House Excludes Countries with Ties to Iran from Debt Relief Bill

Last month, the US House of Representatives amended foreign debt relief legislation to exclude countries with “business interests with Iran.”  The bill, titled the Jubilee Act for Responsible Lending and Expanded Debt Cancellation (HR 2634), is intended to provide low-income countries relief from debts owed to the United States and international financial institutions.

The bill passed following a tense floor exchange between Rep. Mario Diaz-Balart (R-Fl), and Financial Services Committee Chairman Barney Frank (D-MA) over the amendment to exclude countries with ties to Iran.  “I’m trying to get an honest answer,” Frank said,  “We are setting policy here, not just for this week.  We are saying here that if you do business with the government [of Iran] . . . you’re ineligible.”

At issue for Rep. Frank were the unintended consequences of the amendment, which he argued could exclude Iraq from future debt relief programs.  “I know there are close ties between the Governments of Iraq and Iran,” Frank said, “There’s interchangeability.  I think this is a pretty sketchy way to go forward.”

According to a report by the Congressional Research Service issued in January, estimates for non-oil trade between Iran and Iraq in 2007 are as high as $2 billion.

Rep. Diaz-Balart offered the motion to recommit the bill to the Financial Services Committee as a procedural move to approve the exclusionary amendment immediately.

“The lives of our troops are at stake,” Rep. Diaz-Balart said, “and any country that assists Iran economically should not benefit from the bill.”

Rep. Frank called the motion “mischief,” but said he understands how it passed.  “People get afraid in an election year of being accused of having helped Iran,” he said.

After its passage, Rep. Frank warned that the restriction could prove damaging to US interests.  “I will predict that we will hear that if the United States Congress adopts a principle that no debt relief goes to a country that does business with Iran, it will undercut Secretary Rice’s efforts to get the Gulf Cooperation Council to get debt relief to Iraq.”

The abrupt change also inadvertently affected more than Iraq.  The amendment removed key bipartisan provisions from the bill, including language to require countries to commit to holding free elections, fighting human trafficking, and opposing illegal immigration.  It also erased a provision that required savings from the program be applied to poverty reduction.  The House later restored the erased provisions.

“Will no one learn from this?” Frank asked.  “Can we not stop this process of ambush, last-minute recommittal motions that are not part of a constructive legislative process, but are drafted purely to make political points, and drafted badly and drafted not in consultation with people of any substantive knowledge?”

The Senate counterpart to the bill, S2166, has been referred to the Foreign Relations Committee which hopes to take action on it before the Memorial Day recess.

This article was first published on the Web site of the National Iranian American Council on 8 May 2008.

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