Interest on national debt to become second largest government expenditure in ’24: Watchdog says
By Nicholas Ballasy – February 10, 2024
Interest on the U.S. national debt is on pace to become the “second largest” federal government expenditure, according to a new Committee for a Responsible Federal Budget (CRFB) analysis of the latest Congressional Budget Office projections.
The CRFB characterizes interest on the national debt — currently climbing to $35 trillion — as the “fastest growing” part of the federal government’s annual budget. The CRFB’s February report adds that “As a share of the economy, debt will grow from 97 percent of Gross Domestic Product (GDP) in Fiscal Year (FY) 2023 – twice the 50-year historical average of 48 percent – to a record 106 percent of GDP by 2028.”
“Net interest payments will exceed both defense and Medicare spending this year, in FY 2024, according to new projections from the Congressional Budget Office (CBO). That will make interest the second largest government expenditure,” according to the budget watchdog’s analysis.
“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. In 2024, CBO projects net interest will total $870 billion, a near-record 3.1 percent of Gross Domestic Product (GDP),” the CRFB noted.
According to the CRFB, federal spending on interest had “already topped the Medicaid budget and all spending on children” in 2023.
“At a projected $870 billion, interest will surpass current spending on national defense ($822 billion) in 2024 and grow well beyond the defense budget over time,” the organization said.
“Interest costs will also slightly exceed net Medicare spending ($851 billion) this year and remain in line with Medicare costs in future years. That would make interest the second largest line item in the budget after Social Security,” the CRFB also said.
