Jim DeMint Introduces European Bailout Protection Act

WASHINGTON, D.C. – Today, U.S. Senator Jim DeMint (R-South Carolina), chairman of the Senate Steering Committee and member of the Senate Banking and Foreign Relations committees, introduced the “European Bailout Protection Act” to halt U.S. participation in the proposed bailout of European Union (EU) countries, including Greece. U.S. Representatives Mike Pence (R-Indiana), Cathy McMorris Rodgers (R-Washington), Jerry Lewis (R-California), Jeb Hensarling (R-Texas), and Rep. Kay Granger (R-Texas) have introduced similar legislation in the House of Representatives.

Specifically, the bill would: 1) Prohibit any U.S. funds that have yet to be drawn by the International Monetary Fund (IMF) from being used to provide financing to any EU countries until all EU nations are in compliance with the debt to Gross Domestic Product (GDP) ratio requirement in their own collective growth pact, and 2) Require the U.S. Treasury Secretary to oppose any IMF loans to EU nations until all EU countries are in compliance with their debt to GDP ratio requirement. The bill does not permanently prohibit the IMF from lending to these nations, it simply prohibits U.S. contributions to the IMF from being used to loan money to these nations until they can bring their debt to GDP ratio to 60 percent.

In comparison, the U.S. is in danger of losing its AAA rating as the American debt to GDP ratio is expected to reach 94 percent by next year, up from 57 percent in 2007. The total outstanding U.S. public debt is nearing $13 trillion.

“America isn’t even close to getting our own fiscal house in order and this is the worst time to ask taxpayers to borrow more from China to bailout other foreign nations,” said Senator DeMint. “The U.S. debt is equal to nearly 90 percent of our GDP today and we need to stop the runaway spending and find a way to pay our own bills instead of bailing out other nations. It’s time to end the bailout and big government culture in Washington that thinks more spending and higher taxes is the answer to every problem. I was proud to support Senator Cornyn’s amendment as a necessary first step, and we must go further to ensure EU nations are held accountable to their own standards.”

Senator DeMint authored legislation last year to prevent $108 billion in U.S. taxpayer dollars to be used bailouts of foreign nations through the IMF, but it was opposed 64-30.

United States Senator Jim DeMint Press Releases News Room May 18, 2010.