WASHINGTON – Sen. John Kennedy (R-La.) today introduced the No Dollars for Dictators Act to prevent perpetrators of genocide and state sponsors of terrorism from receiving special drawing rights through the International Monetary Fund (IMF) without congressional authorization.
In 2021, President Biden approved the largest-ever allocation of special drawing rights at the IMF totaling $650 billion. He did this without consent from Congress. Large portions of that allocation flowed to dictators and countries that actively oppose American interests and violate human rights.
“The Biden administration already green-lit a 2021 deal that sent $4.5 billion to Iran and another $54 billion to China and Russia. Congress can’t afford to let this White House and Secretary Yellen do it again.
“My bill would stop the Biden administration from making an end run around Congress on behalf of the world’s most oppressive and violent regimes. These countries work to undermine America’s security and success every day, and this White House shouldn’t be forcing U.S. taxpayers to line the pockets of terrorists and dictators,” said Kennedy.
Background
The IMF distributes special drawing rights according to each country’s economic standing in the global economy. That means the world’s wealthiest countries received the most special drawing rights of all IMF members when the 2021 allocation became effective on Aug. 23, 2021.
China alone received $38 billion in special drawing rights. Russia received $16 billion. In addition to sending billions of dollars to Xi Jinping and Vladimir Putin, the allocation sent billions in aid to Iran, Syria and Venezuela. Syria and Iran are state sponsors of terrorism.
While some have claimed that special drawing rights offer the U.S. a no-cost way to assist poor countries, this is demonstrably false. This IMF allocation requires the U.S. to issue debt in order to cover the loans issued through special drawing rights. The U.S. has to pay interest on that debt, and that interest would exceed any interest that the U.S. may receive on the loans it issues.
There is no requirement that countries that receive loans from the U.S. through special drawing rights ever repay the principal. As a result, the financial burden of these loans falls on the U.S. taxpayer.
Text of the No Dollars for Dictators Act is here.
