Treasury Secretary Jack Lew faced a skeptical Congress on Wednesday as he defended President Obama's request for $2.9 billion to fund international affairs programs next year.
Lew testified that aid to multilateral financial institutions such as the World Bank and the International Monetary Fund are a “cost-effective” way to solidify the world financial system, promote U.S. national security and boost U.S. exports. Lawmakers however raised doubts after the IMF bailed out five European countries – Greece, Ireland, Portugal, Spain and Cyprus – over the past few years.
“Mr. Secretary, the IMF is controversial within the Congress,” House foreign operations appropriations chairwoman Kay Granger (R-Texas) said in prepared remarks. “It was not created to bail out industrialized nations that cannot control their spending.
“I cannot speak for other members, but it will be difficult for me to support increased resources if this is what is envisioned for the IMF for the future.”
Lew said the budget request calls for a $63 billion increase in the U.S. share of the IMF, offset by an equivalent decrease in the fund's emergency lending arm, known as the New Arrangements to Borrow (NAB). Granger, however, said the NAB funding was approved as an emergency appropriation in 2009, meaning cutting it wouldn't decrease the deficit.