Should the U.S. default on its debt, governments contractors would likely be forced to go without pay.

From TechTarget. Government contractors will likely face a tough road ahead as Congress and the Biden administration navigate whether to raise the U.S. debt ceiling to avoid an economic crisis.

This content is supported by your donations.
Give today.

If the $31.4 trillion debt ceiling isn’t raised by the June 1 deadline, the U.S. Department of the Treasury won’t have enough cash to pay all of its bills. It would then likely focus on maintaining its payments on the debt interest to preserve the U.S.’s creditworthiness, said David Wessel, director of the Brookings Institution’s Hutchins Center on Fiscal and Monetary Policy. That means payments to Social Security and government contracts, among others, would stop.

“The bottom line is, if they don’t raise the debt ceiling, somebody’s not going to get paid,” Wessel said. “If they have a priority list, government contractors are going to be at the bottom of that list.” …

“If it stretches on for more than a couple days, it’s going to be terrible for the economy,” Wessel said. “Everyone will get paid eventually, but we don’t know how long eventually is.” …

Government contractors need to prepare

A default would be calamitous to U.S. businesses, especially given the number of additional government contracts brought about thanks to Biden’s “Build Back Better” agenda, said Robert Hockett, a law professor at Cornell Law School. …

How are you praying against a default? Share this article to encourage others to pray.

(Excerpt from TechTarget. Photo Credit: Canva)