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Government Bailout Prevention Act
To prohibit the provision of Federal funds to State and local governments and school districts for payment of obligations, to prohibit the Federal Reserve banks, the Department of the Treasury, and other Federal agencies from financially assisting State and local governments and school districts that have defaulted on their obligations, and for other purposes.
Summary
- Prohibits the use of Federal funds to purchase, guarantee, or provide loans or grants to states, municipalities, counties, or school districts that have filed for bankruptcy, defaulted on obligations, or are at risk of default.
- Prohibits the Treasury Department from using general revenues or borrowed funds to purchase or guarantee obligations of state and local governments that are in default or at risk of default.
- Prohibits Federal Reserve banks from providing funds, loan guarantees, credits, or other financial assistance to state and local governments or school districts that are in default or at risk of default.
- Exempts from these prohibitions any Federal assistance provided in response to a declared disaster.
- Does not restrict regular discretionary appropriations, direct spending, or standard federal grants provided to state and local governments.
AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.
Sponsor (1)
3 cosponsors
- Rep. Harrigan, Pat [R-NC-10] (R-NC)
- Rep. Perry, Scott [R-PA-10] (R-PA)
- Rep. Self, Keith [R-TX-3] (R-TX)
Money behind the sponsor
Top reported contributors to W. Gregory Steube’s campaign committee (2024 cycle) — who funds the bill’s sponsor, not a claim about this bill. Data from FEC.
- CHENEY BROTHERS $7,800
- NEXTGEN MANAGEMENT $6,600
- STEPHENS, INC. $6,600
- NEPTUNE WELLNESS SOLUTIONS $6,600
- COOLTODAY $6,600
Organizations whose employees gave the most — itemized individual contributions grouped by the donor’s reported employer (FEC Schedule A). Full finance for W. Gregory Steube → · Outside spending →
Actions (2)
- Jun 15, 2026 Referred to the Committee on Oversight and Government Reform, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned. · house
- Jun 15, 2026 Introduced in House
Similar bills (6)
Bills with similar text or summary — includes reintroductions across Congresses. Ranked by semantic similarity of the bill text (computed locally); a neutral discovery aid, not a claim the bills are duplicates.
Full text
IN THE HOUSE OF REPRESENTATIVES
June 15, 2026
Mr. Steube (for himself, Mr. Perry, and Mr. Self) introduced the following bill; which was referred to the Committee on Oversight and Government Reform, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
A BILL
To prohibit the provision of Federal funds to State and local governments and school districts for payment of obligations, to prohibit the Federal Reserve banks, the Department of the Treasury, and other Federal agencies from financially assisting State and local governments and school districts that have defaulted on their obligations, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the “Government Bailout Prevention Act”.
SEC. 2. DEFINITION.
In this Act, the term “State” means—
(1) any of the several States;
(2) the District of Columbia; and
(3) any territory or possession of the United States.
SEC. 3. PROHIBITION ON THE USE OF FEDERAL FUNDS TO PAY OR GUARANTEE STATE AND LOCAL OBLIGATIONS.
(a) In General.—Notwithstanding any other provision of law, no Federal funds may be used to purchase or guarantee obligations of, issue lines of credit to, or provide direct or indirect grants-and-aid to, any State government, municipal government, local government, county government, or school district which, on or after January 1, 2026, has filed for bankruptcy, has defaulted on its obligations, is at risk of defaulting, or is likely to default, absent such assistance from the United States Government.
(b) Limit on Use of Borrowed Funds.—The Secretary of the Treasury shall not, directly or indirectly, use general fund revenues or funds borrowed pursuant to title 31, United States Code, to purchase or guarantee any asset or obligation of any State government, municipal government, local government, county government, or school district or otherwise to assist such government entity, if, on or after January 1, 2026, that State government, municipal government, local government, county government, or school district has defaulted on its obligations, has filed for bankruptcy, is at risk of defaulting, or is likely to default, absent such assistance from the United States Government.
(c) Prohibition on Federal Reserve Assistance.—Notwithstanding any other provision of law, no Federal Reserve bank may provide or extend to, or authorize with respect to, any State government, municipal government, local government, county government, school district, or other entity that has taxing authority or bonding authority, any funds, loan guarantees, credits, or any other financial instrument, including the purchasing of the bonds of such State, municipality, locality, county, school district, or other bonding authority, or to otherwise assist such government entity under any authority of any Federal Reserve Bank.
(d) Limitation.—Subsections (a) through (c) shall not apply to Federal assistance provided in response to a declared disaster.
SEC. 4. APPLICABILITY.
The prohibition under section 3—
(1) includes debt restructuring or any other related activity; and
(2) does not include—
(A) any discretionary appropriations or direct spending, as those terms are defined in section 250(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 900(c)); and
(B) any grant awarded by the United States to the State government, municipal government, local government, county government, or school district. <all>
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