The U.S. federal government spent $857 billion on net interest costs from October 2025 through June 2026, according to a July 9 budget review from the Congressional Budget Office, making debt service one of the largest costs in the federal budget.

The figure covers the first nine months of fiscal year 2026, which began on Oct. 1, 2025. Over the same period, the federal deficit — the amount by which government spending exceeds tax revenue — totaled $1.4 trillion, according to the CBO. That was $35 billion higher than in the same period a year earlier.

The continued gap between spending and revenue has contributed to a national debt of $39.64 trillion as of July 2026, according to the U.S. Department of the Treasury. The Treasury’s national debt figure includes debt held by the public as well as intragovernmental holdings.

Net interest costs of $857 billion over nine months amount to about $95.2 billion per month. Divided across roughly 129 million U.S. households, based on U.S. Census Bureau household data, that equals approximately $737 per household per month. The amount is not a direct bill to households, but it illustrates the scale of federal borrowing costs.

Debt service has become a major budget item

Servicing the federal debt has become one of the government’s largest expenses. According to the CBO review, net interest costs during the October 2025-to-June 2026 period exceeded federal spending on the military or Medicare.

Interest spending differs from many program costs because it largely reflects past borrowing decisions and prevailing interest rates on Treasury securities. As older debt matures and is refinanced, changes in market rates can affect the government’s future interest bill.

As with any borrower, the federal government can address a debt burden through higher income, lower spending, or some combination of both. Current fiscal measures cited in the source article point in different directions.

The Trump administration’s One Big Beautiful Bill Act, or OBBBA, is expected to reduce taxes — a source of government revenue — by $5 trillion between 2025 and 2034, according to the Tax Foundation.

At the same time, the Department of War has requested $1.5 trillion in funding for fiscal year 2027. That request represents a 42% increase in an area already among the largest line items in the federal budget.

Cost-cutting efforts were also associated with billionaire Elon Musk’s Department of Government Efficiency, or DOGE. An analysis by the Center for Economic and Policy Research said DOGE failed to produce a meaningful shift before it shut down.

Potential effects cited by fiscal agencies

The U.S. Government Accountability Office has said high and rising federal debt can affect Americans through higher borrowing costs, inflation and stagnant wages.

The United States also has a sovereign credit rating of AA+ from S&P Global Ratings, below the AAA ratings held by several peers including Canada, Australia and Germany, according to the Peter G. Peterson Foundation. The foundation has reported that a growing debt burden could increase the risk of further credit downgrades.

Separately, Yale University’s The Budget Lab calculated that each increase in the primary deficit equal to 1% of gross domestic product could reduce household purchasing power by $300 to $1,250 over five years. A primary deficit excludes net interest costs, so it is used by budget analysts to separate current policy choices from the cost of servicing previously accumulated debt.

Addressing the fiscal imbalance would likely require politically difficult measures. The source article cited examples including raising taxes, cutting Social Security or reducing government services.

The article’s cited sources included the Congressional Budget Office, the U.S. Department of the Treasury, the U.S. Census Bureau, the Tax Foundation, the Office of Policy Planning, the Center for Economic and Policy Research, the U.S. Government Accountability Office, the Peter G. Peterson Foundation and Yale Budget Lab.