House Speaker Rep. Kevin McCarthy, R-Calif., and President Joe Biden continue discussions on raising the nation’s borrowing limit. The two leaders said they’ve had “productive” meetings, but there is still no clear agreement as of Wednesday afternoon.
Federal agencies are watching the process closely, including the VA.
What You Need To Know
- The Treasury Department warned the U.S. could default if Congress doesn’t agree to raise the borrowing limit by June 1
- Each month, the Treasury makes payments on behalf of the VA of approximately $25 billion
- If the debt limit is reached, those payments could be curtailed or stopped
- VA Press Secretary Terrence Hayes emphasized “there are very real consequences behind these payments”
A failure to come to an agreement before the deadline would have an enormous impact on people across the country, including veterans who receive government benefits.
“Obviously, there is a lot of anxiety right now,” said Terrence Hayes, press secretary for the U.S. Department of Veterans Affairs. “Our anticipation is that something will get done, but we do know that if something does not get done, it will have very real consequences at VA.”
Since there is no precedent for default, it’s difficult to know the “precise impacts on specific federal programs,” Hayes explained.
“But what is clear is that, without the ability for the federal government to borrow funds, there is a very real potential that any government program or payment would be halted or severely delayed.”
Monthly payments that would be at risk include $12 billion per month in benefit payments to over 7.1 million veterans and their families, $4.8 billion per month in pay to more than 451,000 VA employees and 2.6 billion per month to community providers caring for roughly 900,000 veterans.
“Default cannot be an option for these men and women who have served our country so well,” Hayes said.
U.S. Army combat veteran Jeremy Harrell is on the board of directors for the Veteran’s Club based in Louisville, Kentucky. Harrell served in Operation Iraqi Freedom in the Global War on Terrorism.
The Veteran’s Club is focused on bringing attention to the issues that affect those who have served. Harrell said that many veterans have told him they are “fearful” of what would happen if the government defaulted.
“They’re just very uncertain,” Harrell explained. “It creates a lot of extra anxiety, particularly to our most vulnerable veterans who suffer from anxiety, and PTSD, and other debilitating circumstances. It really just adds an extra layer of fear.”
“When we sign the line to join the military, the promise from the United States is that what happens to you while you’re serving, we’ll take care of you,” Harrell said. “All that’s being threatened right now.”
If the nation were to default, the VA is just one of many federal agencies that would be affected. The Treasury Department warned that the United States could default if Congress doesn’t agree to raise the borrowing limit by the June 1 deadline.