Interest Costs Crowd Out US Spending as Debt Hits $39T

The federal government paid $529 billion in interest on the national debt between October 2025 and March 2026, roughly $88 billion per month or more than $22 billion per week. Interest costs consumed 18% of federal revenue in Fiscal Year 2025 and have begun to rival major program spending.

The six-month interest total is comparable to $461 billion spent on the Department of Defense and $70 billion spent on the Department of Education over the same period. Total U.S. national debt has climbed past $39 trillion, and higher borrowing costs have increased the expense of carrying that debt.

Interest payments rose by $33 billion, or about 7%, compared with the same six months a year earlier, when they totaled $497 billion. The Congressional Budget Office attributed the increase to a larger stock of debt and higher long-term interest rates, and noted that declines in short-term rates partially mitigated the overall rise in interest payments.

Interest accounted for 18 cents of every dollar of federal revenue in Fiscal Year 2025, the highest share since the 1990s and roughly three times the share recorded in 2015. The CBO projects that, if economic conditions remain stable and Treasury yields do not spike, interest costs will climb to 25 cents of every dollar of revenue by 2035.

At current levels, interest outlays occupy a sizable portion of federal receipts, reducing the funds available for other discretionary and mandatory programs. The monthly average of about $88 billion represents a steady demand on the budget dedicated solely to servicing debt.

Long-term interest rates have moved higher, which raises the cost of rolling and refinancing government debt. Short-term rates have eased somewhat, which has partially offset the overall impact on interest expenses, according to the CBO.

Some investors have increased allocations to assets with limited supply, such as gold and Bitcoin, citing protection against potential currency dilution or higher inflation. Bitcoin’s price has shown relative resilience during recent geopolitical tensions while gold has at times fallen.

CBO forecasts assume no major recession or sudden spike in Treasury yields; a downturn or sharp rise in yields would push interest costs higher and could accelerate the share of revenue absorbed by debt service. Policymakers will need to weigh growing interest obligations alongside defense, education and other federal program demands.