White House unhappy with IMF limits in US spending bill

The Obama administration on Wednesday said it strongly opposed legislation in the U.S. Congress that would restrict its ability to respond to future financial crises through the International Monetary Fund.

The U.S. House of Representatives is expected later this week to consider a $48.8 billion spending bill for the State Department and U.S. foreign operations that would impose several limits on U.S. participation at the IMF.

The IMF provisions are far from becoming law and could be either changed or stripped.

The measure would require the United States to end its participation in an emergency loan facility, known as the New Arrangements to Borrow, after five years.

President Barack Obama recently increased the U.S. commitment to the facility by $100 billion as part of an agreement by the Group of 20 member nations to boost the IMF's resources as it helps countries weather the financial crisis.

The facility was set up in 1994 to deal with crises that pose a threat to the stability of the global financial system. It is about to expanded to include emerging market powers like China, Russia and Brazil, which have for the first time agreed to contribute resources to help the IMF respond to the global financial crisis.

The legislation in the House also requires the U.S. representative to the IMF to oppose allowing countries that have supported acts of terrorism to withdraw hard currency like U.S. dollars, Japanese yen or euros from the IMF.

While the White House stopped short of issuing a veto threat, the administration on Wednesday expressed its displeasure with the provisions.

The administration strongly opposes provisions that affect U.S. participation in the International Monetary Fund and that would limit future efforts to respond to urgent and unanticipated financial crises, a White House statement said.

The House is expected to vote on the must-pass annual spending bill later this week while the Senate is set to begin crafting its own version of the bill on Thursday. The language would have to pass both chambers and be signed by Obama before becoming law.