House Speaker Thomas P. O'Neill yesterday threw a major roadblock in the way of congressional passage of an administration-sponsored bill to help the International Monetary Fund deal with the Third World debt crisis.
O'Neill said he would hold up the IMF authorization bill until Democrats received an apology from President Reagan for a Republican Congressional Campaign Committee letter accusing them of "supporting communism" for backing the White House position on the measure.
The bill, increasing the United States' contribution to the IMF by $8.4 billion, is a key element of an international rescue operation for Third World nations whose accumulated debt to western banks and governments of more than $600 billion threatens the world financial system.
Because of Congress' delay in passing the authorization measure, European nations and Saudi Arabia have refused to provide an emergency $6 billion advance to bail the IMF out of its temporary shortage of money. The IMF, in turn, has suspended all negotiations for new loans to needy nations.
The administration had hoped to have the authorization measure passed by this weekend when the IMF begins its annual meeting here. Instead, Treasury Secretary Donald T. Regan said yesterday he doesn't expect passage until Thanksgiving.
The IMF measure slipped through the House in July by a slim six-vote margin after heavy White House lobbying, with Democrats supplying many of the votes. Many Democrats also voted against an amendment offered by Rep. Phil Gramm (R-Tex.) to prohibit the United States from supporting IMF loans to "communist dictatorships."
That amendment passed the House, 242 to 185. The Republican Congressional Campaign Committee sent press releases to districts of 20 Democrats accusing them of "supporting Communism because they voted against the Gramm amendment, which was opposed by the Reagan administration."
House Democrats asked Reagan for a letter of apology, and the O'Neill threat adds teeth to their request.
Capitol Hill sources said Regan had recommended to the White House that the president write the letter of apology. Presidential aides, conscious of the letter's political implications, objected to the wording of a draft letter.
Any action by the president publicly disowning the campaign committee release is likely to further isolate Reagan from the Republican Party's right wing, which furnished the bulk of his original support. It also could complicate Gramm's campaign for the Senate seat being vacated by Republican John G. Tower, who announced his retirement.
The Senate, meanwhile, yesterday defeated an amendment similar to the one offered by Gramm while approving a five-year authorization for the Export-Import Bank. Before voting against the move to ban U.S. support for IMF loans for "communist dictatorships," however, Senate Democrats forced Majority Leader Howard Baker to get White House assurances--in writing from the president--that the administration still opposes the amendment.
The Senate defeated the proposal, offered by Sen. Jesse Helms (R-N.C.), by a 45-30 vote. Earlier in the session, the same proposal was beaten back, 60 to 32.