As Washington’s borrowing costs keep rising, interest on the national debt is consuming a larger share of federal spending than many cabinet agencies and domestic programs. The latest federal budget data shows that debt service alone is now running ahead of the combined spending tied to Education, Homeland Security and the Environmental Protection Agency.
CBO says debt interest reached $857 billion through June
The Congressional Budget Office said in its July 9 Monthly Budget Review that net interest on the public debt totaled $857 billion in the first nine months of fiscal year 2026. That covers October 2025 through June 2026 and works out to roughly $95 billion a month, or close to $24 billion a week, based on the CBO tally and calendar math drawn from the fiscal year-to-date totals.
That figure is about $100 billion higher than the amount spent on net interest during the same period a year earlier, according to the CBO. The increase reflects two pressures identified in the report and in broader federal budget documents: a larger stock of debt and higher interest rates on Treasury borrowing than the government faced in the prior fiscal year.
Treasury data cited in budget reporting shows total federal debt has climbed to roughly $39.4 trillion. Over the first nine months of fiscal 2026, the federal deficit approached $1.4 trillion, meaning the government borrowed at an average pace of about $155 billion a month. Those numbers place debt service in a category of spending that now rivals or exceeds many of the government’s biggest non-entitlement functions.
The comparison in circulation is national rather than state-specific: interest costs are being measured against federal agency spending across the country, not against any single state budget. Based on the figures cited from the CBO and budget materials referenced in the reporting, net interest is now about $20 billion higher than the combined outlays for the Department of Education, the Department of Homeland Security and the Environmental Protection Agency.
What is clear from the available federal documents is the scale gap between debt service and those agency budgets taken together. What is less clear is the exact state-by-state effect, because federal budget reports do not break this comparison into a full list of local program reductions, grant changes or staffing consequences tied directly to the rise in interest costs.
That matters for readers trying to understand what this means close to home. Education funding, homeland security operations and EPA-backed environmental work all flow through a mix of formulas, grants, contracts and direct federal administration. The federal government has not released a comprehensive state-level accounting showing how higher interest payments alone have changed those funding streams during fiscal 2026.
Budget analysts have pointed to two immediate drivers behind the jump in interest costs: the government owes more money overall, and it is paying more to finance that debt as older obligations roll over at higher rates. The CBO attributed the year-over-year increase in net interest to the higher debt burden and higher long-term interest rates than in the same stretch of fiscal 2025.
Other large mandatory spending programs are also increasing at the same time, adding pressure to the federal balance sheet. In its budget review, the CBO said Social Security outlays rose by $62 billion, Medicare outlays increased by $58 billion, and Medicaid spending rose by $49 billion in the fiscal year to date. Those are separate from interest costs, but together they shape how much Washington must borrow.
Demographic trends help explain why analysts do not expect that pressure to fade quickly. Census Bureau data shows the U.S. median age continued to rise from 39.2 in 2024 to 39.4 in 2025, reflecting an aging population. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said the current fiscal year is likely to produce borrowing of $2 trillion or more and urged policymakers to address both spending and revenues, framing the debt trajectory as a long-term budget challenge rather than a one-month anomaly.