WASHINGTON — Defense Secretary Lloyd J. Austin III warned Wednesday that a default on U.S. financial obligations later this month would seriously harm servicenmembers 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 the country could exhaust the extraordinary measures 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.”
The warning comes as Senate Majority Leader Charles E. Schumer, D-N.Y., plans to try Wednesday to limit debate on a House-passed measure to suspend the debt ceiling, an effort that would require at least 10 GOP votes.
Senate Republicans have said Democrats will have to go it alone on raising or suspending the debt limit.
