[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 converging pressures: a ballooning federal 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 3.2% in 2025.

Budget experts characterize the trajectory as a fiscal emergency, though it receives comparatively little public or political attention relative to other major spending categories.

The outlook darkens further. The Congressional Budget Office projects net interest costs will more than double again—reaching $2.1 trillion by 2036. Between now and 2036, debt held by the public is expected to grow 86%, adding roughly $26 trillion, while average interest rates on that debt will rise another half percentage point.

WHAT'S NEXT: CFOs and finance leaders should monitor CBO projections for fiscal year 2026 and beyond, as interest cost trajectories will increasingly constrain federal spending flexibility and potentially affect corporate borrowing conditions.