NEWPORT BEACH – Despite an elegant solution that involved no new commitments of resources, the US Congress has refused to take up a long-delayed funding proposal for the International Monetary Fund. In the process, it derailed a multilateral agreement that was hammered out back in 2010 – ironically, in the eyes of the rest of the world, with US President Barack Obama’s administration taking a leading role. And it did so at a time when financial disruption in emerging economies is reminding the world of the importance of a strong stabilizing anchor at the core of the international monetary system.
After the initial disappointment, many are hoping that Congress will again take up the Obama administration’s IMF request after a short interlude. It will certainly have several opportunities to do so while working on other financial legislation. But, with Congressional elections due later this year, few are confident that lawmakers will be in any mood to change course until 2015 at the earliest.