US debt interest

According to the Office of Management and Budget, the net interest payments on the US national debt are estimated to total $395.5 billion this fiscal year, which is equivalent to 6.8% of all federal outlays.

In the last quarter of 2022, the Treasury Department paid a record $213 billion in interest payments on the national debt, up $63 billion from the same period a year earlier. The surge is due mainly to the Federal Reserve raising interest rates by 4.25% between March and December 2022. The central bank increased the rate another quarter point in February 2023.

The Peter G. Peterson Foundation, a nonpartisan organization that seeks to raise awareness of America’s long-term fiscal challenges, estimates that the higher rates could increase the net interest cost on the national debt to about $9 trillion over the next decade. That’s up from the record $8.1 trillion that the Congressional Budget Office projected in May 2022 and the $5.4 trillion it projected in July 2021.