,,ii  #aafth ,,congress  #ast ,session  
,s4 #babj  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,july #ae1     
#bjai,mr4 ,young 7for himself1 ,mr4     
,toomey1 and ,mr4 ,cotton7 introduced   
the following bill2 which was read twice
 and referred to the ,committee on      
,banking1 ,housing1 and ,urban ,affairs 
,a ,,bill  ,to prohibit the provision of
 ,federal funds to ,state and local     
governments for payment of obligations1 
to prohibit the ,federal ,reserve       
,banks1 the ,department of the          
,treasury1 and other ,federal agencies  
from financially assisting ,state and   
local governments that have defaulted on
 their obligations1 and for other       
purposes4  #a4 ,short title ,this ,act  
may be cited as the ,government ,bailout
 ,prevention ,act4  #b4 ,definition ,in 
this ,act1 the term ,state means--  7#a7
 any of the several ,states2  7#b7 the  
,district of ,columbia2 and  7#c7 any   
territory or possession of the ,united  
,states4  #c4 ,prohibition on the use of

 ,federal funds to pay or guarantee     
,state and local obligations  7a7 ,in   
general ,notwithstanding any other      
provision of law1 no ,federal funds may 
be used to purchase or guarantee        
obligations of1 issue lines of credit   
to1 or provide direct or indirect       
grants-and-aid to1 any ,state           
government1 municipal government1 local 
government1 or county government which1 
on or after ,january #a1 #bjai1 has     
filed for bankruptcy1 has defaulted on  
its obligations1 is at risk of          
defaulting1 or is likely to default1    
absent such assistance from the ,united 
,states ,government4  7b7 ,limit on ,use
 of ,borrowed ,funds ,the ,secretary of 
the ,treasury shall not1 directly or    
indirectly1 use general fund revenues or
 funds borrowed pursuant to title #ca1  
,united ,states ,code1 to purchase or   
guarantee any asset or obligation of any
 ,state government1 municipal           
government1 local government1 or county 
government1 or otherwise to assist such 

government entity1 if1 on or after      
,january #a1 #bjai1 that ,state         
government1 municipal government1 or    
county government has defaulted on its  
obligations1 has filed for bankruptcy1  
is at risk of defaulting1 or is likely  
to default1 absent such assistance from 
the ,united ,states ,government4  7c7   
,prohibition on ,federal ,reserve       
assistance ,notwithstanding any other   
provision of law1 no ,federal ,reserve  
,bank may provide or extend to1 or      
authorize with respect to1 any ,state   
government1 municipal government1 local 
government1 county government1 or other 
entity that has taxing authority or     
bonding authority1 any funds1 loan      
guarantees1 credits1 or any other       
financial instrument1 including the     
purchasing of the bonds of such ,state1 
municipality1 locality1 county1 or other
 bonding authority1 or to otherwise     
assist such government entity under any 
authority of any ,federal ,reserve      
,bank4  7d7 ,limitation ,subsections 7a7

 through 7c7 shall not apply to ,federal
 assistance provided in response to a   
declared disaster4  #d4 ,applicability  
,the prohibition under section #c-- 7#a7
 includes debt restructuring or any     
other related activity2 and  7#b7 does  
not include-- 7,a7 any discretionary    
appropriations or direct spending1 as   
those terms are defined in section      
#bej7;c7 of the ,balanced ,budget and   
,emergency ,deficit ,control ,act of    
#aihe 7#b ,u4,s4,c4 #ijj7;c772 and  7,b7
 any grant awarded by the ,united       
,states to the ,state government1       
municipal government1 local government1 
or county government4