While the Obama administration is struggling with sequester-mandated cuts that are nipping into everything from air traffic control to combat-pilot training, it has also tucked a one-time $65 billion pledge to the International Monetary Fund in the most recent budget resolution sent to Congress.Chump change.
The administration has asked lawmakers to approve a permanent increase in the U.S. contribution to the agency -- a step the fund has been waiting on for about three years so it can move ahead with other changes approved in 2010. Those changes have since been ratified by most of the rest of the world.
As it stands, the United States -- the fund's largest shareholder and a blocking vote for any major reforms like this -- is the only holdout to what is a broader and carefully crafted deal. Along with more money for the IMF, the changes would shift voting power within the organization so that big developing nations such as China and Brazil get more say in IMF affairs. It would also let developing nations in general replace a few old-line European countries on the fund's executive board.
More money - which we have SO much of, and less control, which is what O likes. A win-win for the progressive socialist!
We give more money so that China and Brazil decides where it goes. What's not to like?
But in tight fiscal times -- and when the IMF is lending historic amounts to euro-zone nations that can ostensibly look after themselves -- the idea of boosting U.S. support for the agency is politically sensitive.
With the presidential election out of the way, the "fiscal cliff" averted and the sequester now a fact of life, Treasury officials decided they needed to finally submit the three-year-old reform package for congressional approval.
Not that it was advertised. News of the submission was released indirectly when the Bretton Woods Committee -- a high-level group of political and economic officials that monitors IMF issues -- released a letter sent to congressional leaders urging approval.
How embarrassing! A Trunk Trick?
"The IMF has always been a valuable tool for advancing U.S. national interests globally," the committee wrote -- perhaps inadvertently validating one of the arguments China, Brazil and others have made for why they need a greater say at the fund.
The best use of the IMF is to be the designated bully when a government somewhere does stupid economic things. Letting China and Brazil run the place will remove that tool, and thus the IMF won't be as useful to us.