{"id":2662646,"date":"2023-05-18T15:03:27","date_gmt":"2023-05-18T19:03:27","guid":{"rendered":"https:\/\/wordpress-1016567-4521551.cloudwaysapps.com\/plato-data\/debt-breach-could-damage-defense-industry-air-force-official-says\/"},"modified":"2023-05-18T15:03:27","modified_gmt":"2023-05-18T19:03:27","slug":"debt-breach-could-damage-defense-industry-air-force-official-says","status":"publish","type":"station","link":"https:\/\/platodata.io\/plato-data\/debt-breach-could-damage-defense-industry-air-force-official-says\/","title":{"rendered":"Debt breach could damage defense industry, Air Force official says"},"content":{"rendered":"
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WASHINGTON \u2014 A breach of the debt ceiling<\/a> could do \u201clong-lasting and profound damage\u201d to the defense industrial base, the Air Force\u2019s top acquisition official said Thursday.<\/p>\n

The exact effects of a breach<\/a> are hard to predict because it is \u201csuch uncharted territory,\u201d Andrew Hunter said at a discussion in Arlington, Virginia, hosted by George Mason University\u2019s Greg and Camille Baroni Center for Government Contracting.<\/p>\n

But Hunter said it would have \u201cprofound implications for the [defense] industrial base.\u201d<\/p>\n

President Joe Biden and House Republicans are now engaged in a standoff over the nation\u2019s debt ceiling, which limits how much the United States can borrow to cover its debts and has been nearly reached. Biden and Democrats are pushing Republicans to raise the debt ceiling without preconditions by passing a \u201cclean\u201d bill, which happened under President Donald Trump\u2019s administration.<\/p>\n

In April, Republican lawmakers, who hold the majority in the House of Representatives, passed a bill to raise the debt ceiling while cutting non-defense discretionary spending by $130 billion, along with other concessions.<\/p>\n

If the debt limit is breached, the Treasury Department\u2019s ability to pay the government\u2019s bills would be severely limited, if not curtailed entirely. This would mean the Pentagon might not be able to pay its contractors on schedule.<\/p>\n

With the United States\u2019 ability to pay its debts suddenly thrown into question, he said, credit markets could seize up.<\/p>\n

And with credit frozen, Hunter said, the Defense Department\u2019s suppliers might not be able to get financing they need to stay afloat while waiting for the government\u2019s payments \u2014 perhaps forcing them to suspend operations and not pay their own workforce.<\/p>\n

\u201cThey can\u2019t get the short-term financing needed to make payroll, while they\u2019re waiting for the reimbursements from the government \u2014 which also, by the way, may be delayed,\u201d Hunter said. \u201cSo they\u2019re going to need that short-term financing even more to cover their expenses.\u201d<\/p>\n

Under a debt ceiling breach, Hunter said, appropriations would still be in place, meaning the department would not have to shut down and employees would not be furloughed. But because the Treasury Department would not have the money to fund the government\u2019s payments, Hunter said, service members and civilian employees might not be paid on time.<\/p>\n

This could ripple through the military\u2019s entire force structure, Hunter said. Since many service members don\u2019t earn high salaries and may be living paycheck to paycheck, a missed payday \u2014 or several \u2014 could deal a severe blow to their personal finances.<\/p>\n

\u201cFor a lot of service members, that\u2019s a huge issue, because that can then reflect on your eligibility for [a] security clearance \u2014 really everything it takes to do your job,\u201d Hunter said. Such a breach would have \u201chuge impacts on families, huge impacts on the workforce, and a lot of consequences that could ripple for quite a long time.\u201d<\/p>\n

Hunter also warned of the national security consequences of a theoretical deal to raise the debt ceiling that rolls back all federal spending to fiscal 2022 levels \u2014 particularly for the still-young Space Force.<\/p>\n

Pentagon Comptroller Mike McCord said in a March 17 letter to Capitol Hill that lowering defense spending to 2022 levels would amount to a $100 billion, or nearly 12%, budget cut from the Biden administration\u2019s $842 billion request for fiscal 2024.<\/p>\n

Republicans want to exempt the Defense Department from spending caps, and even further raise military spending.<\/p>\n

Hunter said Thursday a budget rollback to 2022 levels \u201cwould come upon us with absolutely no warning, no notice,\u201d and compared such a deal to the \u201cpainful\u201d sequestration caps that occurred during the Obama administration.<\/p>\n

Sequestration led to furloughs and a sudden scale back of defense spending, Hunter said \u2014 particularly in vital research and development efforts.<\/p>\n

\u201cYou would see a huge hit to our research and development, which is right now one of [the Department of the Air Force\u2019s] priority areas of pursuit,\u201d Hunter said.<\/p>\n

Congress approved $18 billion for the Space Force in 2022 and $26.3 billion in 2023. The Biden administration requested $30 billion in 2024 funding for the Space Force, which was formally stood up as its own service in December 2019.<\/p>\n

\u201cBecause the Space Force is relatively new \u2026 much of its budget is growing to reflect the fact that they\u2019re doing things that have just never been done before, because they hadn\u2019t previously been budgeted,\u201d Hunter said. \u201cThe Space Force would be absolutely devastated by a rollback to FY22 [funding], but for the Air Force, it would be devastating as well.\u201d<\/p>\n

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Stephen Losey is the air warfare reporter for Defense News. He previously covered leadership and personnel issues at Air Force Times, and the Pentagon, special operations and air warfare at Military.com. He has traveled to the Middle East to cover U.S. Air Force operations.<\/p>\n<\/div>\n