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Threat to Military Pay and Benefits Delayed as Congress Punts Debt Ceiling Debate

Potential disruptions to military pay and benefits were averted Tuesday night — at least for a couple more months — as Congress voted to delay a showdown over the U.S. borrowing limit until December.

The House voted along party lines to approve a short-term increase to what’s known as the debt limit or ceiling, which is the amount of money the Treasury Department can borrow in order to pay the nation’s bills. The move followed the Senate’s approval of the measure late last week.

The bill now awaits the signature of President Joe Biden. The White House said last week that he “looks forward to signing this bill as soon as it passes the House and reaches his desk.”

The action comes after the Biden administration warned of dire economic consequences if lawmakers failed to raise the debt limit, including the potential for service members to go without pay and veterans to miss benefits payouts.

Defense Secretary Lloyd Austin warned of such problems in a statement last week. “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 wrote.

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Because the United States has never defaulted, two experts told Military.com it is unclear exactly how badly pay and benefits would be hit if Congress didn’t act.

Delays and disruptions in pay and benefits likely would depend on how the Treasury decides to try to pay its bills in the absence of being able to borrow money, and how long a congressional impasse lasts, the experts said.

While Congress’ approval of the bill prevents any immediate catastrophe, it also sets up a similar showdown in December, raising the prospect that service members and veterans again could face uncertainty about their finances.

The bill approved by Congress specifically adds $480 billion to the debt limit, which the Treasury believes will last until Dec. 3. That’s the same day a short-term government funding bill passed by Congress late last month expires, potentially setting up a confluence of crises that could hit pay and benefits. A government shutdown also could mean delayed checks.

This time, Congress came within about a week of a default, according to a Treasury Department estimate.

Republicans and Democrats in the Senate, where the parties are split 50-50 and bills need 60 votes to get over a procedural hurdle, had been stalemated for months over the issue. Republicans insisted that Democrats raise the debt ceiling on their own since they are pursuing Biden’s multitrillion-dollar domestic agenda in a way that doesn’t require GOP votes.

The impasse broke last week when Senate Minority Leader Mitch McConnell, R-Ky., offered Democrats a deal for a short-term extension. While the Senate’s vote to raise the debt ceiling ultimately fell along party lines, 11 GOP senators helped advance the bill in a procedural vote.

But McConnell has warned he will not do the same in December.

“I am writing to make it clear that in light of Senator Schumer’s hysterics and my grave concerns about the ways that another vast, reckless, partisan spending bill would hurt Americans and help China, I will not be a party to any future effort to mitigate the consequences of Democratic mismanagement,” McConnell wrote in a letter to Biden last week, referencing a floor speech by Senate Majority Leader Chuck Schumer, D-N.Y., in which he railed against Republicans.

Democrats, meanwhile, insist they will not use a process known as reconciliation that would allow them to bypass the 60-vote threshold, making it unclear whether and how Congress will be able to raise the debt ceiling and avoid economic calamity in December.

“Republicans played a dangerous and risky partisan game, and I am glad that their brinkmanship did not work,” Schumer said in his floor speech last week. “What is needed now is a long-term solution so we don’t go through this risky drama every few months, and we hope Republicans will join in enacting a long-term solution to the debt limit in December.”

— Rebecca Kheel can be reached at rebecca.kheel@military.com. Follow her on Twitter @reporterkheel.

Related: Congress Votes to Avert Shutdown, Avoiding Military Pay Issues

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