The cost of carrying it
Interest on the US National Debt
The United States now pays $1.36 trillion a year just in interest — more than it spends on national defense.
Interest accrued so far today (estimate, UTC)
Interest accrued so far today (estimate, UTC): $0.00 trillion
Per year
$1.36 trillion
annualised from fiscal FY 2026 to date
Per second
$43,108
annual interest expense, expressed per second
Per citizen, per year
$3,980
annual interest expense per resident
Share of federal revenue
25.2%
of every tax dollar collected, this goes to lenders
What that buys instead
Annual federal outlays, approximate, for scale. Interest is not a program anyone voted for — it is the price of decisions already taken.
Program figures are approximate FY2025 outlays from the Monthly Treasury Statement, shown for scale rather than as exact budget lines. The interest figure is live.
Average rate paid
3.531%
weighted across all interest-bearing Treasury debt
Interest, fiscal YTD
$1.36 trillion
reported through 2026-09-30
Debt outstanding
$40.58 trillion
the principal all of it is charged on
Why the interest bill exploded
Two things happened at once, and the combination is what did the damage. The debt itself grew, and the rate paid on it roughly tripled from the near-zero decade that followed 2008.
The second effect is the one people miss. Treasury debt is not borrowed once at a fixed rate — it is constantly rolled over as bills and notes mature. Every rollover reprices old cheap debt at today’s rate. The average rate across all interest-bearing debt is currently 3.531%, and it is still climbing as the last of the cheap paper matures.
This is why the interest line moves even in a year when new borrowing slows: a large share of the existing stock reprices annually regardless.
The part that compounds
Interest is paid by borrowing more. There is no separate interest fund — the payment is financed out of the same deficit, which is financed by issuing more debt, which accrues more interest.
That is the definition of a compounding loop, and it is why economists watch interest as a share of revenue rather than the headline debt number. Currently it is 25.2% of everything the federal government collects. There is no agreed threshold at which this ratio becomes dangerous — it depends on the currency a country borrows in, the maturity of its debt, who holds it and how fast the economy grows. What can be observed without guessing is the direction, the average maturity of the debt and how much has to be refinanced each year: when rates rise, a short average maturity turns yesterday’s cheap borrowing into today’s interest bill faster.
Is there a way out?
Four broad channels are usually distinguished: grow the economy faster than the debt, run a primary surplus, let inflation erode the real value of the debt, or default. The first carries the lowest visible cost and is how the US worked down its post-war debt peak, though it cannot be chosen at will. The second is politically brutal. The third is a transfer from savers that no one has to vote for. The fourth is widely considered remote for a country that borrows in a currency it issues — which is a judgement about incentives, not a guarantee.
Which of the first three is being chosen — deliberately or by default — is genuinely the whole debate.
What this shows
This is the page about what the debt costs rather than how large it is. The figure that matters most is not the total but the distance between two rates: what the Treasury pays on the debt it has already issued, and what it pays on new borrowing today. Because the debt is constantly refinanced as older securities mature, that gap is next year's increase in the bill, already determined.
Interest now costs more than national defence, and it is paid before any program is funded. That is not a forecast about future budgets; it is this year's cash.
How the interest bill grew
Interest per fiscal year, and the average rate the Treasury pays across all its interest-bearing debt.
Interest on the debt per fiscal year
Average interest rate on the debt
Interest expense: US Treasury, Interest Expense on the Public Debt Outstanding, fiscal years ending 30 September, including interest credited to federal trust funds. Average rate: US Treasury, Average Interest Rates on U.S. Treasury Securities, total interest-bearing debt.
The rate the Federal Reserve sets
Treasury bills are refinanced within weeks, so their cost follows the Fed’s policy rate almost immediately. The average rate on all the debt moves far more slowly, as older, cheaper securities mature.
Fed funds target range
3.75–4%
set by the Federal Open Market Committee
Effective fed funds rate
3.88%
October 27, 2026
Average rate on all the debt
3.531%
what the Treasury pays across everything outstanding
Policy rates: Federal Reserve Bank of New York. © 2026 Federal Reserve Bank of New York. Content from the New York Fed subject to the Terms of Use at newyorkfed.org. How much US debt the Fed owns →
Common questions
How much interest does the US pay on its national debt?
About $1.36 trillion a year, annualised from fiscal year FY 2026 Treasury reporting. That works out to roughly $43,108 every second, or $3,980 per citizen per year.
Is interest on the debt bigger than the defense budget?
Yes. Annual interest on the federal debt now exceeds annual national defense outlays, which run around $900 billion. Interest has become one of the largest single line items in the federal budget, behind only Social Security and health programs.
Why did the interest bill rise so fast?
Two effects compounded. The debt itself grew, and the average interest rate paid on it roughly tripled from the near-zero era after 2008. Treasury debt is constantly rolled over as bills and notes mature, so each rollover reprices old cheap borrowing at current rates. The weighted average rate across all interest-bearing debt is now about 3.531%.
What share of federal taxes goes to interest?
Roughly 25.2% of all federal revenue currently goes to interest payments, before any program is funded. Economists watch this ratio more closely than the headline debt total, because it measures what the debt actually costs each year rather than what it totals.
Interest is what makes the debt compound: it is paid by borrowing more. Debt to GDP shows whether the economy is outgrowing that loop, and the debt ceiling explains why fighting over the payments costs extra on top.