Clinton Proposal to Increase IMP Resources Passes First HurdleBy Art Pine
Los Angeles Times
President Clinton's controversial bill to increase the resources of the International Monetary Fund cleared its first - and easiest - congressional hurdle Thursday, but strategists said the measure still faced an uphill fight on the House floor and in the Senate.
In a first-round victory for the administration, the House Banking Committee overwhelmingly approved a compromise version of the bill that essentially would pay lip-service to Democrats' concerns about improving worker rights in countries that receive IMF loans.
The vote was 40-9, with all committee Democrats voting for the bill. Eight Republicans and Rep. Bernard Sanders of Vermont, Congress' only independent, opposed the measure.
The bipartisan bill, one of Clinton's top legislative priorities for this year, now goes to the House Appropriations Committee, which is expected to attach it to a must-pass money bill later this month. But conservatives may seek to hold the legislation hostage in a battle over anti-abortion provisions in another bill, one approving foreign aid for 1999.
Clinton has cited the IMF legislation as crucial, both to help deal with the Asian financial crisis and to maintain U.S. economic leadership around the world. The IMF, with 182 countries as members, is coordinating the global rescue effort for Asia.
The bill would provide $18 billion in lines of credit to the IMF as the U.S. share of a $90 billion increase in the IMF's overall financial resources.
The money is not used until the IMF decides to tap the U.S. credits, and the organization pays market interest rates on the portion of the money it uses.
Although the IMF does not need the increase immediately, officials say it might - and quickly - if the Asian crisis worsens. IMF authorities also want to assure the financial markets that the organization has enough resources on hand if it needs them.
Besides the money, the measure would establish an advisory panel with representatives from labor, agriculture and private charities to consult with the Treasury Department on U.S. policy toward the IMF.
It also would require the U.S. representative to the IMF to push aggressively for policies that pressure borrowing countries to foster labor rights and force banks to shoulder more of the burden when their loans to developing countries turn sour.
The legislation was crafted by Republican chairman, Rep. James A. Leach of Iowa, and Rep. John J. LaFalce of New York.
The committee action came as the IMF and Indonesia continued to wrangle over that country's efforts to overhaul its domestic economy, and amid increasing concern that the IMF won't agree to provide more money unless Jakarta makes more of the reforms it has promised.
IMF officials disclosed Thursday that the organization's hierarchy already has postponed a March 15 target date for Indonesia to receive a second $3 billion installment of its $10.1 billion loan package - if only because of procedural delays.
Although the IMF has made no decision on whether to disburse the second $3 billion, officials said the turnover among top officials of the Indonesian government as a result of elections last Sunday has made it difficult to nail down future policy objectives.