Will 34 Democrats Oppose Endless War and Funding the IMF's European Bank Bailout?

The Administration is combining two sets of policies -- endless war and IMF austerity -- that most progressive Democrats vigorously oppose; and are trying to ram them through by strong-arm tactics.
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A spectacular, nasty Washington drama is unfolding which you aren't likely to read about in the New York Times or the Washington Post, until perhaps after the fact. Even if it is reported in these papers, few readers will understand it, because the reporters won't care to understand and explain it, and the critical voices of progressive Democrats in Congress will be ignored in their reporting, even though the actions of progressive Democrats are at the center of the drama.

Early next week, the Administration and the House leadership want to bring to the House floor a war supplemental that includes $100 billion for the International Monetary Fund which will likely be used primarily to bail out European banks from their exposure in Eastern Europe. The IMF will also likely use this money as leverage to impose economic austerity measures, like government budget cuts and punishingly high interest rates, policies that most Democrats oppose -- at least, most Democrats oppose them when someone suggests that they be applied in the United States.

Because House Republicans object to including the IMF "global bailout" money in the war supplemental, they have pledged to vote no on the supplemental if the IMF money is included.

Therefore, the Administration and the House leadership intend to try to pass the war supplemental, including the IMF money, with only Democratic votes.

The leadership's first problem is that in May, 51 Democrats voted no on the supplemental. Many of those no votes were motivated by opposition to the Administration's plans to escalate the war in Afghanistan, and the leadership's refusal to allow consideration of Rep. Jim McGovern's amendment requiring the Pentagon to submit to Congress an exit strategy from Afghanistan. As freestanding legislation, McGovern's amendment now has 84 co-sponsors.

In order to pass the supplemental with the IMF money, the Administration and the House leadership need to flip at least 18 of those 51 Democrats. If the leadership succeeds, that would mean anti-war Democrats would be passing up an opportunity to defeat a war supplemental on the floor of the House, thereby missing an important step towards ending the endless war in Afghanistan. Defeat of the war supplemental in the House, even temporarily, would send a signal to the world that there is dissent in Washington about continuing the Afghan war indefinitely, thereby hastening diplomatic solutions.

The leadership's second problem is that many Democrats in the House have big problems with the IMF. This includes both Democrats who voted no before and those who voted yes before but might vote no now with the IMF money attached.

Some of these Democrats share criticisms of the IMF with Republicans: why should U.S. taxpayers be on the hook to bail out European banks? It was bad enough when we were forced to bail out American banks.

And some of these Democrats have criticisms of the IMF that many Republicans don't share. And those are the criticisms that you will likely never read about in the New York Times or the Washington Post. Often, reporters justify ignoring the views of progressive Democrats based on the claim that progressive Democrats aren't determining an outcome. But at this critical juncture, it's progressive Democrats who hold the balance of power.

Forty-one Democrats have signed on to a letter led by Rep. Maxine Waters to the House appropriators objecting to the Senate's IMF language, which they called a "blank check" for the IMF.

The 41 anti-IMF Democrats argue that the increase of IMF resources and power should be conditioned on a strong commitment by U.S. leadership to ensure that the IMF becomes more transparent and accountable.

In particular:

Use the Stimulus Money for Stimulus, not Contraction. While the IMF pronounces its commitment to flexible policy approaches for countries in recession or depression, its track record since the onset of the economic crisis in September 2008 demonstrates routine imposition of contractionary monetary and fiscal policies which are exacerbating recessions in recipient countries. In conference, we urge inclusion of language to ensure that the funds allocated by Congress for global stimulus are used for stimulatory, and not contractionary, purposes.

In Latvia, the IMF is imposing draconian budget cuts with the economy already in recession. In Pakistan, the IMF is imposing punishingly high interest rates that are strangling economic activity.

Democratic Process. Currently, the IMF negotiates and obtains approval for loans from the executive branch of recipient countries, leaving little opportunity for democratic debate in recipient countries over the content and terms of IMF loans. In conference, we urge inclusion of bill language requiring the U.S. Executive Director to the IMF to ensure parliamentary approval of all IMF loans.

In fact, for years the IMF has functioned as a key mechanism for governments to end-run elected parliaments. The negotiations are secret. Agreements are presented to parliaments as accomplished facts. The government says to the parliament: the IMF demanded this -- what can we do? No one knows how hard the government fought the IMF, if at all, or if the IMF is simply signing off on something the government wanted to do anyway.

Transparency. Some of the IMF's most important documents are considered classified, strictly confidential, or secret. Among the secret documents are: 1) "side letters" containing policy conditions that the IMF requires a recipient government to implement as a condition of loan disbursements; and 2) transcripts of meetings of the Board of Executive Directors. Draft IMF documents are not disclosed prior to approval by the Board of Executive Directors which precludes input from country constituencies. In conference, we urge inclusion of language to ensure greater transparency and public availability of documents within a reasonable time period.

As elsewhere, secrecy blocks effective democratic input. Not only does secrecy prevent the public and parliaments in recipient countries from seeing what their governments are doing, secrecy prevents Congress and the American people from knowing whether the Treasury Department is following U.S. laws. The Federal Reserve publishes minutes of its meetings -- why can't the IMF?

So far the Administration has refused to accept the demands of the anti-IMF 41, and past experience indicates that they are likely to continue to do so. Unfortunately, through Republican and Democratic Administrations, and Democratic and Republican Congresses, the permanent government at U.S. Treasury has learned the lesson that by merely being stubborn they can largely evade Congressional oversight.

The Administration and the House leadership are combining two sets of policies -- endless war and IMF austerity -- that most progressive Democrats vigorously oppose; and are trying to ram them through by strong-arm tactics, like having Administration officials yell at Members of Congress on the phone. Will 34 Democrats stand with Reps. Jim McGovern and Maxine Waters and say no? Firedoglake is keeping score.

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