U.S. support of Asia's economy faces Congress

U.S. support of Asia's economy faces Congress

WASHINGTON (Reuters): The Clinton administration's support of
international efforts to bail out Asia's ravaged economies will
face a major test in Congress later this month, a senior
Republican senator predicted on Saturday.

"I think that Congress will have, as we should have, some very
real reservations and will want to ask some probing questions,"
Sen. Alfonse D'Amato said in a television interview.

D'Amato, a New York Republican who heads the Senate Banking
Committee, said his panel would investigate the issue immediately
after Congress reconvenes on Jan. 26.

"We are going to hold hearings on this, and I have some very
serious reservations about the current U.S. policy and the
readiness with which we are providing funds to bail out some very
undisciplined investors ..." he said on the CNN program Evans &
Novak.

Pending before Congress is legislation that would make an
extra $3.5 billion available to the International Monetary Fund
for emergency lending, as well as $15 billion to cover the U.S.
share of a quota increase to replenish IMF accounts depleted by
multibillion-dollar loans to South Korea, Thailand and Indonesia.

The IMF put together the bailouts over the past six months
after the July 2 crash of the Thai baht currency sent shock waves
through Southeast Asian economies. The United States and other
rich countries have agreed to contribute billions of dollars to
the rescue efforts.

But the Clinton administration's decision to take part has
drawn heavy fire from some lawmakers, who argue that U.S.
taxpayers should not be forced to prop up countries responsible
for their own financial problems.

D'Amato objected to what he called "bailing out undisciplined
private-sector corporations with taxpayers' money" and said his
committee wanted to know what was being done to ensure that U.S.
funds were not "feeding speculators and others who have taken
advantage of the situation."

"I don't think that we can just willy-nilly make monies
available without there being some very real discipline and
guarantees that these monies are not following other money down
the proverbial chute," he said.

D'Amato suggested that in some cases it could be against the
U.S. national interest to join rescue efforts, but did not say
what those cases might be.

"We're talking about some situations where I don't believe
that the IMF has sufficient funding, nor can we bring it up to
bail some of these countries out, nor do I think that it's our
obligation," he said.

Conservative Sen. Lauch Faircloth, a vocal critic of the IMF-
led bailouts in Asia, has called a meeting of Republican staffers
on Capitol Hill on Wednesday to rally support against the
administration's IMF funding requests.

Aides and speakers scheduled to attend the closed-door session
said they expected the briefing to draw dozens of Republican
staff members. Faircloth, a North Carolina Republican, and his
colleagues will be briefed by experts about the IMF and economic
developments in Asia.

Analysts expect a bitter struggle in the Republican-led
Congress over the legislation to replenish the IMF's coffers.

"This is not just a Republican issue," said Ian Vasquez of the
Cato Institute. "This is an issue that Democrats are going to be
sympathetic about."