The US Treasury is paying more than $3 billion a day in interest on the national debt, according to the Congressional Budget Office's (CBO) August budget update. Between October 2025 and July 2026, net interest on public debt totaled $963 billion, averaging about $3.18 billion daily over 303 days. This reflects a 14% increase, or $117 billion more, compared to the same period last year, driven by a larger debt and higher long-term interest rates, the CBO reported.
The CBO's report, led by director Phil Swagel, noted that while short-term interest rates declined, partially offsetting the rise, the overall interest payments increased due to the growing debt burden. The fiscal deficits also widened, reaching $1.8 trillion in the first 10 months of the fiscal year, $169 billion higher than the previous year. Consequently, the CBO revised its full fiscal year deficit projection to $2.1 trillion, up by $200 billion from its February estimate, underscoring escalating fiscal challenges.
The near-$40 trillion national debt and its rising interest costs highlight ongoing fiscal pressures for the US government. The increase in debt servicing costs reflects broader economic conditions, including long-term interest rate trends. These figures add to concerns among fiscal conservatives about the trajectory of US fiscal policy, as deficits continue to grow despite efforts to manage spending. The CBO's update provides a detailed snapshot of the government's borrowing costs amid a complex economic environment.
The CBO's August budget update covers the first 10 months of fiscal year 2026, with the fiscal year ending in September. The report's data will inform policymakers as they consider budgetary decisions in the coming months, with the next major fiscal update expected after the fiscal year closes, providing a full picture of the government's debt and deficit status.