The net interest on the federal debt exceeded defense spending in the first half of fiscal year 2024 as government spending piles up and interest rates remain high, according to a report from the Congressional Budget Office (CBO).
Net interest on the U.S. government’s public debt cost an estimated $440 billion in the first half of fiscal year 2024 from October to March, compared to $308 billion in the same period in fiscal year 2023, an increase of 43%, according to the CBO.
Spending on the U.S. military only increased 8% in that same time frame, from $386 billion to $412 billion.
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Total spending for the first half of fiscal year 2024 increased to around $3.25 trillion compared to $3.15 trillion last year, a gain of 6%, according to the CBO. The deficit reached $1.1 trillion, just $37 billion less than the same time last year, even as revenues increased 7%, or $140 billion.
Social Security remained the biggest source of spending, increasing from $652 billion in the first six months of fiscal year 2023 to $711 billion this year, a gain of around 9%, according to the CBO. The costs of Medicare and Medicaid were both exceeded by payments in interest, with the programs costing $389 billion and $304 billion, respectively.
The increase in the payment on interest is primarily the result of a rise in interest rates that are being driven up from hikesto the federal funds rate, which has been placed in a range of 5.25% and 5.50%, the highest level in 23 years. The Federal Reserve placed the rate at that level to combat high inflation, which peaked at 9.1% in June 2022 and has remained elevated since, rising 3.2% in February, far above the Fed’s 2% target.
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The national debt is currently $34.6 trillion as of Friday, according to the Treasury Department. In February, the federal government spent $567 billion but only collected $271 billion, meaning it spent more than double what it collected.
The White House did not immediately respond to a request to comment from the Daily Caller News Foundation.
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