Preventing Government Bailouts

Washington, D.C. – U.S. Senators Tom Cotton (R-Arkansas), Todd Young (R-Indiana), and Pat Toomey (R-Pennsylvania) on Monday 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 this 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.

“The reckless, debt-fueled spending of a few state and local governments can’t go on forever, so it won’t,” said Cotton. “Our bill would ensure American taxpayers aren’t stuck with the tab for the spending binges of a few irresponsible politicians.”    MORE

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