Ban bailouts to state/municipal entities

Economy
1

An Act to Prohibit Federal Bailouts to State and Municipal Entities

[Preamble]
WHEREAS, fiscal responsibility at state and municipal levels is essential for the long-term financial stability of our nation;
WHEREAS, reliance on federal bailouts can undermine the autonomy and accountability of local governance;
BE IT ENACTED by the Senate and House of Representatives of [State/Country] in Congress assembled:

Section 1. Short Title
This Act may be cited as the “Prohibition of Federal Bailouts to Local Governments Act”.

Section 2. Definitions
For the purposes of this Act:

  1. “Federal bailout” refers to any federal financial assistance provided to state or municipal entities to prevent bankruptcy or financial failure, including but not limited to grants, loans, loan guarantees, or financial incentives.
  2. “State or municipal entity” includes any government division or agency at the state or local level, including counties, cities, townships, public districts, or any other jurisdictional governmental body.

Section 3. Prohibition of Federal Financial Assistance

  1. No federal agency or department shall provide a bailout, as defined in Section 2, to any state or municipal entity under any circumstances.
  2. This prohibition includes any direct financial intervention designed to mitigate budget shortfalls, cover deficits, or absorb debts incurred by state or municipal entities.

Section 4. Enforcement and Penalties

  1. Any federal official who authorizes or facilitates a bailout contrary to the provisions of this Act shall be subject to disciplinary action, including possible removal from office, and may face civil penalties appropriate to the severity of the breach.
  2. Any state or municipal entity that attempts to solicit or receive a bailout in violation of this Act may be subject to financial penalties and may be disqualified from receiving future federal aid of any kind for a period to be determined based on the severity of the violation.

Section 5. Reporting and Oversight

  1. The [appropriate federal oversight agency, e.g., the Department of the Treasury or the Government Accountability Office (GAO)] is tasked with monitoring and ensuring compliance with this Act.
  2. An annual report shall be submitted to Congress, detailing all requests for bailouts received and actions taken to enforce this Act.
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