Senate Instructions Could Add $1.1T in Interest Costs
APR 11, 2025
Congress’ concurrent budget resolution includes reconciliation instructions to allow lawmakers to pass a bill that adds a net $5.8 trillion to primary deficits through 2034 and nearly $7 trillion including interest. As a share of the economy, interest would grow from a record 3.2 percent in Fiscal Year (FY) 2025 to 4.6 percent by 2034.
Passing an additional $5.8 trillion of new and extended tax cuts and spending without offsets would be unprecedented, and we estimate it would:
- Boost interest spending costs by $1.1 trillion between FY 2025 and 2034.
- Increase annual federal net interest payments to nearly $2.0 trillion by FY 2034, $260 billion higher than what is currently projected.
- Triple the interest-to-revenue ratio from 9 percent in 2021 to over 27 percent in 2034 (compared to 22 percent under current law).
- Cause the average interest rate (R) to exceed economic growth (G) by 2035, increasing the risk of a debt spiral.
This is an update to our previous February analysis in response to reports that the House was considering passing a reconciliation bill with $5.5 trillion in net deficit increases.
Source: Committee for a Responsible Federal Budget
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