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. (RELATED: ‘Enormously Naive’: JPMorgan CEO Slams Biden’s Natural Gas Pause, Issues Warning About Economy)
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.
And the Treasury gets to go $34.6 trillion in debt… https://t.co/tObSXe3jOw pic.twitter.com/AlAaQCNT8z
— E.J. Antoni, Ph.D. (@RealEJAntoni) April 9, 2024
The increase in the payment on interest is primarily the result of a rise in interest rates that are being driven up from hikes to 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.
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.
All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.