Democrats Just Lost the Fight Over Ukraine Aid

The GOP refused to bend on a portion that would have changed the way the U.S. funds the International Monetary Fund.

US Senate Majority Leader Harry Reid speaks during a press conference by professional boxing and fighting organizations as they pledge $600,000 in support of the Professional Fighters Brain Health Study by the Cleveland Clinic, at the US Capitol in Washington, DC, February 4, 2014. The study, by the Cleveland Clinic Lou Ruvo Center for Brain Health in Las Vegas, develops methods to detect early and subtle signs of brain injury and chronic neurological disorders. 
National Journal
Stacy Kaper Jordain Carney
March 25, 2014, 11:01 a.m.

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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