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  • Writer Login


    Fireworks ahead on IMF funding?

    by | 0 | Jun 9, 2009

    imf-trapping-countries-in-debtFunding for the International Monetary Fund, which the Obama administration wants included in the supplemental spending bill for Iraq and Afghanistan, is looking like an extreme long shot at this point.

    If Rep. John Lewis (D-GA) – a.k.a. the “conscience of the House” – is any kind of bellwether, the odds for IMF funding are very long, indeed. Lewis was one of 51 anti-war Democrats who voted against the supplemental bill last month. With most Republicans supporting the bill, however, it passed overwhelmingly.

    But that was before the Senate passed a version of the spending bill that allows the IMF to extend its line of credit by $100 billion (actual cost to the U.S. is estimated at around $5 billion). Republicans in the House say they’ll vote en masse against the bill if IMF funding is included. As Democrats hold a solid majority in the House, this would normally be an idle threat. With the 51 Democrats who previously voted nay, however, the bill would be defeated. The Democratic leadership would need to flip 18 of those votes for passage. Lewis indicated Tuesday he’s not inclined to do that.

    “My opposition to war is very firm,” Lewis said in an e-mail response. “Few if any of our objectives have been met, even though thousands of Americans have died, millions of Iraqis and Afghans have died, millions have been displaced, hundreds of our wounded have returned home, and trillions of taxpayer dollars will be spent before this war is over.  Those trillions would be better spent on resolving our financial problems here at home and on diplomatic solutions to our problems abroad.  The conflict in Iraq is one of the greatest tragedies of our time.”

    In a political scenario that would make Machiavelli’s head spin, here’s what has happened:

    At the G-20 Summit back in April, President Obama pledged that the U.S. would contribute funding for the IMF to help countries currently struggling through the economic crisis, appointing the IMF, in effect, to be a financial fireman. The Fund has a history, however, of being more of an arsonist when it comes to economic and social development in the world’s poorest countries.

    Advocacy groups like RESULTS have long been critical of the IMF’s draconian policies, starting with its structural adjustment programs in the 1980s and ’90s. Under structural adjustment, many poor nations were forced to require user fees for health and education, putting those services beyond the reach of the poor at a time when AIDS was laying waste to Africa. Though no longer requiring user fees, the IMF now imposes budget caps on nations, preventing them from hiring more health workers and teachers, another way that the poor are denied access to these services.

    When the U.S. House passed its supplemental spending bill last month, IMF funding was not included. A week later, the Senate passed its version, including a package worth $108 billion for the IMF. Thanks to an amendment from Sen. Sherrod Brown, along with pressure from a number of anti-poverty advocacy groups, the IMF funding includes language calling for health, education and other social safety nets to be exempt from IMF-imposed budget caps.

    Meanwhile, back at the House, Rep. Maxine Waters circulated a letter calling for serious IMF reforms to be attached to new funding for the Fund. The letter, signed by 41 House members, was sent to Rep. David Obey (D-WI) and Rep. Nita Lowey (D-NY), leaders on the Appropriations Committee. It calls for IMF to stimulate, not contract, the economies of troubled nations. It also calls on the IMF to provide debt relief for the poorest countries, and to make the IMF’s dealings more transparent and participatory. Congressman Lewis is one of the signers on the Waters letter.

    johnlewis“It has been well-documented that the debt Third World nations are carrying is a back-breaking load to those economies,” Lewis said.  “In some cases a large portion of the gross national product of many nations is diverted to debt payments instead of providing services to their citizens — like building roads and houses, investing in job development, agriculture, and education.”

    Any hope for the IMF funding would lie with inclusion of reforms set out in the Waters letter and Senator Brown’s amendment. The Waters letter includes 19 signers who originally voted against the supplemental. The big question, of course, is whether they would all flip their votes in order to get IMF reforms into the bill.

    In the case of John Lewis, at least, that won’t happen. He sees the stand against the wars as principled and unshakable, even it means passing up, for the moment, a chance to change the IMF’s harmful policies.

    “There are those who believe the IMF issue does not require coupling with the supplemental in order to pass,” Lewis said.  “We may see this again as a stand-alone bill.  I feel fairly sure there will be other opportunities besides this one to vote on this issue.”

    It’s likely there are others among the 19 who feel the same way.

    If IMF funding in the supplemental is dead in the water, the Obama team will have to find another vehicle to move it through Congress, one that won’t provide as much cover as the current supplemental spending bill. The IMF and its policies could be the topic of hot debate on the Hill next month, providing more fireworks than the Fourth of July.

    ###
    Steve Valk

    Steve Valk

    Steve Valk is communications director and regional manager for Citizens Climate Lobby. Before joining Citizens Climate Lobby, he was an editor for 31 years at the Atlanta Journal-Constitution. For 25 years, he has volunteered as a citizen lobbyist with RESULTS, which works to create the political will to end poverty. He's building a new career dedicated to creating a more just, equitable, sustainable and peaceful world. His articles also appear on Open Salon and The Huffington Post. Steve Valk left his job of 31 years at The Atlanta Journal-Constitution on May 29. His last position there was Sunday Metro Section editor. He has also volunteered for more than 20 years with RESULTS, an advocacy group working to end poverty.  

     

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