Government Bailout Prevention Act

W. Gregory Steube

Republican · FL · Representative

Source: Congress.gov · FEC

• Keith Self (R-TX-3)Original· 2026-06-15
• Scott Perry (R-PA-10)Original· 2026-06-15

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.

2026-06-15

Source: Congress.gov

This bill would prevent the federal government from using taxpayer money to bail out state and local governments or school districts that fail to pay their debts, and would block the Federal Reserve and Treasury Department from providing financial assistance to these entities if they default on their obligations. The measure aims to hold states, cities, and school districts financially accountable by forcing them to manage their own budgets without federal rescue funds. It would affect state and local officials, school administrators, and potentially taxpayers in those jurisdictions.

AI-assisted summary generated from the official bill metadata (title, subjects, actions) sourced from Congress.gov. Cached and reviewed. Always verify against the official text linked below.

[Congressional Bills 119th Congress] [From the U.S. Government Publishing Office] [H.R. 9324 Introduced in House (IH)] <DOC> 119th CONGRESS 2d Session H. R. 9324 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. _______________________________________________________________________ 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>

• HR9369To amend title 49, United States Code, to authorize employees or authorized agents to edit or annotate electronic logging device records as long as such employee or agent is physically located in North America and the edit or annotation is subject to driver approval, and for other purposes.
  Referred to Committee · 2026-06-18
• HR9302Student Athlete Act of 2026
  Referred to Committee · 2026-06-11
• HRES1353Expressing the sense of the House of Representatives supporting the Department of State's efforts to prevent the Islamic Revolutionary Guard Corps (IRGC) from embedding themselves within the Iranian National Football Delegation during the 2026 FIFA World Cup and to limit the delegation's presence in the United States to the minimum time necessary for scheduled match play.
  Referred to Committee · 2026-06-09
• HRES1354Impeaching John McConnell, Jr., Chief Judge of the United States District Court for the District of Rhode Island, for high crimes and misdemeanors.
  Referred to Committee · 2026-06-09