Because of the political season, there is a good chance that the United States will only consider acting after the election, in a lame-duck session of Congress. However, this alternative should not be in play unless enough of the rest of the G-20 countries has acted, or will act, by the end of the year. The reason is that a lack of progress on the first step in the Seoul package has delayed progress on the second step -- and will continue to do so. The U.S. administration has little to gain from spending its scarce political capital on a controversial issue unless it has a reasonable assurance that the complete two-step IMF reform package is back on track.
An attractive alternative would be to restart the process in early 2013. The G-20 countries and the rest of the IMF membership could then focus on reaching agreement on the new quota formula and on a substantial, permanent increase in IMF quota resources -- which the European crisis has demonstrated are needed -- by January 2014. The two steps in the original Seoul agreement would be combined, and the United States and other laggard countries would be able to submit the package in its entirety to their national approval processes. This would allow the G-20 countries to catch up with their original timetable.
What is not acceptable, however, is for countries to allow these important reforms to remain in limbo indefinitely. A failure to do what is necessary will put the global economy and financial system at risk by starving the IMF of resources and sidelining it as the principal institution of the global economic and financial cooperation. This time, if there is another crisis, the G-20 countries would have only themselves to blame.
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