“Congress Should Have an Up-or-Down Vote on U.S. Participation in $321 Billion IMF Deal
Washington, DC – Rep. Cathy McMorris Rodgers (R-WA), Vice Chair of the House Republican Conference, and Rep. Mike Pence (R-IN), the Conference Chairman, introduced a Congressional resolution today to stop U.S. tax dollars from being used by the International Monetary Fund (IMF) for bailouts of European countries.
On May 9, 2010, the IMF unveiled a proposal to spend $321 billion to help bailout debt-ridden European countries such as Greece, Portugal, and Spain. The United States is the largest contributor to the IMF, and therefore, under this plan, at least $50 billion of U.S. taxpayer money would be funneled to Europe to help prop up failed socialist policies.
“President Obama supports the European bailout, although the public is strongly against it,” said Rep. McMorris Rodgers. “Unfortunately, Congress’ means to stop the President are limited because last year Congress passed legislation which increased America’s quota contribution and line of credit to the IMF by $100 billion without any safeguards to ensure that taxpayers would be protected from unnecessary bailouts. Even so, Congress still has the right to express its opinion on this vital matter which affects America’s economic freedom, fiscal integrity, and national sovereignty. That’s why I’ve introduced this resolution. The U.S. House should have an up-or-down vote. Every Member of Congress should go on record – either ‘yea’ or ‘nay’ – on whether or not U.S. tax dollars should go to a ‘Euro-TARP.’ We owe it to the American people to have this vote.”
The U.S. share of the European bailout is expected to come from the IMF’s pool of reserves, which the U.S. supplemented with $100 billion in the FY 2009 War Funding Supplemental bill. The legislation was ultimately opposed by Rep. McMorris Rodgers and 201 other Members of the House, in part because of fears that taxpayer dollars would be used to finance an international bailout slush fund. The IMF is turning those fears into reality.
The IMF’s $321 billion bailout is not a fait accompli, however. Even at this late hour, the Obama Administration has considerable power to stop the deal. The IMF is expected to schedule a meeting to give final approval to the European bailout package. While the IMF does not expect that a formal Executive Board vote will be held, the U.S. has the power to call a vote. Rep. McMorris Rodgers has called on the Obama Administration to vote “no” on a European bailout until all EU nations are in compliance with the debt to GDP ratio requirement in their own collective growth pact. If a majority of the IMF Executive Board votes against the bailout, the agreement is defeated.
“Should Congress approve our resolution, it will send a powerful message to President Obama that America has ‘bailout burnout,’” said Rep. McMorris Rodgers. “We cannot afford to take the ‘too big to fail’ philosophy to a global level. “The only thing ‘too big to fail’ is America itself.”
On May 13, 2010, Rep. McMorris Rodgers, Rep. Pence, Rep. Jerry Lewis (R-CA), Rep. Jeb Hensarling (R-TX), and Rep. Kay Granger (R-TX) introduced legislation to stop U.S. tax dollars from being used by the International Monetary Fund (IMF) for bailouts for European countries.
Their bill, The European Bailout Protection Act, will protect U.S. taxpayers from becoming more involved in a ‘Euro-TARP’ by requiring the EU nations to meet the fiscal requirements mandated by their own charter before they can withdraw U.S.-provided funds from the IMF.
The text of the McMorris Rodgers-Pence resolution, H. Con. Res. 279, is below.
Disapproving of the participation of the United States in the provision by the International Monetary Fund of a multibillion dollar funding package for the European Union, until the member states of the European Union comply with the economic requirements of membership in the European Union.
Resolved by the House of Representatives (the Senate concurring), That the Congress disapproves of the participation of the United States in the provision by the International Monetary Fund of a multibillion dollar funding package to the European Union, until each member state of the European Union demonstrate compliance with the economic requirements of membership in the European Union, including limiting the deficit of the member state to 3 percent of the gross domestic product of the member state and limiting the total public debt of the member state to 60 percent of the gross domestic product of the member state.