Pay Down the Debt Act

This bill says that if a state or local government turns down a federal grant, that money won’t be left sitting around or re-awarded elsewhere. Instead, the same amount will be removed from the program’s funding and sent to the U.S. Treasury to reduce the national debt . A short summary from the Library of Congress says the rescinded funds must be used for deficit reduction .

• For communities, this doesn’t change how you apply for grants or the rules to use them. It only affects what happens to money when a state or city says “no thanks.” In that case, the funds go toward paying down the federal deficit rather than being spent elsewhere .

Key points:

• Who is affected: States and local governments that choose not to accept certain federal grants .
• What changes: Unaccepted grant money is canceled and moved to the Treasury to reduce the deficit .
• When it applies: Whenever a state or local government does not accept a federal grant award .