In fiscal 2026, the US government paid approx. $1.052T in net interest on the national debt, the first time the figure has ever crossed $1T in a year. It now costs more than defence, and it takes about 19 cents of every dollar the government collects.
The United States crossed a trillion-dollar milestone in 2026 that nobody celebrated: the cost of servicing the national debt passed $1 trillion in a single year. Net interest on the federal debt reached approx. $1.052T in fiscal 2026, which ran from October 1, 2025 to September 30, 2026, according to the US Treasury's Final Monthly Treasury Statement for fiscal 2026, released October 16, 2026. That is up 8.4% from approx. $970B in fiscal 2025, and it is the first time net interest has topped $1T in any fiscal year.
Net interest is the interest the government pays on Treasury securities, minus the interest it receives back, mostly on its own holdings and loans. It is the budget-function figure the Treasury reports, and it is the number economists usually cite. It is not the same as gross interest, which was approx. $1.36T in fiscal 2026 and includes interest the government effectively pays itself on intragovernmental holdings. The Congressional Budget Office uses yet another measure, net interest on the public debt, at approx. $1.143T for the year. The definitions differ, but every one of them now sits above $1T, which is the point: by any counting, the interest bill is a thirteen-figure number.
Net interest of approx. $1.052T is now larger than national defence spending, at approx. $965B in fiscal 2026. Interest has outspent defence since fiscal 2024, and the gap widened this year. It also takes about 19 cents of every dollar the government collects: receipts were approx. $5.40T against outlays of approx. $7.40T, leaving a deficit of approx. $1.992T, the third largest on record in dollar terms. Net interest alone explains about 37% of the increase in the deficit from fiscal 2025, rising approx. $81B while the deficit rose approx. $217B.
For scale, net interest was approx. $352B in fiscal 2021. It has roughly tripled in five years, as the debt grew and interest rates rose. The average interest rate on Treasury debt was 3.53% at September 30, 2026, more than double the 2021 rate.
The debt itself stood at approx. $40.56T on November 9, 2026, having first closed above $40T on August 18, 2026. The statutory debt limit is $41.1T, leaving about $740B of headroom, and the next round milestone, $41T, is projected around December 27, 2026. Those are the numbers that will decide whether the interest bill keeps climbing: every additional trillion of debt, at current rates, adds tens of billions a year to the cost of carrying it. The interest line is no longer a footnote to the budget. At more than $1T a year, it is one of the budget's largest items, and it grows whether Congress acts or not.