June 2, 2009 / 3:06 PM / 8 years ago

Democrats agree to IMF money in U.S. war bill

WASHINGTON (Reuters) - Democrats in the U.S. Congress have reached a deal to boost support to the International Monetary Fund, lawmakers’ aides said on Tuesday, a victory for President Barack Obama who pledged to help the lender assist countries in the global economic crisis.

<p>U.S. soldiers conduct a joint search operation with Iraqi security forces in Saadia area near Baquba, 115 km (70 miles) northeast of Baghdad May 19, 2009. REUTERS/Saad Shalash</p>

The war funding measure will provide a $100 billion credit line to the IMF, increase the U.S. member contribution to the IMF by $8 billion and authorize the United States to back the IMF’s plan to sell 400 tons (12.97 million ounces) of gold, said the aides, who declined further identification.

Obama had pleaded with the House of Representatives and the Senate to approve the provisions and the full funding package is expected to be completed in the coming days.

The bill must be voted on in both chambers before being sent to Obama. The House approved a $96.7 billion measure for the wars in Iraq and Afghanistan without including the IMF provisions while the Senate approved a $91.3 billion version with them.

The final package is also expected to include funding for eight Boeing Co C-17 military transport planes that the House approved but the Senate cast aside, one source said.

Senate Appropriations Committee Chairman Daniel Inouye said that “so far” 11 Lockheed Martin C-130 transport planes approved by the House also were in the compromise package.

Other unresolved disputes include how much additional economic aid to provide Pakistan.

The House ignored Obama’s IMF request when it passed its version and Appropriations Committee Chairman David Obey, a senior Democrat, expressed reservations about including it until European countries did more to stimulate their economies.

Obama’s credibility has been on the line with world leaders because he pledged the support at a Group of 20 nations meeting in April. The G20 agreed to provide the IMF $500 billion more to help developing countries coping with the economic downturn.

“Even if the $500 billion isn’t completely used, it is part of the overall strategy from this administration about building confidence around the world,” said Nancy Birdsall, president of the Washington-based Center for Global Development.

Additionally, congressional authorization is needed for the U.S. representative to the IMF to vote on the gold sale.

Democrats could have some problems getting the final bill through the House because about 50 anti-war Democrats voted against it initially because they opposed the wars while senior House Republicans have expressed unease about including the IMF provisions in an emergency war funding bill.

“We should not be having this discussion. IMF funding has no business being included in the war supplemental” bill, said Representative Eric Cantor, a member of the Republican leadership.

It would take a defection of almost all Republicans and the anti-war Democrats for the bill to fail but because the measure funds U.S. troops in the field, it is unclear whether they are willing to vote down the measure.

Additional reporting by Lesley Wroughton; Editing by Vicki Allen

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