Bill · S. 4629· Senate(119-S-4629)
Government Bailout Prevention Act
- Introduced
- 5/21/2026
- Last activity
- 5/21/2026 — Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- Sponsored by
- Todd Young
- Cosponsors
- - 6 - 0
- Introduced
- In Committee
What this bill would do
The Government Bailout Prevention Act aims to stop the use of Federal funds to help State and local governments or school districts that are in financial trouble. It specifically prohibits the use of Federal funds to purchase, guarantee, or provide grants-and-aid to entities that have defaulted, filed for bankruptcy, or are at risk of doing so after January 1, 2026. The bill further restricts the Secretary of the Treasury from using general fund revenues or borrowed funds to assist these entities. Additionally, it prohibits Federal Reserve banks from providing financial assistance or purchasing bonds for such entities. However, these restrictions do not apply to assistance provided during a declared disaster.
Yes· 3 of 4
Does this make the government pay for what it commits to?+5
The bill restricts the use of federal resources to assist entities facing financial instability, emphasizing fiscal discipline for state and local governments.
Does this reduce what the federal government spends?+4
The bill prohibits the use of federal funds and the Treasury to assist entities that have defaulted or are at risk of defaulting.
Does this leave more decisions to the states?+4
The bill forces state and local governments to manage their own financial obligations without federal bailouts.
The opposite· 3 of 8
Does this put more money into public schools?-5
The bill prohibits federal grants-and-aid to school districts that are at risk of defaulting or have filed for bankruptcy.
Would people in cities be better off under this?-4
Municipalities in urban areas are often more susceptible to financial distress and may lose vital federal assistance under this act.
Would people in rural areas be better off under this?-4
Rural local governments may lose critical federal funding if they face economic instability or default.
Who it would affect, and how
Potential Positive Impacts for People
-
Prevention of Federal Bailouts: The bill prevents the use of Federal funds to purchase or guarantee obligations for governments or school districts that have defaulted, filed for bankruptcy, or are at risk of defaulting (Section 3(a)).
-
Restriction on Treasury Assistance: The Secretary of the Treasury is prohibited from using general fund revenues or borrowed funds to assist entities that are at risk of defaulting or have already defaulted (Section 3(b)).
-
Limitation of Federal Reserve Involvement: Federal Reserve banks are prohibited from providing funds, loan guarantees, or purchasing bonds for entities that have defaulted or are at risk of defaulting (Section 3(c)).
Potential Negative Impacts for People
-
Loss of Financial Support for Struggling Entities: State governments, municipal governments, local governments, county governments, and school districts that are at risk of defaulting or have filed for bankruptcy may lose access to Federal funds, grants-and-aid, or credit lines (Section 3(a)).
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Prohibition of Federal Reserve Financial Instruments: Entities with taxing or bonding authority may be unable to receive funds, loan guarantees, or credits from Federal Reserve banks if they are facing financial instability (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-4Good For Urban Residents-4Good For Low Income Households-3Good For Middle Class Households-2
- Economy And Finance
- Improves Fiscal Responsibility+5Reduces Government Spending+4Reduces National Debt+3
- Social Issues And Justice
- Improves Affordable Housing-3Improves Poverty Reduction-3
- Education And Technology
- Increases Public School Funding-5
- Environment Energy And Infrastructure
- Improves Public Transit-4
- Governance And Ideology
- Increase States Rights+4
- 6/24/2026
- 1 Cosponsor added.
- 6/18/2026
- 1 Cosponsor added.
- 6/9/2026
- 3 Cosponsors added.
- 5/21/2026
- Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- 1 Cosponsor added.
- Introduced in Senate
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.
Mike CrapoRepublican · Idaho
John CornynRepublican · Texas
Tom CottonRepublican · Arkansas
Lindsey GrahamRepublican · South Carolina
Roger MarshallRepublican · Kansas
Tim SheehyRepublican · Montana