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Tags: IMF | Lagarde | Reforms | Republicans | oppose

Republicans at Odds With Christine Lagarde Over IMF Reforms

By    |   Monday, 14 April 2014 12:18 PM EDT

Christine Lagarde, managing director of the International Monetary Fund, says she will accelerate efforts to secure a U.S. agreement to controversial funding reforms for the organization, even as congressional Republicans tell Newsmax they oppose the measure.

As the spring meetings of the IMF and the World Bank Group concluded in Washington on Saturday, Republican members of Congress said they would oppose any measure giving the IMF a stronger hand with U.S. tax dollars, which compose 16 percent of the $755.7 billion fund.

Under changes that President Barack Obama and other world leaders agreed to in 2010, the IMF's equity capital would be doubled and 6 percentage points of the total would be shifted to emerging markets.

In addition, the proposed reforms would move two of the IMF's 24 directorships from European to developing countries.

"The IMF has to secure long-term resources rather than being the fireman who is asked to turn the tap every time it has to extinguish a fire," Lagarde said during last week's meeting.

She also said the reforms are essential so that "there is proper representation of the membership, so that China has the right seat at the table, Brazil is duly represented, South Africa has the right seat and so on."

But she noted that Congress has steadfastly said "no" to the reforms.

Lagarde recalled how "we all agreed on a reform that was to be completed in 2012. We're not there because the United States hasn't ratified it. I'm being very blunt because we've been sort of cute about it for a while."

Of the clash between the president and the Republican-controlled House, Lagarde said: "It's a perennial difference. But for some reason we've been a bit of the collateral damage of that perennial difference. It's an international commitment that was made by the countries. The United States is my biggest shareholder. It has exercised leadership, it does exercise leadership in many situations. When it did historically, it was quite often helpful. Now we are stuck."

Newsmax recalled to Lagarde how Republican Rep. Cathy McMorris Rodgers of Washington introduced a measure in 2011 and 2012 to rescind the additional $108 billion Congress had voted for the IMF two years before. Noting that Rodgers did not re-introduce her legislation in the current Congress, Newsmax asked Lagarde whether relations between Congress and the IMF have improved.

"I have to say I was really grateful to those members of the Senate who presented the [reform package], supported it, and spoke very convincingly about the value of the proposition," Lagarde said. "[Senate Foreign Relations Committee Chairman Robert] Menendez was clearly a strong advocate of the IMF."

But in trying to budge Republicans in Congress, Lagarde faces a major task.

"I'm against the IMF reforms because I don't believe in world government," veteran Republican Rep. Jimmy Duncan of Tennessee told Newsmax.

Lagarde's "main concern is her organization, and the package of reforms would give too much power to international bureaucrats. It was a mistake for the president to promise that the U.S. would go along with those reforms and it would be a further mistake for Congress to go along with him."

Of the lawmakers Lagarde praised, Duncan said: "Too many people in Congress are concerned too much with what is good for the liberal establishment, the Washington Post and the New York Times, and too little concerned about what is good for the people in their districts, especially when we are facing a $17.5 trillion debt."

Duncan said that if McMorris Rodgers does not introduce her measure to rescind the additional IMF funding, "I might introduce it myself."

Another Republican House veteran, Rep. John Mica of Florida, seconded Duncan's view, saying "I'm not a big IMF fan, especially when we're drowning in debt at home."

Mica told Newsmax that any U.S. dollars to the IMF "should go with the caveat that countries they lend to clear up their environments and start regulating safety in their industries. Foreign businesses clean our clocks because so many of them have no Environmental Protection Agency, no Occupational Safety and Health Administration, no National Labor Relations Board."

Republican Rep. Chuck Fleischmann of Tennessee told Newsmax: "Unfortunately, this administration seems set on ceding American power wherever possible. The recent IMF reform package would not only undermine the United States' power, it could also expose the taxpayers to billions of dollars in additional financial liability. This is yet another example of the Obama administration's blind trust in nations such as Russia and China to effectively and transparently manage international organizations."

Republican Rep. Mike Pompeo of Kansas is more supportive of the IMF but nonetheless is against the reforms.

"I support the IMF because sometimes they get it right — reforming market systems in developing countries, for example," Pompeo told Newsmax. "American leadership will get the IMF to be more successful. But I regret the president led [Lagarde] and others to believe the U.S. would support these reforms. These reforms would move away authority within the IMF from the people who provide the most money."

John Gizzi is chief political columnist and White House correspondent for Newsmax.

© 2024 Newsmax. All rights reserved.

Christine Lagarde, managing director of the International Monetary Fund, said she will accelerate efforts to secure a U.S. agreement to controversial funding reforms for the organization, even as congressional Republicans tell Newsmax they oppose the measure.
IMF, Lagarde, Reforms, Republicans, oppose
Monday, 14 April 2014 12:18 PM
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