Interest on the $38.8 trillion national debt has tripled since 2020, exceeding defense and medical aid benefits.
The United States now pays nearly $970 billion a year just to service interest on its $38.8 trillion national debt — a number that has nearly tripled since 2020 and already exceeds what the federal government spends on national defense or Medicaid, according to a February analysis by Medicaid. Committee for a Responsible Federal Budget (CRFB).
For many Americans, the number barely registers. But budget experts warn it represents one of the most significant — and least discussed — fiscal emergencies in the country’s history.
Rapid climbing didn’t happen overnight. Interest costs have soared because of a double whammy: The federal debt burden has ballooned by trillions, while interest rates have risen sharply from post-pandemic lows near zero. As a share of the economy, interest costs have more than doubled from 1.6% of GDP in 2021 to a record 3.2% in 2025. Today, the government already spends more on debt interest than it does on Medicaid or the entire national defense budget, programs that Americans feel strongly about and are politically contested over. However, the interest clause arouses relatively little anger.
$2 trillion threshold
The numbers ahead are even more astonishing. According to the latest baseline from the Congressional Budget Office, net interest costs are expected to double again, from $970 billion in fiscal year 2025 to $2.1 trillion by 2036.
Between now and 2036, the debt owed by the general public is expected to grow by 86%, adding nearly $26 trillion, while the average interest rate on that debt will rise by another half a percentage point. Together, these will raise interest costs by 121%.
By 2036, interest payments will consume a quarter of total federal revenues, compared with about a fifth today and just a tenth in 2021. In other words: for every four dollars the United States collects in taxes, fully one dollar will go toward repaying creditors – not roads, not veterans, and not schools.
When Medicare is passed
Currently, benefit spending is closely aligned with Medicare, one of the most popular and politically untouchable programs in the federal budget. The Congressional Budget Office projects that by 2029, net interest costs will officially exceed Medicare, making it the second-largest government program, behind only Social Security. This milestone is less than four years away.
The path does not stop there. By 2047, the Congressional Budget Office projects that interest costs will even exceed Social Security spending, rising to become the single largest line item in the entire federal budget — larger than retirement income, larger than Medicare for the elderly, and larger than the military.
Congestion crisis
The consequences extend beyond accountability. As interest costs balloon, they crowd out almost all other national priorities. The CRFB predicts that rising interest costs will account for 28% of all nominal spending growth over the next decade and 120% of all spending growth as a share of GDP, meaning that other programs will effectively shrink in relative terms just to make room.
The national debt currently stands at approximately $38.77 trillion as of February, and is growing by about $6.43 billion per day. At this pace, the United States is expected to be worth $39 trillion by around April.
The CRFB and other financial watchdogs argue that a credible deficit-reduction plan remains the only viable output — one that would put debt on a sustainable path, ease pressure on interest rates, and prevent the interest bill from eventually eating up the entire budget. So far, Washington has not produced one
For this story, luck Journalists have used generative AI as a research tool. An editor verified the accuracy of the information before publication.
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