Urgent May 2023 Updates
A debt default would be catastrophic for veterans and the American people.
- In the event of a default, there is no blueprint for what happens to the VA. It could lead to halts or severe delays in various programs and payments.
- An estimated $12 billion in veterans benefits scheduled for June 1st may face delays, affecting approximately 7.1 million veterans and their families.
- Several other payments crucial to veterans’ well-being are at risk, including those totaling $2.6 billion for health providers, $1.8 billion for contractors, $835 million for pharmacy costs, $3 billion for miscellaneous expenses, and $4.8 billion in employee paychecks.
- The impact of a default extends far beyond veterans’ payments, potentially erasing millions of jobs, triggering a recession, devastating retirement accounts, and increasing borrowing costs.
Your benefits and financial security should never be compromised. Stay informed, stay engaged, and reach out to your representatives to express your concerns. We will continue to provide updates on this critical issue that affects all veterans. Find out how to contact your representatives here.
In January, Treasury Secretary Janet Yellen informed Congress that the federal government had reached its borrowing limit, commonly referred to as the debt ceiling.
Unless Congress takes action to raise, suspend, or eliminate this limit, the United States may default on its legal obligations, potentially starting as early as June.
Historically, the nation has never deliberately defaulted before.
The exact ramifications of the U.S. Treasury Department exhausting its “extraordinary measures” to manage cash flow and borrowing, as well as depleting its cash reserves, are uncertain.
Even the specific date of default remains unknown.
However, irrespective of the timing or specifics, it is certain that defaulting would have severe repercussions for federal budget programs, endangering the well-being of millions of Americans.
Recent research conducted by the Center for American Progress sheds light on the significant impact a default could have on veterans and their families nationwide.
Veterans, in particular, would be greatly affected by potential delays in payments resulting from a default.
This is because vital programs such as pensions, disability compensation, educational allowances, and healthcare services for veterans and their dependents fall under federal obligations.
If a default situation persists for an extended period, it could potentially lead to delayed payments to healthcare providers, including those serving veterans and their families.
Consequently, this may result in care delays for patients and discourage providers from participating in public programs.
While the federal government has numerous fiscal responsibilities, one of its most longstanding and widely acknowledged commitments is to provide support for those who have contributed to the nation’s security.
The well-being of veterans and their families hinges on important benefits, healthcare, and retirement provisions that serve as a vital pillar of their financial stability once a family member has served in the military.
For instance, numerous children rely on health insurance coverage as dependents of military or veteran parents.
However, if Congress fails to promptly take action to raise, suspend, or eliminate the debt limit, it would jeopardize the economy and expose millions of veterans to the potential of experiencing delays in receiving the essential support they rightfully deserve.
Immediate intervention is necessary to avert this threat and ensure that veterans and their families can access the crucial assistance they need without unnecessary delays.
Veterans who are concerned about the potential impacts of a default can take several steps to protect their interests and seek assistance. Here are some actions they can consider:
- Stay informed: Stay updated on the latest news and developments regarding the debt ceiling and potential default scenarios. Follow reputable news sources, government announcements, and veteran-focused organizations for reliable information.
- Contact elected officials: Reach out to your representatives in Congress and voice your concerns about the potential consequences of a default. Share your personal experiences and emphasize the importance of timely and uninterrupted support for veterans and their families.
- Utilize veteran support services: Connect with veteran service organizations such as the Department of Veterans Affairs (VA) or local veterans’ assistance offices. These organizations can provide guidance, resources, and support during uncertain times.
