IMF reforms to hold up Ukraine bill?

Greg Nash

The Senate Foreign Relations Committee is set to vote on an aid bill for Ukraine on Wednesday that includes reforms to the International Monetary Fund pushed by President Obama. 

Conservatives oppose the IMF provisions and are demanding that the bill also include the delay of Internal Revenue Service regulations to govern 501(c)(4) tax-exempt groups that were at the center of the recent IRS targeting controversy.

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The fights could make it difficult to get a final bill to Obama’s desk before Friday, when Congress is set to recess.

If the Senate doesn’t take action by then, lawmakers will leave Washington without providing any aid to Ukraine ahead of a Sunday vote on secession in Crimea, a region of Ukraine now occupied by Russian troops.

The House has already approved $1 billion in loan guarantees for Ukraine. The House bill doesn’t include the IMF language opposed by most House Republicans.

Negotiations between Foreign Relations Committee Chairman Robert Menendez (D-N.J.) and ranking member Sen. Bob Corker (R-Tenn.) on Tuesday centered on whether to include IMF reforms in the bill and how to pay for them.

Republicans have long opposed the reforms, which they see as reducing U.S. influence in the IMF. They’ve sought to get a deal from the administration in which they’d agree to the reforms in exchange for the White House backing off on new regulations to govern 501(c)(4) tax-exempt groups that were at the center of the recent IRS targeting controversy.

The IRS rules, released after the tax agency acknowledged it improperly scrutinized conservative organizations, seek to clarify what would be considered political activity for tax-exempt groups.

The GOP offered a similar deal during a fight over an omnibus spending bill.

Asked if he was concerned about not getting something on the floor this week, Menendez said he was concerned “about not getting the right thing on the floor.”

While Corker and a few other GOP panel members are open to the IMF reforms, they worry opposition within their party would stymie any hope of moving the Ukraine bill this week.

“Look, the IMF reform is something that I support,” Corker said. “I’d like to see that done, [but] if we cannot get that done as part of that package, instead of holding the package up, I’d rather go ahead and pass the Ukraine-specific issues because I think it’s time to send them.”

Sen. John McCain (R-Ariz.) signaled he is open to the IMF provision. He said any lawmaker who would object to a Ukraine bill over an IMF provision has their priorities “terribly skewed.”

Republicans can count on big business support if they back the IMF provisions. The Business Roundtable on Monday urged the committee to back the changes. 

The IMF in 2012 proposed rules that would double member financial contributions to its general loan fund and gave advanced developing countries like Russia, Brazil, India and China more voting rights. Conservatives are reluctant to support the plan because they worry it would give the U.S. less power in the organization.

“You are not going to get unified support. It gives a lot of us heartburn,” said Sen. Ron Johnson (R-Wis.), a Foreign Relations panel member.

The U.S. has a 16.73 percent voting share in the IMF, which effectively gives Congress veto power over the changes, since the reform package needs 85 percent of all shares to agree.

America’s contribution quota to the IMF is set to increase by $63 billion. The Obama administration has proposed shifting the money from a special crisis fund to the general IMF loan pool. 

Republicans argue that shift would put the money in a fund with less U.S. influence, since general loans are approved by a simple majority of the IMF Executive Board. They also noted that the reform would make the board an elected body rather than guaranteeing that the U.S. always has a representative on it.

House Republicans were standing firm officially on the need to pass a clean aid bill to Ukraine. 

“It’s getting pretty clear that the only way for Congress to act this week is for the Senate to pass the House-passed bill,” a House leadership aide said. 

Another House GOP aide said the House could be open to a deal on IRS regulations however. 

“If the Senate passes a bill with that in it, we will take a look at it,” he said. 

Separately, Sen. John Barrasso (R-Wyo.) has been pushing to have the Senate bill include language allowing natural gas exports to Ukraine.

 

Laura Barron-Lopez contributed.