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.

[Congressional Bills 119th Congress] [From the U.S. Government Publishing Office] [S. 4629 Introduced in Senate (IS)] <DOC> 119th CONGRESS 2d Session S. 4629 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 SENATE OF THE UNITED STATES May 21, 2026 Mr. Young (for himself and Mr. Cotton) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs _______________________________________________________________________ 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 go