Will the Second Trump Treasury Choose Taxpayers or the World Bank?

When it comes to the World Bank and other multilateral foreign aid organizations, the first Trump administration does not give us confidence that taxpayers won’t be burdened with more pain in the second.

In 2018, Treasury Secretary Mnuchin agreed to a major increase in the capital of the International Bank for Reconstruction and Development.  It cost taxpayers $1.24 billion in immediate contributions and $8.5 billion in “callable capital”¹, unappropriated amounts for which the IBRD may come calling.  

This largesse could not pass through Congress in the light of day so its authorization was buried in one of the many omnibus bills no one has read.  In this case, it was PL 116-94 December 20, 2019: Further Consolidated Appropriations Act, 2020.  Division P Title XIX.

While this was ostensibly an appropriations bill, tacked on to it were multiple authorizations for programs which had never been brought before the full Congress and debated.

What did the IBRD do with this new found wealth: it immediately doubled its Green New Deal spending all wrapped up with a DEI bow.  All approved by the Treasury.

To add insult to injury, an additional appropriation was included for the Global Environment Facility under the direction of the IBRD.  This clever facility spreads expenditures among a vast array of multilateral and non-government organizations (those of USAID fame) sponsoring Green New Deal initiatives. In the end, there is zero accountability.  

The Mnuchin Treasury also approved $3 billion for the IBRD’s sister organization, the International Development Association, $514 million for the African Development Fund and $189 million for the Asian Development Fund.  

The beat goes on.

What of the Scott Bessent Treasury?  

While it remains to be seen, there are troubling signs in the qualified endorsement his nomination was given by Sen. Chris Coons (D-Del).  In his January 27 statement of support for Bessent’s nomination, Coon’s stated “I am particularly encouraged by his commitment to continue U.S. investment in international financial institutions.”  He meant the World Bank.

Whenever someone in government uses the word “investment” you know taxpayers are making the “investment” and the swamp is getting the returns.

Secretary Bessent should make clear that he opposes any additional funds for the multilateral development banks, does not regard U.S. subscriptions to callable capital to be full faith and credit obligations and that he will recommend to the President that the U.S. withdraw from these organizations and recoup the $70 billion in prior contributions on behalf of American taxpayers.

An early test for Secretary Bessent will be the recent agreement his predecessor Janet Yellen made to add another $4 billion to the International Development Association (Yes, it is always coming back for more. Yellen earlier approved $3.5 billion on top of Mnuchin’s $3 billion).  

That contribution has not been authorized by Congress.  It should not be.  Bessent should block any inclusion of it in Treasury budget requests.  

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1. For more on “callable capital” read our How to DOGE the World Bank: A Primer ↩︎