Government shutdown doesn't halt, but hinders Pentagon work

By Mike Stone

WASHINGTON (Reuters) - If the U.S. government shuts down as expected on Oct. 1, it will halt the payments of salaries across the Department of Defense, furlough hundreds of thousands civilian employees, and slow the pace of war planning and the military modernization, the Pentagon said Thursday.

"If there is a shutdown in just a few days, our service members would be required to continue working, but would be doing so without pay, and hundreds of thousands of their civilian colleagues would be furloughed," Pentagon spokesperson Sabrina Singh said.

Troop pay is delayed during a government shutdown, but Singh said housing and bills are not.

The authority to draw from U.S. arms for Ukraine remains intact - for now - because of a financial mistake that released $6 billion worth of authority to ship from U.S. stores. For example, Ukrainian "F-16 pilot training would continue," said Chris Sherwood a Pentagon spokesman.

However, some "delivery of defense articles, services, and/or military education" could be paused, Sherwood said.

The Democratic-led U.S. Senate forged ahead on Thursday with a bipartisan stopgap funding bill aimed at averting what would be the fourth partial government shutdown in a decade.

In anticipation of the looming shut-down the department is deciding which of its processes are going to be deemed "necessary" for national security, and which will be "impacted by furloughs of personnel and DoD's suspension" of activities that aren't deemed necessary to continue.

A shutdown and use of temporary funding measures "will hit every company that supports federal missions," trade association presidents David Norquist, of the National Defense Industrial Association (NDIA) and David Berteau of the Professional Services Council (PSC) wrote in a letter to Congressional leaders.

"Under a shutdown, the government stops payments on invoices not yet paid for costs incurred before the shutdown," the letter said. Smaller businesses don't have the "financial reserves to pay their costs when the government is not paying them" the letter warned, adding that could lead to job losses.

NDIA and PSC represent companies like Lockheed Martin Corp, L3Harris Technologies Inc, Bank Of America Corp and Oracle Corp.

(Reporting by Mike Stone in Washington; Editing by Alistair Bell)