“President is Doubling Down on the Path to Bankruptcy”
Washington, D.C. – Rep. Cathy McMorris Rodgers (R-WA), Vice Chair of the House Republican Conference, announced today that she was circulating a letter to Treasury Secretary Timothy Geithner expressing her strong opposition to the Obama Administration’s decision to use the G-20 economic summit as a platform for supporting more government spending by the United States and our European allies – at a time when a consensus is belatedly emerging that the global debt crisis can only be resolved through fiscal austerity measures.
“I have deep, grave concerns about the President’s handling of the global economy,” said Rep. McMorris Rodgers. “Last month, President Obama worked behind the scenes to craft a $900 billion bailout of the European Union – a bailout which will cost U.S. taxpayers between $50-100 billion. Even supporters of the bailout – such as German Chancellor Angela Merkel – acknowledged that the bailout would only ‘buy time’ to get European governments off their spend-and-borrow addiction. Now, incredibly, the Obama Administration – standing alone, against our European allies – is working to facilitate that addiction by vocally opposing much-needed austerity measures. While Europe – to its credit – may be learning its lesson, the President is doubling down on the path to bankruptcy.”
According to today’s Wall Street Journal, “At the G-20 Summit in Toronto, the U.S. is expected to emphasize the need to keep government spending to boost economic recovery…The U.S. plans to press its economic partners to move cautiously with plans to tighten their fiscal policies.”
In her letter to Secretary Geithner, Rep. McMorris Rodgers wrote, “We are disturbed to know that despite Europe’s growing debt crisis the United States continues to push policies in the international community that promote unsustainable global government borrowing and spending… Despite the Administration’s efforts to spend the nation back into growth and prosperity, we now face record annual deficits, a record debt level of more than $13 trillion, and an unemployment rate that hovers just below 10%…Debt problems cannot be solved with more debt. Just look at Greece.”
Rep. McMorris Rodgers is one of the few Members of Congress who oppose using U.S. tax dollars for a European bailout.
On March 24, 2010, BigGovernment.com published the Congresswoman’s article, Beware of Greeks Bearing Bailout Plans. This made Rep. McMorris Rodgers the first Member of Congress to publicly oppose U.S. taxpayer dollars for a European bailout.
On May 18, Rep. McMorris Rodgers and Rep. Mike Pence (R-IN) introduced a Congressional Resolution, H. Con. Res. 279, opposing U.S. participation in the European bailout.
A copy of the Congresswoman’s letter to Secretary Geithner is below.
The Honorable Timothy F. Geithner
United States Department of the Treasury
Dear Secretary Geithner:
We write in anticipation of the G-20 meeting to be held this coming weekend in Toronto, Canada and to express our concern with the reported policies advocated by the United States to address the global financial crisis. In particular, we are disturbed to know that despite Europe’s growing debt crisis the United States continues to push policies in the international community that promote unsustainable global government borrowing and spending. The United States’ position is particularly disturbing given the evidence that suggests these stimulus policies will put an even larger number of European nations, and the world, in financial peril. We need not look any farther than Greece to understand the implications of runaway spending and mounting deficits and debt.
Indeed, the October 2009 IMF Financial Stability Report demonstrates the impact that additional spending will have on the global economy. This report reveals that global borrowing will total $3.9 trillion in 2010, with global debt reaching 137 percent of gross domestic product. The same report shows that global borrowing averaged less than a trillion dollars cumulatively between the years 2002 and 2008. As most world leaders now recognize, implementing excessive borrowing and spending policies will put nations on the brink of a debt crisis. To quote German Chancellor Merkel in Seoul, Korea “growth cannot come at the price of high state budget deficits.” It is important to note that the recent elections in Great Britain was as much about excessive spending as any other issue — demonstrating that sovereign debt and default is top of mind of individuals and leaders world-wide.
Moreover, it is clear in this country that excessive government spending policies have not worked. Despite the Administration’s efforts to spend the nation back into growth and prosperity, we now face record annual deficits, a record debt level of more than $13 trillion, and an unemployment rate that hovers just below 10 percent. In fact, 2009, the annual deficit was approximately 42 percent of all revenues and our external debt of $14 trillion was almost equal to gross domestic product. Debt problems cannot be solved with more debt. Just look at Greece.
We urge you to reconsider the Administration’s borrowing and spending policies both here and abroad, particularly at a time when fiscal restraint is necessary for the future viability of the United States and the world. Other nations are recognizing the need to reign in spending. So, should we. We look forward to hearing your response.