Kennedy Introduces Bill To Cut Off Dictators’ Funds

Legislation presses Senate Dems on ‘no-brainer’ chance to cut taxpayer funding to China

Jack Beyrer • May 26, 2021 2:00 pm

Sen. John Kennedy (R., La.) will introduce a bill Wednesday afternoon that aims to cut off dictators’ finances through the Treasury department.

The legislation, which will be filed as an amendment to the Endless Frontier Act, a massive China package pushed by Senate majority leader Chuck Schumer (D., N.Y.), would restrict cash that rogue regimes withdraw through the International Monetary Fund. Through reserve assets known as “special drawing rights,” dictators have been able to draw billions from the international financial organization to alleviate financial pressures often created by U.S. sanctions.

Kennedy’s amendment would prohibit special drawing rights for countries found to have committed genocide or sponsored terrorism without authorization from Congress. Both China and Iran qualify as regimes that fall under the bill’s jurisdiction.

Kennedy, a member of the Senate banking committee, told the Washington Free Beacon that the vote will measure how seriously his colleagues take the challenge posed by China.

“Stopping taxpayer money from flowing to dictators and genocidal leaders like Xi Jinping is a no-brainer,” Kennedy said. “It’s one of the simplest, most honorable votes we’ll take this year. I can’t see any reason that anyone with America’s best interests at heart would have a problem voting to require Congress to sign off before the Treasury sends U.S. dollars to dictators.”

In April, Treasury secretary Janet Yellen confirmed that her department plans to allocate $650 billion in special drawing rights to the IMF, leaving the money accessible to such dictators as China’s Xi Jinping and Venezuela’s Nicolás Maduro.

The Treasury did not respond to a request for comment.

Senate Democrats have framed the Endless Frontier Act as a massive anti-China package that will spend billions to boost scientific research and technological programs in competition with China. Critics, however, say the bill betrays its purpose by playing too loosely with taxpayer dollars. The Congressional Budget Office estimates the bill will cost $244 billion, a massive jump from its original figure because of emergency authorizations.

“The last thing the Senate should want is a collection of deals made with individual senators that is then attached to what becomes a massive spending bill, clearly more about industrial policy and pork-barrel spending than geopolitics,” Heritage Foundation China expert Walter Lohman wrote in March.

Kennedy’s amendment will be heard for voice vote this afternoon.