President Carter was handed a significant defeat on the House floor yesterday as the House voted 295 to 115 to prevent international banks and lending institutions from using money contributed by the United States for aid to Cuba, Indochina or the African nations of Uganda, Mozambique or Ethiopia.
Carter, in a letter to Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.), had said that passage of such an amendment would, "in effect, jeopardize continued U.S. participation in the banks." He went on to say, "Specifying that U.S. funds could not be used for loans to these countries by the multilateral development institutions would in all probability make it impossible for these institutions to accept our funds." He did not explain why.
Bilateral aid to Indochina, Cuba and the three African nations was already prohibited by the $7 billion foreign aid appropriation bill the House was considering, but Rep. C. W. (Bill) Young (R-Fla.) wanted to prohibit U.S. multilateral aid, given through six international banks and lending institutions.
Rep. Jack Kemp (R-N.Y.), supporting Young, said the banks were just providing a "circuitous" way to give U.S. money to Indochina and the other nations. Rep. B. F. Sisk (D-Calif.) said Congress was not being "sincere" with the American people by telling them it was not aiding those countries bilaterally, but then allowing multilateral aid.
Rep. David R. Obey (D-Wis.), leading the fight for the Carter administration on the floor, said, the international institutions were set up as a way of "depoliticizing" foreign aid programs and as a way of "sharing the burden" of foreign aid with other countries which also contribute to the institutions.
If such a limit as Young wanted were put on, the banks would probably have to reject U.S. contributions, Obey said.
"Baloney, I say let's find out," Young shot back. "Let's put the limit in there. I say the banks will take our money anyway." Under the bill, the United States is scheduled to contribute to six international banks and institutions, such as the Asian Development Bank, $2.123 billion for fiscal 1978.
Carter suffered a second defeat as the House continued to refuse to allow him to back away from his strong rhetoric on human rights.
The House voted 233 to 180 to delete $700,000 for military training assistance for Argentina on the grounds that the Argentine military junta has a consistent record of gross violations of human rights because it inprisons and tortures Argentine citizens.
Despite his strong stand on human rights, Carter wanted the aid to stay in the bill on the grounds that it gave him some leverage over the Argentine regime and the President needed flexibility in dealing with such countries.
But Rep. Edward R. Roybal (D-Calif.), who offered the amendment to deleat the funds, said, "How long are we going to use the excuse that the President needs flexibility." He said the situation in Argentina has been deteriorating for months.
Military assistance funds for Nicaragua had already been deleted by the Appropriations Committee on human rights grounds, but after a strong lobbying effort with agents paid for by the Nicaraguan government, an attempt to put the funds back in is expected today when the House continues to work on the bill.
Before quitting for the night - it will resume work on the bill today - the House also voted 359 to 33 to bar payments of any reparations to Vietnam.
Rep. Lester L. Wolff (D-N.Y.), who offered the amendment, said he was doing so to resolve any question left because of a letter by former President Nixon which promised $3.5 billion in reparations if various conditions were met.