The IMF Accountability Moment

Seeking to avoid a direct
up-or-down vote on a proposal to send $108 billion to the International
Monetary Fund, the administration, at the last moment, had the money
stuck into a supplemental appropriations bill to fund the wars in Iraq
and Afghanistan.

That maneuver turned out to be too clever by a turn.

Republicans
in the House of Representatives -- opposed to the process by which the
IMF money was added, frustrated with the IMF unaccountability and
critical of international institutions in general -- have announced they will oppose the appropriations bill.

Meanwhile, 51 antiwar Democrats in the House voted against the appropriations bill when it was first under consideration, and 41 Democrats
(overlapping substantially but not entirely with the 51 antiwar
Democrats) have raised concerns about funding the IMF without attaching
meaningful conditions.

This unlikely coalition is poised to defeat the supplemental,
unless the administration can peel off 18 of the antiwar Democrats to
support the bill. The administration may need more than 18 if other
Democrats vote against the bill because of the IMF money (this might
include Blue Dog Democrats who object to the budgetary impact of the IMF funding and the ways in which the IMF money will aid European banks, as well as progressives).

Defeating the bill will be a meaningful statement against the wars, and against unconditional money for the IMF.

The White House and Congressional leadership are pressuring Progressive
Dems to support the supplemental, warning of the cost of dealing a
legislative defeat to President Obama. Whether they can stand up to the
pressure -- and thus the outcome of the supplemental -- will depend in
significant part on how much the public mobilizes to urge a vote
against the wars and the IMF. You can take action through this "Citizen Whip" site maintained by firedoglake.com.

Emanuel of course wields enormous power, but his arguments are
misplaced. A defeat on the supplemental will be self-inflicted, not the
work of progressives unsympathetic to the president.

If the administration and House leadership are unable to garner
sufficient votes to pass the supplemental, they can pull the IMF
funding. Republicans will support a war-only bill. But antiwar forces
will have shown their seriousness and power.

And, the administration can seek funding for the IMF later this year,
hopefully moving through normal legislative procedures. That would
enable a legitimate debate over the merits of IMF funding. Critics
would raise concerns that the money will be used to bail out European banks that lent recklessly in Eastern Europe. Appropriations Committee Chair David Obey has highlighted this issue,
and noted the incongruity of aiding the European banks while Europe
refuses to employ the stimulative measures adopted by the United States
and China, among others.

Critics would also focus on the contractionary policies -- primarily
reduced government spending and higher interest rates -- that the IMF is imposing on borrowing countries
hit by a global financial crisis not of their making. These policies
are the opposite of the stimulative policies that the IMF recommends
for rich countries, and directly contrary to the global stimulus that
was the rationale for the decision of the G-20 (the world's most
economically powerful countries) to increase IMF resources by $750
billion.

On the ground in borrowing countries, these policies deepen the harmful
impact of the economic crisis, and translate into serious human
depredations. Less money is available for health, education and other
key government programs; unemployment skyrockets; and families struggle
to subsist.

The IMF's favored contractionary policies also conflict with the
economic logic of providing loans in the context of an economic crisis.
"The main purpose of providing balance of payments support to a
developing country in a time of recession or approaching recession is
to enable the government to pursue the expansionary fiscal and monetary
policies necessary to stabilize the economy," explains the Center for Economic and Policy Research in a recent paper.

To be clear, the IMF has a response to these arguments:
It says it has changed, and is much more reticent about demanding
borrowing countries adopt contractionary policies than it once was.
And, it says it aims to protect social spending in crisis-affected
countries.

Putting it mildly, the evidence does not exactly comport with this story. But in any case, it is a claim that should be examined through a proper legislative process.

And, if the IMF takes the position that it only imposes contractionary
policies when absolutely necessary, then it should be receptive to the
top-line requests from IMF campaigners. These include demands
that no contractionary conditions be included in IMF programs absent a
quantitative showing that such conditions are necessary and cannot be
delayed, and that health and education spending be exempted from
IMF-mandated budget restraints.