US Treasury Secretary Scott Bessent has announced that the department is prioritising payments to ensure that US military personnel are paid on time. This action comes in response to Congress’s failure to pass appropriation bills for the fiscal year, which began on October 1, leading to a partial shutdown of the federal government. The situation has raised concerns about the timely payment of wages due to US troops on October 15.
Bessent stated in an interview with Fox Business that the Treasury is “having to hold back on some payments so that our brave men and women in the US military can get paid. So we are having to shuffle things around.” President Donald Trump addressed the issue in a Truth Social post, saying he had directed Defence Secretary Pete Hegseth to use “all available funds” to ensure troops are paid on time.
Currently, the Treasury continues to make payments for essential services such as Social Security benefits and interest payments to bondholders, which do not require annual congressional approval. The prioritisation of payments is a sensitive matter, particularly in light of past debt-limit disputes in Washington, where lawmakers have struggled to raise or suspend the federal borrowing ceiling in a timely manner.
In previous debt-limit crises, bondholders have generally expected that the government would prioritise interest and principal payments on Treasury securities to avoid default. This latest action by the Treasury highlights the immediate challenges posed by the current funding impasse in Congress and its impact on essential government functions.
