US cities with military bases risk economic damage in debt ceiling fight: CNN
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E-mail Xinhua, May 23, 2023
This photo taken on Jan. 19, 2023 shows the U.S. Capitol building in Washington, D.C., the United States. [Photo/Xinhua]
The United States could default on its debt in less than two weeks, and cities with a large military presence risk an economic firestorm if lawmakers don't act, according to a recent CNN report.
"A default would mean the government won't be able to meet all of its financial obligations, which include salaries paid to federal workers and payments to Social Security recipients," said the report.
About a sixth of U.S. government spending goes toward national defense, a quarter of which is to pay military personnel, the report said, citing the Congressional Budget Office.
"If the United States can't pay its national defense bills, cities with large military bases face a potentially massive fallout, encompassing missed payments, rising debt and a significant pullback in spending that would cut into local businesses' bottom lines," it noted.
It remains unclear what payments the Treasury Department would prioritize or how it would service the government's debts once it runs out of cash, it said.
"Workers on government payrolls, such as military personnel, likely wouldn't get laid off if a default drags on, according to an analysis from the Brookings Institution, but their payments would probably be delayed. That could further damage local economies grappling with financial market turbulence that could unfold even ahead of a possible default," it added.
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