Rising borrowing costs are on track to make interest the largest federal budget item, with projections showing it could surpass Social Security soon.
Interest expenses on the US national debt reached a record $1.37 trillion over the last 12 months. The report said that, at the current pace, those borrowing costs are projected to soon become the largest line item in the federal budget, overtaking Social Security. The figure highlights how higher rates can rapidly lift debt-servicing costs as government borrowing accumulates.