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Congress Moves Closer to IMF Funding Request

© Bryan Johnson

With precious few legislative days left on the Congressional calendar, unfinished issues continue to arise almost on a daily basis in Washington. Funding for the International Monetary Fund is one of those issues. President Clinton is seeking an increase in U.S. Contributions to the IMF of $18 billion. But, the normal legislative process Congress uses for this type of appropriation was defeated in May with a procedural vote to remove IMF funding from a mid-summer supplemental spending bill [ Editor's Note: For a detailed account of this issue, see Congress Deals IMF Major Setback ].

The $18 billion request passed the Senate several months ago. However, without a similar bill passing the House, no funding can go forward. As such, supporters of the IMF are trying to marshal funding through the foreign operations appropriations bill, which includes funding for such programs as foreign aid. But, at this point, it seems unlikely that the House is willing to appropriate all $18 billion. Instead, Congressional sources indicate that only a partial IMF payment will be included in their bill when it is marked up later this summer.

Indeed, the $18 billion the Clinton Administration is requesting for the IMF actually is two separate requests. One is for a new IMF program called the "new arrangements to borrow" (NAB) and includes $3.5 billion in funding. The other $14.5 billion in for the IMF's request of all member nations to increase their donations by 45 percent (called a capital subscription quota increase). The House seems to be leaning toward appropriating the $3.5 billion, but not the $14.5 billion.

Moreover, the House is likely to make that funding conditioned on a series of requirements that the IMF must implement before the U.S. Treasury can release the funds to the IMF. Thus, the House seems unwilling to pass legislation that would appropriate any money to the IMF until there are specific IMF reforms enacted and in place. Since the IMF is an international organization, it has no enforceable jurisdiction over the IMF. As a result, many policymakers have concluded that the only way to get the IMF to change its policies is to withhold U.S. funds until it does so [ Editor's note: For a detailed description of what some policymakers find objectionable about IMF policies and operations, see: Congress Request's More Information on IMF .

The House likely is not to have completed its work on the foreign operations appropriations bill before mid-July. Shortly after the full appropriations committee marks up the bill, it will come to the floor for a vote. In the meantime, policymakers are lining up a host of amendments that would require the IMF to significantly alter the way it does business. Here is a partial list:

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