I would like to welcome Secretary Geithner and thank him for appearing before the Subcommittee today to discuss the Fiscal Year 2012 request for the Department of Treasury's international programs. Additionally, I would like to hear about the current status of the International Monetary Fund, given the large level of funding approved by Congress two years ago.
Secretary Geithner, I know Treasury's international programs are ones you worked on for many years before becoming secretary. I hope you will provide the Committee with your insight so we can better understand this large request for Fiscal Year 2012.
The President’s budget includes $3.4 billion for Treasury’s international affairs programs, which is $1.2 billion, or 58%, over the enacted 2010 levels. I would also like to highlight that this is more than a doubling of funds since 2009 and more than a 150% increase since 2008.
All of these funds are contributions to international financial institutions, with the exception of the Treasury Technical Assistance and bilateral debt relief programs. Last year, I asked that you justify the need for such a large increase for multilateral assistance during an economic crisis here at home.
This year, the fiscal situation is even direr. The United States is facing record budget deficits. The President's fiscal commission released its report calling for freezing or cutting discretionary spending. I know I don't have to remind you that we are all facing a very different budget situation than last year.
Support for increases to the multilateral development banks was already in doubt before this budget was formulated. Now, this administration is requesting almost $2 billion in appropriations for capital increases and putting the U.S. taxpayer on the hook for another $40 billion in potential liabilities.
Mr. Secretary, this committee never consented to these capital increases. Authorization bills are needed for each bank spelling out specific reforms and possibly withholding funds until reforms are met. I cannot support writing a blank check to these institutions.
Large multi-year capital increases and other global commitments will be extremely difficult to justify without convincing evidence that taxpayer dollars will be used in a more effective and transparent manner than they have been in the past.
Mr. Secretary, I can predict that this subcommittee will face very difficult choices this year. We will have to look at each request to determine what is critical to our national security. We must prioritize spending by looking at what works, what has good oversight, and what is not duplicated elsewhere. I urge you to approach the Subcommittee with your request in that context today and as the year progresses.
Finally, I want to mention the unique role the Treasury Department plays in U.S. foreign policy. Your work to administer sanctions against countries like Iran and Libya, and to track terrorist financing, is critical. Members will want to hear your comments on these important matters.
Thank you, and I look forward to your testimony.