Representative Greg Steube (R-FL) has introduced a bill seeking to reform the federal government's policies for bailing out state and local governments.
What the Bill Does
Specifically, Rep. Steube's Government Bailout Prevention Act would prohibit federal funds, including assistance from the Federal Reserve System and the U.S. Treasury Department, from being used to purchase, guarantee, or otherwise support state and local governments that are defaulting, filing for bankruptcy, or facing imminent insolvency.
Additionally, the bill limits federal bailouts to state and local governments in response to declared disasters and does not apply to discretionary appropriations, direct spending, or federal grants.
In essence, the Government Bailout Prevention Act is a response to state and local governments frequently spending beyond their means, assuming the federal government will bail them out. Therefore, there is no incentive to spend responsibly.
What Lawmakers are Saying
"Taxpayers should not be forced to foot the bill for poorly run state and local governments," said Rep. Steube in a press release. "When politicians spend beyond their means and make reckless financial decisions, they shouldn't be able to turn around and expect a federal bailout. If states and local governments get themselves into a financial mess, taxpayers in other parts of the country shouldn't be stuck paying for it."
Senator Todd Young (R-IN), who introduced the bill in the Senate, said, "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. 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."
Previous Emergency-Related Measures
Last March, Steube introduced legislation requiring noncitizens, meaning lawful permanent residents, to present a green card and valid taxpayer requirements to receive FEMA aid. Asylees and refugees must similarly prove they are actively working toward receiving lawful permanent residence.
