A group of GOP senators recently urged Treasury Secretary Janet Yellen to withdraw support for the International Monetary Fund’s (IMF) plan to allocate new special drawing rights (SDRs) without congressional approval.
SDRs are backed by IMF member countries’ fiat currencies, with the largest component being the American dollar.
The senators point out that foreign aid is generally appropriated by Congress—not by executive action. They add that allocating new SDRs would also be an ineffective way of providing foreign aid to low-income countries, as SDRs disproportionately benefit G20 countries. Further, beneficiaries could include America’s adversaries.
“The proposed allocation of SDRs would be inappropriate, ineffective, and a wasteful use of taxpayer dollars that would end up benefiting repressive regimes and state-sponsors of terrorism. We strongly urge you to abandon your support for this proposal,” the senators wrote in a letter to Yellen. “In fact, over two-thirds of any allocation would go to G20 countries, which do not need assistance, and less than ten percent would reach poor countries.”
The letter was signed by Sens. Pat Toomey (R-PA), ranking member on the Senate Banking Committee, Jim Risch (R-ID), John Kennedy (R-LA), and Bill Hagerty (R-TN).
“An allocation would also directly benefit repressive regimes around the world, including U.S. adversaries and state-sponsors of terrorism, since all IMF members would receive SDRs. That means billions of dollars’ worth of SDRs would go to China, Russia, Iran, Venezuela, and Syria,” they added.