Congress’s first task post-midterms is to figure out how to keep funding America—and that’s before it addresses the $40 trillion national debt

In the wake of the midterms, Congress finds itself in a precarious position, tasked with funding the government while also addressing the massive national debt. With a Democrat-controlled Congress and a Republican-led administration, a key issue on the table is how to keep the federal government running smoothly. A temporary 72-hour funding bill, signed by President Trump in September, will expire on December 11, necessitating a new funding resolution.

Beyond the immediate funding debates, the looming debt ceiling is another critical hurdle. Currently set at $41.1 trillion, of which $40.5 trillion has already been borrowed, the debt ceiling will need to be raised. Analysts predict that this will be achieved by early 2027, just a year after the $1 trillion mark is expected to be reached. While some may assume that such massive borrowing is feasible, experts warn that the U.S. could soon face higher interest rates, negatively impacting households and businesses.

The deficit, currently around 6% to 7% of GDP, is also a concern for budget watchdogs, who aim to halve it to 3% of GDP. Democrats and Republicans have distinct priorities in this regard, with Republicans focusing on defense funding and Democrats prioritizing healthcare. Finding common ground in these budget battles may be challenging, but both sides likely have the spending power to advance their agendas.

As the fiscal landscape becomes increasingly complex, the long-term implications of U.S. debt and deficit must be addressed. Fiscal hawks warn that government borrowing ultimately affects the voters being served, and rising bond yields could lead to higher interest rates for Americans. To address these concerns, experts argue that meaningful deficit reduction is necessary to improve affordability and maintain investor confidence.