Varney falsely claims Obama "gave" $100B in "taxpayer dollars" to IMF
Fox business analyst Stuart Varney claimed that "our taxpayer money ... is bailing out the Greeks right now" because President Obama "gave" $100 billion in "American taxpayer dollars" to the International Monetary Fund (IMF). In fact, Obama did not "give" the IMF money; rather, he requested -- and Congress approved -- a line of credit that involves "an exchange of assets" and not "an expenditure."
Varney: "Our taxpayer money, given by President Obama, is bailing out the Greeks right now"
From the May 7 edition of Fox News' Fox & Friends:
VARNEY: Here's something a lot of people don't know. Right after President Obama was inaugurated, off he goes to Europe on a big extended trip. On that trip, he gave an extra $100 billion -- American taxpayer dollars -- into the IMF, the International Monetary Fund. The IMF is part of the bailout of Greece, to the tune of maybe $7 billion. Our taxpayer money, given by President Obama, is bailing out the Greeks right now.
In fact, Obama and Congress provided "line of credit" to IMF
Congress approved funds for IMF in June 2009. The Los Angeles Times reported  on June 17, 2009, that Congress approved a "$106-billion war funding bill," which included "$5 billion to expand the role of the International Monetary Fund in shoring up the world economy." The Times further reported that "[t]he $5 billion for the IMF will finance U.S. guarantees enabling loans to poor nations worth $108 billion."
Peterson Institute fellow: "[N]one of the $108 billion represents an expenditure. It is actually an exchange of assets." In a May 22, 2009, interview , C. Randall Henning , senior fellow at the Peterson Institute for International Economics, stated that "none of the $108 billion represents an expenditure" because "the United States gets a claim on the International Monetary Fund, an asset in return." Henning added that "there should be some recognition of the risk that the money that the United States extends to the IMF -- there is a possibility that it will not be repaid. It's a very, very small possibility, but that possibility should be recognized and they've scored it in the budget at $5 billion for an appropriation. This seems a little high to me but it's within the ballpark":
Steve Weisman: The opponents are uncomfortable with more lending generally as a solution to a crisis that was brought on by too much lending. I read a recent editorial in the Wall Street Journal that certainly derided that idea and also argued that this was being done in a nontransparent way. How would you respond?
C. Randall Henning: The main thrust of the Wall Street Journal article was that the way that this bill has been approached is not fully transparent. They've argued about the mechanism by which this is budgeted and accounted for in the US budget. I think that their criticisms are misplaced in that the way to properly score this in the budget is to recognize that not all of the $108 billion represents an expenditure. In fact, none of the $108 billion represents an expenditure. It is actually an exchange of assets that doesn't involve an outlay by the United States because the United States gets a claim on the International Monetary Fund, an asset in return. But there should be some recognition of the risk that the money that the United States extends to the IMF-there is a possibility that it will not be repaid. It's a very, very small possibility, but that possibility should be recognized and they've scored it in the budget at $5 billion for an appropriation. This seems a little high to me but it's within the ballpark.
Steve Weisman: Scoring an outlay in the form of an asset exchange or a loan, scoring it as only a fraction of that, is a time-honored budgetary practice.
C. Randall Henning: That's right.
Steve Weisman: The TARP, which was $750 billion, was not scored as a $750-billion budget expenditure, as I recall.
C. Randall Henning: That's right. Since 1990, they've been doing it this way. The Federal Credit Reform Act of 1990 would take the amount of the loan, adjust it for risk and put it on the budget only in the amount of the expected expenditure outlay that would be involved if there was a default on that loan.
CBO: "[N]o IMF borrower has defaulted on its obligations to the IMF to date." On May 19, 2009, the Congressional Budget Office explained  that "[t]he $5 billion estimate captures the small chance that the IMF will experience some significant losses in the future, and an additional amount reflecting the premium that financial market participants demand for bearing losses associated with global economic deterioration":
Historically, the IMF has used several mechanisms to mitigate risk: by holding precautionary balances, by accumulating reserves, and through its de facto preferred creditor status. As a result, no IMF borrower has defaulted on its obligations to the IMF to date, although multiple countries have needed to have their loans rolled over (such as Argentina) or have failed to pay the Fund promptly (currently, Sudan, Somalia, and Zimbabwe are in protracted arrears). A lack of default history, however, does not ensure that in the future the IMF would never sustain significant financial losses that exceeded its reserves. In such a case, the IMF would pass those losses on to its creditor members, either through reduced remuneration (through the IMF's burden-sharing mechanism for protracted arrears) or additional liquidity risk (because the IMF may not be able to meet U.S. requests to draw on its SDR-denominated assets).
CBO estimates that the present-value risk-adjusted cost of the proposed increase in U.S. participation in the IMF is $5 billion. In forming this estimate, CBO envisioned various potential states of the world economy. In the most likely situations, the IMF would draw against only a small portion of the U.S. commitment and, CBO assumes, the likelihood of those funds being promptly repaid would be high. Thus, the cost of the U.S. commitment would be close to zero in those cases. In less likely situations where the IMF would need to loan out most or all of the new $100 billion line of credit, the odds of all funds being repaid are much lower and the cost would therefore be relatively high. CBO combined those different possibilities using standard options-pricing techniques to estimate the market value of the U.S. commitment. The $5 billion estimate captures the small chance that the IMF will experience some significant losses in the future, and an additional amount reflecting the premium that financial market participants demand for bearing losses associated with global economic deterioration.
Economist Edwin Truman: "Since no country has ever lost money in [IMF's] history, the notion that we will lose $5 billion is a stretch." PolitFact.com reported  on June 23, 2009, that "budget experts ... said the CBO's estimate is reasonable because it reflects the likely risk to the taxpayers." PolitiFact further stated:
The real cost to the Treasury Department all comes down to whether other countries pay back those loans, said Edwin Truman, who is an IMF expert with the Peterson Institute for International Economics, an economic think tank.
"Since no country has ever lost money in [IMF's] history, the notion that we will lose $5 billion is a stretch," he said.
WSJ: "U.S. participation" in loan to Greece "is relatively modest." The Wall Street Journal reported  on May 5 that "[s]ome lawmakers and other commentators are arguing that the U.S. will be handed a big bill to rescue Greece from default because the U.S. is the International Monetary Fund's largest shareholder." The article further stated:
But the U.S. participation in the €110 billion ($145 billion) loan to Greece is relatively modest compared with the huge commitment by Greece's fellow euro-zone governments, and their taxpayers. Those 15 nations are in various stages of approving a total of $106 billion, divided according to their stake in the European Central Bank. Germany would loan $29 billion, followed by France with $22 billion.