The United States’ federal interest payments on its $40 trillion national debt have reached $1.25 trillion annually, surpassing the 1991 record, according to a recent analysis by investment firm Doubleline. This interest burden now accounts for 18.5% of federal revenue, edging past the previous high of 18.4% set in 1991, as reported by fortune.com.
The surge in interest payments reflects rising interest rates and the expanding debt load. The Kobeissi Letter, citing the Congressional Budget Office, noted that interest expenses as a share of revenue have tripled since 2015. The government must increasingly borrow to cover these costs, limiting its ability to invest in infrastructure, education, and other growth drivers. Analysts warn that servicing the debt today poses greater risks than in the past due to this compounding effect.
The growing interest burden creates a cycle where more borrowing is needed just to pay interest, reducing fiscal flexibility. The Congressional Budget Office projects that interest payments could consume 25% of federal revenue by 2036 if current trends continue without a major economic slowdown or rise in Treasury yields. This situation places the US in what the Kobeissi Letter described as 'uncharted territory' for national debt management.
The $1.25 trillion interest expense now exceeds the entire 2026 defense budget, highlighting the scale of the challenge. The Congressional Budget Office’s projections and the Kobeissi Letter’s analysis underscore the increasing fiscal strain as the US government balances debt servicing with other spending priorities.