[BREAKING] Interest on the $38.8 trillion national debt has tripled since 2020, and it already costs taxpayers more than defense and Medicaid

HEADLINE: U.S. Interest Payments Hit $970 Billion Annually, Now Exceed Defense and Medicaid Spending

LEAD: The federal government is now spending nearly $970 billion annually to service interest on the $38.8 trillion national debt—a figure that has nearly tripled since 2020 and already surpasses spending on national defense or Medicaid, according to a February analysis by the Committee for a Responsible Federal Budget.

BODY: The surge stems from two factors: a ballooning debt load and sharply elevated interest rates climbing from near-zero pandemic lows. As a share of GDP, interest costs have doubled from 1.6% in 2021 to a record 3.2% in 2025.

Budget experts characterize the trajectory as a fiscal emergency receiving comparatively little public attention despite its scale. The Congressional Budget Office projects net interest costs will more than double again, reaching $2.1 trillion by 2036. Over the same period, debt held by the public is expected to grow 86%—roughly $26 trillion—while average interest rates on that debt rise another half percentage point.

WHAT'S NEXT: CFOs and finance leaders should monitor CBO projections as Congress faces mounting pressure to address the structural deficit. Interest payments are now the fastest-growing federal budget item, crowding out discretionary spending and entitlements.