Modelling A.I. in Economics

Defense Sidelines: $16 Billion in Projects Cut

The US debt ceiling deal that was passed on June 1, 2023, will strand $16 billion worth of defense side-projects. These projects, which include tanks, helicopter upgrades, and a ship, would normally be paid for as part of the defense budget. However, the debt ceiling deal includes a provision that caps spending on defense programs at $773 billion for the fiscal year 2023. This means that the $16 billion worth of side-projects will have to be cut.

The Pentagon has already identified the $16 billion worth of projects that will be cut. These projects include:

  • The purchase of 13 Abrams tanks
  • The upgrade of 100 Apache helicopters
  • The construction of a new littoral combat ship

The Pentagon says that these cuts will not have a significant impact on the military's readiness. However, some lawmakers and defense analysts have expressed concern that the cuts could weaken the military.

The debt ceiling deal was a compromise between President Biden and Republicans in Congress. The deal lifts the debt ceiling, which was set to be reached on June 15, 2023. However, the deal also includes spending caps that will force the government to make cuts to a variety of programs, including defense.

The debt ceiling deal is a temporary fix. The government will need to raise the debt ceiling again in the future. However, the deal does provide some certainty for the markets and for the government. It also avoids the possibility of a government shutdown.

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