Sponsors (2)
The bill protects payment of key benefits (Medicare, Social Security, veterans/defense obligations) and increases reporting transparency during a debt-limit impasse, but does so by rigidly prioritizing payments—raising the risk of widespread delays for nonpriority payees, constrained Treasury flexibility, and potential market confidence costs.
Medicare and Social Security recipients will be prioritized so Medicare benefits and Social Security trust-fund interest/principal are paid on time if the debt limit is reached.
Veterans, active-duty service members, and defense-related beneficiaries are prioritized (Tier II), increasing the likelihood DoD obligations and VA benefits are paid before lower-priority items.
Congress and the public get more timely information because the bill requires weekly reports to House Ways and Means and Senate Finance on paid and unpaid obligations by priority tier.
Many businesses, contractors, and individuals receiving nonpriority federal payments (Tiers III–V) could see delays or nonpayment, disrupting incomes and cash flows.
Rigid statutory priority and issuance rules could limit Treasury flexibility and harm market confidence, complicating debt management during crises and potentially raising broader costs for taxpayers.
Members of Congress and many federal employees could have pay delayed because congressional pay and certain executive-branch compensation are assigned low priority.
Based on analysis of 2 sections of legislative text.
When the statutory debt limit is reached, the Treasury must pay federal obligations in a five-tier order, may issue limited obligations for top-tier payments, and must report weekly to finance committees.
Introduced January 3, 2025 by Tom McClintock · Last progress January 3, 2025
Requires the Treasury to follow a specific five-tier order for paying federal obligations if the statutory public debt limit is reached, giving highest priority to certain debts and Medicare payments and allowing limited new borrowing only to cover top-tier obligations or to place proceeds in a trust. It also requires weekly written reports to the House Ways and Means and Senate Finance Committees listing amounts paid and unpaid by tier. The measure clarifies that obligations issued under the priority authority do not count against the statutory debt limit until a later change, and it preserves the Treasury’s existing payment-prioritization authority for situations not covered by this law.