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Economy
Interest payments on the national debt top $1 trillion as deficit swells
Published Thu, Sep 12 20241:09 PM EDTUpdated 15 Min Ago


Jeff Cox @jeff.cox.7528 @JeffCoxCNBCcom

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Key Points

  • With the Federal Reserve holding benchmark rates at their highest in 23 years, the government has laid out $1.049 trillion on debt service, up 30% from the same period a year ago.
  • The jump in debt service costs came as the U.S. budget deficit surged in August, edging closer to $2 trillion for the full year.




A view shows a bronze seal beside a door at the U.S. Treasury building in Washington, U.S., January 20, 2023.
Kevin Lamarque | Reuters

The U.S. government for the first time has spent more than $1 trillion this year on interest payments for its $35.3 trillion national debt, the Treasury Department reported Thursday.

With the Federal Reserve holding benchmark rates at their highest in 23 years, the government has laid out $1.049 trillion on debt service, up 30% from the same period a year ago and part of a projected $1.158 trillion in payments for the full year.

Subtracting the interest the government earns on its investments, net interest payments have totaled $843 billion, higher than any other category except Social Security and Medicare.

The jump in debt service costs came as the U.S. budget deficit surged in August, edging closer to $2 trillion for the full year.

With one month left in the federal government’s fiscal year, the August shortfall popped by $380 billion, a dramatic reversal from the $89 billion surplus for the same month a year prior that was due largely to accounting maneuvers involving student debt forgiveness.

That took the 2024 deficit to just shy of $1.9 trillion, or a 24% increase from the same point a year ago.

The Fed is widely expected to lower rates next week, but just by a quarter percentage point. However, in anticipation of additional moves in future months, Treasury yields have tumbled in recent weeks.

The benchmark 10-year note

last yielded about 3.7%, down more than three-quarters of a percentage point since early July.

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