Title: Default Prevention Act
Policy area: Economics and Public Finance

Summary:
Default Prevention Act
This bill requires the following obligations to be granted priority over all other U.S. obligations if the public debt reaches the statutory limit:
If Congress is notified, the Department of the Treasury may issue additional debt in excess of the debt limit for the priority obligations. Treasury may issue the additional debt during the 30-day period beginning on the date on which the United States is unable to use revenues or extraordinary measures to fully pay the priority obligations at the time they are due.
(The term extraordinary measures refers to a series of actions that Treasury may implement to allow the United States to borrow additional funds without exceeding the debt limit. The measures generally include suspensions or delays of debt sales and suspensions or redemptions of investments in certain government funds.)

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 100 Introduced in Senate (IS)]

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117th CONGRESS
  1st Session
                                 S. 100

 To provide guidance and priorities for Federal Government obligations 
 in the event that the debt limit is reached and to provide a limited 
     and temporary authority to exceed the debt limit for priority 
                              obligations.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 28, 2021

   Mr. Paul introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To provide guidance and priorities for Federal Government obligations 
 in the event that the debt limit is reached and to provide a limited 
     and temporary authority to exceed the debt limit for priority 
                              obligations.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Default Prevention Act''.

SEC. 2. PRIORITIZING OBLIGATIONS.

    (a) In General.--In the event that the debt of the Government of 
the United States reaches the statutory limit under section 3101 of 
title 31, United States Code, the following expenditures shall be 
granted priority over all other obligations incurred by the Government 
of the United States:
            (1) The authority of the Department of the Treasury 
        provided in section 3123 of title 31, United States Code, to 
        pay with legal tender the principal and interest on debt held 
        by the public.
            (2) The full payment of compensation, allowances, and 
        benefits for members of the Armed Forces on active duty.
            (3) The authority of the Commissioner of Social Security to 
        pay monthly old-age survivors' and disability insurance 
        benefits under title II of the Social Security Act.
            (4) The authority of the Secretary of Health and Human 
        Services to make payments for items and services furnished to 
        beneficiaries under the Medicare program under title XVIII of 
        the Social Security Act and related provisions.
            (5) All obligations under any program administered by the 
        Department of Veterans Affairs.
    (b) Authority To Issue Additional Debt for Priority Obligations.--
            (1) In general.--The Secretary of the Treasury may issue 
        obligations subject to limit under section 3101 of title 31, 
        United States Code, in an amount in excess of the limit under 
        such section--
                    (A) during the 30-day period beginning on the date 
                on which the United States is unable to use revenues or 
                the extraordinary measures described in paragraph (2) 
                to fully pay obligations of the Government of the 
                United States described in subsection (a) at the time 
                they are due;
                    (B) only to the extent necessary to make timely 
                payment on obligations of the Government of the United 
                States described in subsection (a); and
                    (C) if the Secretary provides to Congress notice of 
                the exercise of the authority under this subsection.
            (2) Extraordinary measures.--The extraordinary measures 
        described in this paragraph are the following:
                    (A) The authority under subsections (j), (k), and 
                (l) of section 8348 of title 5, United States Code.
                    (B) The authority under subsections (g) and (h) of 
                section 8438 of title 5, United States Code.
                    (C) The suspension of investing amounts in the 
                stabilization fund under section 5302(a)(1) of title 
                31, United States Code.
                    (D) The suspension of investing of amounts or the 
                issuance of obligations for any other fund or account 
                for purposes of preventing the amount of obligations 
                subject to limit under section 3101 of title 31, United 
                States Code, from exceeding such limit.
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