WASHINGTON (Reuters) - U.S. lawmakers late on Monday failed to agree on key funding measures for the International Monetary Fund, in another setback for historic reforms at the global financial institution to give more power to emerging markets.
A $1 trillion proposed spending bill for the federal government on Monday did not include funding for the IMF, according to a Republican summary.
For nearly a year, the Obama administration has been pushing Congress to approve a shift of some $63 billion from an IMF crisis fund to its general accounts in order to maintain Washington’s power at the global lender, and to make good on an international commitment made in 2010.
Congress must sign off on the IMF funding to complete 2010 reforms that would make China the IMF’s third-largest member and revamp the Fund’s board to reduce the dominance of Western Europe. The changes would also give greater say to nations such as Brazil and India to reflect their growing economic heft.
The reform of the voting shares, known as quotas, cannot proceed without the United States, which holds the only controlling share of IMF votes.
After putting off the request in 2012 because of the U.S. presidential election, the U.S. Treasury has sought to tuck the provision into several bills since March.
The administration’s requests, however, have been met with skepticism from some Republicans, who see them as tantamount to approving fresh funding in a tight budget environment.
Some lawmakers have also raised concerns about how well the IMF was helping struggling economies in Europe and the risks attached to IMF loans, suggesting Congress was in no hurry to approve any changes.
Republican Hal Rogers, the chair of the House Appropriations Committee, said no new funding for the IMF was an example of program cuts that “ensure the responsible use of taxpayer dollars,” according to a statement.
The U.S. Treasury has consistently defended the safety of contributions to the IMF and argued U.S. funding to the lender helps preserve U.S. business interests by pushing for a level playing field abroad.
“We are disappointed that Congress failed to include the 2010 quota and governance reforms in the current legislation,” a U.S. Treasury spokeswoman said on Monday.
“The United States remains committed to implementing the 2010 quota and governance reforms, and we are examining options to do so as soon as possible.”
Reporting by Anna Yukhananov, additional reporting by David Lawder; Editing by Lisa Shumaker