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GOP Lawmakers Push to Keep U.S. Funds Out of Euro Bailouts

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June 29, 2011: Sen. Jim DeMint speaks to the media on Capitol Hill. (AP)

Republican lawmakers on Capitol Hill are moving to block the International Monetary Fund from using U.S. money for European bailouts, as talks intensify across the pond over how to stanch the debt crisis. 

Some U.S. lawmakers want their concerns addressed as part of the feverish end-of-year budget talks. On the House and Senate side, lawmakers have introduced legislation to wall off U.S. taxpayer money from playing any role in averting a European meltdown. 

"It's time to stop the bailouts and start restoring fiscal discipline to our own economy," Sen. Jim DeMint, R-S.C., said in a statement, as he and 25 other senators introduced an IMF bill Friday. 

A similar bill on the House side has been on the table since the summer, though it has not moved out of committee. 

But lawmakers are sharpening focus on the issue as European leaders discuss what future role the IMF can play in stabilizing the region. They are talking about lending billions to the IMF to create a backup fund for future crises, in addition to pressing the European Central Bank to expand its role. 

Asked whether the U.S. would put up any money as part of the latest proposal, the White House on Friday assured skeptics that whatever plan the Europeans come up with will not involve more U.S. money. 

"Our position hasn't changed, which is that the IMF has substantial resources and that American taxpayers are not going to have to make any more commitments to the IMF," White House Press Secretary Jay Carney said. 

The U.S. involvement with the IMF also works differently than U.S. support of organizations like the United Nations. Rather than appropriate money on an annual basis, the U.S. has what amounts to a bank account with the monetary fund. While paying the U.S. interest, the IMF can then use that money on deposit to finance lending elsewhere. 

But Republicans are trying to claw back U.S. money that already has been obligated -- particularly a $108 billion line of credit the U.S. approved in 2009. 

The Senate bill introduced this week would rescind that line of credit, and ban U.S. involvement in any European IMF bailouts until those countries bring down their debt to a certain percentage of their economy. The lawmakers argue that, considering the U.S. is the largest contributor to the IMF, its funds have already gone toward the massive and sustained Greek bailout effort. 

On the House side, a bill from Rep. Cathy McMorris Rodgers, R-Wash., would take similar steps. 

"The time for wasteful spending is over -- both here and abroad," she and House colleagues wrote in a letter Friday to congressional budget-writers, urging them to include IMF language in their final package. 

Meanwhile, European leaders are trying to take modest steps toward a solution. As part of a new treaty, European nations would impose budget controls on themselves and be subject to penalties for breaking the rules. 

Though happening overseas, the crisis has wreaked havoc on the U.S. markets. And while the debt problems are deepest in Greece, they have demanded the attention of the entire European Union, as many member countries use the same currency. 

Portugal and Ireland have also required bailouts, but the crisis has focused most recently on the potential for trouble in Spain and Italy. The uncertainty has created a cycle that is difficult to break. Amid the chaos, investors want European governments to pay more in interest on their loans. But that makes it harder for those governments to control costs. 

The Associated Press contributed to this report.

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