ICYMI: no more IMF subsidies to dictators – Press releases
WASHINGTON — Sen. John Kennedy (R-La.) wrote this op-ed for The Wall Street Journal, which discusses President Biden’s decision to send Russia billions of dollars in special drawing rights.
“The United States European Command warned a year ago that a crisis could be imminent in Ukraine. Vladimir Putin had more than 100,000 members of his army lined up to blow Ukraine’s neck – the biggest mobilization since Russia annexed Crimea in 2014. As Mr Putin prepared to invade a democracy sovereign, the Biden administration continued to push for more than $17 billion in International Monetary Fund allocations for Moscow.
“President Biden and Treasury Secretary Janet Yellen finally got what they wanted in August, when the IMF doled out more money in one general allocation than ever before. The IMF’s $650 billion in IOUs backed by the US Treasury – known as Special Drawing Rights – sent money to Moscow as the world watched Mr Biden surrender Bagram Air Base to the Taliban. Iran got access to about $4.5 billion through the IMF deal, and China got a windfall of $40 billion.
“In this case, there were no sanctions to avoid because the Biden administration simply handed over the money to Vladimir Putin, Ayatollah Ali Khamenei and Xi Jinping. IMF special drawing rights work like grants, since the countries that have obtained these tokens can exchange them for hard currencies like dollars and euros on demand without having to repay the principal.Immediately after the White House finalizes these grants, the foreign exchange reserves of the Russia have reached a new high.
“To further put that $17 billion into perspective, Mr. Biden asked Congress for just $10 billion in aid to Ukraine after Russia’s violent invasion began to run all the news.
“Perhaps the most egregious decision from the White House is yet to come. The Biden administration deliberately structured the 2021 allocation as a down payment on another flood of special drawing rights this year, totaling $350 billion. Some Democrats asked Ms. Yellen in November to back a tranche of around $2 trillion. Either way, the Treasury would again lay tens of billions of dollars at the feet of dictators and terrorist states. But more free money will not lead to better behavior.
“As the new axis of evil grew richer last fall, it became markedly more belligerent. Russia has invaded Ukraine, Iran has become more incorrigible in its demands for a nuclear deal, and China has signaled recently that it believes its claim to Taiwan is even stronger than Russia believed to be. ‘Ukraine.
“Mr. Biden and Mrs. Yellen can’t say they weren’t warned. I started imploring Mrs. Yellen not to subsidize our enemies in the name of Covid aid last March, as was makes the editorial board of the Journal.
“The Biden administration also cannot claim that it was forced into the deal by the IMF, given that the United States has the largest voting share in the fund. The allocation that met the Putin’s and Xi’s pockets had to have US approval because the world’s largest economy can veto important IMF decisions.
“The Treasury cannot claim that it had no other options. The IMF could have avoided spending most of the $650 billion general allocation on dictators and countries that did not need the aid by making the special allocation for poorer nations. Again, these pages pointed out that Mr. Biden’s objection to a tailor-made approach was that it would force him to submit to Congress — something he generally seems reluctant to do.
“The White House’s eyes were wide open and his hands were untied. The Biden team knew that Mr. Putin was mobilizing against Ukraine and gave Russia $17 billion anyway, while slowing military aid to Ukraine.
“China and Iran took notes at every turn. Mr. Biden’s run around Congress has left rogue leaders emboldened and enriched. His task now is to get America out of the Iran deal negotiations, force Russia out of Ukraine, and keep China out of Taiwan.
“He has to show determination. He can start by disavowing future IMF allocations that would pump money into Russia, China, Iran and others. Let’s turn off the IMF tap to communists and terrorists and make sure it stays off.
The editorial is available here.