March 10 (Bloomberg) -- Senate Democrats may boost International Monetary Fund resources in an aid package they’re preparing for Ukraine, potentially setting up a dispute with the U.S. House.
Senate Foreign Relations Committee Chairman Bob Menendez said today lawmakers “are very close” to an agreement “at least in the committee” on an aid plan for Ukraine that would include the IMF funding.
Still, the committee delayed its planned consideration of the measure from tomorrow until March 12. “The IMF is the hangup” to an agreement on the measure, said Senator Lindsey Graham, a South Carolina Republican.
“We are short-sighted as Republicans not to understand” that the IMF “is a tool available to the world community to reinforce good behavior and deter bad behavior,” said Graham, who isn’t a member of the Foreign Relations panel.
The measure being crafted by Menendez, a New Jersey Democrat, with the panel’s top Republican, Bob Corker of Tennessee, is intended to rebuke Russia for its incursion into Ukraine and to assist the Ukrainian government. Corker said he would prefer to “try to get the whole package” rather than split it into separate parts.
The IMF assistance was requested by President Barack Obama and the Treasury Department.
The Republican-led House opted not to include the IMF provision in legislation the House Foreign Affairs Committee approved last week seeking sanctions against Russia, or in a bill to provide about $1 billion in loan guarantees to Ukraine that the full House passed March 6. The bill is H.R. 4152.
Obama’s fiscal 2015 budget plan, sent to Congress March 4, would boost the U.S. share, or quota, at the Washington-based IMF by shifting about $63 billion from an existing credit line. House Republicans in January refused to include the IMF quota changes in a measure to fund U.S. government operations.
The Treasury Department says the move would help bolster the fledging Ukrainian government.
“I believe there is bipartisan support for such assistance, but we must make sure it is done responsibly and any legislation is not delayed by adding divisive provisions,” House Majority Leader Eric Cantor, a Virginia Republican, said in a statement.
Including the IMF language in the Senate bill would complicate prospects for sending a Ukraine aid package to Obama before Congress takes a break during the week of March 17. The Senate hasn’t scheduled a vote on Ukraine-related legislation.
The U.S. is delaying implementation of a 2010 agreement by all IMF member countries to double the fund’s lending capacity to about $733 billion. The plan would give emerging markets such as China more clout at the institution, which was set up at the end of World War II to help ensure the stability of the global monetary system.
Also today, a group of former U.S. government officials urged Congress to approve the IMF measure.
“The IMF has played a crucial role in the global approach to recent financial crises and in navigating the world economy through severe threats,” said the letter signed by former Treasury Department undersecretaries for international affairs Timothy Adams, David Mulford, Jeffrey Shafer and more than 100 others.
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