Interest Bill Explodes Past Pentagon

America’s debt interest bill has crossed a dangerous line, and Washington keeps adding more fuel to the fire.

Quick Take

Federal interest payments reached about $970 billion in fiscal year 2025, more than defense spending.
The Congressional Budget Office projects net interest will hit $1 trillion in fiscal year 2026 and keep climbing.
Interest now takes a larger share of federal revenue than any time since the early 1990s.
The national debt rose by $2.23 trillion year over year, showing the problem is still getting worse.

Debt Interest Overtakes Defense

The federal government spent about $970 billion on interest in fiscal year 2025, and that topped the Pentagon’s $917 billion budget.^[2]^[3] That is not a small accounting quirk. It means taxpayers are now paying more just to cover past borrowing than to fund the military that protects the country.

The Congressional Budget Office says net interest will rise to $1 trillion in fiscal year 2026 and nearly $1.8 trillion by 2035.^[4] The Peterson Foundation also says interest has become the second-largest federal spending item, behind only Social Security.^[2] For families already squeezed by inflation, higher energy costs, and stubborn borrowing, that is a hard number to ignore.

Washington Is Spending More, Not Less

The Joint Economic Committee Senate Republicans report says the national debt grew by $2.23 trillion year over year, which works out to about $6.12 billion per day.^[3] The same report says the average interest rate on marketable debt rose to 3.382 percent in November 2025, more than double the rate from five years earlier.^[3] When debt grows fast and rates rise at the same time, the bill climbs even faster.

That is why the interest share of federal revenue matters so much. The Peterson Foundation says interest payments reached 18.5 percent of federal revenues in 2025, which passed the previous high set in 1991.^[2] In plain terms, nearly one out of every five federal revenue dollars is going to creditors instead of core services.

Why Fiscal Conservatives See a Warning Sign

Fiscal hawks argue this is a clear sign of government overreach and weak budget discipline. The numbers support the concern that debt service is crowding out other priorities. If interest keeps rising, Congress will have less room for defense, border security, veterans care, and tax relief. The CBO projects net interest will keep growing through the next decade, even without a fresh crisis.^[4]

Supporters of the more relaxed view say the economy can still absorb these costs. They point to growth, reserve currency demand, and Federal Reserve remittances that reduce the net burden on the Treasury. But those arguments do not erase the main fact: the debt bill is already bigger than the defense bill, and it is still moving up.^[2]^[4] That is the kind of trend that should worry anyone who wants a smaller, stronger, and more accountable federal government.

What Comes Next for Taxpayers

The next fight is not about whether the problem is real. The data already answer that. The real fight is whether Washington will cut spending, slow borrowing, and stop treating debt as if it has no limit. If current-law projections hold, interest will keep taking a larger bite out of the budget every year.^[4] That leaves taxpayers carrying more of the load while elected officials postpone the hard choices.