The U.S. Treasury has paid $628 billion in net interest this year to service its borrowing,according to the the Congressional Budget Office (CBO). The latest monthly budget update on the national debt and its interest burden, shared on May 8, breaks down the government’s income and outgoings for the fiscal year so far, which began in October. The CBO breakdown shows the deficit so far this year is actually smaller than it was for the same period a year prior. However, every day the Treasury is still forking out billions of dollars to manage existing service payments to lenders.
The report demonstrates the government’s largest outlays: $953 billion so far this year for Social Security benefits, $588 billion for Medicare, and $409 billion for Medicaid. Net interest on public debt is a larger figure than both Medicare and Medicaid, totaling $628 billion for the seven months between October and April.
On those numbers, for the 212 days since October, the Treasury’s interest payments have averaged at just shy of $3 billion a day—$2.96 billion to be precise.
The interest payment figure is rising with every budget update that passes, the CBO said: “Outlays for net interest on the public debt rose by $41 billion (or 7%) because the debt was larger than it was in the first seven months of fiscal year 2025 and because of higher long-term interest rates. Declines in short-term interest rates partially mitigated the overall rise in interest payments.”
The overall debt picture has marginally improved: The April update shows government income totaled $3.3 trillion for the fiscal year so far, up from $3.1 trillion for October to April of 2025. Outlays have also increased, from $4.2 trillion to $4.3 trillion, meaning the deficit for FY26 stands at $955 billion, which is $94 billion less than for the same period in FY25.
A significant driver in this change was the revenue generated by Trump’s tariff agenda, intended to rebalance trade deals with every nation on the planet.
While geopolitical fallout and a level of market volatility followed, the income generated by the policy was significant: A 220% uplift in duties revenue compared to the previous year. In FY25 (between October and April), customs duties totaled $59 billion, but for the same period this year, the government has raked in $190 billion.
It’s the reason Wharton Professor Joao Gomes previously argued that the initially unpopular tariffs are here to stay—even if the Democrats win the next election. “The truth is governments need revenues and once you see the amount of revenue the tariffs bring, I think Democrats will be addicted to them as Republicans—or are as likely to be,” he told Wharton Business Daily last year.
What impacts CBO projections?
The CBO’s reports are macroeconomics on the hugest of scales, balancing expectations for productivity and growth against policies impacting labor supply, to demographic expectations like aging and the birthrate. And, it has to balance those considerations not just over the course of years, but over the course of many decades.
With so many factors up in the air at present, not least the impact AI might have on the global economy, how does the CBO balance the factors that color its projections?
When it comes to baseline projections, “productivity is massively the most important thing,” CBO director Phil Swagel told Fortune in an exclusive interview earlier this year. For the economy as a whole, “it’s policies that change the labor force, whether more people or fewer people,” Swagel added, “Or skills … how much more skilled, the quality of education.”
On the impact of AI, the thinking is moderate, but optimistic, Swagel explains: “What if it doesn’t pay off to the extent we’re hoping? … That’s the kind of exercise we try to do here. On the macro side, it’s the near-term GDP, the strength of the capital investment in these data centers is driving GDP, and will it pay off?”
Balancing that concern is the bullish potential for growth, he explained: “So far, we have just a modest impact of AI on productivity—10 basis points a year, so a full percent over 10 years added to the level of GDP. And that’s from the improvement of things that already exist. The part that we’re still trying to figure out is the new occupations, the new activities. We don’t have that, that’s not in our forecast because we don’t have a basis.”
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