Obama OMB Director Orszag Tried To End-Run Congress To Fund The IMF
April 24, 2009 • 12:04PM

Politico.com reported today that Peter Orszag, Director of the Office of Management and Budget, tried recently to accomplish the promised new U.S. funding of more than $100 billion for the International Monetary Fund, without action by Congress' appropriations committees. At the time of the G-20 Summit at which President Obama agreed to this funding of the IMF, Lyndon LaRouche had called for patriots on either side of the aisle in Congress to reject the agreement. The committees and the Congress itself — which would have the final vote — are subject to political pressure on Senators and Representatives by their angry and increasingly impoverished constituents, which might impel a No vote. Of course, Orszag's end-run also would have avoided a blow-back on the Administration by those same constituents.

What Orszag did, was to call a meeting for April 9, of the "scorekeepers" group in the Congressional Budget Office (which reports to the Congress's Budget committees), to pitch the idea that not only should the CBO not score the payments to the IMF as contributing to the deficit, but that the CBO should also not designate such payments as "spending," and thus not subject to the appropriations committees' deliberations. As a person familiar with the report said, this would have created the result that, had the IMF payments been inserted into the pending supplemental military funding request for $83.4 billion — which would have more than doubled its size to more than $185 billion — the press would have reported that $83.4 billion in spending had been approved.

Orszag's rationale for this legerdemain? The payments, Orszag says, will not be spending at all, just an exchange of assets with the IMF — i.e., U.S. Government cash for a claim, in the form of Special Drawing Rights, on the gold-holdings of the IMF. Politico notes that critics argue that this is true on paper, but SDRs don't have the same flexibility as real currency, and quotes a former House Appropriations Committee staffer experienced in past IMF debates, "You can't buy a Big Mac with an SDR."

Orszag's OMB was reported in the April 6 edition of Time magazine, as slated to be the nesting place of fellow behavioral economist and "Regulatory Czar" Cass Sunstein, for finagling around elected authority — i.e. Congress — by disguising fundamental policy changes as mere regulatory amendment to existing law.