At 30-year Treasury yields above 5.19%—about 55 basis points above CBO assumptions—those costs would climb 2.5-fold to $2.5 trillion by 2036, taking nearly 30% of federal revenue.
CRFB said sustained rates above economic growth would widen the r>g gap to 75 basis points by 2036, raising the risk of a self-reinforcing debt spiral.
That pressure would spread beyond Washington: a 55-basis-point mortgage-rate increase adds almost $200 a month on a $500,000 30-year loan, while federal interest would overtake Medicare by 2027.
The group urged deficit reduction to ease inflation pressure, lower long-term yields and prevent interest payments from crowding out other spending priorities.
As government borrowing drives up mortgage rates, what does the future of homeownership look like for the average American family?
With debt interest costing more than defense, is America's fiscal crisis crippling its ability to act on the world stage?
Can the new Fed Chair's plan to tame inflation succeed without triggering an even deeper US debt spiral?
America's Exploding Debt Interest: How $16 Trillion in Payments Will Reshape the Federal Budget
Overview
US national debt interest payments are rising rapidly and are projected to take up a much larger share of the federal budget in the coming years. This is driven by a combination of growing debt, persistent deficits, and increased spending on mandatory programs like healthcare and retirement benefits. As a result, debt held by the public is expected to reach 108% of GDP by 2030 and continue climbing, with current debt levels on track to double by the mid-2060s. These trends highlight the urgent need for fiscal reforms to prevent interest costs from crowding out other important government priorities.