Ukraine loans stalled in Congress for reasons unrelated to aid

Ukraine loans stalled in Congress for reasons unrelated to aid
Pro-Russian activists hold Russian flags during a rally in the eastern Ukrainian city of Donetsk on Thursday. (Alexander Khudoteply / AFP/Getty Images)

WASHINGTON - Even areas of agreement in Congress get snarled in political gamesmanship.

That's what's happening to a $1-billion Ukraine loan package that has widespread support, but is stalled by a partisan fight over other issues, including the Internal Revenue Service's regulation of political activity.


As a result, Congress is now expected to recess for a week without approving the loan guarantees to the new government in Ukraine.

Trouble hit when both Democrats and Republicans used the popular aid package as a vehicle to push through more divisive items that otherwise would not have had much of a chance.

Democrats want to attach International Monetary Fund reforms sought by the White House that would allow additional loan-making capacity, which in turn could send further assistance to Ukraine.

Republicans are not necessarily opposed to the IMF changes, which have been discussed for months, but they see the issue as not directly related to the current crisis in the Ukraine.

And Republicans decided that if the White House is going muscle through one of its priorities, they want something in return: A delay of pending IRS regulations that govern the political activity of tax-exempt social welfare groups.

Stopping the IRS's reach into the groups' affairs has been a priority for Republicans.

"I understand the administration wants the IMF money, but it has nothing to do with Ukraine," House Speaker John A. Boehner said Thursday, suggesting the Senate should abandon the effort and approve the House-passed loan package that did not include the IMF changes.

But Senate Majority Leader Harry Reid (D-Nev.) said Republicans were holding up aid so they could "protect the Koch brothers," the billionaire industrialists affiliated with some of the leading social welfare groups that align with Republican interests.

Other donors also back groups that promote the priorities of Democrats.

Without a compromise, the aid package is not expected to be approved by Congress before lawmakers recess for the week. They'll likely try again when return at the end of the month.

Twitter: @lisamascaroinDC