Congress Requests More Information on IMF
Back in January, it became apparent that the Clinton Administration was going to engage in a full court press to have Congress provide some $18 billion in new funding for the International Monetary Fund (IMF). (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 and American Farmers Fall In Love With IMF - Editor - BTJ .)
Yet this is only part of the funding that the IMF can expect to receive. For example, the IMF is seeking the creation of a "new arrangements to borrow" program. The U.S. share of that new program would be $3.5 billion. But there are some 180 other IMF members that also could, and probably will contribute to the program. Moreover, the IMF is seeking a 45 percent increase in the level of contributions from all its members. The U.S. share of that is $14.5 billion. Thus, the total U.S. share would be $18 billion in new funds for the IMF.
But the 45 percent increase in contributions from the other 180 some members of the IMF would be billions more, making this the single largest one-year increase in IMF resources in its 51-year history. Not surprisingly, many members of Congress want to examine the issue before they pass legislation granting this money to the IMF. As such, there has been an unprecendented interest by Congress in the IMF. Much to the Clinton Administration's surprise, many members of Congress now are beginning to question the value of contributing money to the IMF at all.
Indeed, the IMF already suffered a major legislative setback in Congress in April (see Congress Deals IMF Major Setback). That vote prevented a quick consideration and vote on the IMF funding. Instead, Congress sent a signal that the IMF will not get its money until Congress has thoroughly reviewed the issue. The Senate responded by passing an appropriations measure in May that includes the $18 billion for the IMF along with a few token reform proposals. The House is expected to forward its version of the bill very soon. But before it does, the House leadership wants some answers.
Specifically, the Joint Economic Committee found out in January that the IMF has produced several internal reports blaming itself for making the Asian Financial crisis worse, and in spreading it to other countries after it started in Thailand. Not surprisingly, several members of Congress want to see these reports and consider them vital to understanding how the IMF operates, and whether it deserves continued U.S. support.
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