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Pentagon Leaders Warn of Dire Consequences as U.S. Debt Ceiling Deadline Looms

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As the United States approaches a critical deadline to raise the national debt ceiling, past and current Pentagon leaders are sounding the alarm on how such an event could have catastrophic consequences for the country and its national security.

Potential outcomes include disrupted pay for service members, late benefits checks for veterans, and a hit to the country’s defense. Defense Secretary Lloyd Austin warned lawmakers that the Pentagon “won’t, in some cases, be able to pay our troops with any degree of predictability” if a default occurs. Joint Chiefs of Staff Chair Gen. Mark Milley added that such an event could also “embolden China and increase risk to the United States.”

The debt limit is the maximum amount of money that the Treasury Department can borrow to pay for congressionally approved spending determined through the annual appropriations process. However, the Biden administration and GOP are at a standstill on the matter, with congressional Republicans demanding spending cuts in exchange for raising the ceiling, while the White House stands firm that the limit should be raised now, with spending cut negotiations handled separately.

With the deadline approaching in a matter of weeks, the brinkmanship between the White House and congressional leaders to avoid a default has not made progress. The Treasury Department has warned the country could default, an unprecedented event in modern times, as soon as June 1. And the Congressional Budget Office (CBO) issued a report Friday that estimated the federal government’s deadline could now be the “first two weeks of June.”

As the matter depends on how the Treasury Department decides to prioritize U.S. bills, it is uncertain what would happen to government payments. Ongoing obligations that deal with national security, however, require a large chunk of funding. According to Arnold Punaro, a retired two-star Marine Corps general and a former Senate Armed Services Committee staff director, the Defense Department expends multiple billions of dollars every day for military, civilian, and contractor pay, fuel to run bases and keep ships at sea, maintaining U.S. nuclear deterrents, keeping production lines running, and Social Security, Medicare, and retirement payments for veterans.

If the debt ceiling is not raised, the government could use whatever revenues it takes in, but those amounts would be insufficient to support normal operations. “It would not just be a huge stain on U.S. credibility in a very dangerous and unstable world, it would be the equivalent of a government shutdown of our national security,” Punaro said of a default.

On military salaries alone, the U.S. is due to pay out about $4 billion on June 15, according to an analysis released earlier this week by the Bipartisan Policy Center. On June 1, another $12 billion is supposed to go to military and civilian retirement payments, and $12 billion towards veterans’ benefits. This would have severe consequences, as noted by Austin in a letter released in October 2021, the last time Washington neared the ceiling. He warned that a default would “undermine the economic strength on which our national security rests” and that “it would also seriously harm our service members and their families.”

Austin noted that benefits for 2.4 million military retirees and 400,000 survivors would be at risk, federal contractors could have their payments delayed, and America’s international reputation and the stature of the U.S. dollar would be at risk. In a separate letter to Congress, seven of Austin’s predecessors said that should a default halt payments to members of the military, it is unclear whether they would ever be repaid.

While Congress eventually raised the debt limit to roughly $31.4 trillion in late 2021, not without months of drama, lawmakers are back in a similar situation this spring, as the GOP-led House has held firm on not raising the debt ceiling without significant spending cuts.

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