AMONG UKRAINE’S many problems, none is more pressing than a looming cash crunch. Even if it manages to avoid the dismemberment of its territory by Russia, the fledgling pro-Western government in Kiev could default unless it comes up with the money needed to meet debt payments due in June.
Fortunately for Ukraine, President Obama has promised to help. Unfortunately for Ukraine, Mr. Obama and his allies in the Democratic-majority Senate opportunistically linked legislation authorizing a $1 billion loan guarantee (and sanctions on Russia) to the separate, long-standing administration goal of overhauling the funding and governance of the International Monetary Fund, which Republicans in the House oppose. As a result, aid that should be moving urgently to Ukraine is bogged down in partisan bickering on Capitol Hill.
Senate Majority Leader Harry Reid (D-Nev.) is milking the impasse for all it’s worth, blaming House Republican intransigence and even suggesting that the Senate GOP wanted to hold the Ukraine bill hostage in return for more lenient Internal Revenue Service regulation of the Koch brothers and other conservative donors.
The IMF reforms are important; they would fulfill a promise Mr. Obama made at the 2010 Group of 20 meeting to help the fund boost its lending capacity while shifting some of its financial burden to emerging economies — and giving those countries correspondingly greater power over IMF decisions. But there is only a vague policy connection between that and pending IMF aid to Ukraine, which is well within the fund’s current capabilities. Furthermore, House Republican opposition to the IMF reform plan was perfectly foreseeable, and, in light of current events, not entirely unreasonable. The reform plan would subtract slightly from the United States’ and Europe’s voting power within the institution, while adding to that of a bloc including China and Russia, of all countries.
The White House and Senate Democrats are more to blame for picking this fight than is the House GOP for waging it. The House has passed a bill that authorizes the Ukraine loan guarantee, and it would have been simple to get Senate approval for a similar, “clean” measure. Notably, a senior House Democrat, Nita Lowey (N.Y.), said Friday that she was “surprised and disappointed” that the Senate linked Ukraine aid to IMF reform. We know it’s an election year, but vital U.S. interests in Europe are at stake. Perhaps even the United States’ partisan politicians can stay focused on addressing the Ukraine crisis instead of exploiting it.