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Can Treasury Sneak IMF Money Through the Supplemental?

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posted on May, 19 2009 @ 01:13 PM
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Almost completely lost in the drama over the war supplemental for Afghanistan, Iraq and Pakistan is a sneaky play by the US Treasury Department to get $108 billion in tax dollars for the International Monetary Fund through the supplemental. Of course, if Treasury can get the money through the supplemental, it can avoid any Congressional debate over the policies of the International Monetary Fund and whether this is a wise and just use of US tax dollars, and whether Congress should insist on meaningful, observable reforms of IMF policy as the price of new US funding.

After 1980, the IMF became one of the most powerful institutions in the world. The IMF's power largely derived from the fact that it headed a "creditors' cartel" that included the World Bank and other multilateral development banks, and as a result developing countries that didn't obey the IMF's policy "advice" could face a cut-off of international credit - a powerful disincentive. This power was used to impose an agenda of privatization, cuts in social spending, and removal of policies deemed obstacles to profit by foreign banks and corporations. The power of the IMF in middle-income countries has waned in recent years, as Venezuela, Brazil, Argentina and other countries broke free, repudiating a legacy of policies that failed to promote economic growth and reduce poverty. But in the poorest countries, especially in Africa, the IMF's abusive reign has largely continued. Now, rich countries are trying to strengthen the influence of the IMF, using the "opportunity" of the global economic crisis - that's the context of Treasury's request for more US tax dollars.

The House so far has rejected Treasury's request. Regardless of what one thinks of the IMF, there's a common-sense, nonpartisan, good-government reason not to include IMF funding in the supplemental: funding for the IMF is not an "emergency" and it has nothing to do with funding the wars. The only reason to include funding in the supplemental is to avoid transparency and debate.

But on Thursday the Senate Appropriations Committee went along with Treasury's request. The Senate is expected to consider the supplemental next week; if the money for the IMF is not stripped out, the question will go to a House-Senate conference. In a House-Senate conference, the leverage of Congressional leadership is high and that of rank-and-file legislators is weak, so Treasury may get its way even if the majority of House members wouldn't support money for the IMF in a freestanding vote.

That would be a terrible shame. The last time there was a vigorous Congressional debate on the policies of the IMF was 1998, over ten years ago. Real reforms - not changes in rhetoric that have no practical consequence, but actual changes in policy that one can verify - would have a tremendous impact on the quality of life of millions of people around the world.


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