Lugar backs prioritizing payments if U.S. defaults

Indiana’s senior U.S. senator, Richard Lugar, announced he is in support of legislation that would prioritize U.S. government payments in the event of a default on U.S. debt.

The plan would prioritize payments to Social Security recipients, military personnel and interest on the national debt, if the federal government default occurs on or around August 2.

“This will help provide some order and first priority in the case that the U.S. defaults on payments at the beginning of August because the debt ceiling has not been raised,” Lugar said in a statement.

Payments to Social Security, fighting forces in the military, interest on payments on debt and covering 85 percent of Medicare would consume most of the money from actual revenue, retired New Hampshire Sen. Judd Gregg wrote in the Washington, D.C. newspaper, The Hill.

He also wrote that most government offices would need to shut down and most federal payments would have to stop.

The legislation to prioritize these payments will be introduced next week.

— Zach Ammerman