WASHINGTON (AP) - Two key lawmakers on Wednesday said they support Treasury Secretary Timothy Geithner’s call to significantly increase funding for the International Monetary Fund.
Sen. John Kerry, chairman of the Senate Foreign Relations Committee, said there was bipartisan support on the panel for providing additional resources, even as the federal government faces record budget deficits from a $787 billion economic stimulus package and bank bailout spending.
The Massachusetts Democrat spoke at a press conference following a meeting with IMF Managing Director Dominique Strauss-Kahn and World Bank President Robert Zoellick. Indiana Sen. Richard Lugar, ranking Republican on the committee, said he also supported Geithner’s proposal.
“We are convinced that the IMF needs additional funding,” Kerry said.
Geithner last week proposed that an IMF program which provides financial assistance to troubled countries be expanded tenfold to $500 billion. Geithner said he will seek approval for the increase at the Group of 20 summit in London on April 2.
The G-20 includes both wealthy nations such as the United States, France and Japan, as well as major developing countries such as China, India and Brazil.
Currently, the U.S. contributes 20 percent of the $50 billion fund, known as the New Arrangements to Borrow, which implies the U.S. contribution could grow to $100 billion. Geithner said last week the U.S. share of the expanded fund would have to be worked out. Kerry did not comment on specific numbers.
Kerry said the IMF can provide critical help to countries such as Afghanistan and Pakistan, and to nations in eastern Europe that are suffering from financial crises. The IMF recently has provided rescue loans to Hungary, Latvia and Ukraine as the region struggles with an economic slowdown and growing government debt.
The IMF, World Bank and European Union will provide an emergency loan of about $25 billion to Romania, officials from that nation said Wednesday, to support its struggling banks and prevent its currency from falling so low that it hurts the economy.