One key consequence of a high and rising national debt is an increase in the interest payments to service it. In a new insight, Director of Fiscal Policy Jordan Haring walks through the Congressional Budget Office’s (CBO) latest long-term budget projections for interest payments on the national debt.

Key points:

• CBO projects that interest payments will grow from $1.0 trillion (3.3 percent of gross domestic product (GDP)) in fiscal year (FY) 2026 to $2.1 trillion (4.6 percent of GDP) in FY 2036 and to $6.6 trillion (6.9 percent of GDP) by FY 2056.
• Over the FY 2026–2036 budget window, interest payments will grow faster than any other major budgetary category, increasing by 106 percent; over the FY 2026–2056 period, interest will increase by a staggering 538 percent.
• Interest will exceed Medicare spending by FY 2028, defense and nondefense discretionary spending by FY 2038, and will become the single-largest federal government expenditure by FY 2048 – meaning the federal government will soon be spending more to service the past than to make productive investments in the future.

Read the analysis.