US Congress report suggests legislation to limit bailouts like Argentinas

The United States Congressional Research Service, a nonpartisan public policy research institute within the U.S. Congress, released a report last Friday suggesting that lawmakers legislate “specific limitations” on the fund used to carry out bailouts like the one Argentina received. The conclusion is part of a brief written by two economists on the Exchange Stabilization Fund (ESF), the emergency reserve fund the Department of the Treasury used to assist the Milei administration.  In October 2025, Treasury Secretary Scott Bessent announced that the U.S. would provide Argentina with a currency swap line worth US$20 billion via the Central Bank. It also announced a purchase of the country’s USD-denominated bonds and a standby credit line, strengthening the relationship between Argentine President Javier Milei and U.S. President Donald Trump. The ESF was originally created by Congress in 1934 to maintain the fixed-dollar exchange rate. After the United States abandoned the gold standard in 1971, the fund’s use was expanded for supporting foreign governments, some transactions with the IMF, and stabilizing U.S. financial markets.   The brief opens by saying that the financial support to Argentina in 2025 has “renewed debates about the ESF’s function and purpose.”  After reviewing the fund’s background, the authors pointed out that Argentina’s US$20 billion bailout was the second largest use of the ESF in a foreign country and was “opposed by some members of Congress because it appeared ‘to be an effort to unduly influence Argentina’s democratic elections.’” The report, which was written by macroeconomic expert Marc Labonte and international trade specialist Rebecca Nelson, ends with a series of policy recommendations.  Policy recommendations The report highlights how President Donald Trump framed assistance to Argentina as “based on ideological rather than financial grounds,” a position that has “raised questions about whether more limitations on the ESF are needed.” The authors pointed out that U.S. Congress “could legislate more specific limitations” on the ESF’s use, such as “capping its size, limiting how it can be used, or requiring congressional approval when the Treasury Secretary initiates interventions.” They added that lawmakers could also consider new reporting requirements that improve the “flow of information” from the administration to Congress. If deputies wanted to support the fund as a crisis-response tool, they could also increase ESF resources. Critics of the bailout The bailout received heavy criticism at the time in the U.S. In October 2025, Congressman David Scott sent a letter to Treasury Secretary Scott Bessent demanding details on the use of the ESF to establish the swap line with Argentina’s Central Bank.  The lawmaker called the decision “reckless” in a letter co-signed with 11 members of Congress. Following the bailout, Elizabeth Warren and other U.S. senators introduced the “No Argentina Bailout Act” bill. The goal was to prevent the Treasury from “bailing out Argentina’s financial markets and its global investors while American families are struggling at home and the Trump administration is shutting down our own government.” Bernie Sanders, a sitting U.S. senator who signed the bill and also ran as a presidential candidate in the 2016 Democratic primaries, criticized Trump for throwing “15 million Americans off health care […] because we don’t have enough money” while also giving “US$20 billion to bail out the right-wing regime of Argentina.”  “We can’t let that happen.”