Secretary of Defense Lloyd Austin is joining the debate over whether the government should raise the federal borrowing ceiling to stave off the nation defaulting on its financial obligations, saying a default would have major negative consequences for national security.
The Treasury Department now says the government will run out of cash by mid-October, which could mean a U.S. default for the first time in the nation’s history. Democrats accuse Republicans of blocking a vote to raise the government’s borrowing limit, but Senate Republicans say the burden is on President Biden and the Democrats as they are also pushing trillions of dollars in new government spending.
Mr. Austin weighed in Wednesday, warning that a default would undermine the economic strength critical for maintaining the nation’s security.
“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,” Mr. Austin said in a statement.
Retirement checks for the nation’s 2.4 million military retirees and 400,000 survivors also would be at risk. Meanwhile, payments could be delayed for defense contractors that provide technology and equipment to the military.
“A default risks undermining the international reputation of the United States as a reliable and trusty economic and national security power,” Mr. Austin said. “A default also risks undermining the stature of the U.S. dollar as the global reserve currency of choice.”
Mr. Austin said military members and Department of Defense civilians are expected to live up to their financial commitments, and the government should, too.
“My hope is that, as a nation, we will come together to ensure we meet our obligations to them, without delay or disruption,” he said.