U.S. public debt surpassed $40 trillion in August 2026, exceeding the approximately $31.9 trillion size of the economy in June, while annual interest payments rose above $1 trillion and exceeded federal defense spending. Treasury data put debt at roughly $40.047 trillion on August 18 and above $40.09 trillion on August 25. Against that backdrop, Sen. Rand Paul (R-Ky.) promoted his Six Penny Plan, which would cut federal spending to 94% of projected levels in the first year and continue 6% annual reductions until the budget is balanced in the fifth year. Net interest costs through July of fiscal 2026 reached $963 billion, up 14% from a year earlier, while projections indicate debt held by the public could reach about 120% of GDP by 2036. Rising yields, a possible 2027 debt-limit breach and growing support for a bipartisan fiscal commission have intensified calls for fiscal reform.