WASHINGTON – Sens. John Kennedy (R-La.), Pat Toomey (R-Pa.), Jim Risch (R-Idaho) and Bill Hagerty (R-Tenn.) today sent a letter urging Treasury Secretary Janet Yellen to withdraw her 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, the largest component being the American dollar.

“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. 

As the members point out, foreign aid is generally appropriated by Congress—not by unilateral executive action. Allocating new SDRs would also be an ineffective method of providing foreign aid to low-income countries, as SDRs disproportionately benefit G20 countries. Moreover, beneficiaries would include America’s adversaries, which could take new SDRs and exchange them for U.S. dollars without conditions.

“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. There is no rational economic justification for such a poorly targeted distribution of aid,” the senators continued. 

“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,” the senators concluded.  

The letter is available here.