Accord On $18B IMF Funding

Negotiators for Congress and the White House are in basic agreement on a package to give the International Monetary Fund $18 billion to help it weather the global financial crisis.

Still, some fine-tuning remained on conditions being put on the U.S. contribution, said congressional and administration officials.

The compromise calls on the IMF to stop lending money at below-market interest rates, a practice critics claim leads to high-risk investments. The package also demands that the IMF open its books and proceedings to more public scrutiny.
While the conditions would not be legally binding on the 182-nation lending organization, the administration agreed to push hard for the changes among other key IMF members, the officials said.

"There are still a couple of words that have meaning" that need to be negotiated, said Senate Majority Leader Trent Lott, R-Miss.

The Senate passed the full amount, but House Republicans slashed it to $3.4 billion and attached a variety of conditions.

Rep. Jim Saxton, R-N.J., chairman of the House-Senate Joint Economic Committee and a strong IMF critic, said he was disappointed that the conditions weren't stronger and that the compromise lacked any real enforcement mechanism. But he said it was a good first step.

"We have begun a very serious discussion of this institution," he said. He predicted the next Congress would do more to reform the IMF.

One of the provisions still being refined, Saxton said, was language calling on the IMF to limit the length of its loans to one year or shorter. "Some of the language is still being tweaked," he said.

Republican leadership aides said the final language would be included in the omnibus spending bill that will fund much of the government in the fiscal year that began Oct. 1, probably by midweek.

Written By Tom Raum, Associated Press Writer