119th (2025–2027)
H.R. 9324
The Government Bailout Prevention Act would prohibit the federal government from using taxpayer funds to bail out state, local, or county governments and school districts that have filed for bankruptcy or defaulted on their financial obligations. The bill would also prevent the Federal Reserve and Treasury Department from providing loans, loan guarantees, or purchasing bonds from these struggling government entities. The restrictions would apply to any jurisdictions that have defaulted, are at risk of defaulting, or would likely default without federal assistance, applying retroactively to situations occurring after January 1, 2026. The only exception to these prohibitions would be federal assistance provided in response to presidentially declared disasters. This legislation is intended to ensure that state and local governments are financially responsible without the expectation of a federal rescue, though it would still allow general federal grants and appropriations to continue.