Statement by Secretary of Defense Lloyd J. Austin III on the Economic Consequences of Default on National Security and Military Families

 Oct. 6, 2021

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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.

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.

Here are some other potential impacts:

• The benefits earned by and owed to 2.4 million military retirees and 400,000 survivors would also be at risk.
• 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.
• A default risks undermining the international reputation of the United States as a reliable and trustworthy economic and national security partner. 
• A default also risks undermining the stature of the U.S. dollar as the global reserve currency of choice.

Our service members and Department of Defense civilians live up to their commitments. My hope is that, as a nation, we will come together to ensure we meet our obligations to them, without delay or disruption.