Three Roadblocks to Congressional Ukraine Aid

Will Congress give President Barack Obama the Ukraine aid bill he’s requesting? Not right away.

On Wednesday -- with Ukrainian Prime Minister Arseniy Yatsenyuk sitting next to him in the Oval Office -- Obama urged Democrats and Republicans in Congress “to move quickly to give us the support that we need so that we can give the Ukrainian people the support that they need.”

But it probably won’t happen “quickly.”

The Ukraine loan-guarantee bill, which the House passed last week, differs from the measure OK’ed on Wednesday by the Senate Foreign Relations Committee.

The House and the Senate may not be able to negotiate a compromise until after Congress returns from its recess on March 24.

Three issues stand in the way of an agreement:

  • To help pay for Ukraine aid, the Senate Foreign Relations Committee bill included cuts to military spending. But House Armed Services Committee Chairman Buck McKeon opposes the cuts.
  • The House bill lacks the Senate bill’s asset freezes and visa bans directed at those who ordered or carried out the invasion of Ukraine, and those who ordered attacks on Ukrainian protesters who toppled the government of Viktor Yanukovich.
  • Finally, the Senate bill includes, but the House bill omits, changes in the operations and organization of the International Monetary Fund (IMF).

The IMF, composed of 188 member countries, provides emergency financing to troubled economies, such as Greece during its financial meltdown four years ago.

The United States has agreed to provide $1 billion in loan guarantees to Ukraine. On top of that Ukraine is seeking $15 billion from the IMF.

In 2010 Obama agreed to changes in how the IMF operates – reforms which are mostly designed to reduce European overrepresentation in the IMF and to increase the clout of emerging market countries. But Congress has not yet OK’ed those reforms.

House Speaker John Boehner said at a press conference Thursday the IMF issue “has nothing at all to do with Ukraine.”

Boehner’s argument gets support from analysts Benn Steil and Dinah Walker at the Council on Foreign Relations, who say that the IMF has the money to lend Ukraine and that the IMF reforms aren’t necessary for the funding to flow.

But Sen. Chuck Schumer, D-N.Y., told reporters that passing the IMF reform was essential to the overall Ukraine package and that there was no good reason for Congress to block the IMF changes.

“I find it hard to believe that some of our colleagues on the other side of the aisle are blocking IMF funding,” Schumer said. “Here we have a big Goliath, Russia, and one of the ways they leverage the Ukrainian people away from their freedom is putting financial incentives on the table. If we can’t do that … what are we talking about in terms of the greatness of the United States?”

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