Tuesday, January 28, 2014

IMF hostage-taking

Domestic politics has thwarted good foreign policy once again. Despite strong administration pressure to include a provision in the recent omnibus appropriations bill, Congress failed to approve a $63 million shift of funds provided to the International Monetary Fund as part of a restructuring Congress had already approved in 2009.

Why? Some Republicans just don't like the IMF, despite the fact that most of its conditions on assistance to struggling economies come right out of the Chicago school of conservative policies. Other lawmakers don't like the notion of "giving" money to any international institution, again despite the weighted voting that gives the U.S.a veto over IMF actions.

The strongest reason appears to be hostage taking: Republicans wanted something in return for approving something wanted by the administration. According to a revealing article in the Financial Times, the IMF issue was the last one in dispute as the budget negotiators tried to conclude their deal. At first, Republicans wanted restrictive rules to prevent the IRS from tightening regulations on non-profit groups involved in politics. Then they asked for a change in Obamacare to delay the mandate for contraception funding. The administration rejected both proposals, and the IMF transfer was dropped.

Next in line, hostage taking for the debt limit increase...

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