The fight over a controversial piece of the Ukraine aid package is over: Republicans won.
Senate Majority Leader Harry Reid conceded defeat Tuesday, announcing during a press conference that he will not push for a provision that would have bolstered the International Monetary Fund’s ability to lend to countries in times of crisis.
The White House supports the change, but Senate Democrats were divided over whether to fight for it.
Reid framed Democrats’ capitulation not as an agreement with the Republican stance, but rather as making the compromise necessary to move the measure forward quickly. The Senate, which took steps Monday toward considering legislation that included changes to the IMF, now plans to vote Thursday on an amended bill stripped of any IMF reforms.
“It appears we have a way to move forward on Ukraine,” he said. “Hopefully we can do that today, if not tomorrow at the latest.”
The writing was on the wall for Democrats earlier Tuesday. With pressure to provide quick relief before Russia seizes more of Ukraine, it became clear that Senate Democrats were fighting a losing battle, as unity on the issue began to fray.
“Take it out,” said Sen. Mark Begich, ahead of the Democrats’ weekly lunch. “Let’s get on with dealing with the Ukraine and focus on working on that issue. We can have a reform discussion later on.”
House Republicans, meanwhile, barreled ahead on the issue, as the Foreign Affairs Committee on Tuesday approved a bill that does not include the White House’s requested change to Washington’s IMF contributions.
And following Reid’s speech, Republicans were quick to declare victory.
“As the speaker has said all along, that is the only way to get Ukraine the help it needs as quickly as possible,” Michael Steel, a spokesman for John Boehner, said of Reid’s decision to drop the IMF provision.
Democrats, however, are not going down quietly.
After Reid’s announcement, Senate Foreign Relations Committee Chairman Robert Menendez gave an impassioned speech on the Senate floor arguing the IMF reforms are needed to strengthen the aid to Ukraine and U.S. global leadership.
“The House Republican leadership has proven itself intransigent on IMF reform, and we all know why,” he said. “I cannot believe that the House leadership will not put national security interests above a partisan political interest.”
But all along, it appeared the coalition backing the IMF changes was more inclined to compromise if it meant moving the measure sooner. Secretary of State John Kerry said as much earlier this month.
“We must have IMF reform,” Kerry said at a Senate hearing. “It would be a terrible message to the Ukraine not to be able to follow through” on boosting the fund’s lending capacity.
But when pressed later in the House, he said, “I want both, and I want them both now…. But if I can’t have one, we have got to have aid; we’ve just got to get the aid immediately. We can’t be toying around here at a critical moment for Ukraine.”
The contested IMF reforms would have completed a 2010 international agreement that the administration has been pushing to finalize. It would shift $63 billion from an IMF crisis fund to its general account, which would double its lending capacity allowing countries in need greater access to assistance. The reforms would also boost the role of growing economies, giving them more responsibility at the fund and updating the formula for how much countries must provide — and can borrow — from the IMF.
Menendez and other Democrats argued the changes would increase IMF emergency funding to Ukraine by up to 60 percent, provide an additional $6 billion for longer-term support, and require developing countries to contribute — increasing the fund’s lending power.
But Republicans generally opposed the change. Boehner argued that the reforms were unrelated, or unnecessary, for the aid package. Others expressed concern that the change would reduce U.S. influence over the IMF and spread some of that power to other nations — including China.
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