Congress Clashes Over Ukraine Aid


KIEV, Ukraine — The United States House of Representatives passed the Ukraine Aid Plan March 6 in which the U.S. pledged $1 billion in loan guarantees to the struggling and indebted Ukraine government. The question now, however, is whether this bill will escape the trenches of the senate and see the light of day anytime soon as Democrats and Republicans clash over the International Monetary Fund (IMF) provision.

The legislation that was passed by the Foreign Relations Committee has yet to be voted upon by a full Senate and may not be even be touched upon again until the Senators’ return from recess on March 24.

The hang-up with the loan guarantee bill is whether to include reforms to the IMF, which a number of Republican leaders oppose. Because the bill was passed with the IMF provision, opposing parties in Congress find themselves at each other’s throats again as they debate whether IMF funds are a necessary and beneficial part of aid to Ukraine.

Through these reforms, $315 million of unexpended Defense Department and State Department funds, accounts directly tied to the military, would be funneled into the IMF. Their main mission for Ukraine, as stated by IMF Managing Director Christine Lagarde, is to “…put Ukraine on the path of sound economic governance and sustainable growth, while protecting the vulnerable in society.”

According to the IMF, its function in aiding countries in crisis is to work with the government to assess and discuss appropriate policy and the level of support needed. After policies are agreed upon and commitments set, the IMF aids through lending, surveillance and technical assistance.

An administration official said that the delay in Congress over whether to pass the reforms will affect the timing in which Ukraine will see the original guarantee of $1 billion take place. For Ukraine, this means that while violence persists, tensions rise and assistance is most needed during these volatile times, that same assistance will be delayed because of disunity in Congress.

This disunity travels deeper even within political parties.

Senator John McCain (R-AZ,) who backed the Ukraine bill, continues to critique his fellow Republicans who oppose its forward momentum based on the reforms. He said during a floor speech on March 13, “Our signal to the people of Ukraine today – as Russian military forces are massing on their border – wait a minute, it’s more important that we get our campaign finance regulations fixed.”

Although Republicans have not been fans of the IMF in general, the key to this issue rests perhaps in whether the bill has a provision addressing the Internal Revenue Service (IRS) proposed new rules, an issue that the Republicans have long been battling.

The question, therefore, is whether Congress can reach a compromise. Can Democrats get their increased funding to IMF while Republicans get a provision to stop the IRS from working on new regulations in order to allow the Ukraine aid plan, which both sides sweepingly agreed upon, to make its way where it can do some good?

Despite these setbacks, and potentially dangerous delays, Ukraine’s prime minister, Arseniy Yatsenyuk, remains positive about the aid package itself, saying that it is, “the first real and concrete step how to stabilize the situation in my country, and we praise it.”

– Heather Johnson

Sources: Business Week, Politico, IMF, NPR
Photo: Yahoo Finance


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