Debt default could stop benefits payments to 7 million vets, Democrats say
Stars and Stripes May 25, 2023
WASHINGTON — A default on the U.S. government’s debt would hit veterans particularly hard, endangering benefits, health care and retirement payments for former service members and their families, according to Democrats on the House Veterans’ Affairs Committee.
The Treasury Department spends about $25 billion each month on behalf of the Department of Veterans Affairs, including $12 billion monthly in benefits payments to more than 7 million veterans and their families, according to the panel’s Democratic minority.
Members estimate if Congress fails to raise the debt ceiling before a projected June 1 default, payments for VA employees, care providers, medical contractors, pharmacies, veteran-owned businesses and others could cease.
“The list is long if there's default,” committee member Rep. Mike Levin, D-Calif., said. “It's a very bad list.”
The White House and House Republicans remain stalled over negotiations to increase the nation’s borrowing limit, bringing the U.S. closer to its first-ever default. Republicans want to enact deep spending cuts in exchange for agreeing to raise the debt ceiling.
House Democrats said hitting the ceiling will jeopardize salaries for more than 451,000 VA employees and lead to a decline in health care for veterans. The Treasury spends $2.6 billion per month on community providers that care for about 900,000 veterans, and $1.8 billion per month on 114,000 medical and other contractors, according to the members’ analysis.
An additional $825 million per month is spent on pharmacy prescriptions costs, and $3 billion per month is paid to small and veteran-owned businesses.
The Center for American Progress, a liberal think tank based in Washington, predicted last week that nearly 15 million veterans and their family members would be harmed by a default.
Former service members are susceptible to “enormous consequences” because the federal government is required to pay for many of the programs on which they rely, such as health care, pensions, disability compensation and educational allowances, according to the organization’s analysis.
“The federal government has many fiscal responsibilities, but one of its longest-standing and most agreed-upon obligations is to support those who have contributed to the country’s national security,” the organization wrote.
Family members of veterans are also at risk, with hundreds of thousands of children receiving health coverage from the VA or the military, according to the group’s report.
“Veterans and their families depend on benefits, health care, and retirement as a crucial part of their financial security after a family member serves in the military,” the Center for American Progress wrote. “Without immediate action to raise, suspend or eliminate the debt limit, Congress will put the economy at risk and could cause millions of veterans to face the threat of delays in receiving the critical support they and their families need and deserve.”
The debt ceiling plan that House Republicans narrowly approved in April calls for a return to 2022 spending levels across the government.
House Veterans' Affairs Committee Chairman Mike Bost, R-Ill., a Marine Corps veteran, has vowed to protect funding for the VA while Democrats have said the agency’s budget will be on the chopping block if Republicans successfully push through their demands.