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How did interest payments on the debt change from FY2023 to FY2025 projections?
Executive summary
Interest payments on publicly held debt rose notably from FY2023 to FY2025: reporting indicates net interest was about $710 billion in FY2023 and interest payments on debt held by the public reached roughly $1 trillion in FY2025—an increase on the order of $290 billion (about 41%) if comparing those two figures directly from the available accounts [1] [2]. Coverage varies by source on exact fiscal definitions (net interest vs. interest on debt held by the public) and on intermediate FY2024 values; those definitional differences matter for direct year-to-year comparisons [2] [1].
1. The headline: interest moved from near defense levels to a trillion-dollar item
Reporting by Taxpayers for Common Sense notes that net interest on the public debt was $710 billion in FY2023, a level that already rivaled the Pentagon budget [1]. Separate summaries and fiscal trackers say interest payments on debt held by the public increased by roughly $79–80 billion in FY2025 versus FY2024 and “hit $1 trillion for the first time” in FY2025, making interest the second-largest federal outlay behind Social Security [2]. Taken together, those figures portray substantial upward pressure on interest costs between FY2023 and FY2025 [1] [2].
2. Watch your terms: “net interest” vs. “interest on debt held by the public”
Sources use slightly different measures. Taxpayers for Common Sense cites “net interest” at $710 billion for FY2023 [1]. The bipartisan tracker and deficit summaries cite “interest payments on debt held by the public” reaching about $1 trillion in FY2025 and an increase of ~$79–80 billion year‑over‑year [2]. Those differences reflect variations in accounting definitions and what components are included or excluded; therefore a simple subtraction across sources mixes related but not identical concepts [1] [2].
3. How big is the change in plain numbers?
If one lines up the FY2023 net-interest figure ($710 billion) with the FY2025 “interest on debt held by the public” figure (~$1 trillion), the arithmetic indicates an increase of roughly $290 billion, about 41% over the two‑year span [1] [2]. However, the direct year-by-year change reported in the FY2025 tracking source emphasizes a smaller single-year increase—about $79–80 billion (8%)—from FY2024 to FY2025 for the “interest on debt held by the public” series [2]. That signals most of the detectable rise concentrated in the most recent 12 months reported [2].
4. Why did interest climb? Debt growth and rates both feature
Available sources point to two drivers: large increases in the quantity of debt outstanding (debt managed by the Treasury rose substantially in recent years) and rising interest costs per dollar of debt. GAO reporting documents big increases in total federal debt over recent years—debt managed by Fiscal Service rose from $5.4 trillion in 1997 to $33.2 trillion by the end of FY2023—illustrating the scale of borrowing [3]. The FY2025 tracker attributes the higher FY2025 interest outlays to growth in the public debt and to prevailing financing costs [2].
5. What to watch for in interpreting these numbers
Different agencies and analysts present related metrics—“net interest,” “interest payments on debt held by the public,” and interest expense on debt outstanding—each with slightly different inclusions [1] [4] [2]. That means comparisons must align definitions and fiscal years. The FRED series and Treasury’s Fiscal Data datasets referenced by these sources provide monthly and fiscal-year-to-date series for researchers to reconcile differences [5] [4] [6]. Available reporting does not provide a single harmonized FY2023→FY2025 time series using one consistent accounting convention—so precise percentage-change claims depend on which series you choose [2] [1].
6. Alternative viewpoints and caveats
Some trackers highlight one-year changes (FY2024→FY2025: +$79–80 billion, 8%) emphasizing recent acceleration, while commentators like Taxpayers for Common Sense emphasize longer-run implications by comparing FY2023 net interest to other priorities such as defense [2] [1]. Analysts and agencies (GAO, Treasury Fiscal Data, FRED) urge careful use of definitions and point to ongoing debt growth as the structural cause [3] [4] [5]. Available sources do not mention an OMB or CBO reconciled table in this packet that lays out a single comparable FY2023–FY2025 series using one exact definition—researchers should consult the original datasets for a rigorous, apples‑to‑apples calculation [4] [5].
Bottom line: interest costs rose materially from the FY2023 era to FY2025, with headline figures using slightly different definitions pointing to either an FX-sized single‑year jump (+$79–80 billion between FY2024 and FY2025) or a multiyear increase of about $290 billion if comparing FY2023 net interest to FY2025 interest on debt held by the public; confirm which interest series you mean before quoting a single percent change [1] [2] [3].