[Congressional Record Volume 144, Number 39 (Tuesday, March 31, 1998)]
[House]
[Pages H1779-H1780]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  FURTHER DEBATE IS NEEDED ON THE IMF

  Mr. STEARNS. Mr. Speaker, I rise today to discuss attempted 
misappropriation of American taxpayers' money for the International 
Monetary Fund.
  I applaud the efforts by our Speaker to create a second supplemental 
appropriations bill to handle this. This will give the House the 
ability to have a straight up or down vote on increasing our financial 
commitment to the IMF.
  The U.S. now presently provides about 18 percent of the IMF funds, 
and we are being asked to cough up another $18 billion without a full 
debate on the House floor about the merits of such a proposal.
  In a recent Wall Street Journal article, three outstanding experts on 
international finance gave their views on the International Monetary 
Fund. George Shultz, President Reagan's Secretary of State; William 
Simon, Presidents Nixon and Ford's Secretary of Treasury; and Walter 
Wriston, former Chairman of Citicorp and Citibank. They asked the 
question, who needs the IMF? They point out that President Clinton and 
the IMF have shifted into overdrive in their efforts to save the 
economies of Indonesia, the Philippines, South Korea and Thailand, or 
to be more accurate, to save the pocketbooks of international investors 
who can face a tide of defaults if these markets are not now shored up.
  I welcome the support of these distinguished experts on this subject. 
The way I see it, the IMF places American taxpayers in the position of 
guaranteeing a return on investment to those who engage in these risky 
schemes. The likelihood of an IMF bailout removes the incentive for 
nations to not engage in bad economic policies or pursue unsound 
financial practices.
  As these distinguished gentlemen note in this article, the IMF can 
lull nations into complacency by acting as the self-appointed lender of 
last resort, a function never contemplated by our Founding Fathers. The 
world has changed a great deal since the IMF was founded in 1944 to 
assist in global trade by supporting currency convertibility and 
providing needed financing to defend exchange rates.
  The financial crisis in Asia results from decades of direct 
government regulation, the absence of foreign competition, and closed 
financial systems. By relying on heavy-handed bureaucracies managing 
every aspect of their economies, these nations are destroying 
themselves financially.
  This observation was echoed in the Wall Street Journal article 
recently. ``Asian nations are facing financial difficulties not because 
outside forces have imposed bad economic policies on them, but because 
they have imposed these policies on themselves.''
  According to Shultz, Simon and Wriston, ``the Mexican people suffered 
a massive decline in their standard of living as a result of their 
crisis. As is typical when the IMF intervenes, the governments and the 
lenders are rescued, but not the people.''
  They conclude the following. ``The IMF is ineffective, unnecessary 
and obsolete. We do not need another IMF. Once the Asian crisis is 
over, we should abolish the one we have.''
  Now the President is asking us to increase our quota to the IMF 
without a constructive debate on the merits of this proposal. In fact, 
there is clear evidence that the IMF has sufficient capital to 
withstand any immediate financial distress anywhere in the world. The 
IMF right now has close to $50 billion in reserves and access to 
another $25 billion through their general arrangements to borrow.
  In addition, the IMF will receive nearly $28 billion in loan 
repayments from other borrowing nations by the end of the year 2000.
  If we add the more than $100 billion being borrowed and repaid by 
Thailand, Indonesia, and South Korea, the IMF will basically have $200 
billion in its coffers, the same amount it had before the Asian crisis 
began.
  Mr. Speaker, today I ask my colleagues, what is the rush of throwing 
more American taxpayer money at the IMF, when there is substantial 
capital already in place? It is for one reason only. The proponents of 
the IMF do not want to just replenish the IMF fund; they want to expand 
the breadth and scope of the IMF itself so that the IMF will play an 
even more dominating role in global finances.

[[Page H1780]]

  It is our responsibility in Congress to prevent this latest abuse of 
taxpayers' money and to defeat the proposal to increase the U.S. share 
of IMF money by $18 billion.

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