|Rep. Cathy McMorris Rodgers (R.-Wash.) brings concerns about U.S. tax dollars for European bailouts to IMF Managing Director Christine Lagarde.|
The managing director of the International Monetary Fund (IMF) held her first meeting with the leading congressional skeptic of continued U.S. funding for the IMF’s European bailouts. After fielding a string of questions about how her organization uses U.S. tax dollars for international bailouts, Director Christine Lagarde promised to “continue the dialogue” with Rep. Cathy McMorris Rodgers (R.-Wash.), vice chairman of the House Republican Conference.
Most importantly, HUMAN EVENTS learned, the IMF finally answered the question that McMorris Rodgers had posed without success to the U.S. Department of the Treasury: namely, what percentage of the $173 billion Congress most recently voted to give the IMF ($108 billion in additional funding approved by Congress in 2009, plus its $65 billion in regular IMF contributions) has been spent by the financial titan. The answer is roughly 16% of that amount (about the same percentage as that of the overall U.S. funding of the IMF), or about $27.68 billion on all IMF projects worldwide, including the controversial bailouts of Ireland, Portugal and Greece.
Recalling her repeated efforts to get the figure from the Treasury Department, McMorris Rodgers said that Secretary Tim Geithner was “very unresponsive.”
“We had a good meeting and an open and direct conversation,” the congresswoman told HUMAN EVENTS shortly after the 45-minute session in her office with Lagarde. “And I appreciated her willingness to sit down, and her willingness to answer tough questions.”
McMorris Rodgers most strongly drove home to the IMF chief the concern of many of her colleagues over the fact that while Greece had adopted austerity measures, “its Gross Domestic Product continues to go up. Unless fundamental changes take place in Greece and the two other countries under the IMF bailout plan, she said, “we will be throwing good money after bad. For now at least, they are not making tough decisions [in the three debt-wracked eurozone countries].” She also told Lagarde that members of Congress “would like to see a stronger enforcement mechanism for the guidelines of IMF loans.”
Lagarde recognized that the process of reform in those countries “has been slow-going,” the congresswoman told us, and promised that the IMF would work “to ensure conditions [of the loan repayment] are met in a timely fashion.”
McMorris Rodgers also revealed that Lagarde had told her that the IMF would soon be releasing a complete review of “their financial situation and an honest assessment of the financial situation in major world economies.” She said that the former French finance minister told her that there are serious economic issues facing the U.S. “and they do not look good.”
For all of the positive tone of her summit with Lagarde, McMorris Rodgers assured HUMAN EVENTS this would not change her commitment “one iota” to the fight for HR 2313, her legislation to rescind the $108 billion additional U.S. donation to the IMF, and to apply the remaining funds to the U.S. deficit. So far, the measure has 83 House co-sponsors, and Sen. Jim DeMint has introduced a companion measure in the Senate.
That Christine Lagarde was willing to answer serious questions from the IMF’s most severe critic in Congress was most significant. That, as McMorris Rodgers told us, “she wants to continue the dialogue” is also important. It remains to be seen, however, whether this will translate into genuine reform in the way the IMF handles U.S. tax dollars and in what beneficiary countries do with the money.