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New Debt Relief Bills Introduced!

April 25, 2002

WHY YOU ARE RECEIVING THIS ALERT: New, bipartisan debt relief bills have been introduced in the Senate and House. We need to get behind these initiatives and push for their adoption!

BACKGROUND: On April 18, 2002, Sen. Joseph Biden (D-DE) and Sen. Rick Santorum (R-PA) introduced in the Senate the “Debt Relief Enhancement Act of 2002” (S. 2210). On the same day Rep. Chris Smith (R-NJ) and Rep. John LaFalce (D-PA) introduced in the House a companion bill with the same title (H.R. 4524). The primary purpose of these bills is to require the Administration to work with other major creditor countries and international financial institutions to amend the heavily-indebted poor countries (HIPC) debt relief program to provide deeper debt reduction for beneficiary countries.

USCCB Position: USCCB strongly supports the new debt relief in S.2210 and H.R.4524.

• The new bills reflect the position that USCCB has been advocating with the Administration and the Congress for many months.
  
• As the improved debt-relief (HIPC) program which we had successfully advocated along with the Jubilee 2000 movement in 1999 and 2000 began to be implemented, we noted a substantial disparity in the amount of debt relief being received by HIPC countries. This was because the amount of a country’s debt relief under HIPC is determined by its export earnings rather than its budgetary resources.
  
• Countries such as Rwanda and Uganda were receiving relief sufficient to free up substantial resources for critically needed investments in health care, education, and other programs for poverty reduction. Most of the HIPC countries, however, were receiving much less, a situation which was particularly troubling as so many of them are in desperate need of maximizing the resources available to combat the scourge of HIV/AIDS and other infectious diseases.

Details of the Proposed Legislation:

• The new bills are designed to assure deep debt relief for all HIPC countries, with special consideration for countries suffering health crises.
  
• Specifically, these bills call for all HIPC-eligible countries to receive debt relief sufficient to reduce their annual debt payments during 2003 through 2005 to no more than 10% of government revenues, or in the case of countries suffering a public health crisis, no more than 5% of government revenues.
  
• A health crisis is defined slightly differently in each bill, but both definitions include countries with high rates of HIV/AIDS infection.
  
• It is expected that 19 of the 26 countries which have so far qualified for HIPC debt relief would receive new debt reduction under these bills and that 16 of the 19 would be eligible for the 5% ceiling. The other 7 countries are already receiving relief that brings them to or below the proposed debt payment ceilings. (Up to about 10 additional countries are expected eventually to qualify for HIPC relief and thus be eligible for the 5 or 10% ceilings.)
  
• The U.S. budgetary cost of the HIPC amendment for fiscal year 2003 is estimated at less than $50 million.

ACTION: Contact your Senators and Representatives and urge them to support the new debt relief in S. 2210 (in the case of Senators) and H.R. 4524 (in the case of Representatives) in order to substantially increases resource available for human development and poverty reduction in heavily indebted poor countries.

TARGETS: While it would be helpful if as many members as possible were contacted to show the strength of the support for new debt relief, it is particularly important to contact the following target list of Senators and Representatives who are mostly members of the Committees which must approve the bills before they can be presented to the full Senate and House. NOTE: For those who are original sponsors (marked with * in list below) or co-sponsors (marked with **), please thank them for sponsoring the bill; for all others, urge them to support the bill’s new debt relief.

Target List

Senators: Joseph Biden (D-DE) * Rick Santorum (R-PA)* Bill Frist (R-TN)** Lincoln Chafee (R-RI)** Mike DeWine (R-OH)** Paul Sarbanes (D-MD) ** John Kerry (D-MA)** Jesse Helms (R-NC) Richard Lugar (R-IN) Chuck Hagel (R-NE) Gordon Smith (R-OR) Patrick Leahy (D-VT) Christopher Dodd (D-CT) * Original Sponsor ** Co-Sponsor

Representatives: Chistopher Smith (R-NJ)* John LaFalce (D-PA)* Spencer Bachus (R-AL)** James Leach (R-IA)** Barney Frank (D-MA)** Maxine Waters (D-CA)** Dennis Kucinich (D-OH)** Michael Oxley (R-OH) Doug Ose (R-CA) Henry Hyde (R-IL) Doug Bereuter (R-NE) Edward Royce (R-CA) Tom Lantos (D-CA) Ileana Ros-Lehtinen (R-FL) Peter King (R-NY) Donald Payne (D-NJ) Cynthia McKinney (D-GA) Barbara Lee (D-CA) Bernard Sanders (I-VT)

More information: Gerry Flood or Fran Horner, U.S. Conference of Catholic Bishops, (202) 541-3199, www.USCCB.org/sdwp/international