House Wants to Delay IMF Reform for Ukraine

Secretary of State John Kerry pleaded with lawmakers Thursday to pass Ukraine aid immediately.

"We need aid for Ukraine, and we need it now," he said at a House Foreign Affairs Committee hearing on the State Department budget.

During the hearing, California Democrat Brad Sherman, urged Kerry to pressure the Senate to take up the House-passed bill that would provide $1 billion in loan guarantees immediately, and to not allow a push to include reforms to the International Monetary fund to drag out the process.

"I hope that you would make it clear that the Senate should pass the House $1 billion aid bill now, because the plan to load up IMF reform—which I know you very much support—and put that on the back of the Ukraine bill threatens to delay that bill for three legislative weeks, which, I might add, is six calendar weeks," he said.

Committee Chairman Ed Royce told Kerry at the outset that the IMF reforms should be removed from the Ukraine aid debate. 

"The Senate should move on this legislation today," Royce said about the House bill. "And leave IMF debates to later."

Earlier in the day at a Senate Appropriations subcommittee hearing on the State Department and Foreign Operations budget, Kerry said the U.S. would be sending the wrong message to Ukraine if it failed to include International Monetary Fund reform in an aid package.

"We must have IMF reform," Kerry said at the 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 by Sherman on whether the IMF reforms should be allowed to hold the aid up, Kerry was forced to place priority on the aid piece of the package.

"I want both, and I want them both now," he told Sherman. "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."

Kerry said he did not want to get caught in the politics of the issue. (The IMF reforms are controversial with some Republicans, but the Ukraine aid enjoys broad bipartisan support.)

"I know how things work up here," Kerry said. "I don't want to get into the politics in between, but to the degree I do get into it, we need both. We need them now."

Kerry sought to knock down criticism of the IMF reforms, arguing that they are a lever to encourage democracy and increase the pool of countries that contribute to international aid efforts. 

At the Senate Appropriations subcommittee hearing, Democratic Sen. Patrick Leahy, who chaired the hearing, argued it was important for the Senate to understand which version of Ukraine aid the president wanted to sign—the House-passed bill that authorizes $1 billion in loan guarantees, or the Senate Foreign Relations Committee's version, which would include IMF reform and sanctions against Russia.

"I'm looking at right now we have two different pieces of legislation on the Ukraine," Leahy said. "All of us are hoping we can get agreement on a bill that the president can sign."

Earlier in the week, it had seemed that the Senate had hoped to pass a Ukraine aid package before it adjourned for a weeklong recess, but by Thursday such action appeared in doubt.

The administration is gunning for IMF reforms included in the Senate Foreign Relations bill that would enable the fund to increase its aid to countries in crises like the Ukraine, but is controversial with some Republicans, who think it is unnecessary.

Leahy made it clear that the buck stops with appropriators. It is the State, Foreign Operations Subcommittee of Appropriations that will ultimately decide how much and what form of aid Ukraine will receive.

"One of the things that seems to be missing from the press release and op-eds is that the Appropriations Committee, and this subcommittee in particular, will actually decide what assistance and how much to provide," he said. "Of course, that will depend on what evolves in the Ukraine over the coming months; none of us can predict that."

Republican Sen. Lindsey Graham, the panel's ranking member, made a plug for the IMF reform, arguing that it provides a wise investment and an additional tool in the toolbox to aid in nonmilitary solutions.

Kerry argued that the IMF piece is critical. "The IMF is the tool that helps to bring countries into alignment on their transparency, accountability [in] their reforms, their market economy, all of the things that are in our interests," he said. "I could not underscore more, Senator Graham, the importance of what you are saying and the importance of following through."

Graham said he has often been at odds with the administration but hinted that he believes some members of his own party are throwing up unnecessary road blocks by resisting IMF reform.

"I have been critical—I think sometimes forcefully and appropriately so—about this administration's foreign policy," said Graham. "But Congress needs to do some self-evaluation of where we are as a body. What is our role in all of this?"

On whether Russia's incursion into Crimea could interfere with its role in applying pressure on Syria to dismantle its chemical weapons, Kerry said he hoped it would not, but could not guarantee it.

He said that Syrian President Bashar al-Assad is "not winning, but not losing" the civil war there and that the U.S. is still optimistic it can work with the Russians to ensure a peaceful resolution.

"Whether or not we can succeed in getting that done will depend to some degree on the outcome of events that we are obviously all focused on with respect to Ukraine," he said.

"My hope is that what happens in the Ukraine will not interfere."

Kerry said he believes "Russia maintains a significant interest in not having these chemical weapons loose, not having them fall into the hands of terrorists."

"My hope is, we will continue no matter what," Kerry said. "We are focused on getting them out. The end deadline for this is June. So, in fact, we are operating within the timeframe still. I still believe its possible to achieve this, and we will stay focused on it."