The IMF agreed on reforms in 2010 that would double the amount of the organization’s quota resources and ramp up representation of emerging and developing countries, but the changes cannot take effect until the U.S. and a supermajority of IMF countries formally approve the plan.
The reforms could require Congress to appropriate funding to the organization, since the U.S. quota would increase by approximately $63 billion.
Members of the House Financial Services Subcommittee on Monetary Policy and Trade said claims by the Obama administration that increasing the quota would only require the transfer of the funds from one account to the other is incorrect.
“Withholding judgment for the time being on whether this change in policy is something Congress should authorize, I do feel that this Committee has an obligation to hardworking American taxpayers to fully understand the risks, benefits and continued Congressional oversight over the government’s involvement in the International Monetary Fund,” Rep. John Campbell (R-Calif.), the chairman of the subcommittee, said. “I firmly disagree with the Administration that this is simply a bookkeeping entry. Taxpayers would be taking on additional risk. One of my goals with this hearing is to provide an opportunity for this Committee and the American public to better understand these subtle but meaningful distinctions.”
Though the administration has not yet requested the fund increase, a note in the budget recently submitted by the president for next fiscal year indicated that the request would be submitted separately.
“To President Obama and his Administration, let me be very clear: This Committee is ready and willing to listen to your proposals with regards to international financial institutions, but recognize that we will consider them in the context of a fiscal consolidation to which you, I, and many other policymakers agreed,” Campbell said. “We would each be derelict in our duty to the taxpaying public to make one-off appropriations of large sums of money without being transparent in our budget priorities.”
IMF loans are generally funded by quota contributions from member countries based on the nation’s size relative to the world economy. At present, the largest contributors to the IMF are the U.S., which contributes nearly 18 percent of the quota, Japan, Germany, France and the U.K.