U.S. Senate Leader Says IMF Must Address Problems
By Adam Entous/Reuters
WASHINGTON (Reuters) - Senate Majority Leader Trent Lott said Friday the International Monetary Fund had policy and leadership problems that had to be addressed before U.S. funding for the agency was approved.
"There are real problems with IMF policy and IMF leadership," the Mississippi Republican told the U.S. Chamber of Commerce.
Lott did not specify what problems he saw with the IMF and aides could not elaborate. Lott said Congress would not necessarily consider the controversial issue of providing additional U.S. funding for the IMF early in the legislative session.
Lott's remarks added to growing anti-IMF sentiment in Congress, where conservative and left-leaning lawmakers have found common cause to work together to block an administration request to make more money available for the IMF.
"We're having questions raised from the left and the right," Lott said. "And the question is, how can we have some reforms, how can we find out what caused this problem and what's going to be done with that money before any replenishments."
The IMF has put together rescue deals worth well over $100 billion for Indonesia, South Korea and Thailand.
The Clinton administration, dogged by new sex scandal, is asking Congress to make an extra $3.5 billion available for an emergency IMF lending facility and around $15 billion to cover the U.S. share of a quota increase to replenish IMF resources, which have been drained by the three bailouts.
Timothy Geithner, assistant treasury secretary for international affairs, told bankers Friday that the IMF had an important role in resolving the crisis and that approval for the extra funds was in America's best interests. "If we did not have the IMF we would have to invent it," he said.
But opposition is strong, both in Congress and outside it.
A Reuters poll of American voters released Thursday found that 52.2 percent opposed giving financial help to Asia's stricken economies, which are struggling to cope with collapsing currencies and an end to long economic booms.
Conservative opponents argue that IMF rescue deals encourage countries to be financially reckless because they know the agency will step in if things go wrong. Left-leaning critics say rescue deals help only the countries' elites while demanding sacrifice from the poor and harming the environment.
A report released on Friday by the pro-labor Economic Policy Institute warned that more than one million Americans could lose their jobs as a result of Asia's economic crisis, figures which are bound to fan the fears of labor groups which say the crisis will spread and hurt U.S. workers.
But the EPI study runs counter to other forecasts.
"Thus far, the effects on our economy, though real, are relatively moderate and the most likely scenario for the next year is continued solid growth and low inflation," Treasury Secretary Robert Rubin said earlier this week.
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