Amid the ongoing debt ceiling standoff, top Pentagon leaders warned that a default would be a win for Xi Jinping, who describes the U.S. in his speeches as "declining power."
What Happened: Defense Secretary Lloyd Austin and Joint Chiefs Chair General Mark Milley, during a Senate Defense Appropriations panel meeting on Thursday, warned that if the debt limit is breached, it would cause significant harm to Washington's position on the global stage and raise concerns about the U.S. leadership.
"China right now describes us in their open speeches, etc., as a declining power," Milley said, reported Politico.
"Defaulting on the debt would only reinforce that thought and embolden China and increase the risk to the U.S.."
The defense secretary warned that a default would mean a "substantial risk to our reputation" that China could exploit. Austin added that the most substantial impact would be troops' pay if the federal government defaults.
See Also: Team Biden Reportedly Aims To Paint Xi Jinping As ‘Recalcitrant’ If He Refuses To Engage In Talks
"We won't be able to pay people like we should," he said, adding, "I think that's something that China and everybody else can exploit."
Why It Matters: The comments from top leadership serve as another warning that a default would adversely affect national security. Republicans and President Joe Biden are engaged in a dispute over raising the debt limit, with only a few weeks left until the administration runs out of money to pay its bills.
Meanwhile, the much-awaited meeting between Biden and House Speaker Kevin McCarthy to discuss the debt ceiling crisis has reportedly been postponed, with the leaders having agreed to meet early next week.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
