Defense spending represents the largest category of discretionary spending by the U.S. government appropriated by the U.S. Congress each year. Interest on the national debt represents mandatory spending. It now ranks third behind the annual spending to fund other mandatory spending programs like Social Security and Medicare.

Fueled by excessive spending, the growth of the national debt and the surging amount of interest that must be paid on it is crowding out other parts of the U.S. government's spending. The Biden administration announced it will cut some Medicare benefits starting in January 2025.

Part of the problem is how the Biden administration manages the national debt. After making the worst fiscal blunder in the department's history in 2021, the U.S. Treasury Department is now gambling on interest rates falling.

The Treasury Department's Gamble

That gamble came to light during Treasury Secretary Janet Yellen's recent testimony before the U.S. Congress.

Republican Senator John Kennedy and Bill Hagerty criticized Yellen for issuing debt at higher interest rates amid an inverted yield curve. Currently the yield on the benchmark 10-year Treasury note is 4.33%, compared to 5.4% on the three-month Treasury bill.