I wanted to share the good news with you that the Jubilee Act for Responsible Lending and Expanded Debt Cancellation passed by voice vote out of the House Financial Services Committee yesterday. We anticipate consideration by the full House of Representatives as early as Tuesday.

After the jump Jubilee’s release and an article about it that appeared in Congressional Quarterly. – Neil Watkins, Jubilee USA

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Jubilee USA Network
www.jubileeusa.org

FOR IMMEDIATE RELEASE
Thursday, April 3, 3008

Contact:
Eleiza Braun, Massey Media, 415-420-4059
Neil Watkins, 202-783-0129, 202-421-1023 (c)

Legislation To Expand Debt Cancellation to Poor Countries, Reform IMF/World Bank Lending Practices Passes House Financial Services Committee

Full House of Representatives Expected to Consider Jubilee Act for Responsible Lending and Expanded Debt Cancellation Next Week

WASHINGTON – Jubilee USA Network, an alliance of more than 80 religious denominations, development agencies and human rights groups, today heralded the passage by voice vote in the House Financial Services Committee of the Jubilee Act for Responsible Lending and Expanded Debt Cancellation (HR 2634).

The bill’s passage in committee comes just ahead of the spring meetings of the IMF/World Bank, set to be held from April 12-13 in Washington next weekend. Poor countries that would be made eligible for the bill owe much of their debt to the IMF and World Bank.

“We welcome the strong bi-partisan committee support for this forward-looking legislation which, when passed, will help to ease the unjust burden of debt on some the world’s most impoverished nations,” said Neil Watkins, National Coordinator of Jubilee USA Network. “As importantly, the bill urges greater responsibility in lending and borrowing in the future, so as to arrest the accumulation of odious and unjust debts that have plagued nations of Africa, Asia and Latin America for decades.”

The legislation calls on the US Treasury Department to negotiate at the IMF and World Bank for an agreement for debt cancellation for up to 24 additional poor countries that need cancellation to meet the Millennium Development Goals (MDGs) but do not currently qualify for the current IMF/World Bank debt relief Initiative. The bill also addresses current IMF/World Bank policies and other global lending policies by:
Urging greater resources be devoted to grants for the world’s poorest countries;
Requiring greater transparency at the IFIs and a policy of maximum disclosure in project and loan documents;
Urging the development of a binding framework for more responsible lending practices in the future;
Sharply limiting the types of conditions that may be required of countries going through the debt relief process to those focused on making sure that money released by debt relief is used transparently and accountably; and
Directing the GAO to undertake an audit of odious lending by the World Bank, IMF, and US government in specific countries.

It is anticipated that the legislation will be considered by the full House of Representatives next week. Companion legislation has been introduced in the Senate (S. 2166); a hearing on the Senate companion to the Jubilee Act has been set for April 24 at 2 p.m. in the Dirksen Senate Office Building Rm. 419.

More info on the mark – up is available at http://www.house.gov/apps/list/speech/financialsvcs_dem/mu040308.shtml

CQ TODAY ONLINE NEWS
April 3, 2008 – 11:56 a.m.

House Panel Approves Expanded Debt Relief for Developing Countries

By Adam Graham-Silverman, CQ Staff

The House Financial Services Committee approved a bill Thursday to speed debt relief to developing countries.

The bill (HR 2634), approved by voice vote, would allow up to 23 low-income countries to qualify for new debt relief.

Since 1996, more than 30 developing countries have had $80 billion in debt to the World Bank, International Monetary Fund, and similar lending banks forgiven. The countries, some of which are so poor they had no reasonable expectation of ever repaying their loans, can use the money they save in interest payments for poverty reduction and growth.

Uganda, for example, has used $57.9 million in savings on improving energy infrastructure, primary education, malaria control and water projects, said bill sponsor Maxine Waters, D-Calif.

Ranking panel Republican Spencer Bachus of Alabama said existing debt relief programs that had freed up billions for poverty reduction had cost the average American only $3.

“I can’t think of a really more humane way, more economical way, a better way to stabilize these countries than through debt relief,” he said.

Under a manager’s amendment, adopted by voice vote, the bill would authorize the Treasury Department to negotiate for debt relief but would require congressional approval of any agreement reached. The underlying bill, which had authorized agreements to go forward, would have required offsets for those deals under House pay-as-you-go rules.

“This is a mandate to the administration to start terms, but any agreement will have to come back to us,” said panel Chairman Barney Frank, D-Mass.

It also would eliminate many conditions on debt reduction that critics call counterproductive. Some global lending institutions require countries to control inflation, for example, which critics say prevents them from pursuing needed government programs such as treatment for HIV or AIDS.

The manager’s amendment would bar all conditions on debt relief except those encouraging transparency and anti-corruption. It would require benefits from relief to go to poverty reduction.

The bill would require eligible countries to have a good human rights record, no support of terrorism, and a record of fighting drug trafficking. It would exclude countries with “excessive” military spending.

The manager’s amendment also removed a reference to so-called vulture funds, which buy up cheap, poor-country debts and — when debt relief is granted — sue the countries to recover the debt’s original value. Frank said the committee would address vulture funds in separate legislation, perhaps involving the Judiciary Committee.

A few dissenters on the Republican side questioned the cost of debt relief as many American homeowners struggle with their own debt obligations.

“While we certainly can feel for these poor developing countries and their people, we have some real crises here in the United States,” said Ginny Brown-Waite, R-Fla.

Offering relief without enforcing economic reform would waste the money, she said.

“With this type of logic it’s no wonder Americans question the mental stability of Congress in general,” she said.

Bachus responded that the cost of this round of debt relief would be about 50 cents for every U.S. citizen.

Source: CQ Today Online News
Round-the-clock coverage of news from Capitol Hill.
© 2008 Congressional Quarterly Inc. All Rights Reserved.

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