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Senate Ukraine aid bill will not include IMF changes

Senate Majority Leader Harry Reid (D-Nev. (AP Photo/J. Scott Applewhite)
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Updated 5:55 p.m.

Senate Democrats will remove provisions from a proposed aid package for Ukraine that would change how the United States provides money for the International Monetary Fund in order to ensure quicker passage of the measure, Senate Majority Leader Harry M. Reid (D-Nev.) said Tuesday.

The decision caps more than a week of disagreement between Democrats and Republicans over whether to use an aid package for the new Ukrainian government to also make changes sought by the White House that would shift about $63 billion in IMF money from a crisis fund to a general account. Doing so would make good on a 2010 pledge by the Obama administration and ensure greater U.S. influence over the world body, according to supporters.

"I feel very strongly about IMF reform, we need to get that done and we need to get it done just as quickly as we can," Reid told reporters Tuesday afternoon. "But this [aid] bill is important. As [Secretary of State] John Kerry said yesterday, he wants both of them, but the main thing is to get the aid now, and I'm following his lead."

Senate Foreign Relations Committee Chairman Robert Menendez (D-N.J.) had earlier blamed the decision to drop the IMF provisions on the GOP-controlled House.

"The House Republican leadership has made very clear, come hell or high water, regardless of the importance of the IMF to the Ukraine and future emergencies, that their politics doesn't permit to have the national security interests of the United States superseded," he told reporters.

The White House also responded angrily to the decision. Dan Pfeiffer, a senior adviser to President Obama, said "It’s simply irresponsible that the Republican leadership insisted on holding IMF reforms hostage in an effort to protect their special interest campaign contributors’ ability to pour money into the system unchecked.  Supporting these reforms would have meant Ukraine could access additional assistance, and it’s unfortunate that Republicans stood in the way. We will continue to urge Republicans in Congress to do the right thing when it comes to the situation in Ukraine."

Once the IMF-related language is removed, the Senate's aid package proposal will provide $1 billion in loan guarantees for Ukraine and impose sanctions on Russian and Ukrainian officials involved in starting the standoff between the two countries. The agreement also will authorize $50 million for democracy, governance and civil society assistance and $100 million in security assistance for Ukraine and other countries in the region.

Senate Minority Leader Mitch McConnell (R-Ky.) credited senators for developing "a decent amount of common ground" on providing assistance to Ukraine and has warned earlier Tuesday that the bill wouldn't be able to pass Congress if it continued to include the IMF language.

McConnell also blasted Reid for suggesting Monday night that Republicans may have helped Russia annex Crimea by delaying procedural votes on a Senate bill that would provide more than $1 billion in aid to the new Ukrainian government.

"I mean, who writes this stuff?" McConnell said Tuesday morning in response. "It's not just completely unhelpful. It also injects hyper-partisanship into the process when we should all actually be working together."

Over in the House, Speaker John A. Boehner (R-Ohio) on Tuesday accused Senate Democrats of trying to "slow the whole process down" by including the IMF provisions in their aid bill.

The House passed an aid package two weeks ago that includes $1 billion in loan guarantees. Senators had amended that bill to include additional sanctions and the IMF language.

Meanwhile, the House Foreign Affairs Committee approved a new, separate round of sanctions and penalties against senior Russian and Ukrainian officials Tuesday and approved a bill that said nothing about the IMF.

"There isn't support in my committee on either side of the aisle for including this. We feel it should be handled separately," Rep. Ed Royce (R-Calif.), who chairs the House Foreign Affairs Committee, told reporters.

Rep. Eliot Engel (D-N.Y.), the ranking Democrat on the committee, agreed with Royce, telling Foreign Policy Magazine in an interview that ongoing debate over IMF reform "makes us look silly and weak. If there's one thing Ukraine needs, it's aid, it's help ... I'm for these reforms happening, but I'm even more for immediate loan guarantees and aid to Ukraine."

In addition to the new sanctions bill, Royce said the House Energy and Commerce Committee plans to move a separate measure that would eventually authorize exporting American liquid natural gas to Europe.

Russian President Vladimir Putin "has got Ukraine by the throat in terms of the monopoly pricing of gas," Royce said. "He can turn the valve off anytime. And we need the ability to ship gas into that market at any time."