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Rep. Issa: What's the Plan if the Eurozone Collapses?


"...if the dominoes starting with Greece...keep falling, there are scenarios in which we could end up with France and Greece and beyond."

Rep. Darrell Issa (R-CA), Chairman of the House Oversight and Government Reform Committee, went on CNBC's Squawk Box on Wednesday to discuss the committee's hearing on Europe's sovereign debt crisis with Secretary of Treasury Tim Geithner and Chairman of the Board of Governors of the Federal Reserve Ben Bernanke.

“Will economic growth in Europe overcome the increase in sovereign debt in a number of nations, not just Greece?” Rep. Issa asked, kicking off the interview.

“The Fed chairman seems to be a little more optimistic, obviously, about what’s happening over in Europe,” the CNBC host said. “Is today’s hearing going to be more of a conversation about that or is it going to morph into something more confrontational about Fed policy?”

“Well, certainly we want to limit it and we think it will be primarily about the whole question of whether or not (post-2008 and 2009) his confidence in credit default swaps, his theory that only one domino or two dominoes will fall, is accurate. As I’m sure you very well know, if the dominoes starting with Greece going through the PIIGS [Portugal, Italy, Ireland, Greece, and Spain] keep falling, there are scenarios in which we could end up with France and Greece and beyond,” Rep. Issa responded.

Watch Rep. Issa make his case via CNBC:

Rep. Issa was then asked a hypothetical question about whether, if things got “really, really bad,” Republicans would support a motion to provide the International Monetary Fund with additional cash.

“Well, as you know, I led the charge against TARP [Troubled Assets Relief Program]. I felt there were other ways in the U.S. to deal with it. One of the reasons this hearing is important is I want to have our leaders, and responsible leaders, give us alternate scenarios to that now, rather than coming to us in desperation, saying (as they did with TARP) ‘the world is ending, the sky is falling, we need this money,’ which ultimately got misused as political walking around money in many cases,” Rep. Issa responded.

The California Representative reaffirmed his position, saying “just as they don’t intend to come and ask, I don’t intend to offer or to say ‘yes.’”

Switching gears a little, the CNBC host asked Rep. Issa how he would grade Bernanke’s and Geithner’s handling of the U.S. economy.

“I would give them both F’s for the first year, or year and a half. I’d give them C+’s or B’s for the intervening period,” Rep. Issa, “Thumbs down the first two years, a cautious thumbs up the last year.”

The CNBC hosts thought Rep. Issa’s grades were a little “harsh.”

“We can agree to disagree,” the Congressman said, “If you’re going to need money, you come to Congress, you get an appropriations. But then you use it for the way that you said you were going to. In the case of TARP, very clearly, they did not use it the way they said they were going to.”

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