Vote On Cornyn Amendment For Blocking US Bailouts Of Overindebted Foreign Countries Currently On C-SPAN

Update: vote passes 94-0. O. If Italy, UK, or Japan (or, soon, the US), with their 100%+ debt/GDP need an IMF loan, they may well be out of luck. It will be viciously ironic if the US is prohibited from obtaining an IMF loan to save itself.

Currently on C-Span is the vote on the Cornyn amendment which requires the Obama Administration to evaluate any proposed bailout of a foreign nation where that nation’s public debt exceeds its annual Gross Domestic Product (GDP), and then to certify to Congress whether the bailout loan will be repaid. If the Administration cannot certify that the bailout loan will be repaid, it will be required to oppose the bailout and vote against it at the IMF. That this is in effect a new Monroe Doctrine, as the entire world now has more debt than GDP, is not mentioned. The vote can be seen here.

Sen. Cornyn Introduces Legislation to Restrict U.S.-Funded Bailouts of Foreign Nations

WASHINGTON — U.S. Sen. John Cornyn (R-TX) today offered an amendment, which was cosponsored by Sen. David Vitter (R-LA), to the current financial regulatory reform bill to protect U.S. taxpayers from paying for bailouts of irresponsible foreign governments:

“American taxpayers have seen more bailouts than they can stomach, and the last thing they should have to worry about are their hard-earned tax dollars being used to rescue a foreign government,” Sen. Cornyn said. “This amendment will help prevent American taxpayer dollars from underwriting dysfunctional governments abroad.”

“It’s bad enough that taxpayers have to foot the bill for the mistakes of the big banks and the big automakers, but asking them to bail out irresponsible foreign governments is outrageous,” said Sen. Vitter.  “Our country already owes trillions of dollars in debt.  We simply can’t afford to take on other countries’ debt in addition to our own.”

Despite its weak political system and dysfunctional economy, last month Greece requested a bailout from the International Monetary Fund (IMF) to help cover its ballooning debt. For 2010, the expected IMF bailout to Greece is $20 billion and Greece is unlikely to repay that amount. Although the U.S. currently has severe debt problems of its own, as the largest financial contributor to the IMF, U.S. funding will comprise a major share of that amount.  In response to the pending IMF bailout of Greece, Sen. Cornyn offered an amendment (S. A. 3986) to The Restoring Financial Stability Act of 2010 (S.3217) to prevent U.S. taxpayer-funded bailouts of foreign governments.

Sen. Cornyn’s amendment requires the Obama Administration to evaluate any proposed bailout of a foreign nation where that nation’s public debt exceeds its annual Gross Domestic Product (GDP), and then to certify to Congress whether the bailout loan will be repaid. If the Administration cannot certify that the bailout loan will be repaid, it will be required to oppose the bailout and vote against it at the IMF.