Congress' debt-relief battle unnoticed by protesters

Stalled bill includes aid for Third World nations

April 18, 2000|By Jonathan Weisman | Jonathan Weisman,SUN NATIONAL STAFF

WASHINGTON -- As protesters raged yesterday at the World Bank and International Monetary Fund, a battle over debt relief for the world's most impoverished countries had reached a stalemate on the other side of the city -- on Capitol Hill.

Demonstrators have loudly called on the rich nations that control the IMF and World Bank to forgive decades-old loans that have left Third World nations scrambling to make interest payments instead of meeting the needs of their citizens. A move in that direction is well under way in much of the industrialized world.

But in the United States, the Clinton administration's yearlong effort to forgive the debts of its poorest creditors has ground to a halt over congressional budget bickering. Locked inside a stymied, $13.2 billion supplemental spending bill for 2000 is a $210 million package targeted to help relieve the crushing debts of such countries as Bolivia, Honduras, Tanzania and Mozambique.

"The protesters, if they were really concerned about the biggest obstacles to debt relief, would be surrounding Congress right now," said Seth Amgott, spokesman for Oxfam America, a nongovernmental organization that has long sought debt relief for Third World nations.

In September, with little fanfare, President Clinton told the annual meeting of the IMF and World Bank that he was directing his administration to move toward forgiving all of the debt owed to the United States by developing countries, provided they use the savings for poverty relief.

"Excessive and completely unsustainable debt can halt progress, drag down growth, drain resources that are needed to meet the most basic human conditions, like clean water, shelter, health care and education," Clinton told the gathering, which six months ago attracted no protesters.

To fulfill his pledge, Clinton would need $920 million to make the accounting changes needed to write off $7 billion in debt. For the 2000 budget, Clinton had asked for a down payment of $330 million, but Congress gave the White House only a third of that, $110 million.

None of that money was earmarked, however, for a special debt relief fund set up to help multilateral banks like the World Bank or the Inter-American Development Bank swallow the losses debt relief would entail. And those multi-lateral banks are the ones that hold the lion's share of the Third World debt.

Seventeen countries have contributed to that debt relief fund, including six of the seven members of the G-7, the seven largest industrial countries. The odd country out? The United States.

The White House is pleading for money: $210 million for the debt relief fund this year, and a congressional promise of additional $390 million for the fund over the next two years.

"We will not be able to deliver a comprehensive debt relief program without additional appropriations," Treasury Secretary Lawrence H. Summers told a Senate appropriations subcommittee this month.

But the prospects for that relief are fading fast. Clinton included the debt relief in a $4.4 billion supplemental spending bill that included funding for the drug war in Colombia, peacekeeping in Kosovo and disaster relief for the home front. In the House, the president's request ballooned to $13.2 billion as members of Congress added their pet projects and Senate leaders refused to bring the measure to a vote.

The conflict stems not from any philosophical opposition to Third World debt relief but from anger at how the House expanded the measure, said John Czwartacki, a spokesman for Senate Republican Leader Trent Lott. And Lott's resolve appears to be firm.

"Put the supplemental out of your brain," Czwartacki said. "There is no supplemental."

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