US Federal 2023-2024 Regular Session

US Federal House Bill HB187

Introduced

1/9/23

Refer

1/9/23

Report Pass

3/9/23

Caption

Default Prevention Act This bill requires the Department of the Treasury to continue borrowing to pay the principal and interest on obligations held by the public or the Social Security trust funds if the federal debt limit is reached. The bill also (1) exempts any obligations issued under this bill from the debt limit if the obligations would otherwise cause the limit to be exceeded, and (2) prohibits the obligations from being used to compensate Members of Congress.

Impact

If enacted, the Default Prevention Act would significantly affect federal financial practices by ensuring that certain obligations take precedence over others when the debt limit is reached. The bill specifies tiers of obligations ranging from crucial payments, such as those related to Social Security and Medicare, to other government expenses. By prioritizing these payments, the bill aims to stabilize fiscal operations and protect the trust funds from potential financial disruptions, thus providing a safety net for essential government programs.

Summary

House Bill 187, known as the Default Prevention Act, addresses the contingency of the federal debt limit being reached. The legislation requires the Department of the Treasury to continue borrowing necessary funds to cover interest and principal payments on public obligations and obligations held in trust funds, such as Social Security, regardless of whether the debt ceiling is hit. The bill emphasizes maintaining the government's capacity to honor its financial commitments to prevent a credit default, which could result in severe economic consequences.

Sentiment

The sentiment around HB 187 appears to be cautious but generally supportive among those who see the importance of avoiding a government default. Proponents argue that the bill is a necessary step to uphold financial integrity and protect essential services. However, some critics express concerns about the implications of increasing federal borrowing and its potential impact on the national debt. The debate indicates a recognition of the need for a balanced approach to fiscal responsibility and government funding.

Contention

Notable points of contention surrounding the bill include the discussions about the broader implications of escalating the federal debt limit. Some legislators are concerned that continually raising the borrowing capacity might lead to fiscal irresponsibility, while others argue that ensuring payments to retirees and essential services is paramount for economic stability. The tension reflects a fundamental disagreement over the strategies to manage national debt and financial priorities, particularly in a rapidly changing economic landscape.

Companion Bills

No companion bills found.

Previously Filed As

US HB402

Debt Explanation Before Taxwriters Act or the DEBT Act This bill requires the Secretary of the Treasury to appear before the House Ways and Means Committee and the Senate Finance Committee before the federal debt limit is reached or extraordinary measures are taken to prevent the United States from defaulting on its obligations. The term extraordinary measures generally refers to a series of actions that the Department of the 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. The bill requires the Secretary of the Treasury to appear before the committees to provide a detailed explanation of (1) the extraordinary measures that Treasury will take and the administrative costs of taking the measures, and (2) any reversal of such measures and any other changes in the funding of federal government obligations.

US HB2926

Relating to the text of ballot propositions on the issuance of debt obligations.

US HB1221

Social Security and Medicare Lock-Box Act This bill establishes (1) in the Federal Old-Age and Survivors Insurance Trust Fund, a Social Security Surplus Protection Account; and (2) in the Federal Hospital Insurance Trust Fund, a Medicare Surplus Protection Account. The Managing Trustee of each trust fund (in both cases, the Secretary of the Treasury) (1) must transfer the annual surplus of the trust fund to its respective account; and (2) may not invest the balance in the account until a law takes effect that authorizes, for amounts in the trust fund, an investment vehicle other than U.S. obligations. The bill establishes in the executive branch a commission to study the most effective vehicles for investment of the trust funds, other than investments in the form of U.S. obligations.

US HB5334

Relating to the notice required before the issuance of certain debt obligations by political subdivisions.

US HB6438

ROBINHOOD Act Redistribution of Billions by Instituting New High-Income Obligations on Overlooked Debt Act

US HB96

Relating to the date and requirements regarding an election to authorize the issuance of general obligation bonds or other debt obligations payable from ad valorem taxes or to approve an increase in an ad valorem tax rate.

US HB94

American Sovereignty and Species Protection Act This bill limits the protection of endangered or threatened species to species that are native to the United States. In addition, the bill prohibits certain funding for endangered or threatened species from being used to acquire lands, waters, or other interests in foreign countries.

US A09404

Relates to the prohibition of lending institutions issuing mail-loan checks except in response to an affirmative request or application therefor; provides that any debt, interest, fee or other obligation arising from a mail-loan check issued in violation of this section shall be null and void and unenforceable.