Congress Moves to Approve Funding for the IMF

With the recent economic collapse of Russia, many congressional policymakers have returned from their recess with increased concern over the stability of the international economy. Moreover, after meeting with constituents many of them farmers, members of Congress seem more poised than ever before to provide the full $18 billion Clinton Administration funding request for the International Monetary Fund.

Earlier in the week, the Senate approved the funding in its annual foreign operation appropriations bill. Yet, there is growing skepticism among many IMF proponents over whether giving the money now is the best course of action. In an editorial run in the September 2, 1998 edition of the Washington Post , the Post's editorial board writes: "[I]t's ominous that the world's economic doctor of last resort, the International Monetary Fun, has delivered its strongest medicine to both Indonesia and Russia, only to watch both fall deeper into trouble...the United States should initiate an international, high level thoughtful review of questions underlying this crisis. These would include the efficacy of IMF rescue measures.."

This is the first departure of the Post from its long standing editorial support for the IMF rescue packages and its request that Congress move quickly to provide the full $18 billion to the IMF. Thus, the recent Russian economic crisis is having the opposite effect on some policymakers. According to one Congressional source, "my boss views the Russian crisis as empirical proof of what some people have been saying all along, the IMF often does more harm than good."

This notion is not just sweeping through some already skeptical Republicans, but is increasingly coming from many Democrats. Moreover, some traditional media supporters of the IMF also seem to be questing the soundness of the IMF's policies In the September 2, 1998 edition of the New York Times , Times reporter Eric Schmitt writes, "Even as the American stock market plunges, fueled in part by the uncertainty in Moscow, lawmakers say there is no public pressure to shore up the monetary fund." Thus, pressure to provide IMF funding seems to be waning.

While the Senate seems firm in its belief that the IMF should be fully funded, support in the House is wavering. In order for the funding to be signed by the President, it must pass both houses of Congress. At this point, the Senate is the only house eager to pass such legislation. However, even of the House fails to pass IMF funding, it still could be added through a continuing resolution before the end of the legislative year.

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