U.S. debt interest payments hit $3 billion a day and jumped 8% in fiscal 2026 — faster than total federal spending, revenue and GDP growth

U.S. debt interest payments surged to $3 billion daily in fiscal 2026, marking an 8% increase and outpacing total federal spending, revenue, and GDP growth. According to Treasury Department data, the budget deficit ballooned to $1.99 trillion, 12% worse than the previous year's $1.78 trillion gap. Revenue rose by just 3% to $5.4 trillion, trailing behind the 6% increase in spending to $7.4 trillion.

Interest payments on the national debt surpassed defense spending and Medicaid, totaling $1.36 trillion, with an average rate of 3.53%. This is double the rate in 2021, before the Federal Reserve's aggressive tightening to curb inflation. Net interest payments surged 8% to $1.05 trillion, surpassing GDP growth of about 2% and nominal GDP growth of about 6%.

This translates to about $2.9 billion daily, or 3.2% of GDP, breaking a previous record set in 1991. With gross U.S. debt at $40 trillion and publicly held debt at 100% of GDP, interest costs are projected to be the fastest-growing federal budget component. Treasury Secretary Scott Bessent has issued more short-term debt to finance the deficit and is retiring long-term obligations, with about one-third of publicly held debt maturing within the next 12 months.

The Congressional Budget Office projects annual debt interest expenses to reach $2.1 trillion by 2036. However, easing the debt burden seems unlikely, as President Trump has proposed a $5,000 "dividend" check and Bessent suggests economic growth will solve the issue. However, experts argue that economic growth alone is insufficient, as spending and revenue changes are necessary.