Congress has allocated more funds to interest payments than to national defense and Medicare combined.
In the first seven months of the fiscal year, spending on net interest reached a staggering $514 billion, overshadowing the expenditures on national defense ($498 billion) and Medicare ($465 billion).
The data, drawn from a report by the Committee for a Responsible Federal Budget, also reveals that interest payments this year have exceeded the combined spending on veterans, education, and transportation.
Such figures signal a troubling trajectory for the U.S. economy, especially given the Congressional Budget Office’s (CBO) March projections which expect interest costs to more than double in relation to GDP between now and 2054, driven by rising interest rates and an expanding national debt.
Moreover, a February analysis by the U.S Government Accountability Office painted a bleak picture, projecting an unsustainable fiscal path over the coming decades unless significant changes are made to current revenue and spending policies.
The report forecasts that debt held by the public as a percentage of the economy will more than double over the next 30 years.
Compounding the issue, the federal government’s budget deficit is set to widen significantly, with projections suggesting it will hit $2.6 trillion by 2034, while the national debt is anticipated to climb to an unprecedented $48.3 trillion.
This fiscal deterioration is expected to lead to annual interest payments reaching $1.6 trillion by 2034, surpassing spending on many national priorities including defense.
“The federal government faces an unsustainable long-term fiscal path,” the Government Accountability Office report states. “We project that debt held by the public as a share of the economy will more than double over the next 30 years and will grow faster than the economy over the long term if current revenue and spending policies are not changed.”
As U.S. Senator Mitt Romney and other fiscal experts have warned, the nation is at a critical juncture. Without decisive action, the U.S. risks not only economic hardship but also geopolitical instability.
“The U.S. economy is becoming critically fragile as we continue to ignore our public debt crisis,” Romney wrote on X. “Without action, we risk economic and geopolitical collapse.”
Biden maintains that prices are declining, referencing a slowdown in the rate of inflation’s rise. However, since he assumed office, overall prices have surged by nearly 20%.