RELEASE: REP. HILL SENDS LETTER URGING SCRUTINY OF PRESIDENT BIDEN’S SUPPLEMENTAL REQUEST
WASHINGTON, D.C.,
December 13, 2023
WASHINGTON, D.C. – Rep. French Hill (R-AR) and Senator Bill Hagerty (R-TN) today sent a letter to House and Senate Leadership that details their concerns with President Biden’s $106 billion supplemental request.
Together, Rep. Hill and Sen. Hagerty outlined why the President’s supplemental request is too broad and goes beyond what the supplemental request intended to address, which is funding for Ukraine, Israel, Taiwan, and securing America’s southwest border. Their letter states concerns about specific international economic and finance provisions within the request, including the International Monetary Fund (IMF), the International Bank for Reconstruction and Development, and the European Bank for Reconstruction and Development.
Read the full letter here:
Speaker Johnson, Leader Jeffries, Leader Schumer, and Leader McConnell:
We write to you regarding the President's supplemental appropriation request dated October 20, 2023 to support funding for Ukraine, Israel, Taiwan, and various border-related accounts. We are opposed to the breadth and scope of the President's request, and we share the deep concern felt by all Americans about the failed Biden policies with respect to the U.S.-Mexico border.
This letter will address our concerns with the President's request in a more narrow manner as it relates to international economic and financing measures.
International Monetary Fund
We oppose the provisions in the President’s supplemental appropriation request to support $21 billion in loans through the Resilience and Sustainability Trust (RST) of the International Monetary Fund (IMF or the Fund). We were also disappointed to see Democrats on the Senate Committee on Appropriations allow appropriated funds to the IMF to flow into the RST in their national security supplemental funding package.
International financial institutions should not be pursuing climate initiatives like the RST at the expense of their work on health, education, and poverty reduction that lower-income countries need the most. Instead of supporting a Chinese-led climate slush fund that lacks congressional oversight and amounts to a “band-aid solution” to a broken Special Drawing Rights (SDR) policy, the IMF should focus its efforts on existing trust funds like the Poverty Reduction and Growth Trust to help developing and emerging countries combat poverty.
Furthermore, the IMF has strayed far from its longstanding mission and needs serious reforms. The Fund’s purpose, as laid out in its charter, is to promote international monetary cooperation through exchange stability and balance of payments. Instead, the IMF—under President Biden’s urging—has surrendered to mission creep in areas like climate, and has chosen to operate as a “development bank,” even though development finance lies properly and effectively with institutions like the World Bank. This identity crisis is nowhere more evident than with the Fund’s policy with respect to SDRs, which were created in 1969 to supplement the long-term global need for central bank reserve assets, but are now often championed as a way to arm countries to address short-term spending needs such as food shortages, rising energy prices, or public health emergencies. This is a mistake.
Although this supplemental appropriation request did not include a provision in support of another general allocation, we reiterate our serious concerns with SDRs because they mainly benefit wealthy countries; are allocated to rogue nations and state sponsors of terror like Iran, Russia, and China; and provide unconditional liquidity with no strings attached on how the funds may be used. Greater congressional oversight is needed to limit the executive branch’s ability to bypass Congress to authorize SDR allocations by the IMF.
International Bank for Reconstruction and Development
While we share the desire to counter Chinese predatory lending to countries around the world, including its Belt and Road Initiative, these proposed funds are not earmarked in any way for Ukraine, Israel, or Taiwan, and have no place in this supplemental package. The World Bank plays a critical role in supporting the provision and disbursement of aid to Ukraine. Direct budgetary support provided by the U.S. is administered by the U.S. Agency for International Development and distributed by the World Bank to Ukraine through the Multi-Donor Trust Fund. The World Bank’s accountability and transparency measures include overseeing expenditures, progress reporting, and financial audits, which are critical to ensure the funds are delivered in a rapid, targeted, and secure manner.
Notably, the supplemental appropriations request includes $1.25 billion in contributions to the International Bank for Reconstruction and Development for loan guarantees and for a contribution to the Multidonor Trust Fund for Innovative Global Public Goods Solutions (GPG Fund), as well as $750 million in contributions to the World Bank’s International Development Association to support the Crisis Response Window. Democrats on the Senate Committee on Appropriations proposed over $755 million for the GPG Fund as well. As the President’s request itself acknowledges, this funding is intended to “help countries … build new infrastructure and essential development projects” and “provide a credible alternative to [the People’s Republic of China] financing.
European Bank for Reconstruction and Development
We oppose any additional supplemental appropriations for the European Bank for Reconstruction and Development (EBRD), which already received $500 million in the FY2022 Additional Ukraine Supplemental Appropriations Act that became law on May 21, 2022. This funding increase was approved with no discussions or oversight by the congressional committees of jurisdiction. It was granted with no policy changes to the EBRD or its current mission, which, in our views, was a mistake.
The EBRD currently prohibits its funding from being used to support the construction of new nuclear power plants or fossil fuels, such as development of natural gas in member states. As the largest shareholder of the EBRD, the U.S. government should take the position that any additional funding for the EBRD will be conditional based on the reversal of this nuclear financing ban.
Russia’s weaponization of its oil and gas sectors amid the war in Ukraine demonstrates the significant vulnerabilities in our global energy security framework, as well as the need for energy independence and an “all-of-the-above” approach to energy that includes nuclear. The EBRD could promote this by investing in projects that support the generation and distribution of nuclear energy. The EBRD should follow the example of the U.S. Development Finance Corporation, which relaxed its own nuclear financing ban in 2020 with bipartisan support from Congress.
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