Congressional Legislators Attempt Push-Back On ‘Euro-TARP’

 By Joy Lutes.

– Several Republican Members of Congress have authored a bill aimed at temporarily prohibiting U.S. loans to the International Monetary Fund (IMF) for the Greek bailout.
Specifically, U.S. loans could not be used to provide financing for any European Union (EU) member state until all EU members are in compliance with the debt to GDP ratio set forth in their own collective agreement pact. The legislation, H.R. 5299, known as the European Bailout Protection Act, was introduced last week and comes on the heels of President Obama’s approval of participation by the U.S. in an international bailout of Greece. Sponsoring the bill are Congressmen Mike Pence (IN), Congresswoman Cathy McMorris Rodgers (WA), Congressman Jerry Lewis (CA), Congresswoman Kay Granger (TX), and Congressman Jeb Hensarling (TX); all are Republicans. Prior to the Obama Administration’s agreement to participate in the bailout, Pence and McMorris Rodgers, who serve as Chair and Vice Chair respectively of the House Republican Conference, put together a letter to Treasury Secretary Tim Geithner, urging the Administration to not to get involved. The letter reads in part, “The American people are tired of the endless bailouts. The United States is facing nearly 10 percent unemployment and a fiscal crisis of its own, and propping up Greece or any other European Union nation that may face a similar crisis in the future should not be the responsibility of American taxpayers. The EU was created to compete economically with the United States, and if it needs to bailout one of its own, it should do so without bilking the American taxpayer.” On May 8, Pence and McMorris Rodgers authored an op-ed in the New York Post asking the Administration to call for a formal vote on the funding at the IMF and then to oppose it. Neither request was heeded. The European Bailout Protection Act was referred to the appropriate committee but considering that Democrats control the House of Representatives, its stop there could be a long one. Democrats have little incentive to move legislation forward that is in direct contrast with the will of the President. Still supporters of the bill are optimistic. Todd Weiner, spokesman for Congresswoman McMorris Rodgers, said, “There are a variety of procedural methods at our disposal. We are committed to getting Members of Congress on the record concerning the European bailout, and we are hopeful that a successful vote will put pressure on the Obama Administration to stop committing U.S. tax dollars to this ever-growing ‘Euro-TARP.’” Meanwhile the U.S. Senate voted 94-0 on Monday in favor of a measure sponsored by Senator John Cornyn (R-TX) setting forth that the U.S. would oppose IMF bailouts to countries that are unlikely to repay them. According to a Reuters report, the measure would direct the United States’ executive director at the IMF to determine whether there is a likelihood of repayment of loans to countries whose public debt exceeds their gross domestic product. If the director determines the loan is not likely to be repaid, the executive director would then be obligated to vote against it. While this measure’s inclusion in a broader financial reform bill is a big step in the right direction for those who oppose U.S. involvement in the bailout, there are still several legislative steps between the current status and victory including passage of the broader measure in the Senate and then reconciliation with the House bill. Still the opponents of these bills may have one powerful ally on their side – politics. Every two years the entire U.S. House of Representatives is up for re-election. In election years, issues tend to become weapons as the political parties get polarized. Traditionally the President’s party loses seats in Congress during the first mid-term election he faces. 2010 is President Obama’s first mid-term election, so named because it takes place midway through the President’s term. Polls demonstrate that many Americans are becoming increasingly unhappy with the job President Obama and the Congress are doing. Republicans, with the mid-term election curse already in their favor, are hoping for significant gains in this fall’s election. But the Obama Administration is not the only one feeling the political heat. German voters made Chancellor Angela Merkel aware of their displeasure of the country’s involvement in the Greek bailout plan by removing her party from control in the Upper House of Germany’s Parliament. When queried as to whether President Obama may have been partially motivated to support the Greek bailout as a way to provide some political cover for his allies in Europe, McMorris Rodgers spokesman, Todd Weiner stated, “That may be part (it)… We can only speculate concerning their motivation, but it’s probably similar to the one used to push for their $787 billion stimulus bill – to borrow and spend and put off the hard choices that are necessary for economic recovery – both in America and in Europe.” While this issue continues to evolve and unravel, one thing seems certain – there are more hard choices ahead for leaders in the U.S. and Europe and equally hard choices facing voters in both places concerning the direction of their countries.
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