U.S. Senators Todd Young (R-Ind.) and Tom Cotton (R-Ark.) introduced the Government Bailout Prevention Act to ensure that federal dollars cannot be used to help insolvent state, territory, or local governments pay off their obligations.
Under the bill, no arm of the federal government – including the Federal Reserve System and the U.S. Treasury Department – can pay or guarantee state and local obligations if that state or local government entity has filed bankruptcy, has defaulted on its debts, or is at risk of bankruptcy or default.
“When state and local governments spend more money than they bring in or rack up dangerous levels of debt, hard-working Americans shouldn’t be forced to bail them out,” said Senator Young. “It is unfair to expect Hoosiers to bail out fiscally irresponsible states or communities outside of Indiana. Our bill will ensure federal taxpayer dollars aren’t used to reward these bad fiscal choices.”
“Arkansas taxpayers shouldn’t be responsible for reckless spending in other states. Our bill would ensure federal tax dollars aren’t used to bailout bankrupt state and local governments,” said Senator Cotton.
The Government Bailout Prevention Act has been endorsed by the National Taxpayers Union.
“With numerous states and localities marching towards insolvency, taxpayers shouldn’t be forced to bail out fiscally irresponsible jurisdictions that have spent beyond their means for years. Thankfully, Senator Young’s Government Bailout Prevention Act establishes clear safeguards against federal rescues of insolvent governments, reduces moral hazard, and protects hardworking Americans from assuming the costs of poor financial management. We look forward to helping this important legislation reach President Trump’s desk before it’s too late,” Thomas Aiello, Vice President of Federal Affairs at National Taxpayers Union.
Text of the legislation is available here.
Indiana AG Rokita calls on race fans to raise the red flag on human trafficking ahead of the 110th Indianapolis 500
Make water safety a priority
USPS proposes maintenance, repairs during Mailbox Improvement Week
Indiana BMV branches closed for holiday weekend
BioHeartland launches as the new identity for Indiana’s bioscience ecosystem
Vermillion County receives OCRA grant for home rehabilitation program
More rain, wind, storms possible Tuesday
"Improving Outcomes, Together" theme for National EMS Week
Candidates can begin filing for school board elections on Tuesday
Indiana Natural Resources Commission to hold public hearing for bobcat rule changes
Single-lane closures to impact State Road 63 near Cayuga
Duke Energy breaks ground on Cayuga Energy Complex project
Miller, Vincent lead Parke Heritage Class of 2026
May 15 is National Peace Officers Memorial Day
Indiana Conservation Officers seek help finding track chairs stolen from Fort Harrison State Park
Clay County man among six drug traffickers, including one illegal alien, sentenced to decades in federal prison
