IMF director Lagarde hopeful U.S. will provide…

WASHINGTON — International Monetary Fund Managing Director Christine Lagarde said she hopes Congress will approve a transfer of money to an IMF program that allows the organization to respond more nimbly to economic crisis abroad.

Lagarde said she was disappointed that a $1.1 trillion U.S. budget proposal doesn't include the shift in funding for the IMF.

A Senate funding bill includes the money for the IMF, but a spending bill approved by the House Appropriations Committee on Tuesday rejected the Obama administration's request.

Congress' failure to include the 2010 quota and governance reforms in its legislation could weaken the U.S. influence in the IMF and as a world economic player, the Treasury Department has said.

"The IMF is critically important to U.S. economic and national security interests," Treasury spokeswoman Holly Shulman said.

"These reforms, which require no new U.S. financial commitment to the IMF, are critical to preserving the United States' leadership and influence at the IMF, and strengthening the IMF's financial and governance structures in which the United States has the largest share and veto power," she said.

Lagarde, who has been managing director of the IMF since July 2011, said she hoped the decision by the House committee can be resolved. She said she would find withdrawal of U.S. support for the reforms "extraordinary and disconcerting."

Conservative House Republicans oppose the IMF's efforts to shift power to emerging market countries such as China, India and Brazil.

"IMF's main mission is to help ensure financial stability in the world, which benefits all world economies, the U.S. being the largest and first among them," Lagarde said in a speech at the National Press Club. "I hope that sensible and common-sense judgment will prevail."

A 2010 agreement approved by the IMF's member countries pledged to double the fund's lending capacity to more than $730 billion.

"U.S. support is vital to that," she said.

! Lagarde said the global economic outlook for 2014 is positive, but world economies are performing below their potential.

"Global growth is still too low, too fragile, too uneven," she said.

Lagarde, 58, praised central bankers for keeping interest rates low as governments introduced economic stimulus packages to boost growth during the financial downturn. To enhance the growth and stabilize the world economies, central bankers must undo what they have done, "but slowly and properly timed," while governments reform their budgetary policies, she said.

Lagarde called the U.S. government shutdown last fall damaging to the world economy because it led to uncertainty and questions about whether the government can manage its finances. She said the budget deal is a step forward.

"We are all very pleased to see an orderly budget process is back on the Hill," Lagarde said. "Any deal is better than no deal."