The gauge theory of defects is formulated for solids with damage due to microcracking. The gauge damage potentials are introduced to model crack densities and currents through minimal replacement, while minimal coupling expands the elastic Lagrangian to include derivatives of the damage potentials. Stationarization of the action integral leads to field equations for the displacements and the damage potentials. The field equations are explicitly solved for the case of a 1-D solid (rod) under a quasi-static loading cycle and a permanent set is observed.