Tags: Obama | Budget | IMF | Funding

Obama Budget Requests US Funding Shift for IMF

Thursday, 11 Apr 2013 08:10 AM

 

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President Barack Obama asked Congress again on Wednesday to permanently boost U.S. funding to the International Monetary Fund, a measure that would increase the clout of China and other big emerging economies at the institution.

In his fiscal 2014 budget request, Obama sought authority to shift a previous $63 billion U.S. contribution from an IMF crisis fund to pay for a permanent increase in U.S. voting power at the IMF.

The U.S. funding move is necessary to finalize a historic deal reached by IMF member countries in 2010 that would make China the IMF's third-largest voting member. It would also increase the say of other emerging economies such as Brazil and India, which have long argued their growing influence in the world economy should be reflected in the IMF and similar institutions.

But Obama's request faces a difficult battle for approval by Congress during a tight budget environment and opposition by many Republicans in the House of Representatives who view the IMF as a vehicle for costly and unnecessary foreign aid.

The Obama administration asked Senate and House appropriations committees last month to include the funding shift in government funding legislation. But it was rejected by both panels. Aides said congressional leaders in both parties were reluctant to include controversial provisions in the "must-pass" bill, which was needed to avoid a late March government shutdown.

Obama put off the funding request last year to avoid controversy before the presidential elections.

But the renewal of the requests demonstrates Obama's desire to make good on the 2 1/2-year-old pledge to the IMF and emerging countries. The request will be considered as the appropriations committees start their work in deciding fiscal 2014 funding levels for government agencies and discretionary programs.

The budget document emphasized that no new taxpayer funding was required for the change, which would preserve U.S. influence over the Washington-based institution.

"The 2010 agreement results in no overall change in U.S. financial participation in the IMF, while preserving U.S. veto power and restoring the primacy of the IMF's quota-based capital structure in which the United States has the largest share," the administration said in the budget document.

© 2014 Thomson/Reuters. All rights reserved.

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