Washington - The International Monetary Fund, which in many
ways has become the globe's answer to a worldwide recession, has come
under some tough criticism in the United States as legislators
consider whether to boost US contribution to the crisis lender.
US President Barack Obama, who promised a 100-billion-dollar loan
to the IMF at an April summit of world leaders, is meeting stiff
resistance from lawmakers in both parties who want him to focus on
rescuing the US economy - not the world's.
Congressional approval was in doubt Friday after a vote in the US
House of Representatives was postponed. The Senate approved the funds
last month.
John Boehner, the top Republican in the House, has derided the IMF
loan as a 'global bail-out,' which the US cannot afford as it runs
record deficits to stimulate its own struggling economy.
Democrats and Republicans have said the US could end up funding
hostile regimes, or even terrorists, by giving the IMF money that it
would lend to governments facing a budget crunch. A group of 11
Democrats have sent a letter urging Obama to bar the funds from going
to Iran or Lebanon's Hezbollah.
'Handing over billions to the IMF not only saddles young Americans
with more debt but could fund terrorist activity - a complete affront
to our troops combating terrorism across the globe,' Eric Cantor, the
second-ranking Republican in the chamber, said this week.
Left-leaning lawmakers are taking a more traditional line of
attack: They fear the IMF's reputation for attaching strict
conditions to its loans, which some economists argue has actually
damaged the economies of poor countries it has lent to in the past.
'We urge you to ensure that the IMF is not given a blank cheque,'
a group of 33 House Democrats wrote in a letter to Obama last month,
urging greater transparency and accountability.
All this comes as the IMF is dramatically expanding its role as a
lender and watchdog for the global economy. The Group of 20 (G20)
nations summit in London in April pledged a 500-billion-dollar boost
to the IMF's lending resources.
Previously-skeptical emerging countries including China, Russia,
India and Brazil are all in talks to make contributions to the IMF
for the first time in their history.
Supporters argue the IMF is the only institution that has enough
clout to loan to troubled governments while keeping their spending
levels in check. They point to measures taken by the IMF over the
course of this year to relax its toughest restrictions on lending.
Fears that the IMF loan would raise the US deficit are also
misplaced, according to the Obama administration. The loan would
involve an exchange of financial assets that is likely to cost
taxpayers no money at all. The non-partisan Congressional Budget
Office has put the cost of the loan at 5 billion dollars.
But the US opposition shows that the IMF still has a long way to
go to improve its standing, after a series of botched rescue attempts
in Latin America and Asia in the 1990s.
Talk of the IMF financing terrorism is a 'distraction,' Mark
Weisbrot, co-director of the Washington-based Center for Economic
Policy Research, told the German Press Agency dpa. But Weisbrot said
Congress should be using the legislation to push through much-needed
reforms of the IMF's lending practices.
Aware of the US unpopularity, the White House and Democratic
leaders have tried to sneak the funds through Congress by attaching
them to legislation funding the US wars in Iraq and Afghanistan.
'They can't make a case on the merits,' Weisbrot said. Despite the
recent upgrade in its role, 'the IMF doesn't have that much
credibility in the world.'
The tactic may have failed: While the Senate approved the measure
last month, the White House has come up against a perfect storm in
the lower House. Republicans have been united in their opposition to
the IMF loans, while some leftist Democrats are opposing an expansion
of funding for the war in Afghanistan.
The White House and Democratic supporters are now working
furiously to bring enough skeptical lawmakers over to their side. But
a vote in the House on the war supplemental, originally set for
Friday, has been postponed amid the sharp discord.
USA
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