A Southwest Florida congressman is behind a proposal to ensure federal dollars won’t be used to bailout insolvent states, territories and local governments.
At the end of last week, U.S. Rep. Francis Rooney, R-Fla, introduced the “Government Bailout Prevention Act” which he showcased on Tuesday.
“American taxpayers do not like when their money is used to bail out failing corporations or businesses and this dislike extends to state and local governments who are fiscally irresponsible,” Rooney said. “I have consistently voted against irresponsible spending and subsidies. All levels of government; federal, state, and local, must be better stewards of taxpayer money. While I continue to fight for fiscal responsibility in Congress, I believe that state and local governments should not be bailed out for their fiscal mismanagement. It is time for accountability and honesty.”
According to Rooney’s office, the proposal “prevents the federal government, including the Federal Reserve and U.S. Treasury, from paying or guaranteeing state and local obligations if that government entity has defaulted, filed for bankruptcy, or is at risk of bankruptcy or default.”
Rooney’s bill was sent to the U.S. House Oversight and Reform and the Financial Services Committees on Friday. So far, he has not reeled in any cosponsors.
Over in the U.S. Senate, U.S. Sen. Todd Young, R-Ind., introduced a similar bill back in July with U.S. Sen. Pat Toomey, R-Penn., and U.S. Sen. Tom Cotton, R-Ark., behind it.
“Unfortunately, a number of state and local governments continue to spend more money than they bring in and are racking up dangerous levels of debt,” said Young.“It is unfair for Hoosiers to be expected to pay taxes to bail out this fiscal irresponsibility. These governments need to be on notice that they can’t continue down their fiscally risky path and expect federal taxpayers to pick up the check.”
“The taxpayer should not bail out failing industries, businesses, or banks,” said Toomey.“The same applies to state and local governments that overspend and mismanage their budgets into bankruptcy. Now some in Washington are pushing for the Federal Reserve and other federal agencies to spend billions to clean up these mistakes -- which is unfair. This legislation protects American taxpayers by ensuring their dollars aren’t used to bail out state and local governments.”
“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.”
The bill has not seen much momentum in the Senate in the two and a half months since Young introduced it. It has been before the U.S. Senate Banking, Housing, and Urban Affairs Committee all that time. Outside Toomey and Cotton, no other senators have signed on as cosponsors.