Senate Democrats Drop IMF Reforms From Bill to Aid Ukraine

Tuesday, 25 Mar 2014 09:09 PM

By Todd Beamon

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In a setback for the Obama administration, Senate Republicans on Tuesday forced Democrats to withdraw a provision that would have blocked legislation to provide $1 billion in loan guarantees to Ukraine and sanction Russia for its annexation of Crimea.

The bill would have provided the loan guarantees and imposed sanctions on Russia for its military actions in Ukraine and Crimea. But it also included a White House provision to broaden the lending capacity of the International Monetary Fund.

Republicans opposed the IMF measure, saying that it was more important to immediately codify sanctions against Russian President Vladimir Putin and send assistance to Ukraine.

Eight Senate Republicans introduced an amendment to the Senate measure to remove the IMF provision.

"By adding the IMF issue to this debate, the administration is choosing to divide Congress, weakening our unified front and delaying this urgent help," said Wisconsin GOP Sen. Ron Johnson.

Sen. Mike Lee, the Utah Republican, agreed.

"In choosing to pick this fight with Congress, the administration is signaling to President Putin a real lack of seriousness in actually addressing the Russian government's conduct," he said.

Other Republicans speaking against the IMF provision were Sens. John McCain of Arizona and Bob Corker of Tennessee. Corker is the ranking Republican on the Senate Foreign Relations Committee.

The original bill was proposed by Sen. Bob Menendez, the New Jersey Democrat who chairs the panel.

The Senate is expected to vote on the altered bill on Thursday. The chamber had voted to end debate Monday night.

Senate Majority Leader Harry Reid announced that the IMF provision would be struck from the legislation. The Nevada Democrat said that while he strongly supported IMF reform, the main thing was to get assistance to Ukraine.

"We have to get IMF reform. But we can't hold up the other," Reid said. "As much as I think a majority of the Senate would like to have gotten that done with IMF in it, it was headed to nowhere in the House."

In addition, the House Foreign Affairs Committee approved its own version of the measure on Tuesday — and it appeared that Congress could send its first rebuke to Russia for its annexation of Crimea by the end of the week.

“How the United States meets the Russian invasion of Crimea matters — it’s related to the future vitality of NATO, the negotiations with Iran over its nuclear program, and our own energy policy regarding the export of natural gas," Senate Minority Leader Mitch McConnell said during floor debate on the GOP amendment.

"So many developments have unfolded in this crisis in the weeks since the bill was drafted that the legislation will have to be modified — at least to take those realities into account," he added. "And in order for it to become law, the controversial IMF provision must be removed."

Menendez, for his part, said he understood the political realities behind of the legislation.

"We cannot and should not stand for the violations of international norms that were perpetrated on Crimea by Russia," he said during debate. "The world is watching — and the world's superpower cannot be seen as incapable of rising to Russia's challenge."

In the House, Speaker John Boehner said that the IMF provision was "unrelated" to helping Ukraine and that "all it’s going to do is slow the whole process down.

"I would hope that we would find a common ground and pass it, so that we can help our friends," the Ohio Republican said.

The IMF provision would have increased the power of emerging countries and would have moved $63 billion from a crisis fund to a general account that could be used for economic stabilization efforts worldwide, The Hill reports.

The White House expressed regret over the Senate move.

"We are deeply disappointed by the news that Republican opposition has forced the Senate to remove the IMF quota and governance reforms from the Ukraine assistance package," said Holly Shulman, a spokeswoman for the Treasury Department.

"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 to strengthening the IMF's financial and governance structures in which the United States has the largest share and veto power."

The Associated Press contributed to this report.

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