Default Prevention Act

Priority of Social Security and Medicare: The bill ensures that Tier I obligations are paid as they become due. This includes principal and interest on debt held by 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, as well as payments under the Medicare program (Section 2(a)(1) and Section 2(b)(1)).

Defense and Veteran Benefits Protection: Tier II obligations, which include any obligation of the Department of Defense and benefits under laws administered by the Secretary of Veterans Affairs, are prioritized ahead of several other types of payments (Section 2(b)(2)).

Increased Transparency: The Secretary of the Treasury must submit weekly written reports to the House Committee on Ways and Means and the Senate Committee on Finance. These reports must detail the amounts of various obligations paid and any due and unpaid amounts for each tier (Section 2(a)(6) and Section 2(d)).

Debt Limit Flexibility: Obligations issued to make necessary payments or to hold in trust funds are not taken into account as subject to the debt limit, provided no modification or suspension of the limitation has taken effect (Section 2(c)).

Delayed Compensation for Federal Employees and Officials: Under the established hierarchy, Tier IV obligations—which include compensation for certain Executive branch officers and employees (excluding those in the competitive service) and travel expenses—are only paid if Tier II and Tier III obligations are fully met (Section 2(b)(4)).

Delayed Congressional Compensation: Tier V obligations, which consist of the compensation of Members of Congress, are at the bottom of the priority list and are only paid if all previous tiers (I through IV) have been satisfied (Section 2(b)(5)).

Risk to Unspecified Obligations: Tier III obligations, defined as any United States obligation not covered by the other specific tiers, are only paid if the Secretary can still pay all Tier II obligations (Section 2(b)(3)).