U.S. Interest Payments to Hit $1 Trillion in 2025, Surpassing Medicare and Defense

The U.S. is projected to spend $1 trillion on debt interest next year, more than it will spend on Medicare or defense. According to Fortune, Goldman Sachs warns that delaying action on the deficit could force drastic austerity measures. Goldman Sachs economists say the GOP’s “Big, Beautiful” bill, championed by President Trump, will not stop the debt-to-GDP ratio from reaching World War II-era highs. Goldman Sachs analysts said the House GOP bill and tariff revenue will slightly reduce the primary deficit, but rising borrowing costs keep the overall deficit path unchanged. They warned that the current trajectory is unsustainable, with a large primary deficit, soaring debt-to-GDP ratio, and rising interest expenses. Goldman Sachs warned that if U.S. debt grows too large, stabilizing the debt-to-GDP ratio would require sustained fiscal surpluses that are historically rare and politically challenging.