US Treasury chief urges Congress to fund IMF
US Treasury Secretary Jacob Lew on Wednesday urged Congress to ratify the International Monetary Fund's 2010 reform, which requires another $63 billion contribution.
With Congress stalling on ratification, the entire IMF reform, including a huge doubling of capital and changes to voting rights that give emerging economies more say, has been on hold for months.
That has fueled worries in the IMF that a second planned reform of voting rights which would more substantially reshape the power on the IMF board -- currently weighted toward the United States and Europe -- will not progress.
"The vast majority of the IMF membership has now acted, and only US approval is necessary for these important reforms to go into effect," Lew said in prepared comments to a House subcommittee reviewing the Treasury budget.
Multilateral development banks like the IMF "provide unparalleled returns", Lew said.
"For capital increases once every 15 to 20 years, the MDBs stretch the impact of our dollars around the world, toward every global challenge."
He noted that the reforms and contribution will allow Washington to maintain its veto over IMF decisions, a power that dates back to the institution's founding after World War II.
"As emerging economies play a bigger role in these international financial institutions and seek greater influence, it is critical that the United States maintains its strong position of leadership," he said.
"No other institutions so effectively leverage our limited resources in service of our national and global interests," he added.
On April 10 President Barack Obama, as part of his fiscal 2014 budget, proposed a budget-neutral increase in US funding for the IMF in hopes of getting Congress to act.
The proposal would essentially shift $63 billion from Washington's contribution to the IMF's New Arrangements to Borrow, a standing set of credit lines, to be used for the quota increase.
The US voting share on the board will fall slightly, to 16.5 percent from 16.7 percent, after the reform goes through.
"These actions are necessary to maintain strong US leadership and influence in the IMF, and to restore the IMF's core capital structure," Lew said.