WASHINGTON—U.S. Senator Chris Murphy (D-Conn.), a member of the U.S. Senate Foreign Relations Committee, on Tuesday applauded passage of his provision to allow the United States to better compete with Chinese development finance institutions in the United States Innovation and Competition Act of 2021. Specifically, Murphy’s language 1) increases the Development Finance Corporation (DFC)’s liability limit from $60 billion to $100 billion to better compete with Chinese development finance institutions and (2) clarifies the intent of Congress that DFC equity investments should be treated as federal credit programs, not direct spending. Fixing this problem would allow the DFC to do significantly more projects with the same amount of appropriated funding. Murphy’s provision was originally included as an amendment to the Strategic Competition Act of 2021 (S. 1169), which was voted out of the Senate Foreign Relations Committee earlier this month.
“If the U.S. just thinks of competition with China through a military lens, we are going to get left behind. China's global financing arm is a strategy to chip away at our global influence,” said Murphy. “My proposal will significantly increase our the total amount of money available to America's international development bank, the Development Finance Corporation, and allow us to strike international development deals that are good for the world and our partners, and counter China's growing economic influence. I’m glad to see it included in this important legislative package.”
In March, Murphy along with U.S. Senator Chris Van Hollen (D-Md.), U.S. Representative David Cicilline (RI-01), and U.S. Representative Ami Bera (CA-07) proposed a significant increase to the international affairs budget for Fiscal Year 2022 to better address America’s national security challenges. Investing in 21st Century Diplomacy calls for a $12 billion increase, directing the funding toward three specific challenges: (1) competing with China; (2) preparing for the next pandemic in a post COVID-19-era; and (3) fighting climate change. In this budget proposal, Murphy specifically proposes an increase in funding for the DFC as a way to compete with China.