To direct the Secretary of the Treasury to ensure that social security benefits are paid, to prioritize payments when the United States is not able to issue new obligations due to the statutory debt limit, and to address a lapse in appropriations to fund the Armed Forces.

SECTION 1. TIMELY PAYMENT OF SOCIAL SECURITY BENEFITS IF STATUTORY DEBT 
              LIMIT IS REACHED.

    (a) In General.--Section 1145 of the Social Security Act (42 U.S.C. 
1320b-15) is amended--
            (1) by redesignating subsections (b) and (c) as subsections 
        (c) and (d), respectively; and
            (2) by inserting after subsection (a) the following new 
        subsection:
    ``(b) Timely Payment of Benefits if Statutory Debt Limit Is 
Reached.--
            ``(1) Disinvestment of fund to make current benefit 
        payments.--For the purpose of making payment of cash benefits 
        or administrative expenses during any debt limit default 
        period, public debt obligations held by the applicable Federal 
        fund shall be sold or redeemed in an amount not to exceed the 
        sum of--
                    ``(A) the face amount of obligations held by such 
                fund which mature during such month; plus
                    ``(B) the amount necessary only for the purpose of 
                making payment of such benefits or administrative 
                expenses and only to the extent cash assets of the 
                applicable Federal fund are not available during such 
                period for making payment of such benefits or 
                administrative expenses.
            ``(2) Issuance of corresponding debt.--For purposes of 
        undertaking the sale or redemption of public debt obligations 
        held by the applicable Federal fund pursuant to paragraph (1), 
        the Secretary of the Treasury shall issue corresponding public 
        debt obligations to the public in order to obtain the amounts 
        necessary for payment of benefits or administrative expenses 
        from the applicable Federal fund, notwithstanding the public 
        debt limit.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) Debt limit default period.--The term `debt 
                limit default period' means a period for which cash 
                benefits or administrative expenses would not otherwise 
                be payable from the applicable Federal fund by reason 
                of an inability to issue further public debt 
                obligations because of the public debt limit.
                    ``(B) Applicable federal fund.--The term 
                `applicable Federal fund' means a Federal fund 
                specified in paragraph (1) or (2) of subsection (d).''.
    (b) Conforming Amendments.--
            (1) Section 1145 of the Social Security Act, as amended by 
        subsection (a), is amended--
                    (A) by redesignating subsection (d) as subsection 
                (e), and
                    (B) by inserting after subsection (c) the following 
                new subsection:
    ``(d) Public Debt Limit.--For purposes of this section, the term 
`public debt limit' means the limitation established under section 3101 
of title 31, United States Code, as increased under section 3101A of 
such title.''.
            (2) Section 1145(c) of the Social Security Act, as amended 
        by subsection (a), is amended by striking ``established under 
        section 3101 of title 31, United States Code''.

SEC. 2. PRIORITIZATION OF PAYMENTS IN EVENT THAT STATUTORY DEBT LIMIT 
              IS REACHED.

    Section 3101 of title 31, United States Code, is amended by adding 
at the end the following new subsection:
    ``(d) In the event that the Secretary of the Treasury is not able 
to issue obligations to make all payments authorized by law due to the 
limitation under subsection (b) (as increased under section 3101A), the 
Secretary shall give equal priority to the following: payments of 
principal and interest on public debt; payments of amounts that the 
Secretary of Defense (and the Secretary of Homeland Security in the 
case of the Coast Guard) determines to be necessary to continue pay and 
allowances (without interruption) to the Army, Navy, Air Force, Marine 
Corps, and Coast Guard, including reserve components thereof, who 
perform active service; payments determined by the President (and 
reported to the Congress) to be necessary to continue United States 
priorities of its vital national security interests; and payments for 
items and services under title XVIII of the Social Security Act 
(relating to Medicare).''.

SEC. 3. CONTINUANCE OF MILITARY PAY AND ALLOWANCES DURING PERIODS OF 
              LAPSED APPROPRIATIONS.

    (a) Continuance of Pay.--Chapter 19 of title 37, United States 
Code, is amended by adding at the end the following new section:

``SEC. 1015. CONTINUANCE OF PAY AND ALLOWANCES DURING PERIODS OF LAPSED 
              APPROPRIATIONS.

    ``(a) Definitions.--In this section:
            ``(1) The term `military personnel accounts' means the 
        military personnel, reserve personnel, and National Guard 
        personnel accounts of the Department of Defense, generally 
        title I of an annual Department of Defense appropriations Act, 
        and the corresponding accounts for the Department of Homeland 
        Security used to provide pay and allowances for members of the 
        Coast Guard.
            ``(2) The term `pay and allowances' means basic pay, 
        bonuses and special pay, allowances and any other forms of 
        compensation available for members of the armed forces under 
        this title or otherwise paid from the military personnel 
        accounts.
            ``(3) The term `period of lapsed appropriations', when used 
        with respect to members of the armed forces, means any period 
        during which appropriations are not available due to the 
        absence of the timely enactment of any Act or joint resolution 
        (including any Act or joint resolution making continuing 
        appropriations) appropriating funds for the payment of the pay 
        and allowances of members of the armed forces.
    ``(b) Appropriation of Funds To Continue Payment of Pay and 
Allowances.--For any period of lapsed appropriations, there are 
appropriated, out of any moneys in the Treasury not otherwise 
appropriated, to the Secretary of Defense (and the Secretary of 
Homeland Security in the case of the Coast Guard) to allow the 
Secretary of Defense (and the Secretary of Homeland Security in the 
case of the Coast Guard) to continue to provide pay and allowances 
(without interruption) to members of the United States armed forces.
    ``(c) Limitation on Amounts Paid.--This section only authorizes the 
expenditure of funds during a period of lapsed appropriations for the 
pay and allowances of a member of the armed forces at a rate that is 
equal to the rate in effect for that member immediately before the 
start of the period of lapsed appropriations. The rate for a member may 
neither exceed the rate in effect immediately before the start of the 
period of lapsed appropriations nor be less than that rate, unless 
reduced by disciplinary action under the Uniform Code of Military 
Justice.
    ``(d) Relation to Other Pay Authorities.--This section shall not be 
construed to affect the entitlement of a member of the armed forces to 
an amount of pay and allowances that exceeds the amount of pay and 
allowances authorized to be paid under this section and to which the 
member becomes entitled under other applicable provisions of law.
    ``(e) Effect of End of Period of Lapsed Appropriations.--
Expenditures made for any fiscal year pursuant to this section shall be 
charged to the applicable appropriation, fund, or authorization 
whenever the regular appropriation bill (or other bill or joint 
resolution making continuing appropriations through the end of the 
fiscal year) becomes law.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by adding at the end the following new item:

``1015. Continuance of pay and allowances during periods of lapsed 
                            appropriations.''.

Summary: Amends title XI of the Social Security Act with respect to the payment of cash benefits or administrative expenses from the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, and the Federal Supplementary Medical Insurance Trust Fund during any debt limit default period. Requires that during a debt limit default period public debt obligations held by the applicable federal fund be sold or redeemed in an amount not to exceed the sum of: (1) the face amount of obligations held by the fund which mature during the month in question. Plus (2) the amount necessary only to pay such benefits or administrative expenses, and only to the extent cash assets of the fund are not available during that period to make such payments. Directs the Secretary of the Treasury, in order to undertake the sale or redemption of public debt obligations held by the applicable federal fund, to issue corresponding public debt obligations to the public in order to obtain the amounts necessary to make such payments, notwithstanding the public debt limit. Declares that, in the event that the Secretary is not able to issue obligations to make all authorized payments because the public debt limit has been reached, the Secretary shall give equal priority to the following: (1) payments of principal and interest on public debt. (2) payments of amounts that the Secretary of Defense (DOD) determines to be necessary to continue pay and allowances to the Army, Navy, Air Force, Marine Corps, and Coast Guard, including their reserve components, who perform active service. (3) payments determined by the President to be necessary to continue US priorities of its vital national security interests. And (4) payments for items and services under SSA title XVIII (Medicare). Makes appropriations, for any period of lapsed appropriations, out of any moneys in the Treasury not otherwise appropriated, to the Secretary of Defense to continue to provide pay and allowances to members of the US armed forces.