§286cc Sustaining Economic Growth

Summary

The President must direct the Treasury Secretary, the Secretary of State, other federal officials, and ask the Federal Reserve Chair to press other countries to make plans to fix balance-of-payments problems and outside bank debt. Those plans should try to protect global economic growth, world trade, jobs, and banks’ long-term health, and should try to lower the chance of civil unrest. The U.S. representative at the IMF must push the IMF to change rules so short-term, high-interest bank debt is turned into longer-term, lower-rate debt; so a country’s yearly external debt service (including principal, interest, points, fees, and other charges) is a reasonable share of its projected yearly export earnings; and so the IMF considers how many countries seek help and the combined effect of programs on global growth, trade, exports, jobs, and bank solvency. The U.S. representative must vote against IMF help if a country’s annual external debt service is more than 85% of its export earnings, unless the Treasury Secretary gives written findings to the Senate Committees on Banking, Housing, and Urban Affairs and on Foreign Relations and to the House Committee on Banking, Finance and Urban Affairs showing that the program converts high-rate short-term bank debt into long-term debt with much narrower interest spreads than the average spreads on bank debt reschedulings negotiated between August 1982 and August 1983 for countries getting IMF help, that the debt service is manageable, and that the program won’t harm international growth, trade, exports, jobs, or bank solvency. Those limits do not apply if the Treasury Secretary documents to those same committees that an emergency needs an immediate short loan, that a sudden drop in export earnings raises the ratio above 85% for no more than one year, or that other extraordinary circumstances exist.