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Fight Brewing Over IMF Funding

The Senate Appropriations Committee, in response to a request from the Obama Administration, attached a $108 billion increase in funding for the International Monetary Fund to a supplemental wartime spending bill.

This is a surprising and controversial move, and may succeed in avoiding the hearings and debate that would normally accompany such an important appropriation. In order to make this politically feasible, the administration has argued that the true cost of this $108 billion contribution to the IMF is actually zero. The non-partisan Congressional Budget Office (CBO) did not accept this argument, but presented a figure that is very low; as this goes to press it is reportedly at $5 billion.

This figure is much too low; while any estimate can only be approximate, the basic principles by which such an estimate can be derived are relatively straightforward. Such basic principles indicate a much higher cost to the Treasury, of at least $16.6 to $26.3 billion.

For more details see http://www.cepr.net/documents/publications/imf-contributions-2009-05.pdf

— Mark Weisbrot, Co-Director, Center for Economic and Policy Research