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Failing to Raise the Debt Ceiling Would Threaten National Security

Veterans’ Care and Jobs Supported by Defense Could Be Affected

SOURCE: AP/Charlie Riedel

A blind veteran is assisted by a rehab specialist as he leaves the Veterans Administration hospital in Kansas City, Missouri. Veterans health care as well as education, training, and employment for the high numbers of veterans out of work would be put at risk if the debt limit isn't raised.

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Talks on a far-reaching deal to reduce the deficit are seemingly at an impasse, and the prospect of the U.S. government hitting its self-imposed debt ceiling appears more likely than it did even a week ago. If Congress does not raise the debt limit, the United States will be unable to pay its bills in full starting on August 3. Reaching that point could have serious, immediate, and detrimental effects on our national security.

The U.S. government borrows about 40 cents of every dollar it spends. As a result, not raising the debt ceiling would force the government to prioritize certain programs over others since the $2.2 trillion of revenues the Treasury Department took in this year falls well short of the $3.8 trillion that Congress has ordered the administration to spend. If we’re unable to make up the difference, everything our country does to protect our national security and guarantee the welfare of our veterans—from paying service members’ salaries to maintaining equipment to funding veterans’ hospitals—would be put at risk.

Adm. Mike Mullen, chairman of the Joint Chiefs of Staff and the nation’s top military officer, recently expressed his serious concern for military families if Congress fails to raise the debt limit, saying, “Some of our troops and some of our families … are really living paycheck to paycheck, so I think we have to be very careful.”

Past experience makes plain the importance of consistent funding for our national security. A number of operations were disrupted when the government shut down for just five days in 1995 because Congress and the administration could not come to agreement on a budget:

  • 250,000 civilian DOD employees were sent home. An additional 571,000 continued working without pay.
  • 160,000 troops in the National Guard were not authorized to complete their regular monthly drills.
  • DOD medical facilities were ordered to cease elective surgeries and refuse to carry out or even schedule routine appointments for all but active-duty personnel.
  • Military recruiting offices throughout the country closed.

But the consequences will be significantly worse than the 1995 shutdown if we hit the debt ceiling. The Treasury Department is estimated to take in about $180 billion in revenue this August. Subtracting $29 billion for the interest payment on the debt and approximately $50 billion for trusts such as Social Security, Medicare, and the Highway Trust Fund leaves about $100 billion for the government to spend—just more than half of the $195 billion needed to fund its remaining obligations for the month.

In the total budget for the Department of Defense, including war costs, 65 percent of expenditures go to personnel costs and operations and maintenance: paying our service members and supporting our forces in the field, including in three combat areas. Rep. Duncan Hunter (R-CA) has introduced legislation—called the Guarantee Paychecks for America’s Military Families Act—that would prioritize payments to Department of Defense and Coast Guard personnel if we hit the debt ceiling. But even if these payments—which come to $38 billion for the month of August—are prioritized, numerous other areas of national security would fall under serious threat if the debt limit is not raised by August 2. In total, this decision would leave $62 billion of revenue to pay $157 billion worth of obligations for all government programs.

The following shortfalls could result in the security budget during the month of August alone if only the troops and the cost of operations are paid:

  • $6.3 billion shortfall for veterans’ care. Just more than half of the Veterans Administration’s budget consists of disability compensation and pensions for veterans. The remainder includes providing health care to more than 6 million patients, including more than 500,000 veterans of the wars in Iraq and Afghanistan. It also includes funding for education, training, and employment programs intended to combat the high level of unemployment among veterans. Any and all of these programs would be at risk if the debt ceiling is not raised.
  • $11.3 billion reduction in procurement. Prioritizing personnel and operations and maintenance would leave no money at all for the purchase of new planes, ships, tanks, or other systems DOD planned to receive. These systems support production lines and American workers across the country.
  • $6.8 billion shortfall for research, development, testing, and evaluation. Like procurement, RDT&E, essential for the development of new technologies to confront future threats, could receive no money at all if the debt ceiling is reached. In addition to setting back the progress of technology, these cuts could endanger more jobs as well.

There are sensible ways to cut spending on national security while keeping our nation safe. Forcing the government to choose between mailing a soldier’s or veteran’s paycheck and a Medicaid check by failing to raise the debt ceiling is not one of them.

Lawrence J. Korb is a Senior Fellow and Sam Klug is a National Security intern at American Progress.

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