H.R.182 - Default Prevention Act (119th Congress)
Summary
H.R.182, the Default Prevention Act, aims to ensure the United States government prioritizes payments on its debt obligations, especially principal and interest. It mandates the Secretary of the Treasury to pay Tier I obligations (including debt held by the public and certain trust funds) first when the debt limit is reached. The bill establishes a tiered system for prioritizing government obligations and requires weekly reports to Congress on payments made and obligations outstanding.
Expected Effects
The bill would change the way the US Treasury manages its obligations when the debt ceiling is reached. It would prioritize certain payments, potentially preventing a default on the national debt. This prioritization could lead to delays or non-payment of other government obligations.
Potential Benefits
- Prevents Default: Ensures the US does not default on its debt obligations, maintaining investor confidence.
- Protects Entitlement Programs: Prioritizes payments to Social Security and Medicare trust funds.
- Provides Transparency: Requires weekly reports to Congress on payment prioritization.
- Maintains National Security: Prioritizes Department of Defense obligations.
- Supports Veterans: Prioritizes benefits administered by the Secretary of Veterans Affairs.
Most Benefited Areas:
Potential Disadvantages
- Disrupts Government Operations: Could lead to delays or non-payment of other essential government services.
- Creates Uncertainty: The tiered system could create uncertainty about which obligations will be paid and when.
- Shifts Power to Treasury: Grants the Secretary of the Treasury significant discretion in prioritizing payments.
- Potential for Political Conflict: Prioritization decisions could become highly politicized.
- Does not address the underlying debt issue: This bill only addresses payment prioritization, not the debt itself.
Constitutional Alignment
The bill's alignment with the Constitution is complex. Article I, Section 8 grants Congress the power to borrow money on the credit of the United States. The bill attempts to manage debt obligations within the existing debt limit set by Congress. However, the prioritization of certain obligations over others could be argued to infringe upon Congress's power of the purse, as it effectively reallocates funds without explicit congressional approval. The bill does not appear to violate any specific individual rights outlined in the Bill of Rights.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).