Prevents federal funds from being used to assist state and local governments or school districts that have defaulted on obligations.

The Government Bailout Prevention Act prohibits federal funds from being used to purchase or guarantee obligations, issue lines of credit, or provide grants to state, local, and school governments that have defaulted on obligations, are at risk of defaulting, or are likely to default. This prohibition applies to federal agencies, the Department of the Treasury, and Federal Reserve banks. Exceptions are made for federal assistance provided in response to a declared disaster.

Prevents federal funds from being used to assist state and local governments or school districts that have defaulted on obligations.

The Government Bailout Prevention Act prohibits federal funds from being used to purchase or guarantee obligations, issue lines of credit, or provide grants to state, local, and school governments that have defaulted on obligations, are at risk of defaulting, or are likely to default. This prohibition applies to federal agencies, the Department of the Treasury, and Federal Reserve banks. Exceptions are made for federal assistance provided in response to a declared disaster.