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U.S. bill on Ukraine delayed as Congress debates IMF, campaign finance

Ukrainian Navy sailors stand guard on top of the Ukrainian navy command ship Slavutych at the Crimean port of Sevastopol March 13, 2014. REU
Ukrainian Navy sailors stand guard on top of the Ukrainian navy command ship Slavutych at the Crimean port of Sevastopol March 13, 2014. REU

By Patricia Zengerle

WASHINGTON (Reuters) - The U.S. Senate will not vote until later this month at the earliest on a bill providing aid to Ukraine, after the measure got caught up in a partisan battle over International Monetary Fund reforms.

The legislation including the IMF reforms, loan guarantees for Ukraine, sanctions against Russians and Ukrainians and economic aid for the new Kiev government was passed by the Senate Foreign Relations Committee on Wednesday.

But it failed to advance in the Senate on Thursday, after Republicans objected to the inclusion of the IMF measure.

The Senate's failure to consider the bill on Thursday meant it will be up for a vote only after Congress returns on March 24 from a recess that begins on Friday. Senate approval is expected, but the measure cannot become law without passing the Republican-led House of Representatives, where it faces a difficult fight.

Lawmakers who back the bill blasted opponents in angry speeches on Thursday evening.

Republican Arizona Senator John McCain said he was "embarrassed" by members of his own party. He said passing the legislation would have sent an important message of support to Ukraine as Russian forces massed on its border.

"You can call yourself Republicans. That's fine, because that's your voter registration," McCain said, hours before leaving Washington with a congressional delegation to Ukraine.

"Don't call yourself Reagan Republicans. Ronald Reagan would never, would never let this kind of aggression go unresponded to by the American people," McCain said.

Republican House Speaker John Boehner had urged the Senate to pass a House version of the bill, which backs $1 billion in loan guarantees but does not include the other provisions of the Senate measure, particularly the IMF funding.

"The IMF money has nothing to do with Ukraine," Boehner said at his weekly news conference earlier on Thursday.

The Obama administration has strongly pushed the IMF reforms, but some Republicans complain that they would cost too much and reduce American influence at the international organization.

'LOONEY'

California Representative Howard "Buck" McKeon, the chairman of the House Armed Services Committee, said he would strongly oppose the package in the House, and referred to some money being reallocated from U.S. Army programs to pay for it.

"Senator (Robert) Menendez's bill to fund reforms at the IMF on the backs of our troops is just looney and I will strongly oppose it if it comes to the House," McKeon said in a statement.

Menendez, chairman of the Senate Foreign Relations Committee, dismissed calls to pass only the loan guarantee. In his own emotional speech following McCain's, he said a bill like the House measure, without sanctions, would not punish Moscow.

"If you want to be doing something about Russia, you can't do it with the House bill, you can only be doing it with the Senate bill," Menendez said.

The Obama administration has been pushing Congress for a year to approve a shift of $63 billion from an IMF crisis fund to its general accounts to make good on a commitment from 2010 and maintain U.S. influence at the lender.

Secretary of State John Kerry, Treasury Secretary Jack Lew and Defense Secretary Chuck Hagel have all pressed for the shift at congressional hearings this week.

The Ukraine aid bill was also at risk of getting bogged down in a raging partisan battle over campaign finance reform.

Top Senate Democrats accused Republicans of holding the Ukraine bill hostage to help the billionaires Charles and David Koch, brothers who bankroll independent groups that back conservative political causes.

Some House Republicans have suggested that they would back the IMF measure if the Obama administration ends plans to reform the way such groups engage in political activity.

"This is hard for me to comprehend how with a clear conscience they can say, 'Ukrainians, we probably can't help you because we are trying to protect the Koch brothers,'" Senate Majority Leader Harry Reid told reporters, in comments dismissed by Republicans.

"And not only that," Reid added, "they are saying to the American people that protecting the Koch brothers is more important than protecting our country."

(Additional reporting by Thomas Ferraro, David Lawder and Phil Stewart; editing by G Crosse and Cynthia Osterman)

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