House passes bill to limit effects of debt default
© Greg Nash

The House on Wednesday passed legislation to prioritize debt payments in the event the U.S. defaults, ahead of a looming November deadline for Congress to raise the debt limit.

The measure, passed 235-194, would allow the Treasury Department to continue borrowing above the debt limit to pay principal and interest on the national debt as well as Social Security payments.

Wednesday’s bill comes ahead of an expected Friday vote on a proposal authored by the conservative Republican Study Committee (RSC) that would raise the debt limit through March 2017 in exchange for budget reforms.


The RSC plan would require a House vote on a balanced budget amendment by Dec. 31 and ban all new regulations through July 1, 2017. It would further prohibit the House from adjourning if it hasn’t completed work on spending bills by Sept. 1. 

Republicans touted the debt prioritization bill as a means of ensuring critical payments wouldn’t stop in the event Congress fails to raise the debt limit by the Nov. 3 deadline. The measure would further prohibit any new debt obligations from being used to pay salaries for members of Congress in the event of a default. 

“Seniors shouldn’t have to worry about whether that debt will be paid,” said House Majority Whip Steve Scalise (R-La.). 

But Democrats warned it would still allow other critical payments, such as Medicare and Medicaid, to become abandoned if the U.S. defaults on its debt.

“I’d like to see the formation of a Responsibility Caucus,” House Minority Whip Steny Hoyer (D-Md.) said during floor debate Wednesday. “The Responsibility Caucus would say to the American people, ‘If we bought it, we’re going to pay for it.’ ” 

The House passed similar legislation in 2013, but the Senate never took it up.

President Obama issued a veto threat against the measure, saying Congress should instead pass legislation to raise the debt limit to meet all obligations.

“Any legislative proposal to prioritize certain payments over others is default by another name and would not protect the full faith and credit of the United States government or avoid the negative impact of default on American jobs and businesses,” the White House said in a Statement of Administration Policy.

House and Senate Democratic leaders are insisting Republicans pass a bill to raise the debt limit without strings attached. 

In any case, both the debt prioritization measure and the RSC plan have slim odds across the Capitol. Sen. Charles SchumerChuck SchumerBiden administration stokes frustration over Canada Schumer blasts McCarthy for picking people who 'supported the big lie' for Jan. 6 panel Biden's belated filibuster decision: A pretense of principle at work MORE (D-N.Y.), who’s expected to become the top Senate Democrat in the next Congress, said Wednesday that both bills were “dead on arrival.” 

Vicki Needham contributed.