[Congressional Record Volume 145, Number 144 (Thursday, October 21, 1999)]
[Extensions of Remarks]
[Pages E2159-E2160]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


             IMF SHOULD PAY INTEREST ON ALL U.S. FUNDS USED

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                            HON. JIM SAXTON

                             of new jersey

                    in the house of representatives

                       Thursday, October 21, 1999

  Mr. SAXTON. Mr. Speaker, under legislation I am introducing today, 
the International Monetary Fund [IMF] would have to pay interest on all 
the U.S. reserves it taps, or face a cut-off of future U.S. funds. The 
failure of the IMF to pay full interest to the U.S. has been estimated 
to cost a cumulative $2.7 billion, or $150 million annually. This 
fleecing of the taxpayer should be ended before any further U.S. funds 
are even considered for the IMF. No U.S. approval of IMF gold sales, 
credit lines, or quota increases should be considered until the U.S. is 
fully and fairly compensated for its current financial support of IMF 
operations.
  The IMF's failure to pay interest on all U.S. reserves is another one 
of many inconvenient facts that has never been disclosed or explained 
to the U.S. Congress or to the public. It provides yet another example 
of the lack of transparency so characteristic of the IMF and its 
activities. The disclosure of this failure of the IMF to pay interest 
on all U.S. reserves is one result of the Joint Economic Committee 
research program on the IMF. The JEC finding was recently confirmed and 
quantified in an important new General Accounting Office [GAO] report, 
``Observations on the IMF's Financial Operations.''
  These interest costs to the U.S. also highlight the implausibility of 
the Administration's oft-repeated arguments that the IMF does not cost 
taxpayers a dime, and that the U.S. must pay its fair share to the IMF. 
The U.S. already provides over one-quarter of the IMF's usable 
resources, but it is the IMF that is shortchanging the U.S., not the 
other way around. U.s. taxpayers have been more than generous to the 
IMF, a specialized agency of the United Nations Organization.
  There can be little doubt that very few members of Congress would 
defend the current

[[Page E2160]]

IMF practice that has cost the U.S. $2.7 billion to date. Although many 
issues involving the IMF are controversial, the IMF's full and fair 
payment of interest on all U.S. reserves provided is one area in which 
wide agreement should be possible. The current IMF practice of 
shortchanging the U.S. simply is not defensible.

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