Pentagon chief warns debt ceiling crisis threatens US national security

Pentagon chief Lloyd Austin warns that US national security could be threatened if Congress fails to stave off a catastrophic credit default, which would leave American troops and military contractors unpaid.

Austin said in a written statement on Wednesday that if the federal government is unable to borrow money to finance its debt and operations, pay and benefits for millions would be at risk and "seriously harm our service members and their families."

"If the United States defaults, it would undermine the economic strength on which our national security rests," he added.

"[A]s 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," Austin added.

US Treasury Secretary Janet Yellen has called on Congress to abolish the “very destructive” federal debt limit by October 18, warning that it “would be catastrophic to not pay the government’s bills.”

A first-ever US default could not only delay income to troops, but economists warn it would likely trigger a recession in the country.

US faces a recession if Congress doesn’t address the debt limit: Treasury secretary

US Treasury Secretary Janet Yellen believes the economy would fall into a recession if Congress fails to raise the $28.4 trillion debt ceiling by Oct. 18

President Joe Biden also warned that a failure to raise the debt limit will result in detrimental consequences for the US financial system.

But senate Republicans have twice in recent weeks blocked action to raise the debt ceiling. They say Democrats can use a parliamentary maneuver known as budget reconciliation to act alone, while senior Democrats have rejected using that approach.

Austin remarks came minutes after a bipartisan group of six former Defense secretaries called for congressional leaders to raise or suspend the debt limit as soon as possible.

They addressed the congress in a letter, calling on senators to “authorize the government to pay bills it has already incurred.”

“We should not ask our all-volunteer military to serve our nation without pay. If we do that, we will not have a highly capable military to fight and win the nation’s wars,” they wrote.

Biden warns Republicans against taking US ‘right to the brink’

Biden continued to pile pressure on congressional republicans during a meeting with bank and business leaders at the White House on Wednesday, saying their opposition would take America "right to the brink."

"Our markets are rattled, Americans' savings are on the line...our Republican friends need to stop playing Russian roulette with the economy," Biden said.

He made the remarks at a meeting with leaders of JPMorgan Chase & Co, Intel Corp, Citigroup, Bank of America, Raytheon Technologies Corp, Nasdaq Inc and Deloitte, on Wednesday.

Biden said raising the debt ceiling is about "paying for what we owe."

He said Republicans were planning to block a third attempt by Senate Democrats to raise the debt ceiling on Wednesday.

"It's not right and it's dangerous," he warned.

US Senate majority leader: Congress must raise the debt ceiling by end of the week

US Senate Majority Leader Chuck Schumer has said Congress must get a bill raising the debt ceiling to President Joe Biden

His spokeswoman Jen Psaki also called on Republicans not to "kick the can down the road" when an immediate, long-term solution was available.

Democrats said they neared agreement in the small hours of Thursday, as they were close to accepting an offer from the Republicans to raise the debt limit for two months.

The revised, short-term fix would allow Democrats to "use normal procedures to pass an emergency debt limit extension.”

The temporary fix would buy the Democrats who control the White House and both chambers of Congress breathing space to pass a longer term debt limit extension, although they are still refusing to pursue reconciliation.

According to senator Mitch McConnell, who leads the Republican opposition in the upper chamber of Congress, Republicans have pledged not to block the move.

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