Huizenga Introduces Legislation to Protect U.S. Taxpayers from Financing Foreign Bailouts
Today, Monetary Policy & Trade Subcommittee Chairman Bill Huizenga (MI-02) announced the introduction of H.R. 4836, legislation to prevent American taxpayers from paying for fiscally unsound foreign bailouts through the International Monetary Fund (IMF):
"The Treasury Department has consistently encouraged the International Monetary Fund to bend the rules to make fiscally unsound loans to Greece under the 'exceptional access' rules. It is important to note that Greece did not meet the criteria for exceptional access lending and the IMF has, in fact, conceded that it made mistakes in bailing out Greece. The IMF's own evaluation department has found that internal assessments which permitted Greece to take part in the exceptional access framework were inaccurate, resulting from overly optimistic forecasts for debt sustainability, renewed market access, and governmental commitment to reforms.
“Although I’m pleased that the IMF’s systemic exemption for exceptional access was finally repealed earlier this year, I’m very concerned the IMF Board has already replaced it with a new policy containing significant new loopholes. My legislation will close these loopholes and ensure that there is no more wiggle room.
"Specifically, this legislation calls on the United States to oppose IMF lending to any nation whose debt is not sustainable with a high probability of paying off the debt. Countries across the globe, including the United States, need to get serious about addressing their debt and deficits over the short, medium, and long term. The Treasury Department should not encourage bailouts for nations that do not have serious plans in place to get their fiscal house in order. American taxpayers are not a piggy bank and should not be expected to pay for fiscal follies in the eurozone or elsewhere.
"By already defaulting on a loan from the IMF, Greece has demonstrated that taxpayers are at risk. It makes no sense for the Treasury Department to undermine the Congressional effort to protect American taxpayers by pushing the IMF to make loans that are not financially sound.
"H.R. 4836 will prevent future bailouts of Greece and other countries that fail to meet the IMF’s traditional rules."
Click here to view H.R. 4836's legislative text.