America’s fiscal outlook continues to enter uncharted territory, with the Committee for a Responsible Federal Budget (CRFB) projecting the era of trillion-dollar annual interest payments has arrived. In a grim fiscal milestone first breached in fiscal year 2025, the costs to service the nation’s ballooning debt have spiraled, creating a financial pickle that threatens to squeeze the federal budget for decades to come.
According to an analysis released by the nonpartisan budget watchdog on Dec. 16, the $38 trillion national debt is “largely to blame for these high interest payments,” having climbed to equal 100% of the nation’s gross domestic product (GDP). While the specific line item for net interest in the federal budget totaled $970 billion for the fiscal year, the Congressional Budget Office (CBO) indicates actual spending for net interest payments on the public debt broke the barrier of $1 trillion for the first time in FY 2025. Over the coming decade, the CRFB projects these figures will increase, surpassing $1.5 trillion in 2032 and $1.8 trillion in 2035.
