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Pentagon warns debt default risks troops’ pay

Other veterans chat before Purple Heart recipient and U.S. Marine Corps veteran Curtis Terry receives a payment-free car on Thursday, Oct. 8, 2020. Walmart and Keurig Dr Pepper sponsored the vehicle through the Military Warriors Support Foundationu00d5s Transporation4Heroes program. (Kaytie Boomer |
May 15, 2023

Leaders at the Pentagon recently warned a default on the nation’s debt could endanger troops’ pay while benefiting China.

According to testimony delivered to the Senate Appropriations defense subcommittee, both Defense Secretary Lloyd Austin and Joint Chiefs of Staff Chairman Gen. Mark Milley gave the warning, The Hill reported.

In his testimony to lawmakers, Austin said a default would harm the country’s reputation, as well as military and civilian livelihoods.

Veterans and federal employees, including service members, could experience delays in Social Security payments and paychecks. If there is a default, Austin pointed out that troops’ pay would be one of the biggest casualties because the Pentagon couldn’t guarantee that military personnel would be paid on time.

Milley also warned that China would be emboldened by a default.

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The Pentagon’s warning follows a similar message from National Intelligence Director Avril Haines, who cautioned a debt default would likely lead China and Russia to “take advantage of” the situation.

Both Beijing and Moscow could use such an event to demonstrate the U.S. is “not capable of functioning as a democracy” and the American political system is chaotic, Haines said.

Republicans maintain that raising the debt ceiling must coincide with cutting spending, which has created a political standoff between the Biden administration and the GOP. Washington could default on its obligations as early as June 1 if no solution is found, according to Treasury Secretary Janet Yellen.

During the hearing, Senator Jack Reed (D-RI) asked Austin and Milley about the consequences of a debt default and warned that China could have “a huge opportunity to provide disinformation to American citizens to confuse them” and make the United States look unstable on the global stage.

A second round of negotiations between the Biden administration and congressional leaders is set to take place on Friday. In the absence of a solution, global financial markets are at risk of a catastrophic event.