Federal Debt Ceiling and Military Pay


It is a question that has been lingering around for weeks, since even before the government shutdown worries: If the federal government reaches the debt ceiling, will it impact military families? As usual, you can find individual "experts" who will argue any side of the situation, and I am not a specialist in the most detailed workings of the government budget. However, I can read and research.

Obviously, the biggest concern for most military families is pay. Will military members be paid if the government reaches the debt ceiling? Well, technically, the military should not get paid. In its document Debt Limit: Myth vs. Fact, The Department of Treasury specifically mentions military pay (three times) as something that would be affected by the federal government does not extend the debt ceiling. Legislation has been proposed in Congress to ensure military pay if a debt ceiling emergency occurs, but honestly, how would that work? I can't imagine such legislation ever passing into law, because how can Congress ensure military pay in a situation where they don't have access to any money? Are they going to write us all bad checks? A debt ceiling situation is very different from a budget impasse, so you can't just guarantee military pay in the same way.

Just as the debt ceiling crisis and the budget crisis were different, there are different ways how the debt ceiling could impact the United States. For our purposes, there are two basic parts: the debt part, and the spending part. Long term, big picture, the debt part impacts our world creditworthiness and the economic future of our country, in ways that I can only begin to understand. Short term, small picture, the spending part is the part that could have an immediate impact on our day-to-day lives. The spending part is where military pay, benefits and services could be affected.

Without money, the country has limited options for paying salaries, supporting military benefits, and providing services.

I do not want to make it seem as if all is negative. I can find plenty of sources who seem sure that the military will get paid. More importantly, I can find plenty of sources who say that Congress will act to forestall the crises, and even if they don't, the Treasury Department has lots of ways to make sure that the government doesn't default, even if the debt ceiling isn't raised. There are even some who argue that the President has the authority, in the 14th Amendment, to go around Congress to prevent default.

For now, unfortunately, we are in the usual situation: we just don't know. I'm encouraging readers to keep their eyes and ears open as more information becomes available, and as always, Prepare for the Worst, and Hope for the Best. I'll keep reading and researching, until the situation passes.

This is a cross-posting from The Paycheck Chronicles.  Find more financial news for military families there!

photo by:  jonquark

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