Saturday, June 13, 2009

Foreign Bank Bailout: War Funding Bill Funds International Monetary Fund

While our soldiers await the latest round of funding from Congress, the Senate added an amendment to the original war funding Bill. Some see that amendment as an effort to bailout foreign banks, and via the International Monetary Fund (IMF), perhaps put money into the pockets of terrorist organizations. Could this amendment have anything to do with releasing the Guantanamo Bay photos? Seems it might.

International Monetary Fund
The Senate added an amendment to the War Funding Bill to provide a $100+ billion line of credit to the IMF. It is reported the GOP is objecting with gusto. President Obama "promised" the line of credit at the G-20 Summit in April. The risk to taxpayers is said to be $5 billion but the U.S. would need to borrow $108 billion. The Obama administration says that there will be zero cost to taxpayers, but the Congressional Budget Office places the cost at $5 billion.
Borrowing money from China for a global bailout of the IMF makes no sense," said House GOP Whip Eric Cantor of Virginia.
To get the IMF funding, the Leiberman-Graham amendment to hold secret the Guantanamo Bay photos had to be scratched to get Democrat support. However, some Dems do not like the idea of war funding happening through an emergency supplemental.
Blue Dogs are against the IMF funding but have the national security need for the war funding side of the Bill looming. Here's how TPM's Brian Beutler says the Bill has progressed: 51 Democrats voted against the original war spending bill 14 of those who voted for it now say the have some concerns about the IMF provision Four Democrats didn't vote at all. The Democrats need 218 votes to pass the bill. There are 255 Democrats, which means they can lose as many as 37 of their own members and still pass the thing. Another way of putting that: 200 voted for it in May - and now the administration and Democratic leaders have to convince 18 more Democrats that either a) they shouldn't be concerned about the IMF provision, or b) the IMF provision is actually so important that they should ignore for now their principled opposition to the supplemental process and vote for it (Barney Frank is in this group)
Let's go back to the possibility of bailing out foreign banks and putting money in the pockets of terrorists. Rep. Eric Cantor (R-VA), House Repbublican Whip, charges that:
"under current IMF policy, a long list of member countries have access to an IMF currency that be exchanged by those countries for low-interest loans of hard currencies. That list of countries includes Iran, Venezuela, Sudan and Syria."
We have some unfortunate experiences with bailing out our banks. A foreign bank bailout is unthinkable. Another "unthinkable" is that this trash legislation could be placed in the war funding Bill. If the U.S. economy is critical to the world economy, and if the U.S. economy is unstable, as it currently is with our record deficits, why would we guarantee $100 billion for the IMF who in turn makes loans based on crisis situations? This is a table short one and half legs.

©2007-2012copyrightMaggie M. Thornton