Wed, 02:45 27 May 2009 GMT17

 

Obama IMF aid request goes into Senate bill
13 May 2009 18:57:21 GMT
Source: Reuters
WASHINGTON, May 13 (Reuters) - The U.S. Senate will include President Barack Obama's request for up to $100 billion for the International Monetary Fund in its bill to fund the wars in Iraq and Afghanistan, Senator Judd Gregg said on Wednesday.

Obama asked Congress for the aid to help countries weather the global economic crisis. He also wants to increase the U.S. contribution to the IMF by $8 billion and is asking for support of the IMF's planned 13 million ounce gold sale.

Gregg is a Republican on the Senate Appropriations Committee, which is expected to vote on those requests on Thursday as part of a bill to fund the U.S.-led wars in Iraq and Afghanistan, legislation widely expected to pass.

The legislation for the war funding is considered a must-pass measure so including the IMF aid in the bill will ensure the funding gets approved.

The $96.7 billion version of the bill in the House of Representatives does not include the IMF provisions so any differences between the two versions would have to be resolved before it could become law. Lawmakers want to finish the bill by the end of May.

Obama had said the IMF money would essentially be a loan and therefore would not cost U.S. taxpayers. But lawmakers disagreed, leading to intense negotiations amid concerns that it could add billions to an already bloated budget deficit.

Senator Kent Conrad, chairman of the Senate Budget Committee, said lawmakers reached a deal with the White House on how to calculate the request. He also said the Congressional Budget Office had told him the IMF aid package would require $5 billion to appropriated, which would be included in the legislation.

That "is probably the most intellectually honest estimate of what this would be," he told reporters.

Obama pledged the increased aid to the IMF at a Group of 20 nations meeting last month, when world leaders agreed to provide the IMF $500 billion to help poorer countries ride out the economic storm.

Additionally, congressional authorization is needed for the U.S. representative to the IMF to vote on the gold sales.

The IMF plans to sell about 403 tonnes of its gold reserves to finance administrative expenses, as well as give financial aid to poor countries. A key House Democrat wants $4 billion from it to go to loans for poor countries.

The IMF holds 103.4 million ounces (3,217 tonnes) of gold, making it the third-largest official holder of gold. The sale of a planned 12.97 million ounces (403 tonnes) carried a market value of $12 billion at current prices. (Reporting by Jeremy Pelofsky, editing by Cynthia Osterman)
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