US Senate advances Ukraine aid, clash with House awaits

The US Senate easily advanced a Ukraine aid package Monday that includes sanctions on Russia, but its controversial inclusion of IMF reforms is likely to stall the legislation in the House.

Senators voted 78 to 17 to overcome a procedural hurdle, strongly signalling the bill backed by President Barack Obama could pass later this week.

It would provide the new government in Kiev with loan guarantees for about $1 billion in aid promised by the Obama administration, and imposes sanctions on figures involved in the crackdown on anti-government protesters and in Russia’s seizure of Crimea.

But several Republicans have said reforms to the International Monetary Fund which are included in the bill, and which the White House has said would immediately boost lending capacity to Ukraine, are unnecessary.

The House has already passed an aid measure, but with no IMF reforms.

The reforms agreed in 2010 would increase the fund’s permanent financial holdings and provide a greater voice to emerging-market economies like China, Brazil and India.

But the United States, by far the IMF’s largest stakeholder, has refused to approve the reforms, essentially blocking them.

Senators expressed worry that the legislation would not reach the president’s desk soon given the impasse.

Senator Rand Paul, whose earlier attempt to strip out the IMF reforms from the bill failed, and who voted no on Monday, said it would be a “mistake” to keep them in.

Fellow Senate Republican Lindsey Graham said he supports the IMF reforms as a way for Kiev to access more immediate aid, but would agree to drop them from a final bill if it meant swift passage of the loan guarantees and sanctions.

“Time is of the essence,” he told reporters.

If the two chambers were forced to thrash out a final compromise, “my guess would be that the IMF language would not make it through the conference,” Graham said.

“But hopefully the House would accept the sanctions. I could live with that,” he added. “I think that’s the sweet spot.”

Republicans may be using IMF reforms as a way to extract a political concession from the Obama administration over pending changes to rules for political non-profit groups.

According to reports Monday, House Republicans threatened to balk at the Senate bill unless they receive assurances that the Treasury Department will delay new rules that would limit the electioneering activities of political action committees.

That led Senate Majority Leader Harry Reid to lash out at “radical Republicans” willing to scuttle vital aid to a nation in need in order to seek a political advantage during this year’s mid-term election campaign that would allow wealthy donors “to continue to anonymously spend millions” on advertisements and other activity supporting congressional candidates.

“It’s hard to believe,” Reid said.