Fort Bragg soldiers worry about pay delays
The Fayetteville Observer, N.C.
Army Spc. Ahmad Bey, a supply clerk at Fort Bragg, was stocking up on patches and name tapes at Chang's Sewing and Cleaners on Tuesday, but he is curbing most of his spending for at least the next month or two, he said.
With Congress struggling to reach an agreement to extend the nation's borrowing limit by the Thursday deadline, soldiers are preparing for possible delays in their paychecks, and businesses already are feeling the pinch. Although estimates are uncertain, soldiers could see their next paychecks delayed for weeks.
"As of right now, I'm just trying to hold my money as much as possible just in case it does happen," Bey said.
U.S. Treasury Secretary Jacob Lew has warned Congress that large payments to major federal programs will come due between Thursday and Nov. 1, including those to Medicare providers, Social Security beneficiaries and veterans and salaries for active-duty military. These payments could be delayed if Congress cannot reach a deal to raise the debt ceiling.
"If that happens, it would be tragic. Everybody survives off the military," said Annie Dwiggins, a stylist at Cat's Barber Shop on Yadkin Road, which draws most of its primarily walk-in business from soldiers and retirees.
Economists say the ramifications could be far-reaching.
"It obviously could be very devastating," said Mike Walden, an economist at N.C. State University.
Walden said there are implications for everyone if the federal government does not make interest payments on its debt. This includes a plunging stock market, which is likely to lead to a loss of wealth for businesses.
But delays in payments to retirees and active-duty military personnel could also hurt local businesses, especially in regions such as Fayetteville that are dependent on federal money, he said.
Merchants along Yadkin Road, just south of Fort Bragg's gates, said Tuesday they are worried.
"It could put me in a world of hurt, because my landlord's not going to be worried about the government shutdown," said Ramon Reyes, owner of Da Bootshop. "It could take us from eating T-bones on one day to Top Ramen the next."
Doug Peters, president of the Fayetteville Regional Chamber, said businesses in Fayetteville are resilient, having seen the rise and fall of sales when soldiers are deployed.
"This community above all others is deeply concerned about the uncertainty that comes with these situations," Peters said. "It keeps business owners from making decisions about hiring and investing."
Shai Akabas, a senior policy analyst with the Bipartisan Policy Center, said Tuesday that his organization expects the federal government to run out of cash between Oct. 22 and Nov. 1 if no agreement is reached. If that happens, he said, the federal government has at least two options: choose to pay some bills and not others, or delay paying the entire day's bills until there is enough to cash on hand to pay them all at once.
Akabas said it is more likely the administration will choose to delay payments, which could mean federal benefits and salaries could be late by days or weeks once the government falls short.
Reyes, the owner of Da Bootshop, said business has already begun to slow down, with a 30 percent to 40 percent decline in sales last week.
"People are definitely holding on to their money," he said.
Reyes said that although he usually takes off on holidays, he opened his store on Columbus Day to try to recoup some of his losses.
If the slowdown in business continues or worsens, Reyes said, he will be tapping into his emergency fund just to survive.
"I might have to implement a mandatory vacation for my people," Reyes said.
Even if the debt crisis is averted before Thursday, local businesses may be feeling the effects of Washington politics again soon.
"All the deals being discussed today are not permanent," said Walden, the economist, noting that Congress could be back to the same tug-of-war in several months.
"We're just lunging from one crisis to another crisis," Walden said.
Staff writer Paige Rentz can be reached at firstname.lastname@example.org