President Barack Obama asked Congress to approve a plan to boost the International Monetary Fund’s crisis-fighting resources, trying to make good on a pledge 2 1/2 years ago that would also increase China’s clout at the institution.
In his 2014 budget proposal sent to lawmakers today, Obama asked to boost the U.S.’s share, or quota, at the Washington-based IMF by shifting about $63 billion from an existing credit line. A request to authorize changes in the composition of the IMF board will be sent separately, according to the budget documents.
“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 report.
The timing of the request, which would implement a global agreement that would double the IMF’s lending capacity to $717 billion, is less than ideal as Congress grapples with the effects of automatic spending cuts known as sequestration. What’s more, the IMF needs new champions on Capitol Hill after the departure of two longtime supporters, Republican Senator Richard Lugar and Democratic Representative Barney Frank.
It will be up to Congress to decide whether to appropriate any funds as loan-loss reserves for the $63 billion. Four years ago, the Congressional Budget Office determined an appropriation of about $5 billion was necessary to cover the new commitments under the temporary line of credit of about $100 billion.