If the U.S. hits the debt ceiling, the Treasury Secretary would have to follow a five-tier payment priority order set by Congress. Tier I (debt principal and interest, Social Security and Medicare trust fund payments, and Medicare benefits) would be paid first, followed by Defense and Veterans Affairs (Tier II), then most other federal obligations (Tier III). Federal executive-branch travel, political appointee salaries, and presidential pay fall to Tier IV, and Member of Congress pay drops to last (Tier V). Treasury could issue new debt as needed to make Tier I payments without counting against the limit and would have to send weekly reports to the House Ways and Means and Senate Finance committees.
Average Household Impact
- Social Security, Medicare, debt interest — Designated top-priority during debt-ceiling impasse
Transparency & Accountability
- Weekly Treasury reports — Required to Ways and Means and Finance during impasse
- Member of Congress pay — Dropped to last in payment order
Congressional Summary
Default Prevention ActThis bill exempts certain obligations of the federal government from the statutory debt limit and establishes requirements for paying and prioritizing obligations after the debt limit is reached.If the debt limit is reached, the bill requires the Department of the Treasury to continue issuing debt and making payments necessary to (1) pay the principal and interest on debt held by the public, the Social Security trust funds, and the Medicare trust funds; and (2) pay Medicare benefits. The bill also exempts these obligations from the debt limit until the debt limit has been modified or suspended. The bill also establishes requirements for prioritizing the remaining obligations after the debt limit has been reached. Specifically, Treasury may notpay any remaining obligations unless it can still pay obligations of the Department of Defense and any obligations necessary to provide benefits under laws administered by the Department of Veterans Affairs;pay obligations related to the compensation of federal employees for official time; government travel for executive branch officers or employees; and the compensation of the President, the Vice President, and other members of the executive branch (other than individuals in the competitive service) unless all other obligations except for compensation of Members of Congress can still be paid; andcompensate Members of Congress unless all other obligations can still be paid.Finally, the bill requires Treasury to provide weekly reports to Congress regarding new debt issued and obligations that have been paid or not paid under the bill.
Legislative Subjects
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2025-01-03
- Date Added
- 2026-05-21
- Source
- Congress.gov →
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