Pentagon says debt ceiling breach could halt payments to survivors

Payments to veterans and defense contractors also imperiled

Secretary of Defense Lloyd J. Austin III testifies during a Senate Armed Services Committee hearing on Sept. 28. (Tom Williams/CQ Roll Call)
Secretary of Defense Lloyd J. Austin III testifies during a Senate Armed Services Committee hearing on Sept. 28. (Tom Williams/CQ Roll Call)
Posted October 6, 2021 at 1:01pm, Updated at 5:22pm

Defense Secretary Lloyd J. Austin III warned Wednesday that a default on U.S. financial obligations would seriously harm servicemembers and their families. 

Senate Democrats are locked in a standoff with Republicans over the debt ceiling, the legal cap on government borrowing that allows the U.S. to keep paying its bills on time.

“The United States reached the debt limit at the end of July. Since then, the U.S. Treasury has been taking extraordinary measures to prevent the United States from defaulting on its obligations. If the United States defaults, it would undermine the economic strength on which our national security rests,” Austin said in a press release. 

“It would also seriously harm our service members and their families because, as Secretary, I would have no authority or ability to ensure that our service members, civilians, or contractors would be paid in full or on time,” he said. 

Treasury Secretary Janet L. Yellen has warned that she could exhaust the extraordinary measures she is using now to forestall default as soon as Oct. 18.

According to Austin, breaching the debt limit could endanger benefits owed to 2.4 million military retirees and 400,000 survivors, delay payments to thousands of military contractors and undermine the reputation of the U.S. and the U.S. dollar as the “global reserve currency of choice.”

Defense secretaries, Capitol Hill Democrats weigh in

Later in the day, seven former Defense secretaries, including two who served Republican presidents, Dick Cheney and James Mattis, wrote to the Republican and Democratic leaders in the House and Senate to urge a quick increase in the debt ceiling. “If we default on the ‘full faith and credit of the United States,’ it will send a signal to our friends and our adversaries that America does not keep its word to our military forces,” they wrote.

Democrats on Capitol Hill are also amplifying Austin’s message. 

The House Armed Services Committee, which is chaired by Washington Democrat Adam Smith, tweeted that a debt default would have “catastrophic effects” on America’s national security. 

And Rhode Island Democrat Jim Langevin, who chairs the Armed Services Subcommittee on Emerging Threats and Capabilities, said that the debt limit standoff had gone too far. 

“Defaulting on our debt is not only catastrophic for American families – it also threatens our military’s standing on the world stage. We can’t let Mitch McConnell and Senate Republicans endanger our national security,” he tweeted. 

Austin’s warning came hours before McConnell, the Kentuckian who is the Senate's minority leader, offered to allow Democrats to increase the debt ceiling enough to pay bills till December, a deal Democrats said they would take.

But Senate Republicans continue to say Democrats will have to go it alone in enacting a longer-term increase in the ceiling.