President Obama wants increased funding for the International Monetary Fund (IMF), and the Senate wants to give it to him. And at first blush, it seems like a straightforward and uncomplicated proposition, as reflected in this excerpt from Thursday’s post at CNN’s Money blog:
The International Monetary Fund [IMF] has agreed to lend Ukraine up to $18 billion over the next two years as its new government tries to stave off economic collapse. Kiev has been running dangerously low on cash to pay for imports and service its debts since the ousting of pro-Moscow former President Vitkor Yanukovych last month, which killed off a $15 billion financial lifeline from Russia.
“The IMF package should be sufficient to prevent the country falling into a full-blown balance of payments crisis, in which the hrvynia would drop sharply and output would collapse,” said William Jackson, emerging market economist at Capital Economics. In return for the bailout, Ukraine will implement a program of unpopular reforms aimed at stabilizing the economy and creating the conditions for a return to sustained growth. Central to the program are commitments by Ukraine to tackle corruption — a major concern of international lenders — and reforming the country’s energy market, including the gradual withdrawal of subsidies on natural gas.
But with 100,000 Russian troops poised at the border, things are getting more complicated. On top of that, the House Republicans, who are reluctant to bless the IMF expansions that the President favors, want a quid pro quo. They have agreed to pass the IMF funding bill, which will enable the IMF to prevent chaos in the Ukrainian monetary system, in return for the Obama administrations’s promise to back off on implementation of the new IRS regulations that would restrict the political activism of the many conservative organizations that fall under the IRS Section 501(c)(4) rules for non-profits.
So, does Boehner have a deal? Nope, nada, no way, Jose. As reported earlier this week by Eliana Johnson at the online National Review (with my slight editing for brevity):
In the ongoing negotiations over a bill to fund aid to Ukraine, Republicans in both chambers told Democrats privately that they would cede ground on the IMF provision — which gives more influence within the organization to developing countries and, Republicans say, diminishes that of the United States — if Democrats agreed to delay the proposed rules.
Democrats wanted approval for new IMF rules and more funding for the president’s pre-kindergarten program, among other things, but were unwilling to give in on the IRS regulations: Democrats and the administration rejected [the] offer to trade increased funding for the IMF for an amendment that would have delayed them. “The spin is that Republicans are so petty, but the truth is that Democrats are willing to sacrifice everything, including the IMF reforms they wanted, to keep them,” says a senior Republican aide.