The controversial $8.4 billion appropriation for the International Monetary Fund yesterday appeared headed for passage as the House of Representatives soundly rejected two key attempts to eliminate funding for the agency.
The House, first by a vote of 181-to-246 and then 178-to-226, defeated amendments that would have stripped the IMF of the funding to add to its resources for helping Third World countries deal with their mounting debt.
"We are pleased with the positive actions taken today on the IMF authorization," said Treasury Secretary Donald Regan. "This demonstrates the support this measure has in the House of Representatives . . . It is now not a question of whether, but only when, action will be concluded."
The amendments were offered to a bill introduced by House Banking Committee Chairman Fernand J. St Germain (D-R.I.) as a substitute to previous IMF legislation that appeared headed for certain defeat. The St Germain substitute was intended to meet criticisms of the original bill by both conservatives and liberals, who labeled the bill a bail-out for banks.
St Germain described the action yesterday as "votes for international economic sanity. While these votes are difficult for many, it is clear few wanted to play Russian roulette with the world's economy."
Passage of the amendments to eliminate the funding would have been "a serious blow to the prestige of the United States and an even more disastrous setback for our efforts for economic recovery both at home and abroad."
St Germain added that the votes yesterday are "substantive tests for the IMF legislation. I am convinced that the House will continue to affirm its support of the IMF when we can return to the legislation."
Earlier this week Speaker Thomas P. (Tip) O'Neill (D-Mass.) said the votes for passage of the original bill "just aren't there " despite administration lobbying. O'Neill yesterday said the IMF legislation will be considered on Monday. A final vote on the bill was put off yesterday to make way for more urgent legislation, he said.
The St Germain substitute bill attempted to answer concerns of some legislators that the measure was intended to bail out American banks that had made bad loans and would be an additional expense at a time when many Americans are out of work.
The substitute bill contains an anti-bank bail-out provision requiring the American executive director of the IMF to oppose any IMF loan designed primarily to repay bank loans "which have been made imprudently." It also would require the President, within six months, to send a report to Congress "regarding proposals to reform the floating exchange rate system."
The bill also makes $2.6 billion of the total conditional on certification by the secretary of the Treasury of a serious international financial crisis affecting the entire monetary system. This sum represents a proposed increase in the American participation in the General Agreements to Borrow, a wealthier-nations' emergency fund. The remainder of the $8.4 million represents an increase in the U.S. quota or deposits in the IMF, which now total $13 billion.
"This is corporate banking, elitist welfarism," Rep. Ronald Paul (R-Tex.) said of the legislation. He added that he couldn't vote for the bill when his constituents were out of jobs.
"How long can we go on bailing everyone out who says the whole world will collapse around our ears if we don't" help them, said Rep. Ed Bethune (R-Ark.) Others, during the third day of debate on the bill, said the world economy was counting on the additional IMF funding.