IMF Funding Passes Early Obstacles on Hill (fwd)

[Robert Weissman <rob@essential.org>]

IMF Funding Passes Early Obstacles on Hill
But Administration Says House Panel's Strict Conditions Would Be Unworkable

By Helen Dewar and Guy Gugliotta
Washington Post Staff Writers
Wednesday, March 25, 1998; Page A04

President Clinton's $18 billion request for the International Monetary Fund 
cleared early hurdles on Capitol Hill yesterday but ran into problems in the 
House when a committee added conditions that were criticized as unworkable 
by the administration.

Clinton's full request for the IMF was approved by the House Appropriations 
Committee and neared approval by the Senate, possibly as part of a more 
popular spending bill for military support and disaster relief.

But the proposal still faces serious obstacles, including the dispute over 
conditions to force IMF reforms and an even more contentious struggle over 
an antiabortion provision that doomed passage of funding for both the IMF 
and United Nations last year.

Prospects for approval of Clinton's request for nearly $1 billion for 
payment of U.S. back dues to the U.N. appeared even more problematic. The 
Senate has refused to act on the request, arguing that the House must move 
first on a separate authorization bill -- one that includes the abortion 
language.

Action on the two foreign policy initiatives came as the Clinton 
administration more than quadrupled its request for disaster assistance in 
light of recent El Ni¤o-related storm damage across the country, bringing 
the total to $2.4 billion, according to Senate Appropriations Committee 
Chairman Ted Stevens (R-Alaska).

As of late yesterday, the House and Senate appeared headed down parallel 
tracks that diverged at key junctures, posing problems as both houses 
struggle to pass at least the military and disaster aid package before a 
two-week recess that starts at the end of next week.

The House committee approved two bills.

One included $1.8 billion for military operations in Bosnia and the Persian 
Gulf and $570 million for disaster relief, all of which were offset by cuts 
in low-income housing, airport projects, Clinton's AmeriCorps initiative and 
bilingual education at the insistence of House Republicans. Democrats and 
the administration strongly protested these cuts.

The other bill called for $505 million for the United Nations and $18 
billion in credits for the IMF, including a $14.5 billion quota increase and 
$3.5 billion for new borrowing authority. House GOP leaders plan to add the 
controversial antiabortion language when the bill reaches the House floor, 
probably after the April recess.

The Senate was working to combine the two bills into one, including an 
additional $1.8 billion for disaster relief but excluding any money for the 
United Nations. Unlike the House, the Senate did not try to offset the 
spending increases, which could complicate negotiations with the House on a 
final bill.

Both houses attached strings to the IMF funding. The Senate provisions 
appeared acceptable to the administration, while the tougher House 
provisions were not.

The House proposal would require the IMF to insist that countries borrowing 
more than $500 million meet specific conditions, such as compliance with 
trade agreements and an end to government-directed lending and subsidies, 
before the $14.5 billion quota increase would be made available.

In a letter to Appropriations Committee Chairman Bob Livingston (R-La.), 
Treasury Secretary Robert E. Rubin said: "If it becomes law, this provision 
likely would delay indefinitely the implementation of the quota increase, 
denying the IMF the resources it needs to perform its mission during a 
period of crisis."

Rep. David R. Obey (D-Wis.), ranking minority member of the panel, tried to 
bring the IMF and U.N. proposals back in line with the administration's 
request but was defeated in a party-line vote.

By contrast, the Senate IMF proposal would require certification by the 
treasury secretary that the seven major industrialized nations are publicly 
committed to seeking compliance with the trade and subsidy provisions cited 
in the House legislation, although compliance would not be a prerequisite to 
release of U.S. funds. It also seeks other steps to encourage more openness 
and accountability in IMF operations.

These provisions were worked out with Rubin and other administration 
officials who objected that an earlier Senate Appropriations Committee 
proposal was overly stringent and unworkable.

The compromise appeared to have wide backing in the Senate despite 
complaints from some conservatives, such as Sen. Lauch Faircloth (R-N.C.), 
who described it as "international banking welfare of the highest order."

While the administration dodged most of the political bullets on military 
funding, it ran into trouble with the House committee, which unanimously 
approved an amendment from Rep. David E. Skaggs (D-Colo.) to require 
congressional authorization before Clinton could use money in the bill to 
mount an offensive against Iraq.


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