At today’s Financial Services Committee hearing with Secretary Jack Lew, Ranking Member Maxine Waters
expressed her disappointment that House Republicans have refused to ratify the International Monetary Fund (IMF) quota reform package, she underscored its importance, and laid out the harmful impact delaying these reforms will have on global stability.
Waters delivered these remarks during today’s hearing on “The State of the International Financial System.”
Her full remarks are below.
"Mr. Secretary, we are delighted to have you here this morning. I am very pleased that despite the fact that you have only enjoyed your position for a very short period of time, the Administration continues to be successful in growing this economy. In the last fifty months, as you have indicated, the private sector has created 9.2 million jobs. And we are very pleased. Using our -oversight responsibilities, we have worked hard, you have worked hard, and the housing market certainly is improving.
We are very pleased about the rise in home prices and, of course, what is happening with our homeowners as we get out from under the loss of wealth experienced following the recession. Now, many homes are no longer underwater.
However, today’s hearing is focused on what is happening in the international financial system, so I would like shift my focus quickly to talk about the International Monetary Fund (IMF).
I had hoped that by this point we would have ratified the IMF quota reforms that modernize the IMF.
As you are well aware these reforms were negotiated by the Bush Administration and completed in 2010 by President Obama, and despite repeated efforts by this Administration to secure their passage they continue to languish here under the Republican controlled House.
Negotiated in 2008 by the Bush Administration and completed in 2010 by President Obama, the reforms to the IMF would take account of rapid changes in the global economy.
But despite the benefits these reforms would entail, House Republicans already this year rejected two efforts by the Administration to attach to larger measures legislative language that would authorize U.S. participation in the reform package.
The 2010 agreement would double the IMF's general resources to ensure the emergency lender has enough firepower to respond to crises hitting its members.
It would also update the governing structure—how the IMF's voting power is distributed among members—to reflect a global economy in which emerging markets are now major growth drivers and some European countries have lost their economic might.
These reforms are an essential first step to maintain the IMF’s legitimacy in a volatile world, but none of this will happen until the U.S. has approved its new quota, which would only require a shift of U.S. funds, not new financial commitment.
In my view, depriving it of the resources to combat future global market crises would directly undercut our national interest. Growth remains below potential in most regions, including in major markets for the U.S., and unemployment in many countries remains at historic highs, with the number of long-term jobless still growing. If these crises are not resolved soon, an entire generation could be blighted.
Global stability is ultimately nurtured through trust in international institutions that resolve issues through cooperation rather than economic or political dominance. Should the IMF reforms continue to be delayed, what is at risk is the trust that is key to the stability of the international system.
I yield back the balance of my time."