Pelosi says she would 'have a problem' with China-led IMF

By Pete Kasperowicz - 05/16/11 02:54 PM ET

House Minority Leader Nancy Pelosi (D-Calif.) Monday afternoon said she would "have a problem" with a decision to allow the International Monetary Fund to be led by a Chinese national.

"It depends on who we're talking about and the rest," she said in an interview on Bloomberg after being asked about the prospect of a Chinese-led IMF. "Yeah, I probably would have a problem with that, but again, let's hear what the suggestion is."

Questions about whether another European official should lead the IMF are surfacing after the weekend arrest of IMF managing director Dominique Strauss-Kahn for his alleged sexual assault against a New York hotel maid.

As part of an understanding that has been in place since the end of World War II, a European has always led the IMF, while an American has led the World Bank. But emerging markets have increasingly questioned that arrangement, and the sudden scandal surrounding France's Strauss-Kahn is reopening that debate.

In her interviews with both Bloomberg and CNBC Monday, Pelosi said she did not have any specific recommendations to make on who should lead the IMF now. An American, John Lipsky, is now the acting director.

More broadly, Pelosi said the U.S. should look into the operations of the IMF and other international financial institutions to ensure they are meeting the goals that were originally set out for them.

"I think we have a bigger issue, which is: what is the purpose of the Fund?" she asked.

Pelosi did not offer any specific predictions on how the U.S. debt-ceiling debate would end, but said she's "optimistic" that it can be increased so the government is assured to avoid default.

On the possibility of a tax hike, she indicated that she favors higher taxes on couples making more than $1 million annually as a way of increasing government revenues. "I'd be willing to take it to a million dollars, couples making more than a million dollars," she said.

She also repeated her comments that everything must be on the table when it comes to finding ways to reduce the budget deficit, although she drew the line on drastic changes to Medicare.

"One suggestion we're not open to is the abolishment of Medicare," she said, referring to House Republican plans to turn Medicare into a voucher program. "Abolishing Medicare, that is not on the table."