Clinton appeals for U.S. support for Asian bailout
Clinton appeals for U.S. support for Asian bailout
WASHINGTON (Reuters): President Bill Clinton appealed on
Tuesday to the American people to support rescue deals for Asia's
ailing tiger economies, saying it was the right thing to do for
the United States and the world as a whole.
The president also called on Congress to renew its commitment
to the International Monetary Fund, the agency that put together
multibillion dollar bailouts to rescue the economies of
Indonesia, South Korea and Thailand.
"The American economy remains sound and strong -- and I want
to keep it that way," he said in his State of the Union address.
"But because the turmoil in Asia will have an impact on all
the world's economies, including ours, making that negative
impact as small as possible is the right thing to do for America
and the right thing to do for a safer world," he said.
Clinton, however, faces an uphill battle persuading the
American public and a skeptical Congress to support the bailouts
and the fund that engineered them.
An alliance of lawmakers from the right and left launched a
legislative assault on the IMF on Tuesday, proposing measures
that could limit Washington's role in bailouts and cut off
funding for the IMF.
One of the measures, drafted by Rep. Bernard Sanders, an
independent from Vermont, would prohibit the Clinton
administration from using more than $250 million from Treasury's
Exchange Stabilization Fund as part of any international bailouts
without congressional approval.
Legislation by Republican Rep. Ron Paul would end all U.S.
participation in the International Monetary Fund, the agency that
put together emergency loan packages worth more than $100 billion
for Indonesia, South Korea and Thailand.
Both measures are certain to meet with stiff opposition from
IMF supporters in Congress and from the Clinton administration.
Paul's proposal stands little chance of passage because it is so
radical, several congressional aides said.
House Majority Leader Dick Armey, speaking to public
television's Nightly Business Report Tuesday, said U.S. funding
for the global institution might be in trouble.
"We have to ask what will the IMF do with our tax dollars.
We ... don't know yet what they have asked some of these nations
in Asia to do," he said. "We're not going to just let our tax
dollars underwrite a failed crony capitalism out there."
It was "a very big question" whether funding for the IMF would
be renewed, Armey said, adding, "To a large extent the IMF has
failed in the mission for which it was first created."
The legislation, whatever its fate, marks the start of a
congressional battle, pitting the Clinton administration against
an alliance of conservative and left-leaning lawmakers who insist
that the IMF bailouts in Asia shackle the free market, and hurt
workers and the environment.
"At the very least, Congress is interested in changing how the
IMF works," said Ian Vasquez of the libertarian Cato Institute.
"But there's also a growing sentiment questioning whether it is
needed at all."
President Bill Clinton is asking Congress to approve some $19
billion to boost IMF resources, which have been drained by the
rescue deals in Asia.
The administration has already pledged to tap the Exchange
Stabilization Fund if it needs money to pay the $8 billion U.S.
share of last year's international rescue deals for Indonesia and
South Korea.