The troops will get paid on Tuesday, but the check after that could come in the form of an IOU if the nation defaults on its debt obligations, Treasury Department officials said.
Default on top of the government shutdown would cancel out the hastily-crafted legislation that brought back furloughed Defense Department civilian employees and allowed for the payment of back pay, death benefits, incentive pays, re-enlistment bonuses, veterans disability benefits and survivor benefits.
“[Under default], the first crunch will come when the Nov. 1 payroll is due,” said Gordon Adams, a Stimson Center analyst and professor at American University. “The impact for anybody drawing pay [in the military] will grow increasingly severe,” Adams said. “People are probably not going to get paid for a while.”
A deal to resolve default and the shutdown does not resolve the underlying issue, Adams said.
“There’s a fundamental disagreement about what the budget should be,” Adams said. He explained that sequester spending levels should be “everybody’s least distasteful fallback position.”
Under sequestration, about $500 billion in defense spending would be cut over the next 10 years on top of $500 billion in cuts already underway. In Fiscal Year 2013, the military lost about $37 billion under sequestration, and another $52 billion in defense spending is slated to be cut in Fiscal 2014, Adams said.
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