Obama seeks authority for IMF vote reforms

Through the historic voting reforms, the Treasury seeks authority to shift $65 billion in U.S. funding from an IMF crisis fund into U.S. quotas, which determine voting power in the Fund.

Obama seeks authority for IMF vote reforms

World Bulletin/News Desk

The Obama administration has asked Congress for authority to implement historic voting reforms in the International Monetary Fund that boost the influence of emerging economies like China in the global financial institution, sources said on Tuesday.

But the plan faces an uphill battle for passage in a tense U.S. budget environment marked by the launch of $85 billion in automatic spending cuts on Friday that hit both the U.S. military and domestic programs hard.

The Treasury Department submitted the request as a provision to be inserted into pending legislation to keep the U.S. government funded through Sept. 30 this year, congressional aides said. The Treasury sought authority to shift $65 billion in U.S. funding from an IMF crisis fund into U.S. quotas, which determine voting power in the Fund.

The United States is the IMF's largest member country and has veto power over decisions. The vote reforms were approved by the IMF in 2010, making China the third-largest voting member in the Fund and revamping the IMF's board to reduce Western Europe's dominance.

The U.S. request would not require any new funds to be appropriated by Congress because it simply shifts money from one IMF account within the U.S. budget to another, a Senate Democratic aide said.

The Republican-controlled House of Representatives has already rejected the request to include it in legislation scheduled for a vote on Tuesday that would avoid a March 27 government shutdown. A House Republican aide said House Appropriations Committee Hal Rogers chose to limit such so-called "anomalies" for targeted adjustments to the funding extension bill.

No decision has been made yet by Democrats, who control the Senate, on whether to include the IMF request in the Senate version of the funding bill, expected to be introduced later this month. Approval by the Senate would give it a good chance to be included into the final bill after the two chambers work out differences.

CONCERNS ABOUT U.S. INFLUENCE

A Treasury spokeswoman declined to comment directly on the request, but said: "The United States is committed to implementing the 2010 quota and governance reform. We are actively working with Congress to get quota legislation completed as soon as possible."

Congressional aides said the Treasury is concerned that further delays by Congress in approving the IMF vote reforms could damage U.S. credibility and influence in the global institution, according to aides said.

Should the request be rejected, the $65 billion would remain locked in the IMF crisis fund, known as the New Arrangements to Borrow, until the end of the fiscal year. But the administration could renew its request as part of the fiscal 2014 budget process, which is just now getting underway.

Last Mod: 06 Mart 2013, 09:44
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