearly half of Tomahawk cruise missiles and nearly two-thirds of Patriot interceptors; and between 38 and 80 percent of THAAD high altitude interceptors. Countries and bases attacked as a result of the conflict (other than U.S. and Israel): Iraq, Jordan, Saudi Arabia, Kuwait, Egypt, Oman, Bahrain, Qatar, UAE, Syria, Lebanon, and Yemen. At least several thousand civilians have been killed—mostly in Iran and Lebanon.
The results of Trump’s war: a harder line Iranian Revolutionary Guard is in control—highly motivated to maintain control over the Strait of Hormuz causing higher gas and fertilizer prices and inflation in a wide variety of global commodities; with no progress on a nuclear agreement.
SOME POSITIVE NEWS: The U.S. navy is reporting some success in shepherding tankers through the southern part of the Strait of Hormuz close to Oman.
(4) MAJOR ECONOMIC, TRADE, AND “AI” NEWS
BUSINESS EXPANSION: Bloomberg reports that US business activity expanded at the fastest pace since 2022; however, Walmart reported sliding sales growth.
BESSENT’S BOND BUY-BACK FAILS: Last week, Treasury Secretary Scott Bessent attempted to curb rising interest rates resulting from heavy U.S. Treasury borrowing and private sector AI borrowing. However, his increased “buy backs” of long-term U.S. debt failed to curb rising interest rates. Background and analysis from: Financial Times | Bloomberg | NYTimes | CNBC | WSJ | WashPost | AP.
US-CANADA TRADE WAR: Trade talks fell apart last week due to disagreements between written text and verbal understandings, leading to Trump applying 50% tariffs on $20 billion of Canadian goods, and PM Carney saying Canada would retaliate “dollar for dollar.” Wall Street Journal called it “the dumbest trade war revisited.”
BEEF PRICES: Trump said Friday he plans to remove duties on 300,000 metric tons of imported beef, which he claims suppliers have agreed to sell at a 25 percent discount. Politico says the move has “rattled cattle markets, infuriated beef industry groups and alienated some conservatives.”
GIANT OHIO DATA CENTER COULD COST HUNDREDS OF BILLIONS: Nvidia to Back Ohio Data Center with as much as $105 Billion. The data center, one of the world’s largest, will be leased by OpenAI.
THE DOLLAR AT RISK: US ‘playing with fire’ as dollar risks Yen-style debasement.
INDUSTRIAL POLICY: Administration’s government equity deals are growing at breakneck speed under murky legal authority; and Trump’s industrial policy meets red state politics in Oklahoma.
(5) HEALTH
GOOD NEWS: Moderna says its experimental mRNA cancer treatment passed a key test; and what it was like to go through a trial that could revolutionize cancer treatment.
(6) POLITICAL AND LEGAL NEWS
ELECTIONS: Postal Service published finalized plan to restrict mail ballots. The plan will only go into effect if the Supreme Court rules in the order’s favor; and Justice Department plans to send about 1,000 monitors to the polls this fall.
IMMIGRATION: Judge struck down ban on issuing visas to immigrants from 75 countries; and ICE begins deporting Haitians.
RULE OF LAW: Navy considers naming aircraft carrier after sitting President; and suit filed against Kennedy Center for again attempting to add Trump’s name.
ADMINISTRATION, IGNORING FIRST AMENDMENT, THREATENS THINK TANK: Trump Threatens Suit Over Report He Doesn’t Like,
(7) OTHER KEY U.S. DEVELOPMENTS
DEFENSE: Trump’s steam obsession risks crippling the U.S. carrier fleet.
CLIMATE: Remote stretch of the tropical Pacific is driving U.S. floods; nation’s reservoirs in the Southwest are drying up; and heat threatens highways.
CYBERSECURITY FAILURE: Why the world’s richest country can’t defend vital water infrastructure; and water systems are ripe for cyberattacks, experts warn after suspected Iranian hacks.
HOUSING: How homeowners are reacting to rising property insurance costs.
FOOD STAMP CUTS: Enrollment in SNAP grocery aid is dropping faster than expected as work requirements kick in.
(8) OTHER KEY GLOBAL DEVELOPMENTS
UKRAINE: July was the deadliest month for civilians in Ukraine since May 2022 and the growing shortage of interceptor missiles (due to the Iran War) is causing panic.
KOREA: U.S. cut back military drills with South Korea, as Trump woos Kim Jong-un, again.
(9) OTHER READS/VIDEOS THAT MAY BE OF INTEREST
Yuval Noah Harari discusses why he believes AI will come to control civilization.
Thoughts on how Trump-era corruption is affecting Americans as a people. – WSJ
Everyone’s using this A.I. dictation app that I want to murder with a hammer.
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About the author: Charles S. Konigsberg J.D. served as Assistant Director, White House Office of Management and Budget; General Counsel at the U.S. Senate Finance Committee, where he had principal responsibility for managing federal budget and debt limit legislation; Minority Chief Counsel at the U.S. Senate Rules & Administration Committee where he advised the ranking member on budget, appropriations, trade, and tax legislation; Staff Attorney at the U.S. Senate Budget Committee where he had responsibility for federal fiscal law issues including the Impoundment Control Act and wrote the Senate’s first explanation of the congressional budget process; Director of Congressional Affairs at the Consumer Financial Protection Bureau and AmeriCorps; and Staff Director of the only national bipartisan budget task force to agree on a unanimous long-term debt stabilization plan. He is admitted to the U.S. Supreme Court Bar, the District of Columbia Bar, and the Ohio Bar and is the author of three books:
1. Trillions: A Primer on Federal Spending, Taxes, the U.S. Debt Ceiling, and Fiscal Law. Click here to purchase. The 2026-2027 edition will be released this fall on Amazon.
2. Independent Voters will Decide America’s Future in 2024 and Beyond (2024)
3. America’s Priorities: How the U.S. Government Raises and Spends Trillions (2008)
Charles S. Konigsberg is President of Capitol Public Policy LLC, which provides consulting services on budget reconciliation, appropriations, government shutdowns, the debt limit, mandatory spending, tax expenditures, as well as budget process training. Contact us at ckonigsberg@capitolpublicpolicy.com or (301) 509-5688.