This segment of What’s Ahead walks us through a cute maneuver the Treasury Department is attempting that could cost taxpayers billions of dollars without congressional approval.
It’s arcane, but the money consequences are real.
It involves something called Special Drawing Rights, SDRs for short. They were created back in the 1960s, when there were fears of a gold and dollar shortage, to lubricate international trade and help countries shore up currencies that were under attack.
The fears were groundless, but based on a formula, countries agreed to turn in their currencies to the IMF in exchange for SDRs.
In effect, via SDRs, countries with weak currencies can get their hands on dollars.
The IMF wants to create another $1 trillion in SDRs, and Treasury wants the U.S. to fork over $173 billion as part of its allotment.
With an overdose of cleverness, Treasury claims it doesn’t need Congress’ okay. That’s wrong, and Congress should insist on proper legislative approval.