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Interest Paid on Gov't Debt to 'Dwarf Virtually Every Federal Expense'

11:01 AM, Mar 26, 2014 • By DANIEL HALPER
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The Republican side of the Senate Budget Committee has put together this chart showing that payments on the interest of federal debt will "dwarf virtually every federal expense" in 2024:

The chart is based on Congressional Budget Office projections. "The U.S. gross federal debt currently stands at $17.548 trillion, and net interest payments to our creditors are the fastest-growing item in the budget. In 2014, the Congressional Budget Office projects that the nation will spend $233 billion on interest payments. By the end of the budget window in 2024, however, CBO forecasts that interest payments will nearly quadruple to an astonishing $880 billion. Every dollar spent paying our creditors is a dollar wasted—money for which we get nothing in return. Interest payments threaten to crowd out every other budget item," the minority side of the Senate Budget Committee explains in an email.

To put the $880 billion, single-year interest payment in perspective, here is what we currently spend on other budget items:

  • Federal Courts - $7.4 billion
  • Department of Education - $56.7 billion
  • Secret Service - $1.8 billion
  • Food Inspection - $2.3 billion
  • Census Bureau - $1.0 billion
  • Border Patrol - $12.3 billion
  • National Parks - $3.0 billion
  • NASA - $17.6 billion
  • Centers for Disease Control - $7.1 billion
  • Federal Prison System - $6.9 billion
  • Workplace Safety Inspections - $0.9 billion
  • Immigration and Customs Enforcement - $5.6 billion
  • FDA - $2.6 billion
  • Federal Highway Budget - $40.4 billion
  • Coast Guard - $10.0 billion
  • Small Business Loans - $0.9 billion
  • Veterans’ Health Care - $55.3 billion
  • FBI - $8.3 billion

Not only do interest payments threaten to consume the federal budget, but they also threaten to plunge the nation into fiscal crisis. Even a modest rise in interest rates could lead to a financial emergency, with the U.S. facing a dangerous spiral of rising interest costs and increased borrowing to finance those interest costs.

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