The US government spent $723 billion just on interest payments during the first eight months of fiscal year 2026. Not on roads, not on schools, not on defense. Just on servicing the debt it already owes.
That figure, reported by the Peter G. Peterson Foundation, makes net interest the second-largest category of federal spending. It now trails only Social Security, having leapfrogged both defense and Medicare. The number represents an 8.8% jump from the $664 billion recorded over the same period in FY2025.
The numbers in context
The Congressional Budget Office projects full-year net interest for FY2026 will exceed $1 trillion. For perspective, the full-year figure for FY2025 came in at $970 billion.
Look further out and the picture gets grimmer. The CBO anticipates interest costs could more than double to $2.1 trillion by FY2036. At that point, debt servicing alone could consume roughly a quarter of all federal revenue.
