Federal interest costs on the national debt grew about 14 percent in the first 10 months of fiscal 2026, climbing from $846 billion to $963 billion compared with the same period a year earlier, Fortune reported on Aug. 24, citing Treasury data. Interest has become the second-largest federal budget category after Social Security and now equals 70.1 percent of Social Security outlays, up from 64.9 percent a year earlier, according to Fortune. By comparison, Social Security spending rose 5 percent over the period, while Medicare and Medicaid each rose 8 percent.
The gross national debt reached $40 trillion as of Aug. 22, up 7.3 percent since the start of 2026, Fortune said. The 10-month deficit widened about 10 percent to $1.8 trillion through July. Rising Treasury yields have compounded the cost: the 2-year yield increased to 4.18 percent from 3.94 percent, and the 10-year rose to 4.69 percent from 4.37 percent versus a year earlier.
The Congressional Budget Office projects net interest will total roughly $1.0 trillion in fiscal 2026 and $16.2 trillion over the coming decade, rising to about $2.1 trillion annually by 2036, the Peter G. Peterson Foundation said. Interest payments now consume about 19 percent of federal revenue, the foundation added.
Sources: Fortune, Peter G. Peterson Foundation