The American Action Forum reported on Mar. 24 that interest payments on the national debt are expected to increase significantly over the next three decades, according to new projections from the Congressional Budget Office (CBO).
The growth in interest payments matters because it will consume a larger share of federal spending, potentially limiting resources for other priorities.
Jordan Haring, Director of Fiscal Policy at the American Action Forum, outlined CBO’s latest long-term budget outlook. The projections show that annual interest payments will rise from $1.0 trillion, or 3.3 percent of gross domestic product (GDP), in fiscal year 2026 to $2.1 trillion (4.6 percent of GDP) by fiscal year 2036 and reach $6.6 trillion (6.9 percent of GDP) by fiscal year 2056.
Haring said that during the period from fiscal years 2026 to 2036, interest costs are set to grow faster than any other major category in the federal budget—by about 106 percent over those ten years—and will increase by approximately 538 percent between fiscal years 2026 and 2056.
According to Haring, “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.”
These projections highlight growing concerns about how rising debt service costs could affect future policy decisions and limit flexibility for public investment.
