Austin says debt default would risk national security

By Tony Bertuca / October 6, 2021 at 11:41 AM

Defense Secretary Lloyd Austin warned today that Congress would damage U.S. national security, military families, and countless federal contractors if it allows the nation to default on its debt.

“If the United States defaults, it would undermine the economic strength on which our national security rests,” he said in a statement. “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.”

Austin said the benefits owed to 2.4 million military retirees and 400,000 survivors would also be at risk.

Additionally, “federal contractors, including large firms and thousands of small businesses, that provide our military with world-class services, technology and equipment could have their payments delayed, jeopardizing their operations and many American jobs, he said.

“A default risks undermining the international reputation of the United States as a reliable and trustworthy economic and national security partner,” Austin said. “A default also risks undermining the stature of the U.S. dollar as the global reserve currency of choice.”

The United States reached the federal debt limit in July and the Treasury Department says Congress has until Oct. 18 to raise it again or else the government will default. The debt limit covers spending Congress has already approved.

Senate Republicans, however, seeking to stall Democrats’ legislative agenda, have opposed raising the debt limit, which covers spending Congress has already approved.

President Biden has warned Senate Republicans to stop playing “Russian roulette” with the U.S. economy.

Austin, meanwhile, said he hopes “we will come together to ensure we meet our obligations to them, without delay or disruption.”