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The Government Bailout Prevention Act prohibits the federal government, Federal Reserve, and Treasury Department from providing financial assistance to state and local governments or school districts that have filed for bankruptcy, defaulted on obligations, or are at risk of defaulting. The bill applies to purchases, guarantees, lines of credit, and grants-in-aid, with an exception for assistance provided in response to declared disasters. Regular federal grants and discretionary appropriations are excluded from the prohibition.
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