As the Congressional Budget Office reminded us yesterday, the cost of interest payments on the national debt is rising rapidly. Sifting through the data from the latest CBO outlook, the deficit hawks at the Committee for a Responsible Federal Budget noted that interest costs are projected to exceed spending on both defense and Medicare this year, making interest the second largest government expenditure, trailing only Social Security.
“Net interest has been exploding over the past few years, with payments rising from $223 billion in 2015 to $352 billion in 2021 before nearly doubling to $659 billion in 2023,” CRFB says. “In 2024, CBO projects net interest will total $870 billion, a near-record 3.1 percent of Gross Domestic Product (GDP).”
While interest costs are projected to continue to rise, Medicare spending will rise even faster, according to CBO projections, overtaking interest costs once again in 2028.
