01.18.2012 1

Romney’s Missed Opportunity on Europe

Mitt RomneyBy Bill WilsonIn the Jan. 16 Republican presidential debate in South Carolina, former Massachusetts Governor Mitt Romney was asked another question on whether he would support the use of taxpayer dollars to finance a bailout of banks in Europe that bet poorly on the sovereign debt of socialist governments like Greece.

Call it a missed opportunity.  Not to offer a generic sound bite, which he did by saying, “the right course for us is not to think we have to go run over to Europe to try and save their banking system”.

Instead, it was a missed opportunity to educate the American people about the $100 billion elephant in the room.  Which is what, through the International Monetary Fund (IMF), the U.S. is already offering to finance a bailout in Europe via a credit line created by the Pelosi-Reid Congress in 2009.  This is something that Romney could have called special attention to.

The $100 billion credit line comes in addition to the nation’s $64 billion quota in the IMF, bringing the nation’s total stake in the Fund to $164 billion.

Of that, $22 billion has already been used from the quota and $7.2 billion used from the credit line according to the Fund, in bailouts all over the world, including Europe.  And unless it is rescinded, as the problems in Europe continue to grow, American taxpayers’ stake in the crisis will continue to grow.

Fortunately, of the $100 billion credit line, $93 billion still remains.  Legislation offered by Rep. Cathy McMorris Rodgers, a Romney supporter, would repeal the credit line and protect the taxpayers from funding further bailouts.

Romney at the debate said, “What you don’t want to do is to give the president or anyone else a blank check or a slush fund to take care of their friends or take care of industries or companies they think they want to save.”

That’s good, but the problem is that the Obama Administration and the IMF already have an open-ended commitment from the U.S., a slush fund if you will, to bail out Europe.  To access what remains of the money, the IMF does not need to return to Congress.  That’s why supporting McMorris Rodgers’ legislation is so important.

Romney, sadly, is still treating the issue as if it were hypothetical, which is exactly what he called it at the Oct. 2011 debate hosted by Bloomberg.  Then, he said a U.S. bailout of Europe was “a scenario that’s obviously very difficult to imagine… I’m afraid it is a hypothetical.”

In the Nov. 2011 CNBC Republican presidential debate, Romney was pressed on the issue again about whether the U.S. should bail out Europe.  He said, “We don’t want to step in and try and bail out their banks and bail out their governments.” Again, still as if it were theoretical, even though billions of taxpayer funds are already at risk.

Maria Bartiromo, one of the moderators at that debate, no fool, followed up with the right question, “But the U.S. does contribute to the International Monetary Fund, and the IMF has given $150 billion to the eurozone. Are you saying the U.S. should stop contributing to the IMF?”

To which, Romney replied, “I’m happy to continue to participate in world efforts like the World Bank and the IMF.” Which was not the right answer.

Romney had an opportunity in South Carolina to move in the right direction on this critical issue.  In 2008, Republicans lost touch with their base when they supported bailouts of banks that had made poor investment choices in U.S. housing.  But it is not too late to reclaim the mantle of the anti-bailout party, a pledge House Republicans made in the 2010 elections.

Romney still has an opportunity to be specific and to support the McMorris Rodgers legislation that will save American taxpayers $100 billion — and begin to bring an end to the bailouts once and for all.  He says he against bailing out foreign banks.  Now he needs to put his money where his mouth is.

Bill Wilson is the President of Americans for Limited Government.

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