Treasury Warns No Federal Bailout If Mamdani's Agenda

U.S. Treasury Secretary Scott Bessent warned the federal government would refuse to bail out New York City if it falls into a fiscal crisis after Democratic mayoral front-runner Zohran Mamdani implements his agenda, invoking the 1975 “drop dead” tabloid line associated with President Gerald Ford. Bessent, who helped arrange a $20 billion currency swap line for Argentina under President Javier Milei, told Fox Business that New York would be “coming to the federal government for a bailout” if Mamdani’s proposals are enacted and said Washington would not step in. Mamdani, a democratic socialist leading by double digits in multiple polls, proposes universal childcare, city-run grocery pilots, free city buses, rent freezes, 200,000 affordable housing units, and higher taxes on millionaires and corporations to pay for them. Bessent did not identify which specific policies he viewed as creating fiscal risk, and business leaders and critics warned the proposals could prompt an exodus of high earners and firms. Mamdani’s campaign had not immediately responded, and analysts say the dispute underscores rising federal–local political tensions ahead of the November mayoral election.