The Reagan administration yesterday asked business executives to put pressure on Republican congressmen to vote for a controversial $8.4 billion increase in the U.S. contribution to the International Monetary Fund, the international rescue agency for financially troubled countries.
Treasury Secretary Donald Regan, speaking to a special meeting called by the U.S. Chamber of Commerce, said at least 80 House Republicans must vote for the administration measure, which is scheduled to reach the floor tomorrow. The Democratic leadership supports the bill but is angered by the lack of Republican support.
Only about 50 Republicans have pledged to vote for the IMF bill--which Regan said is essential to the international trading system--although he said he is sure more can be convinced to support it.
He told the executives he needed their "help" to convince Republicans that the bill is necessary, and provided them with a list of 41 Republicans to contact.
Foes of the IMF funding increase, which passed the Senate last month, said yesterday the bill would bail out major international banks--which have lent tens of billions of dollars to ailing countries like Brazil, Mexico and Argentina--but would not help the troubled developing countries.
"This $8.4 billion won't put a can of beans on anyone's table," Rep. Andy Jacobs (D-Ind.) said at a press conference. "It's all going back to the banks."
A series of newspaper and radio advertisements put on by a conservative group called Save the Eagle have urged citizens to write their representatives in order to "stop this big bank bailout." The group is headed by investment adviser Howard Ruff, who also appeared at the press conference.
Regan said yesterday that International Monetary Fund loans to troubled countries are not bank bailouts. Rather, he said, banks have been increasing their lending to the debt-laden nations because of the IMF.
He warned that without an increase in the IMF's funding--the U.S. contribution is about 20 percent of the total increase planned for the IMF--there is a grave risk that international trade could break down, with grave consequences for the the United States. He told the business executives that 40 percent of U.S. exports go to developing countries.
Mexico, along with Brazil the world's biggest international debtors, is the third most important U.S. export market after Canada and Japan. Regan said the worldwide recession of 1981-'82 triggered the debt crisis in countries like Mexico and Brazil and forced cutbacks on purchases from the United States.
He said the IMF, as a condition for its loans, forces these nations to take steps to nurse themselves back to health so they can resume buying other countries' products.
"I'm not Chicken Little," Regan said, "but I'd hate to think of the consequences" if the bill fails.
Rep. Tom Corcoran (R-Ill.), one of the chief House opponents, called such statements "blackmail" yesterday. The opponents at the press conference, including consumer activist Ralph Nader, said the banks created their own problems and should renegotiate the loans with the debtor countries to enable them to repay.
Corcoran, who has announced he will challenge Senate Foreign Relations Committee Chairman Charles Percy in the Illinois Republican primary, said that about one-third of the House favors the bill, one-third opposes it and one-third is undecided.