Explainer: The President’s FY27 Budget Request and the International Financial Institutions

by Eli Whitney Debevoise II, Partner, Arnold & Porter Kaye Scholer LLP; Former US Executive Director, The World Bank Group, and Brian Bombassaro, Managing Director, Arnold & Porter

Key Takeaways:
1. While the US administration has publicly continued its support of the IFIs, the President’s Budget Request (PBR) for FY27 included a 20 percent reduction to the gross new funding to the Treasury International Affairs budget. 
2. Like last year, the PBR included a request for IMF quota reform, which would involve exchanges of assets that maintain a US leadership position in the IMF.
3. The PBR included a request of $866.7 million for the World Bank’s International Development Association (IDA), which is a notable decrease from the previous year’s contribution of $1.07 billion towards the IDA21 commitment.

During the 2026 World Bank and IMF Spring Meetings, U.S. Secretary of the Treasury Scott Bessent reinforced the Trump administration’s message for the international financial institutions (IFIs) to embrace a “back to basics” approach. He cited encouraging steps from the IFIs and, while urging some areas of reform, he indicated that the U.S. commitment to the Bretton Woods institutions remains intact. This cautious endorsement is reflected in the administration’s Fiscal Year 2027 (FY27) Budget Request released in April 2026. Requested gross new funding for the Treasury International Affairs budget is down approximately 20 percent lower than the enacted FY26 level, largely in line with the broader spending cuts proposed by the administration in several areas of discretionary nondefense programs.

The FY27 budget request proposes authorization and funding for the United States’ contributions to the following IFIs:

  • IMF: An increase in the US quota subscription to the International Monetary Fund (IMF), as well as a reduction in the amount of the U.S. commitment to the “New Arrangements to Borrow” (NAB). These reforms would involve exchanges of assets that maintain a US leadership position in the IMF and, according to Treasury, they do not generate any budget cost.
  • IDA: $866.7 million for the next tranche of U.S. contributions to the 21st replenishment period of the World Bank’s International Development Association (IDA).
  • EBRD: $87.5 million for shares issued to the U.S. by the European Bank for Reconstruction and Development (EBRD) under a previously agreed general capital increase.
  • AfDB: $54.6 million for the 6th installment of the general capital increase for the African Development Bank (AfDB) with an associated program limitation for $856 million in callable capital.
  • IADB: $75.3 million for the U.S. share of the third capital increase for IDB invest, the private sector arm of the Inter-American Development Bank (IADB).
  • AsDF: $43.6 million for the 13th replenishment of Asian Development Fund (AsDF), the concessional arm of the Asian Development Bank.

It is worth noting that the administration’s request for the IMF quota subscription was reiterated from the FY26 budget request. The previous request was not fulfilled, largely due to the differences in how the Congressional Budget Office (CBO), the Office of Management and Budget, and the U.S. Treasury “score” the cost of U.S. participation in the IMF. A CBO report released earlier this year reduces the “score” for the US quota subscription in the IMF which may help in moving the proposed quota reform forward this year. More information on IMF quota reform can be found in this BWC Backgrounder.

The requested $866.7 million for the International Development Association (IDA) is a notable decrease from the previous year’s contribution of $1.07 billion towards the IDA21 commitment. IDA21 spans from July 2025 through June 2028. The downward revision suggests an overall cut of the U.S. IDA21 pledge to somewhere between $2.8 billion and $3.0 billion, down from a $3.2 billion commitment suggested by last year’s contribution. The first draft of the National Security, Department of State, and Related Programs (NSRP) Bill from the House included a further reduction to IDA funding to approximately $504 million. As in years past however, the Senate may restore the amount to align with the administration’s request.

The FY27 budget request includes a $32.3 million request for Treasury International Assistance Programs, which can be used for discretional needs at IFIs to respond to urgent short-term emergencies. The FY26 enacted level for Treasury International Assistance Programs was $75.0 million. The FY27 request also includes $35 million for Treasury’s Office of Technical Assistance, which is a slight increase from the $30 million enacted in FY26.

Finally, the FY27 budget request includes $52 million in no-year funds for the U.S. contributions to multilateral debt restructuring through mechanisms such as the G20 Common Framework and the Paris Club.

Citing misalignment with Trump administration foreign policy priorities, the budget request proposes recissions to Treasury International Programs totaling $387.2 million, including a $197 million cut to the African Development Fund, a $150.2 million cut for the Global Environment Facility, and a $30 million cut for debt restructuring associated with the Tropical Forest and Coral Reef Conservation Act.

Featured authors: 

Eli Whitney Debevoise II, Partner, Arnold & Porter Kaye Scholer LLP; Former US Executive Director, The World Bank Group

Brian Bombassaro, Managing Director, Arnold & Porter