The US government is expected to shell out nearly a trillion dollars this year just to cover the interest on its record-level debt.
The Committee for a Responsible Federal Budget (CRFB), a nonprofit that calls attention to issues with significant fiscal impact, cites data from the Congressional Budget Office (CBO) estimating that the US government will spend $870 billion on interest payments for the 2024 fiscal year (FY).
According to the CRFB, interest spending is expected to surpass the government’s $822 billion budget for national defense this year.
“This has never been the case before, going back to at least 1940.”
The CRFB also projects that interest payments will exceed spending on Medicare this year to become the second-largest government expense, just behind Social Security.
Looking at interest spending from another perspective, the CRFB highlights how the cost is growing relative to the size of the US economy.
“Net interest spending nearly doubled from FY 2020 to 2023, rising from $345 billion to $659 billion. As a share of the economy, interest grew from 1.6% of GDP in 2020 to 2.4% in 2023. This year, interest is projected to rise to 3.1% of GDP and will exceed its record – 3.2% set in 1991 – in 2025.”
Data from the U.S. Treasury Department shows that the national debt currently stands at $34.332 trillion.
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