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GOP Seeks to Halt $100 Billion Boost to Troubled International Monetary Fund


As the world’s eyes focused this weekend on the legal turbulence surrounding Dominique Strauss-Kahn, and the International Monetary Fund (IMF) moved closer to choosing his replacement as its managing director, Republicans in both the U.S. Senate and House of Representatives made it clear to HUMAN EVENTS that they were going to push for tighter reigns on U.S. funding for the organization.
 
Rep. Cathy McMorris Rodgers (R.-Wash.), vice chairwoman of the House Republican Conference, made it clear she would soon seek to stop the additional $100 billion that Congress (then under Democratic control) voted to give the IMF in ’09 at President Obama’s urging.  Asked by HUMAN EVENTS last week whether McMorris Rodgers would actually pursue an outright halt to the $100 billion from the U.S., her spokesman told us:  “Yes, that is one of her top priorities.”

Last year, McMorris Rodgers joined with then-House Republican Conference Chairman Mike Pence (Ind.) to introduce the European Bailout Protection Act, which would require European Union nations to meet the fiscal requirements mandated by their own treaty before they could draw on U.S. contributions to the IMF.  The two Republican lawmakers also introduced House Concurrent Resolution 279, which would put Congress on record as opposing U.S. participation in the IMF’s cash infusions to save European countries from bankruptcy.  Under then-Speaker Nancy Pelosi, however, the resolution was never brought to the floor for a vote.

Reminding HUMAN EVENTS that he had vigorously opposed the U.S.’s $100 billion for the IMF in ’09, Sen. Jim DeMint (R.-S.C.) said last week that he was “looking into whether [the IMF] has begun drawing on the U.S. line of credit” and that he would back legislation to stop the latest multibillion-dollar injection of tax revenue into the fund, which Congress acted upon two years ago after President Obama said U.S. support for the IMF was “woefully inadequate.”

Signs of a Republican strike at the IMF came as Greece, which last year received a combined $157 billion loan from the fund and the European Union, missed a deadline Friday for presenting reform plans for its economy.  As a result, the rating agency Fitch downgraded Greece’s credit rating and warned that “the country faced big challenges in turning around its economy,” Britain’s Financial Times reported.

Over the weekend, signs were strong that the movement behind appointing a managing director from an emerging nation rather than a European IMF chief was losing steam.  The IMF was leaning toward French Finance Minister Christine Lagarde as the new managing director.  With the decision to be officially made by the 24-member IMF board June 30, German Chancellor Angela Merkel made it clear she wanted another European at the IMF helm and all but endorsed Lagarde, a member of French President Nicolas Sarkozy’s center-right party.  The push for an emerging nation chief had already suffered a major blow on Friday when Kemal Dervis, a Turkish economist and former United Nations Development Program head, took himself out of contention.
 
To the IMF critics in Congress, however, the issue of whether a managing director comes from Europe or an emerging nation is not as important as the fund becoming more accountable for the U.S. tax dollars it receives.  As McMorris Rodgers said, “The most important quality in the new director is his or her understanding of how a free market system works—and specifically, how the ‘spend, borrow and bailout policies’ of the last few years are endangering that system—rather than what continent that person comes from.”

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