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Congress Votes to Restrain Full IMF Payment

© Bryan Johnson

[ Editor's Note: This is the 16th article on the IMF to appear in Political Economy. This series of articles has been tracking the progress of the IMF funding request. For previous articles on the IMF, see Bretton Woods Revisited: IMF; Congress Gears Up For IMF Funding Debate; Congress Deals IMF Major Setback; IMF Skepticism Grows in Congress; New IMF Strategy Emerges in Congress; Congress Tackles IMF Tax Subsidy Issue; American Farmers Fall In Love With IMF; Congress Requests More Information on IMF ; Congress Moves Closer to IMF Funding ; Russia Likely to be next IMF Recipient ; A Checklist of IMF Reforms ; and IMF Dealt Second Major Setback; GAO: IMF Not in Liquidity Crisis>; Congress Moves to Approve Funds for IMF>; and Congressional Committee Averts Full IMF Funding - Editor - BTJ .]

Last week, the U.S. House surprised many supporters of the International Monetary Fund by refusing to provide the full $18 billion in new U.S. contributions requested by the Clinton Administration. While the U.S. Senate already has passed legislation provided the full $18 billion in funding, the U.S. House has been less sympathetic toward granting full funding.

While there has been greater skepticism in the House than in the Senate over the usefulness of the IMF, most proponents and opponents of the funding predicted that when the House considered the IMF issue on the floor with all members voting, that the IMF would receive the full funding. However, by early week it was clear that there was not enough support in the House to pass legislation providing the full funding. Moreover, the House leadership ruled that no amendments would be considered during the debate. When Rep. Nancy Pelosi (D-CA) sponsored an amendment anyway to provide the full funding, it was ruled out of order.

Instead, the House passed a bill that provides only $3.5 billion in funding for the IMF. This funding is for a new controversial IMF program called the "new arrangements to borrow" or NAB. However, it does not include an additional $14.4 billion in new quota subscriptions for the IMF's general account. Moreover, fulfilling a campaign promise to conservative organization from over a year ago, the House bill also includes antiabortion language that prevents U.S. funds from going to international organizations that sponsor or promote abortion. Both the lack of funding and the antiabortion language have drawn a veto threat from the President.