GOP senators say Bernanke plans no Europe bailout

AP News
Posted: Dec 14, 2011 7:26 PM
GOP senators say Bernanke plans no Europe bailout

Federal Reserve Chairman Ben Bernanke has assured Republican senators that the Fed does not intend to bail out Europe from its debt crisis, according to participants in the meeting Wednesday.

Sen. Lindsey Graham, R-S.C., said Bernanke told the group that he did not "have the intention or the authority" to provide bailout support to Europe.

Sen. Bob Corker, R-Tenn., said Bernanke had offered this assurance "multiple times" during the closed-door meeting, which lasted about an hour.

"I think people walked away knowing he has no intentions whatsoever of furthering U.S. involvement in the crisis," Corker told reporters.

Lawmakers in both parties have expressed sharp opposition to any U.S. support for Europe that might put taxpayer money at risk, especially after the uproar that followed the $700 billion bailout of U.S. financial institutions beginning in 2008.

Bernanke was invited to meet with GOP senators by Sen. Lamar Alexander of Tennessee, the chairman of the Senate Republican conference. The session came after a similar discussion Bernanke held with Senate Democrats on Oct. 20.

Senators said Bernanke told them that the Fed was studying developments in Europe and their possible impact on the U.S. economy.

"He's very concerned," Sen. Orin Hatch, R-Utah, told reporters. "He did say, if they can't get their fiscal situation under control, it could affect us. A collapse over there would be detrimental to us."

Fed policymakers held their final meeting of the year Tuesday. In a statement afterward, they portrayed the economy as slightly healthier despite risks from the European crisis. The Fed held off on any new steps to boost U.S. growth.

In its statement Tuesday, the Fed warned of risks to the economy from strains in global financial markets, a reference to Europe's problems