WASHINGTON PAID $1.05 TRILLION IN NET INTEREST IN FISCAL 2026 — THE FIRST YEAR OVER A TRILLION — BIGGER THAN DEFENSE AND MORE THAN HALF THE $1.99 TRILLION DEFICIT

The federal government paid $1.05 trillion in net interest in fiscal 2026, the year that ended September 30, according to the Treasury’s September statement. It’s the first year over a trillion. It was $970 billion in 2025, $882 billion in 2024 and $659 billion in 2023.

Interest is now the third-biggest thing Washington pays for, behind Social Security at $1.67 trillion and Medicare at $1.07 trillion. It’s bigger than defense, at $965 billion. Out of every dollar of tax that came in, about 19.5 cents went to interest. And that’s the net number. The gross bill on Treasury debt was $1.36 trillion, the “$1.4 trillion” in the headlines, but $218 billion of it was paid to the government’s own trust funds.

The deficit for the year was $1.99 trillion, up from $1.78 trillion. The interest bill alone was more than half the size of it.

Luke Gromen watches a wider number: interest plus entitlements plus veterans’ benefits, against receipts. He calls it “true interest expense.” On September 13 he told Thoughtful Money it was “105% of receipts” through the third quarter. A government in that spot can tax more, spend less or print. The first two need votes. Printing doesn’t. Nobody can print bitcoin. At the time of this writing, bitcoin was $81,380.