[House Report 109-403]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     109-403

======================================================================



 
FIRST REPLENISHMENT OF THE RESOURCES OF THE ENTERPRISE FOR THE AMERICAS 
                      MULTILATERAL INVESTMENT FUND

                                _______
                                

 April 4, 2006.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Oxley, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 4916]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Financial Services, to whom was referred the 
bill (H.R. 4916) to authorize United States participation in, 
and appropriations for, the United States contribution to the 
first replenishment of the resources of the Enterprise for the 
Americas Multilateral Investment Fund, having considered the 
same, report favorably thereon without amendment and recommend 
that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     3
Performance Goals and Objectives.................................     3
New Budget Authority, Entitlement Authority, and Tax Expenditures     3
Committee Cost Estimate..........................................     3
Congressional Budget Office Estimate.............................     4
Federal Mandates Statement.......................................     5
Advisory Committee Statement.....................................     5
Constitutional Authority Statement...............................     5
Applicability to Legislative Branch..............................     6
Section-by-Section Analysis of the Legislation...................     6
Changes in Existing Law Made by the Bill, as Reported............     6
Dissenting Views.................................................     7

                          Purpose and Summary

    The purpose of H.R. 4916 is to authorize United States 
participation in, and appropriations for, the United States 
contribution to the first replenishment of the resources of the 
Enterprise for the Americas Multilateral Investment Fund.

                  Background and Need for Legislation

    The Multilateral Investment Fund (MIF) was created in 1993 
as part of the ``Enterprise for the Americas'' initiative to 
provide technical assistance to stimulate innovation and 
economic growth in Latin American and Caribbean countries. 
Operated through the Inter-American Development Bank (IADB), 
MIF is governed by a Donors Committee--composed of 37 
countries--of which the U.S. is the largest contributor. The 
Donors Committee approves all MIF projects and establishes 
strategic priorities.
    Currently the only private sector grant program in any 
multilateral development bank, the central goal of the MIF is 
to utilize grants and investments to assist in developing micro 
enterprises, build worker skills, strengthen environmental 
management and improve the functions of financial markets. 
Approximately 80% of MIF projects are undertaken in direct 
partnership with private sector business associations, trade 
groups, foundations and NGOs. These organizations typically 
provide half the project costs. MIF has worked with over 400 
private sector organizations throughout Latin America and the 
Caribbean and has approved over $1 billion in 800 projects 
since its inception and is the largest provider of technical 
assistance to the Region. The MIF has a staff of fifty 
employees.
    An example of MIF's work is a project focused on the impact 
of remittances--transfers of money by foreign workers to their 
home countries--to Latin American economies. Among other 
things, the Fund's efforts in this area have resulted in the 
lowering of fees to send remittances. This has been 
accomplished by facilitating more competition among service 
providers, by addressing broader-based issues related to the 
availability of financial services for immigrants, and by 
channeling remittances into economic development and job 
creation in the region.
    H.R. 4916 was introduced on March 9, 2006, by 
Representatives Pryce, Frank, Maloney, and Biggert. This 
legislation is needed to authorize continued United States 
participation in, and appropriations for, the Multilateral 
Investment Fund. The total U.S. pledged contribution for MIF 
II--the current round of funding for which the Committee must 
authorize funds already committed to by the Treasury 
Department--is $150 million over six years. An additional $352 
million was pledged by 36 other countries. The first 
installment payment of $25 million, due to be paid by the U.S. 
in October 2007, was included in the President's FY 2007 
Budget.
    Though not addressed in H.R. 4916, the U.S. has an overdue 
balance of $26.8 million that was promised to the MIF as part 
of the initial $500 million U.S. pledge to the Fund in 1993. No 
request was made in the Administration's FY 2007 Budget to 
address these arrearages. The Committee urges the 
Administration to seek appropriate funding to pay this debt.

                                Hearings

    No hearings were held on H.R. 4916 in the 109th Congress.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
March 15, 2006 and ordered reported to the House H.R. 4916, to 
authorize United States participation in, and appropriations 
for, the United States contribution to the first replenishment 
of the resources of the Enterprise for the Americas 
Multilateral Investment, by voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. No 
record votes were taken in conjunction with the consideration 
of this legislation. A motion by Mr. Oxley to report the bill 
to the House with a favorable recommendation was agreed to by a 
voice vote. During consideration of the bill, an amendment 
offered by Mr. Meeks, No. 1, improving the economic situation 
of African descendants, was offered and withdrawn.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held a hearing and made 
findings that are reflected in this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee establishes the 
following performance related goals and objectives for this 
legislation:
    Through reliance on the private sector, the goal of the 
Multilateral Investment Fund is to provide assistance in the 
economic development in Latin American and Caribbean countries.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 28, 2006.
Hon. Michael G. Oxley,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4916, a bill to 
authorize United States participation in, and appropriations 
for, the U.S. contribution to the first replenishment of the 
resources of the Enterprise for the Americas Multilateral 
Investment Fund.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sam 
Papenfuss.
            Sincerely,
                                          Donald B. Marron,
                                                   Acting Director.
    Enclosure.

H.R. 4916--A bill to authorize United States participation in, and 
        appropriations for, the United States contribution to the first 
        replenishment of the resources of the Enterprise for the 
        Americas Multilateral Investment Fund

    Summary: H.R. 4916 would authorize the appropriation of 
$150 million to replenish the resources of the Enterprise for 
the Americas Multilateral Investment Fund.
    CBO estimates that implementing H.R. 4916 would cost $3 
million in 2007 and $81 million over the 2007-2011 period, 
assuming appropriation of the authorized amounts over the next 
several years. Enacting the bill would not affect direct 
spending or receipts.
    H.R. 4916 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 4916 is shown in the following table. 
The costs of this legislation fall within budget function 150 
(international affairs).

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                           -----------------------------------------------------
                                                              2006     2007     2008     2009     2010     2011
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Spending Under Current Law for the Enterprise for the
 Americas Multilateral Investment Fund:
    Budget Authority \1\..................................        2        0        0        0        0        0
    Estimated Outlays.....................................       30       24       17       10        5        0
Proposed Changes:
    Estimated Authorization Level.........................        0       25       25       25       25       25
    Estimated Outlays.....................................        0        3       10       18       25       25
Spending Under H.R. 4916 for the Enterprise for the
 Americas Multilateral Investment Fund:
    Estimated Authorization Level \1\.....................        2       25       25       25       25       25
    Estimated Outlays.....................................       30       27       27       28       30       25
----------------------------------------------------------------------------------------------------------------
\1\ The 2006 level is the amount appropriated for that year for the Enterprise for the Americas Multilateral
  Investment Fund.

    Basis of Estimate: The bill would authorize the 
appropriation of $150 million to replenish the resources of the 
Enterprise for the Americas Multilateral Investment Fund. This 
fund is an arm of the Inter-American Development Bank. Its 
primary purpose is to provide grants and loans to foster 
private-sector development in Latin America and the Carribean.
    In negotiations completed last year, the Administration has 
pledged to provide $150 million to replenish the Enterprise for 
the Americas Multilateral Investment Fund. International 
agreements to replenish the resources of multilateral 
development banks typically cover a number of years. According 
to the Office of Management and Budget, this replenishment 
agreement calls for the provision of $25 million a year for six 
years beginning in 2007. Thus, CBO assumes that the 
replenishment amounts would be appropriated in six equal 
installments over that period. CBO estimates that implementing 
this bill would cost $3 million in 2007, and $81 million over 
the 2007-2011 period, assuming appropriation of the estimated 
amounts for each year.
    Intergovernmental and private-sector impact: H.R. 4916 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal Costs: Sam Papenfuss. Impact 
on State, Local, and Tribal Governments: Melissa Merrell. 
Impact on the Private Sector: Paige Piper/Bach.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional Authority of Congress to enact this legislation 
is provided by Article 1, section 8, clause 1 (relating to the 
general welfare of the United States) and clause 3 (relating to 
the power to regulate interstate commerce).

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. First replenishment of the resources of the Enterprise for 
        the Americas Multilateral Investment Fund

    This section amends the Inter-American Development Bank Act 
(22 U.S.C. 283 et seq.) to authorize the Secretary of the 
Treasury to contribute $150,000,000 on behalf of the United 
States to the first replenishment of the resources of the 
Enterprise for the Americas Multilateral Investment Fund for 
payment without fiscal year limitation.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

INTER-AMERICAN DEVELOPMENT BANK ACT

           *       *       *       *       *       *       *



SEC. 39. FIRST REPLENISHMENT OF THE RESOURCES OF THE ENTERPRISE FOR THE 
                    AMERICAS MULTILATERAL INVESTMENT FUND.

  (a) Contribution Authority.--
          (1) In general.--The Secretary of the Treasury may 
        contribute on behalf of the United States $150,000,000 
        to the first replenishment of the resources of the 
        Enterprise for the Americas Multilateral Investment 
        Fund.
          (2) Subject to appropriations.--The authority 
        provided by paragraph (1) may be exercised only to the 
        extent and in the amounts provided for in advance in 
        appropriations Acts.
  (b) Limitations on Authorization of Appropriations.--For the 
United States contribution authorized by subsection (a), there 
are authorized to be appropriated not more than $150,000,000, 
without fiscal year limitation, for payment by the Secretary of 
the Treasury.

                            DISSENTING VIEWS

     Congress can do a great service to the American taxpayer, 
as well as to people in Latin America and the Caribbean, by 
rejecting H.R. 4916, which reauthorizes United States 
participation in the Enterprise for the Americas Multilateral 
Investment Fund (MIF).
    Congress has no constitutional authority to take money from 
American taxpayers and send that money overseas for any reason. 
Programs such as the MIF are not only unconstitutional, but, by 
removing resources from the control of consumers and placing 
them under the control of bureaucrats and politically powerful 
special interests, these programs actually retard economic 
development in the countries receiving this ``aid!'' This is 
because funds received from programs like the MIF are all-too-
often wasted on political boondoggles that benefit the 
political elites, or the elites' favored special interests, in 
the recipient countries, but are of little benefit to the 
individual citizens of those countries.
    Even if the MIF's allocations of resources is done without 
reference to the political influence of the potential 
beneficiaries, the MIF will still harm the economy. This is 
because programs like the MIF take capital out of private 
hands, where it can be allocated to its most productive use as 
determined by the choices of consumers in the market, and place 
it in the hands of politicians. Placing economic resources in 
the hands of politicians and bureaucrats inevitably results in 
inefficiencies, shortages, and economic crises, as even the 
best-intentioned politicians cannot know the most efficient use 
of resources. The fact that the MIF provide government 
subsidies to private interests instead of to governments in no 
way corrects the MIF's constitutional and economic defects.
     In conclusion, H.R. 2243 authorizes the continued taking 
of taxpayer funds for unconstitutional and economically 
destructive programs. I therefore urge my colleagues to reject 
this bill, return the money to the American taxpayers, and show 
the world that the United States Congress is embracing the 
greatest means of generating prosperity: the free market.
                                                          Ron Paul.

                                  
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