Biden requests $61bn package to support Ukraine, but level of support is reduced

By bne IntelliNews October 24, 2023

US President Joe Biden has submitted a request to the US Congress for a new military spending package of $106bn to arm both Ukraine and Israel that will see the financial commitment to supporting Ukraine fall.

The largest part of the spending package, submitted on October 20, is dedicated to Ukraine, which will receive a total of $61bn, while Israel gets $14bn, mostly to reenforce its Iron Dome air defences.

As reported by bne IntelliNews, the Western allies support for Ukraine is beginning to waver and Ukraine’s funding is increasingly in doubt.

The proposed assistance to Ukraine primarily focuses on providing Ukraine with the weapons it needs to continue its fight against Russia. A substantial portion of the funds is directed towards the procurement of additional weaponry and equipment.

The financial package will also facilitate significant investments in Ukraine's defence and industrial base.

Beyond defence, the aid package includes provisions for direct budget support to Ukraine, albeit at a reduced level. The initial budget support of $1.1bn per month is slated to be decreased to $825mn per month, as part of the White House's recalibration of financial assistance to Ukraine.

The aid package also includes money earmarked for critical infrastructure development, support for Ukrainian law enforcement agencies, and assistance in demining efforts within the country.

More than $9bn is to be set aside for humanitarian assistance in Ukraine, Israel, and Gaza.

Early approval of the package, is highly unlikely amid ongoing paralysis in the House of Representatives, which has been unable to elect a new speaker, due to infighting among the Republican majority. The House cannot conduct business until the crisis is resolved.

During a recent address, Biden called upon Congress to unite in support of this substantial aid package, emphasising the importance of international assistance to Ukraine.

Most of the $61.4bn US President Joe Biden is asking Congress to allocate for Ukraine would be spent on defence, Ukrainian Ambassador to the US Oksana Markarova said. It is planned to allocate $46.1bn to defence expenditures:

  • $18bn to replenish defence goods from Pentagon warehouses, reimbursement of costs for defence services, and military education and training provided to Ukraine
  • $12bn for the Ukraine Security Assistance Initiative
  • $1.7bn for the Foreign Military Financing program of the State Department for Ukraine and other US partners
  • $14.4bn for technical and intelligence support, increasing the volume of weapon production, cyber security, etc.

This assistance package also includes:

  • $11.8bn to provide direct budget support to Ukraine
  • $2.2bn to support urgent recovery needs and programme development in Ukraine and other regional countries

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