The government must pay interest on the national debt.
Interest is the price the government has to pay for taking out loans.
Net interest equals the interest payments the U.S. government makes on its debt, less any interest it receives on foreign bonds. Interest on our debt is the third largest expense for our federal government. It is paid to people, corporations and institutions who hold government securities. Because our debt is projected to grow well into the next millennium, the interest on the debt will continue to rise as well.