WASHINGTON — The U.S. Senate is on track to approve sanctions against Russia and aid for Ukraine after Democrats withdrew a provision requiring International Monetary Fund reforms.
Opposition Republicans’ rejection of the IMF reforms had been blocking Congress from issuing a sharp response to Russian President Vladimir Putin’s military intervention in Crimea.
A Senate vote was set for Thursday. The House Foreign Affairs Committee has approved its version of the measure, but it was unclear whether a final bill could be sent to President Barack Obama before the end of the week.
With tens of thousands of Russian troops massed on Ukraine’s eastern border, Senate Democrats decided it was more important to denounce Russia, codify sanctions against Putin’s inner circle and support Ukraine rather than push right now for the IMF changes.
Democrats wanted the Ukraine legislation to include provisions to enhance the IMF’s lending capacity, but Republicans were opposed. And since more than two weeks have passed since Russia’s incursion into Crimea, Democrats decided it was important to move quickly to provide $1 billion in loan guarantees to Ukraine and sanction Putin’s inner circle.
Eight Senate Republicans introduced an amendment to the Senate measure to remove the IMF provisions.
The move signaled a retreat for the Democrats and the Obama administration, which had promoted the IMF provisions.
Dan Pfeiffer, senior counselor to Obama, who is traveling in Europe, denounced Republicans for not backing the IMF changes as part of the Ukraine measure. “Supporting these reforms would have meant Ukraine could access additional assistance, and it’s unfortunate that Republicans stood in the way,” Pfeiffer said.
Christine Lagarde, managing director of the IMF, said she too was deeply disappointed that the reforms were dropped from the Senate measure.
The IMF provisions would have increased the power of emerging countries in the IMF and shifted some $63 billion from a crisis fund to a general account the lending body could use for economic stabilization operations around the world.
Republicans have long spurned the administration’s attempt to ratify the IMF revisions, saying they would increase the exposure of U.S. taxpayers in foreign bailouts. Making the shift now, opponents argue, also would marginally increase Russia’s voting power over the fund’s finances.
The Obama administration and Democrats counter that unless the U.S. approves the new rules, Washington will lose its influence at the IMF and hamper the body’s ability to avert economic meltdowns in places precisely like Ukraine. The U.S. is the only major country that has yet to sign off on the IMF changes.
DEB RIECHMANN, ASSOCIATED PRESS