Senate Takes Up $100 Billion Emergency Spending Request for IMF

President Obama has formally requested the money for a $100 billion U.S. loan to the International Monetary Fund, following up on an international commitment to triple IMF resources for struggling nations.

The request, though, could prove politically tricky as Republicans keyed in on spending are raising questions about why such a hefty amount of money is being stuck in the war funding bill before Congress this week.

"Forcing taxpayers to borrow another $100 billion from China to bail out foreign countries makes no (sense) when we're already facing record debt and millions of Americans are losing their jobs here at home," an aide to Sen. Jim DeMint, R-S.C., said in an e-mail. The aide said DeMint would offer an amendment to strip the money.

Senate Appropriations Committee Chairman Daniel Inouye plans to add the amount to an $85 billion wartime spending bill that is scheduled for a committee vote on Thursday. Obama asked for the money as part of a supplemental budget request to Congress Tuesday after first proposing the loan in a letter last month.

Though the country is facing record deficits -- and just recorded an April deficit for the first time in 26 years -- the president claims the request would not add to the red ink.

In his letter explaining the request to Congress last month, Obama said the money would not add to the deficit because the loan "represents an exchange of assets" rather than a budgetary expense.

"The United States receives in exchange another monetary asset in the form of a liquid, interest-bearing claim on the IMF, which is backed by the IMF's strong financial position, including its significant holdings of gold," he wrote.

In his request Tuesday, Obama said the step is "crucial for U.S. economic interests" since the economic collapse of the developing countries that use IMF money could have a ripple effect on U.S. markets.

"Should the situation become worse, and should the IMF not be in a position to stem the crisis, currencies could collapse. The experience with the Asian financial crisis shows that such a massive failure would be a catalyst for steeper drops in U.S. growth, jobs, and exports," Obama wrote.

Sen. Kent Conrad of North Dakota, the Democratic chairman of the Senate Budget Committee, and Sen. Judd Gregg of New Hampshire, the committee's top Republican, agreed to calculate the allocation as credit, but said the Congressional Budget Office should set the cost based on the loss risk to taxpayers. As such, it will likely be priced at less than $10 billion.

The accounting agreement was important given Congress' growing unease with federal spending to address the recession, and could help avoid a potentially embarrassing clash between lawmakers and Obama on an international issue, despite objections from lawmakers like DeMint.

The request is part of the pledge G20 nations made at the April 2 summit in London. Nations agreed to increase the $250 billion lending fund by $500 billion, with the U.S. coming up with $100 billion of that.

"Other countries are looking to the United States to deliver on our commitment," Obama wrote Tuesday.

The Associated Press contributed to this report.