Reid Clears Way for Ukraine Aid Package

Senate Majority Leader Harry Reid said Tuesday that he’ll remove a controversial provision that tied U.S. aid for Ukraine to reforms to the International Monetary Fund.

Reid, the Democratic leader, made his move after discussions with swing Republican votes in the chamber and Senate Foreign Relations Committee Chairman Robert Menendez. House Republicans had opposed tying IMF reform to Ukraine aid, and in his comments Tuesday, Reid said he was following the lead of Secretary of State John Kerry; Kerry has said that if he had to choose between IMF reforms or Ukraine aid, he would opt for the latter.

“I feel very strongly about IMF reform, we need to get that done,” Reid said Tuesday. “But this bill is important. As John Kerry said yesterday, he wants both of them but the main thing is to get the aid now. So I’m following John Kerry’s lead.”

The Senate will now likely pass a bill this week that includes $1 billion in loan guarantees, an additional $150 million of security and governance assistance, and sanctions authorization against Ukrainians and Russians who were involved in the secession of the Crimea region from Ukraine to Russia. But it will not include reforms to the IMF, which would have boosted funding to Ukraine by $600 million and would have increased the voting power and financial contributions of emerging economies like Brazil, Mexico, China and Turkey, something the Obama Administration has sought since 2010. Just as Reid’s office was discussing removing those reforms from the Senate package Monday night with Republican Sens. Bob Corker and John McCain, Christine Lagarde, the Managing Director of the IMF, pleaded in the Wall Street Journal for the provision, arguing that it would improve economic growth and stability without costing America either in IMF influence nor finance, as some Republicans have warned.

In exchange for IMF financing, House Republicans had insisted on a one-year delay in Internal Revenue Service rules governing political activity by some nonprofit groups, an unpalatable offer for most Democrats. On Monday, Reid went so far as to link the Republican “obstructionism” to the loss of Crimea itself.

“It’s impossible to know whether events would have unfolded differently if the United States had responded to Russian aggression with a strong, unified voice,” Reid said. Those comments were echoed by Menendez on the Senate floor Tuesday afternoon.”I cannot believe that the House leadership will not put national security interests above a partisan, political interest,” he said.

House Republicans have argued that the Senate should pass the $1 billion loan guarantee measure its chamber passed on March 6 with an overwhelming majority. House Speaker John Boehner said Tuesday that the House will consider a sanctions package this week and that the Senate should stop bringing “unrelated objects” into the discussion. “The sooner we act, the better,” he said.