Washington, D.C. — Federal spending on interest payments alone surpassed $1 trillion in fiscal year 2025, a stark fiscal milestone that budget watchdogs warn could accelerate long-term economic risks if Congress fails to rein in spending.
According to the Congressional Budget Office, the federal government added roughly $1.8 trillion to the national debt this year, pushing total debt to about $38 trillion. Net interest costs came in near $970 billion, but total interest payments exceeded $1 trillion for the first time, surpassing national defense spending, rivaling Medicare outlays, and equaling roughly two-thirds of Social Security costs.
Chris Towner of the Committee for a Responsible Federal Budget said historically high interest payments threaten to create a “debt spiral” if borrowing continues unchecked. He noted that debt now equals roughly 100% of the U.S. economy, approaching levels last seen after World War II. At current borrowing rates, the U.S. could exceed that threshold within five years.
Towner warned that rising debt crowds out private investment, slows economic growth, and puts upward pressure on interest rates across the economy. Unlike entitlement programs, interest payments provide no direct public benefit, serving only to finance past borrowing.
While politically difficult, Towner said Congress still has options, including capping discretionary spending and forming a bipartisan fiscal commission to address long-term sustainability. Without action, he warned, programs like Social Security and Medicare face insolvency within the next decade, leaving fewer choices and higher costs for taxpayers.
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