Bill · H.R. 9324· House(119-HR-9324)
Government Bailout Prevention Act
- Introduced
- 6/15/2026
- Last activity
- 6/15/2026 — 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.
- Sponsored by
- W. Steube
- Cosponsors
- - 3 - 0
- Introduced
- In Committee
What this bill would do
The "Government Bailout Prevention Act" aims to stop the federal government from helping state and local governments or school districts that are in financial trouble. It prohibits using federal funds to purchase, guarantee, or provide loans to entities that have defaulted, filed for bankruptcy, or are at risk of defaulting on their obligations. This restriction also prevents the Secretary of the Treasury from using borrowed funds to assist these entities. Additionally, the bill stops Federal Reserve banks from providing financial assistance or purchasing bonds for such entities. However, these rules do not apply to assistance provided for declared disasters.
Yes· 3 of 4
Does this make the government pay for what it commits to?+6
The bill enforces fiscal discipline by prohibiting the use of federal funds for entities facing bankruptcy or default.
Does this reduce what the federal government spends?+5
The act prevents the Treasury and Federal Reserve from spending funds to assist defaulting government entities.
Does this leave more decisions to the states?+4
The bill removes the federal safety net for state and local entities, leaving them to manage their own financial distress.
The opposite· 3 of 5
Does this put more money into public schools?-7
The bill restricts the ability of school districts to receive federal grants-and-aid if they are facing financial instability.
Would people in cities be better off under this?-6
Municipal and local governments often face higher risks of default, and this bill denies them federal financial assistance.
Would people in rural areas be better off under this?-6
Local and county governments in rural areas could be deprived of federal aid if they face financial distress.
Who it would affect, and how
Potential Positive Impacts for People
-
Prevention of Federal Bailouts: By prohibiting the use of federal funds to purchase or guarantee obligations for entities that have defaulted or are at risk of defaulting, the bill seeks to prevent financial assistance to struggling governments (Section 3(a)).
-
Restricting Treasury Assistance: The bill prevents the Secretary of the Treasury from using general fund revenues or borrowed funds to assist entities that have filed for bankruptcy or are likely to default (Section 3(b)).
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Limiting Federal Reserve Involvement: The act stops Federal Reserve banks from providing loans, credits, or purchasing bonds for entities with taxing or bonding authority that are facing financial instability (Section 3(c)).
Potential Negative Impacts for People
-
Loss of Financial Support for At-Risk Entities: State and local governments, including school districts, that are at risk of defaulting or are facing bankruptcy will be prohibited from receiving federal funds, grants-and-aid, or lines of credit (Section 3(a)).
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Restriction of Federal Reserve Financial Instruments: Entities with taxing or bonding authority may lose access to financial instruments, loan guarantees, or bond purchases from Federal Reserve banks if they are facing financial distress (Section 3(c)).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Rural Residents-6Good For Urban Residents-6Good For Low Income Households-5Good For Middle Class Households-2
- Economy And Finance
- Improves Fiscal Responsibility+6Reduces Government Spending+5Reduces National Debt+3
- Education And Technology
- Increases Public School Funding-7
- Governance And Ideology
- Increase States Rights+4
- 6/24/2026
- 1 Cosponsor added.
- 6/15/2026
- 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.
- 2 Cosponsors added.
- Introduced in House
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.
Pat HarriganRepublican · North Carolina
Scott PerryRepublican · Pennsylvania
Keith SelfRepublican · Texas