US government interest costs rise 12% to $1.27 trillion in first 11 months of FY2026

The US government spent $1.27 trillion on interest payments in the first 11 months of fiscal year 2026. That’s $139 billion more than the same period last year, a roughly 13% jump that sets a new record for the cost of carrying America’s debt. The federal government is now spending more on interest than it does on the entire Department of Defense. The tab for simply servicing existing obligations has become the second-largest category of federal spending, trailing only Social Security. The numbers behind the surge Total US public debt now sits in the range of $39 to $40 trillion. The interest bill on that mountain of IOUs has been climbing steadily, but the pace has accelerated as older Treasury securities issued during the era of near-zero interest rates mature and get replaced with new ones carrying much higher yields. Previous fiscal years saw interest cost growth in the 7% to 9% range. The 13% increase through the first 11 months of FY2026 represents a meaningful acceleration. In August 2026 alone, gross interest hit $97.7 billion, though that figure actually dipped slightly from the prior month due to shifts in inflation accruals on Treasury Inflation-Protected Securities. For...