The federal government already spends more on debt interest than on Medicaid, national defense, or all non-defense discretionary programs combined. Now, with the 30-year Treasury yield surging past 5.19% — its highest level in almost 20 years — a leading fiscal watchdog is warning that what was already a crisis could turn into something far worse.
According to the Committee for a Responsible Federal Budget (CRFB), interest costs consumed a record 3.25% of GDP and roughly 19% of all federal revenue in fiscal year 2025. If Treasury yields remain elevated at current levels — roughly 55 basis points above Congressional Budget Office projections across the yield curve — interest costs would grow 2.5-fold, climbing from $880 billion today to $2.5 trillion by 2036. That would push debt interest’s share of federal revenue to almost 30% — nearly triple its historical average over the past half-century.
