The federal government has been recording the largest budget deficits, as a share of gross domestic product (GDP), since the end of World War II.

As a result of those deficits, the amount of federal debt held by the public has soared-surpassing $9 trillion at the end of fiscal year 2010 and equal to 62 percent of GDP. The interest the government pays on that debt is currently low by historical standards as a percentage of GDP but is expected to grow rapidly over the next several years as interest rates rise. In response to a request from the Chairman and Ranking Member of the Senate Budget Committee, this study (released in December 2010) provides background material on federal debt and interest costs.

Jared Brewster and Amber Marcellino of the Congressional Budget Office’s (CBO’s) Budget Analysis Division wrote the study under the supervision of Theresa Gullo and Jeffrey Holland. Jared Brewster wrote the Summary and Chapters 1 and 2; Amber Marcellino and Jared Brewster wrote Chapter 3. Jonathan Huntley and Avi Lerner of CBO also contributed to the study. Staff of the Office of Management and Budget provided valuable assistance.