June 3rd, 2009, Fairfax, VA—Americans for Limited Government President Bill Wilson today called upon all members of Congress to reject a proposed $108 billion in assistance to the International Monetary Fund (IMF).
Wilson termed it “a move that simply throws welfare at developing nations, only helps China along in transitioning away from the dollar, and does absolutely nothing to bolster America’s economic standing in the world.”
“Right now, the U.S. financial system is sinking, the national debt has exploded to over $11.3 trillion and the deficit to over $1.84 trillion, and the Obama Administration has no plan to get the nation out from under $104 trillion of unfunded liabilities. It is absolutely sickening that Barack Obama and his meek, toady Congress think it’s a good time to send another $100 billion to a failed international institution. This is nothing more than international welfare checks,” said Wilson.
Last month at the G-20 summit, Barack Obama pledged a $100 billion line of credit to the International Monetary Fund (IMF) as part of a $550 billion global effort to bolster the international bank. The G-20 then approved a new $250 billion general allocation of Special Drawing Rights (SDR)—the bank’s reserve asset.
The Congressional proposal also expands U.S. holdings in the IMF by $8 billion.
Senator Jim DeMint (R-SC) offered an amendment to remove from the Iraq and Afghanistan war supplemental both the $100 billion line of credit to the IMF and the $8 billion increase the nation’s Special Drawing Rights (SDR) holdings. In the Senate the amendment to remove the provisions failed by a vote of 30-64.
“The Senate had a golden opportunity to kill this thing and they blew it. Now it’s on the fast track, and the American people need to know what is happening,” Wilson said.
Overall, the legislation has passed the House with at a cost of $96.7 billion and the Senate at $91.3 billion. The final version of the bill still has not been presented from conference, and the IMF provisions were not originally included in the bill as passed in the House. Since then, House and Senate Democrats have agreed to the $100 billion line of credit to the IMF and $8 billion expansion of U.S. SDR holdings.
The bill, HR 2346, now proceeds to the House and Senate for final approval. Today, Americans for Limited Government released a backgrounder on the issue.
“Russia, China, India, and Brazil are currently buying interest-bearing IMF bonds denominated in the IMF’s Special Drawing Rights, and meanwhile Congress is voting to pay for it with a $100 billion line of credit extension and $8 billion expansion to the IMF,” said Wilson.
Currently, Russia, India, China, and Brazil are already prepared to purchase their first round of IMF bonds—denominated in SDR. According to the Wall Street Journal, “The IMF is preparing its first bond offering, potentially tailored to Brazil, Russia, India and China. Russia’s [$10 billion] offering would equal that of India and would be about a quarter of the $40 billion China is expected to contribute to boost the IMF’s resources.”
Combined, Russia ($2.261 trillion), Brazil ($1.981 trillion), India ($3.288 trillion), China ($7.916 trillion) have GDP (PPP) of $15.446 trillion compared to the U.S GDP (PPP) of $14.264 trillion.
“Why are American taxpayers paying to help China and Russia improve their global monetary positions? This is an insane use of American taxpayers’ money,” Wilson said, adding, “It has no place in a war supplemental appropriation. It is an insult to America’s fighting men and women.”
Wilson promised to remind constituents how each member of Congress votes on the supplemental. “This is not $108 billion for the IMF that was attached to a $90 billion war supplemental, it is a $90 billion war supplemental attached to $108 billion for the IMF.”
“The American people have a right to know which of their representatives vote to crumble up the dollar on the floor of Congress, and Americans for Limited Government will not let constituents forget,” Wilson concluded.
“Dollar in Danger: $100 Billion Line of Credit to IMF Backgrounder,” Americans for Limited Government, June 2009.
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