Government Bailout Prevention Act

This bill, known as the Government Bailout Prevention Act, prohibits the federal government from using taxpayer money or Federal Reserve funds to bail out state, local, county, or school district governments that face financial distress starting in 2026. Specifically, it bars the Treasury Department and Federal Reserve from purchasing bonds, issuing credit lines, or providing loans to any government entity that has filed for bankruptcy, defaulted on its debts, or is at risk of defaulting without federal help. The law explicitly excludes disaster relief assistance and discretionary grants from these restrictions, ensuring that emergency aid for declared disasters remains available even if a government is in financial trouble.