Tags: GOP | IMF | Christine Lagarde | Chuck Fleischmann | Jeb Hensarling

House Republicans Say IMF Reforms Dead Despite Lagarde's Pleas

Friday, 10 April 2015 08:57 AM Current | Bio | Archive

Despite an impassioned plea Thursday from International Monetary Fund Managing Director Christine Lagarde for Congress to enact reforms that would enhance the hand of China and other developing nations at the IMF, House Republicans again left little doubt that, nearly five years after they were presented, her proposed quota and governance reforms are dead in Congress.

In remarks to the Atlantic Council in Washington, D.C., Lagarde delivered a "health check" on the global economy and "the immediate challenge of lifting today's growth." In making her latest call on the U.S. Congress to enact her much-sought reforms, the IMF chief pointed out that "virtually our entire membership waits for one — the U.S."

Lagarde then called on her audience at the Council and those watching on television to ask the members of Congress they knew to "please do it! If only to assert leadership in a key institution."

With President Barack Obama's full support, world leaders agreed in 2010 that 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, including China.

Soon after Lagarde's remarks, however, Republican lawmakers left no doubt these reforms were going nowhere in Congress.

"It's going to be close to impossible for Madame Lagarde and the administration to get any attempts to dilute U.S. strength in the IMF through the House or Senate," three-term Rep. Chuck Fleischmann (R.-Tennessee) told Newsmax. "We've got to be abundantly cautious on attempts to do this so long as we participate in the IMF."

Noting that the U.S. was by far the largest shareholder of the 188-member nations in the IMF, Fleischmann said "we must therefore maintain a robust posture of involvement there."

House Financial Services Committee Chairman Jeb Hensarling, one of the key players in Congress dealing with IMF reforms, made it clear last month that they were not on his agenda. He also voiced skepticism about the current U.S. role in the financial titan.

During hearings March 17 in which Secretary of the Treasury Jack Lew weighed in for IMF reforms, Hensarling said: "In fairness, the Obama administration is not alone in helping put a sovereign nation into insolvency. Europe has a number of practitioners as well. And when Europe runs out of money many turn to the IMF, whose major source of funding happens to be U.S. taxpayers.

"Americans who clearly see the impending debt crisis, and who rightly suffer from bailout fatigue, are scratching their heads at the prospect of being called to continually fund and institutionalize 'too big to fail' on a global scale. Thus the activities of the IMF must be carefully scrutinized by our committee."

Last October, when asked about Lagarde's proposed reforms, Rep. Bill Posey (R-Florida), another member of the Financial Services Committee, told Newsmax, "I have to ask myself, why would I vote for a proposal that increases U.S. taxpayer exposure, has the potential to increase U.S. spending, while also reducing U.S. influence over how our contributions to the IMF are spent? That just doesn't make common sense to me or my constituents."

Following Lagarde's remarks on Thursday, Posey spokesman George Cecala told us that the IMF chief's latest plea for reforms "have done nothing to change Rep. Posey's mind on this subject. His position of last October on IMF reforms remains unchanged."

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

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Despite an impassioned plea Thursday from Christine Lagarde for Congress to enact International Monetary Fund reforms that would enhance the hand of China and other developing nations, House Republicans again left little doubt that they are dead in Congress.
GOP, IMF, Christine Lagarde, Chuck Fleischmann, Jeb Hensarling
Friday, 10 April 2015 08:57 AM
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