United States Congress votes against funding for debt cancellation

The plan agreed by the world's leaders in 1999 to cut the debts of the poorest countries by $100 billion is facing funding difficulties after a crucial vote on foreign operations funding in the United States Congress.

The House of Representatives Appropriations Committee rejected an amendment proposed by Rep Nancy Pelosi to approve the $435 million contribution promised by the Clinton administration to help finance the plan agreed in Cologne at last year's G8 summit. 32 members voted against the measure with only 21 in favour, leaving an allocation of just $69 million in the House of Representatives' budget plans for 2001.

American campaigners for debt cancellation reacted angrily to the vote. Jubilee 2000 USA National Coordinator, Dan Driscoll-Shaw, said: “Our legislators have once again turned their backs on the 19,000 children that die every day as a result of debt. Where is the compassion in this conservatism? Now, when the United States is expecting an enormous surplus, is the time to take action and let the people in these heavily indebted countries get on with the business of caring for their own people.

“It is appalling that the committee could earmark $1.3 billion for military aid to Colombia and leave the poor behind. The faith community -- together with such major secular groups as the National Summit on Africa -- supports debt relief; we will remember this vote on election day,” Driscoll-Shaw added.

Many members of Congress are unhappy with the request for funding because they believe it would strengthen the role of the International Monetary Fund, which has been heavily criticised for its role in the poorest countries. However, campaigners have insisted that the money should be committed and earmarked only for the cancellation of debt, not to support IMF policies.

The fight for funding now goes on through the summer, before final decisions are made on the 2001 budget in September. It is likely that the only hope of increasing the allocation will be through a last-minute deal between Congress' Republican leadership and the White House after the summer break.

In spite of the setback in the House of Representatives – the lower house of the US Congress – the Senate (the upper house) this week passed a motion strongly in support of funding for the debt cancellation plan. The “Sense of the Senate” resolution is not binding but is a significant indication of support in principle for a measure. It was proposed by a bipartisan group including senior Senators such as Connie Mack of Florida, Richard Lugar of Indiana and Joseph Biden of Delaware.

The resolution states:

“It is the sense the of the Senate that -

1) the relevant committees of the Senate should report to the full Senate legislation authorizing comprehensive debt relief aimed at assisting citizens of the poor countries under the Enhanced Heavily Indebted Poor Countries Initiative;

(2) these authorizations of bilateral and multilateral debt relief should be designed to strengthen and expand the private sector; encourage increased trade and investment, support the development of free markets, and promote broad-scale economic growth in beneficiary countries;

(3) these authorizations should also support the adoption of policies to alleviate poverty and to ensure that benefits are shared widely among the population, such as through initiatives to advance education, improve health, combat AIDS, and promote clean water and environmental protection;

(4) these authorizations should promote debt relief agreements that are designed and implemented in a transparent manner so as to ensure productive allocation of future resources and prevention of waste;

(5) these authorizations should promote debt relief agreements that have the broad participation of the citizenry of the debtor country and should ensure that country's circumstances and adequately taken into account;

(6) these authorizations should ensure that no country should receive benefits of debt relief if that country does not cooperate with the United States on terrorism or narcotics enforcement, is a gross violator of human rights of its citizens, or is engaged in military or civil conflict that undermines poverty alleviation efforts, or spends excessively on its military; and

(7) if the conditions set forth in paragraphs (1) through (6) are met in the authorization legislation approved by Congress, Congress should fully fund bilateral and multilateral debt relief.”