# US Debt Default Clock Hits 2 Minutes to Midnight

> Source: [https://icharles.com/articles/us-debt-default-clock-midnight](https://icharles.com/articles/us-debt-default-clock-midnight) (canonical)
> Author: iCharles News — iCharles, https://icharles.com
> Published: 2026-07-07

## TL;DR

The Debt Default Clock has moved to two minutes to midnight — the closest it has ever been. Federal government interest payments hit $1,218.938 billion (annualized) in Q1 2026, according to the St. Louis Fed. The Congressional Budget Office projects interest costs will reach $1.0 trillion in 2026 and climb to $2.1 trillion by 2036. Over the next decade, total interest payments are projected at $16.2 trillion.

## What is the Debt Default Clock, and where does it stand now?

The **Debt Default Clock** is a public tracker that measures how close the United States is to a federal debt default, using a clock metaphor where midnight represents default. The clock has moved to two minutes to midnight — the closest reading in its history, according to [debtdefaultclock.us](https://debtdefaultclock.us/).

That is the most alarming position the clock has ever shown.

## How much is the US paying in interest right now?

Federal government interest payments reached **$1,218.938 billion** on a seasonally adjusted annual rate basis in Q1 2026. That figure comes from the U.S. Bureau of Economic Analysis, as tracked by the [St. Louis Fed's FRED database](https://fred.stlouisfed.org/series/A091RC1Q027SBEA).

Here is how those quarterly readings have trended:

| Quarter | Interest Payments (Billions, SAAR) |
|---|---|
| Q1 2025 | $1,144.212 |
| Q2 2025 | $1,160.900 |
| Q3 2025 | $1,199.189 |
| Q4 2025 | $1,227.495 |
| Q1 2026 | $1,218.938 |

The trend is clear: interest costs have risen sharply across every quarter of the past year.

## What does the CBO project for interest costs ahead?

The Congressional Budget Office projects that net interest costs will reach **$1.0 trillion in 2026** — a 7 percent increase from 2025. That follows increases of 10 percent and 34 percent in the two years before that, according to the [Peter G. Peterson Foundation](https://www.pgpf.org/article/any-way-you-look-at-it-interest-costs-on-the-national-debt-will-soon-be-at-an-all-time-high/).

By 2036, CBO projects net interest costs will climb to nearly **$2.1 trillion**.

Over the full next decade, total interest payments are projected at **$16.2 trillion** — the highest dollar amount for interest in any 10-year period in US history. That figure is nearly double what the US spent on interest over the past two decades, after adjusting for inflation.

## How does $16.2 trillion in interest actually compare to other spending?

Here is what the Peterson Foundation says $16.2 trillion represents:

- Roughly **$47,000 per person** in the United States
- About **three times** what the government spent on net interest between 2006 and 2025
- About **three times** Social Security's cumulative cash deficits over the next 10 years
- About **five times** the cost of all 403 US weather and climate disasters exceeding $1 billion in damages since 1980 (inflation-adjusted)
- More than **25 times** the estimated 20-year, $625 billion drinking water infrastructure need

In 2026, the Treasury will pay an average of **$2.8 billion per day** in interest. Under CBO projections, that rises to **$5.9 billion per day** by 2036.

## When does interest spending break historical records?

By several measures, interest costs are already at or near all-time highs — with data going back to 1940.

- As a share of GDP, interest costs will reach **3.3 percent in 2026**, eclipsing the previous high set in 1991. By 2036, that climbs to 4.6 percent of GDP.
- As a share of federal revenues, interest payments will hit **18.6 percent in 2026**, above the previous high also set in 1991. That ratio rises to 25.8 percent by 2036.
- As a percent of total federal spending, interest costs will reach **15.7 percent by 2029**, exceeding the previous high of 15.4 percent set in 1996.

In 2025 alone, interest costs totaled **$970 billion** — surpassing most other components of the federal budget. CBO also projects that net interest costs will exceed Medicare spending throughout the upcoming decade.

Here's what we know so far: the data across every major measurement — raw dollars, share of GDP, share of revenues, share of total spending — all point in the same direction at the same time.

## Why are interest costs rising so fast?

The Peterson Foundation points to two drivers: growing debt levels and the rise in interest rates over the past several years. Together, they have significantly increased the cost of federal borrowing. Rising interest costs also contribute to what the Foundation describes as a "vicious cycle" of higher debt and additional interest costs.

The Senate Joint Economic Committee also tracks these figures through its [debt dashboard](https://www.jec.senate.gov/public/index.cfm/republicans/debt-dashboard).

## What pressure does this put on the rest of the federal budget?

Mounting interest costs make it harder and more costly to address other spending priorities, according to the Peterson Foundation. The Foundation states that net interest costs will exceed Medicare spending through the next decade under current CBO projections.

For builders and founders tracking [government AI spending](/articles/palantir-nvidia-nemotron-sovereign-government) or [large-scale federal tech contracts](/articles/microsoft-frontier-co-ai-implementation-unit), the fiscal squeeze matters. A federal budget increasingly consumed by interest payments leaves less room for discretionary investments — including technology. The same dynamic affects how agencies approach [AI implementation at scale](/articles/anthropic-pentagon-claude-injunction-dispute).

The Peterson Foundation's stated position is that securing the nation's fiscal future will require getting interest costs under control — to relieve budget pressure, allow investment in future priorities, and respond to emergencies.

The most recent FRED data, updated April 30, 2026, puts the annualized federal interest payment figure at **$1,218.938 billion** for Q1 2026.

## Frequently asked questions

**What does "two minutes to midnight" mean on the Debt Default Clock?**

The Debt Default Clock uses a clock metaphor where midnight represents a US federal debt default. Two minutes to midnight is the closest the clock has ever been to that position. The clock is tracked publicly at debtdefaultclock.us and is intended to signal how near the country is to a potential default event based on current fiscal conditions.

**How much did the US pay in federal interest in Q1 2026?**

According to the U.S. Bureau of Economic Analysis data tracked by the St. Louis Fed's FRED database, federal government interest payments reached $1,218.938 billion on a seasonally adjusted annual rate basis in Q1 2026. That figure was updated on April 30, 2026. The prior quarter, Q4 2025, came in at $1,227.495 billion.

**What does the CBO project for US interest costs over the next decade?**

The Congressional Budget Office projects that US net interest costs will total $16.2 trillion over the next ten years — the highest dollar amount for interest in any historical 10-year period. Annual interest costs are projected to rise from $1.0 trillion in 2026 to nearly $2.1 trillion by 2036, according to the Peter G. Peterson Foundation.

**When will US interest costs exceed their all-time historical highs?**

By several measures, they already have or will in 2026. Interest costs as a share of GDP will hit 3.3 percent in 2026, above the 1991 record. As a share of federal revenues, they will reach 18.6 percent in 2026, also above the 1991 high. As a percent of total spending, they will reach 15.7 percent by 2029, exceeding the 1996 record of 15.4 percent.

**How much does the US pay in interest per day in 2026?**

In 2026, the US Treasury will pay an average of $2.8 billion per day in interest on the national debt, according to the Peter G. Peterson Foundation. Under CBO's current projections, that daily interest cost is expected to rise to $5.9 billion per day by 2036 if current fiscal trends continue unchanged.