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H.R. 422: Default Prevention Act

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The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress, and was published on Jan 10, 2017.

Default Prevention Act

This bill requires the Department of the Treasury to continue to borrow to pay the principal and interest on certain obligations if the debt of the United States exceeds the statutory limit.

If the debt limit is exceeded, Treasury must issue obligations solely for the payment of the principal and interest on debt held by the public or the Social Security trust funds. Obligations issued under this bill may not be used to compensate Members of Congress.

If Treasury exercises authority provided by this bill, it must submit to Congress a report that includes an accounting of: (1) the principal on mature obligations and interest that is due or accrued, and (2) obligations issued under this bill.