National debt interest consumes record 19% of federal revenue as Treasury yields hit 20-year high
By
Nick Lichtenberg
Kettled twice. Extra chewy, extra trustworthy.
Summary
The federal government is spending a record 19% of federal revenue on interest payments for the national debt, surpassing spending on Medicaid, national defense, and all non-defense discretionary programs combined. With the 30-year Treasury yield surging past 5.19% — its highest level in nearly 20 years — the Committee for a Responsible Federal Budget (CRFB) warns that the fiscal situation could deteriorate significantly further if yields remain elevated.
Key quotes
· 3 pulledInterest costs consumed a record 3.25% of GDP and roughly 19% of all federal revenue in fiscal year 2025.
The federal government already spends more on debt interest than on Medicaid, national defense, or all non-defense discretionary programs combined.
If Treasury yields remain elevated at current levels — roughly 55 basis points higher than projected — the situation could turn into something far worse.
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