Dem retreat? Reid drops controversial IMF provisions from Ukraine bill

Senate Majority Leader Harry Reid said Tuesday he will drop controversial provisions pertaining to the International Monetary Fund from a Ukraine aid bill amid objections from Republicans.

Reid, who a day earlier slammed Republicans for their resistance, confirmed Tuesday that he would back off the IMF measures.

Senate Democrats and the Obama administration had pushed for the changes, but Republicans say they could reduce U.S. clout in the international lender while increasing the exposure of U.S. taxpayers -- Republicans also argue the changes do not belong in the Ukraine bill in the first place.

"I feel very strongly about IMF reform. We need to get that done and we need to get it done just as quickly as we can," Reid said Tuesday. "But this bill is important. As John Kerry said yesterday, he wants both of them but the main the thing is to get the aid now so I'm following John Kerry's lead."

Reid and his fellow Democrats succeeded in advancing Senate legislation, which included both IMF changes and Ukraine aid, on Monday. But even if the bill passed intact, it would face resistance from House Republicans.

The move to drop the IMF provisions, though, would clear the way for Congress to issue its first significant response since Russian President Vladimir Putin's military intervention in the Crimean peninsula.

Up to now, the Senate and House have been at odds over the IMF issue.

Just Monday, Reid launched a surprisingly stinging attack on Republicans who blocked the bill from passing before Congress' one-week recess started on March 14. He suggested GOP "extremists" even helped Russia's annexation of Crimea, saying it was "impossible to know whether events would have unfolded differently if the United States had responded to Russian aggression with a strong, unified voice."

Senate Republican leader Mitch McConnell fired back Tuesday, accusing Reid of trying to destroy the widespread bipartisan support for providing Ukraine with aid and hitting Putin's government with sanctions.

On Reid's claim that Republicans were somehow responsible for Russia's invasion of Crimea, McConnell said: "Who writes this stuff? It's not just completely unhelpful. It also injects hyper-partisanship into the process at a time when we should be working together."

The Senate on Monday advanced its legislation in an overwhelming 78-17 procedural vote. But House Republicans repeated their opposition to language enhancing the lending capacity of the IMF. And its Foreign Affairs Committee was marking up its own Russia sanctions bill Tuesday, without any reference to the international lending body.

At issue are changes that would increase the power of emerging countries in the IMF and shift some $63 billion from a crisis fund to a general account the lending body can use for economic stabilization operations around the world.

Republicans have long spurned the administration's attempt to ratify the IMF revisions, saying they would increase the exposure of U.S. taxpayers in foreign bailouts. Making the shift now, opponents argue, also would marginally increase Russia's voting power over the fund's finances.

The Obama administration and Democrats counter that unless the U.S. approves the new rules, Washington will lose its influence at the IMF and hamper the body's ability to avert economic meltdowns in places precisely like Ukraine. The U.S. is the only major country that has yet to sign off on the IMF changes.

Fox News' Mike Emanuel and The Associated Press contributed to this report.