The House yesterday easily passed a bill to contribute $1.7 billion to a special International Monetary Fund loan program that would help suffering nations finance large balance-of-payments deficits caused by high oil prices.
The bill, which was thought to be in trouble just two weeks ago, passed by a 267-to-125 vote after backers accepted two amendments.
One, by Rep. John J. Cavanaugh (D-Neb.), would prevent debtor nations from using the IMF funds to pay off private creditors, meaning mainly large U.S. and other banks.
The other, by Rep. Thomas R. Harkin (D-Iowa), requires the U.S. representative for the loan program to insure that the repayments and conditions attached to loans do not hurt poor people in the receiving countries or contribute to human rights violations.
House Banking Committee Chairman Henry S. Reuss (D-Wis.) said during the debate he was accepting Harkin's amendment because "we need the votes of Mr. Harkin and his dogged band of human righters."
Treasury Under Secretary Anthony Solomon said recently that failure to pass the bill would be "extremely damaging" to President Carter and U.S. prestige abroad. Defeat would have been embarrassing because the United States had insisted that the oil cartel carry some of the burden of the contributions and that all nations, not just industrialized ones, have access to the special fund.
Increases in oil prices since 1974 and a world recession have greatly increased the balance of payments deficits of many nations, both developing and industrialized.
The size and rules of the IMF, which normally helps finance these deficits, presented it from taking speedy action to help the nations, so a special supplementary financing facility, known as the Witteveen Facility, was set up to serve as a temporary lending institution in IMF.
Fourteen industrialized nations and oil-producing countries have agreed to contribute $10 billion to the fund to finance small percentages of the deficits with the remaining deficits covered through bi-lateral aid and loans from private banks.
Oil cartel nations will put up 48.5 percent of the $10 billion, with Saudi Arabia contributing about 25 percent of that. The U.S. share of about $1.7 billion amounts to about 17 percent.
The loan would be repaid with interest to the United States in eight semiannual installments beginning about 3 1/2 years after the funds are drawn.
Subcommittee chairman Stephen L. Neal (D.N.C.) said that without the fund foreign markets would be extremely constricted and U.S. exporters would suffer and the dollar would be vulnerable "to even greater depreciation."
Rep. Charles E. Grassley (R-Iowa) opposed the bill because "Our support of the Witteveen Facility is tantamount to a rubber-stamping of the unwise economic decisions of the dictators of the less-developed countries who care little about their own people."
Harkin defended attaching his human rights amendment even though the IMF is not supposed to take politics into account when making loans. "Nothing is more political than money and how it is loaned," he said. He cited Zaine and South Africa as examples of countries that get loans though they are "violators of human rights."
Rep. Paul E. Tsongas (D-Mass.) called human rights an "important but delicate instrument." He said withholding loans could cause greater deprivation among the people of developing countries. Tsongas added. "We ought not to kill people we are trying to help."
All four area representatives voted for the bill.