Eighty percent of Ukraine-Israel bill will be spent in the United States or by the American military

The implication is that foreign aid is just a gift with no strings attached. This is not the case. About two-thirds of foreign aid is spent through U.S.-based entities, according to the Congressional Research Service. For example, food aid must be purchased in the United States and, by law, must be shipped by U.S. carriers. With the exception of some aid to Israel, all military aid must be used to purchase U.S. military equipment and training.

Since these bills – for Ukraine, for Israel and the Pacific region – are primarily about military aid, this means that they are actually US jobs programs, which, in their view, in turn, support the American economy. The Senate approved the spending package on Tuesday, and President Biden signed it into law on Wednesday. Let’s explore.

The total cost of the project was estimated at $95.25 billion. But information provided by the White House budget office and a detailed review of the bill show that nearly 80 percent went either to U.S. gun manufacturers to replenish their stockpiles or supply weapons or to fund Department of Defense operations in the United States and abroad (including training of Ukrainian soldiers).

Just over $20 billion was earmarked for humanitarian or economic assistance, which, as noted above, often requires the funds to go to U.S.-based organizations. Of this amount, around $8 billion is set aside to help the Ukrainian government, including $50 million to deal with food shortages. Another $5.6 billion is for general international disaster assistance and $3.5 billion for refugee aid.

While previous bills regarding Ukraine provided funds to help the government maintain old-age pensions, this bill prohibits direct payments for pension support. Indeed, the bill calls on Biden to negotiate a deal with Ukraine to repay its economic support, although 50% of the debt could be canceled after November 15 with notification to Congress, with the remaining 50% able to be canceled after January 1, 2026.

As is often the case with appropriations bills, there are different ways to evaluate the numbers. If we look at the plan another way, about $60 billion will support Ukraine, $14 billion will support Israel, and about $8 billion will go to helping countries in the Indo-Pacific region, particularly Taiwan. Another $9 billion will go toward humanitarian aid in conflict zones (including beyond Ukraine and Gaza) and $2.5 billion will support central command operations. Nearly $500 million is earmarked for the resettlement of Ukrainian refugees in the United States.

60 percent will not leave our shores

Nearly $57 billion – or about 60% – never leaves the United States. Instead, these funds are invested with gun manufacturers located in dozens of states. (So ​​far, according to the Pentagon, manufacturers in all but 11 states have received Ukraine-related arms contracts.)

About $24.5 billion is intended to replenish stocks of weapons supplied to Ukraine, Israel and other countries, such as 155mm rounds. The United States is providing defense items to Ukraine and Israel through the Presidential Withdrawal Authority, under which Biden can authorize the immediate transfer of items and services from U.S. stockpiles. Now those stocks will be replenished, meaning U.S. arms factories will operate nonstop.

Nearly $14 billion will fund the purchase of advanced weapons systems for Ukraine, such as the High Mobility Artillery Rocket System, a lightweight multiple rocket launcher built by Lockheed Martin in Arkansas.

An additional $1.6 billion will be used to replenish US military stocks located in Israel, including artillery shells and missiles. These are pre-positioned for US military use, but also available to Israel if needed.

Nearly $5 billion will be used to increase military production capacity to meet the needs of Ukraine, Israel and other countries. For example, the production rate for 155mm caliber artillery shells was about 10,000 per month, and the administration wants to increase that to 1 million per year – a substantial increase that will include the purchase of shell casings. additional weapons, explosive charges, nuclear warheads and detonators.

More than $7 billion — half going to Israel — is earmarked for a State Department program called Foreign Military Financing, in which U.S. grants or loans are provided to countries to purchase equipment American military. (The bill also amends this program’s loan authorization provided in a previous Ukrainian law to allow up to $8 billion in direct loans and $8 billion in loan guarantees to NATO and key allies non-NATO members to purchase American military equipment.)

Nearly $3.3 billion will be used to increase production of submarines, such as the Virginia-class submarines, from an average of 1.3 per year to two per year. Each Virginia-class submarine costs approximately $4.3 billion.

Finally, the bill provided $1.6 billion to build additional missile defense systems for Israel.

19 percent will go to the Pentagon and US intelligence

The bill provides nearly $18 billion for defense spending to help the Pentagon and intelligence services finance the costs of dealing with the aftermath of the war in Ukraine and the war between Israel and Gaza . The bill replenishes both money that has already been spent and money that will be needed for the remainder of the year, officials said. The bill specifically references $2.4 billion for U.S. Central Command, which conducts overseas operations in the Middle East, $1.9 billion for supplemental maintenance and $2.4 billion for dollars for combat and other expenses, including at U.S. bases in the United States. But the money for intelligence activities is classified, so it is not possible to provide a detailed breakdown of all spending.

21 percent will go mainly to aid and diplomacy

This item includes $8 billion to help the Ukrainian government, $5.6 billion in general international disaster assistance and $3.5 billion in refugee aid. The bill has many other smaller spending categories, such as additional funds for the State Department to support diplomatic efforts in the Middle East and increased funds for inspectors general.

Allies fill their baskets here

An underappreciated aspect of Russia’s war in Ukraine is how NATO allies have also spent significant funds purchasing advanced U.S. weapons to replace the equipment they gave to Ukraine. Finland, Norway, Denmark, the Netherlands and Poland have flooded American manufacturers with orders since the start of the war. For example, Poland gave 250 older tanks to Ukraine and then signed contracts worth more than $6 billion to purchase nearly 370 Abrams tanks (made in Ohio). Warsaw also gave Ukraine Soviet-made attack helicopters and in turn signed a $12 billion deal to replace them with Apache helicopters (made in Arizona).

Between 2019 and 2023, according to the Stockholm International Peace Research Institute, the percentage of arms purchases from American companies reached the following percentages: Netherlands (99%), Italy (89%), Norway (89%), Great Britain (89%), Denmark (70%) %), Germany (63%). and Poland (45 percent).

Grenell did not respond to a request for comment.

The only thing Grenell got right was that the bill costs nearly $100 billion. This was emergency spending and therefore was not funded by offsetting revenue, which can be troubling if you’re a deficit hawk.

But it is very misleading to say that these funds go to foreign countries. Nearly 80 percent will be spent on weapons made in the United States or by the U.S. military. This spending may benefit foreign countries – like Ukraine in its war against Russia – but the money is primarily used to create jobs in the United States.

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