Lew emphasizes U.S. veto power at the IMF

U.S. Treasury Secretary Jack Lew was on Capitol Hill today, and he pushed Congress to approve a larger U.S. quota contribution to the International Monetary Fund. In its budget document, the administration cast the request as a means of maintaining U.S. privileges at the fund. As the largest shareholder, the United States has an effective veto over many fund decisions, and the pending reform would maintain that level of control. Lew emphasized that point today with the House Budget Committee. Via Bloomberg:

Lew defended the U.S.’s role in the International Monetary Fund after the Obama administration asked Congress to approve a plan to boost the lender’s resources.

“We have a veto in the IMF, we have a controlling voice when we need to,” Lew told the House Budget Committee today. “We have leverage so that the United States can influence the economic decisions around the world, and it’s something our international leadership depends on.”

Lew’s comments came just as the IMF and World Bank are beginning their annual spring meetings. Finance ministers from around the world are descending on the 19th street headquarters of the institution. Most of them will come from smaller and poorer countries, and many of them respond to publics who are deeply skeptical of U.S. motives and of institutions like the IMF.  

For these observers, Lew’s rhetoric will likely reinforce preexisting beliefs about the IMF:  that the institution is effectively under U.S. control and that Washington uses it to spread its influence. The dilemma for U.S. policymakers is that they need to speak the language of control and instrumentalization on the Hill and a very different dialect across town.