Budget Background

The U.S. gross federal debt currently stands at $17.548 trillion, and net interest payments to our creditors are the fastest-growing item in the budget. In 2014, the Congressional Budget Office projects that the nation will spend $233 billion on interest payments. By the end of the budget window in 2024, however, CBO forecasts that interest payments will nearly quadruple to an astonishing $880 billion. Every dollar spent paying our creditors is a dollar wasted—money for which we get nothing in return. Interest payments threaten to crowd out every other budget item. To put the $880 billion, single-year interest payment in perspective, here is what we currently spend on other budget items:

  • Federal Courts - $7.4 billion
  • Department of Education - $56.7 billion
  • Secret Service - $1.8 billion
  • Food Inspection - $2.3 billion
  • Census Bureau - $1.0 billion
  • Border Patrol - $12.3 billion
  • National Parks - $3.0 billion
  • NASA - $17.6 billion
  • Centers for Disease Control - $7.1 billion
  • Federal Prison System - $6.9 billion
  • Workplace Safety Inspections - $0.9 billion
  • Immigration and Customs Enforcement - $5.6 billion
  • FDA - $2.6 billion
  • Federal Highway Budget - $40.4 billion
  • Coast Guard - $10.0 billion
  • Small Business Loans - $0.9 billion
  • Veterans’ Health Care - $55.3 billion
  • FBI - $8.3 billion

Not only do interest payments threaten to consume the federal budget, but they also threaten to plunge the nation into fiscal crisis. Even a modest rise in interest rates could lead to a financial emergency, with the U.S. facing a dangerous spiral of rising interest costs and increased borrowing to finance those interest costs.