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Prof. ST Hsieh

Director, US-China Energy Industry Forum

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May 15, 2023

The proxy war in Ukraine between the US and Russia has lasted more than one year with significant damges to Ukarine. Spoke person of the US State Department said today “No one wants this war to end more than our Ukrainian partners.” He was responding to a reporter’s question about a Chinese special envoy for peace will head to the war zone soon. US Senators’ comments in the following report indicates that US aid to Ukraine” needs continue to flow without interruption.” If the US were to cover all the cost, Ukraine has no way to back any peace proposal.

But there are major challenges for continuing the Ukraine war indefinitely:

  1. The Biden administration and the GOP dominated congress are engaged in a “game of chicken” over US national debt ceiling. It is a real national crisis for the US, and it is difficult for the administration and the congress to send more funds to Ukraine indefinitely while we can not pay our own bill.
  2. The Ukraine war has already caused significant economic hardships for the Europeans already. Without any exist strategy, Europeans will be hard pressed to send cash as well as military equipment to Ukraine indefinitely.
  3. China’s peace initiative is the only game in town. The west has no choice but support China’s peace efforts so how the west can maintain the narrative that China is a global threat and China’s global influence must be curbed?
  4. President Biden is running for re-election and the voting date is early November 2024. It is going to be a critical election issue for Biden if he could not offer any peace process for the Ukraine war soon. On the other hand, former US President Trump has claimed that “he would finish the Ukraine War within 24 hours if he were re-elected!”

The end of Ukraine aid is rapidly approaching. Reupping it won’t be easy

Paul McLeary, Anthony Adragna and Joe Gould

Mon, May 15, 2023 at 1:30 AM PDT

Move over, Treasury. You’re not the only one with an X-date.

The $48 billion Ukraine aid package that Congress approved in December has about $6 billion left, meaning U.S. funding for weapons and supplies could dry up by midsummer.

That’s raising fresh concerns among lawmakers about what the White House is planning next, including when the administration will ask for another major package and whether it will be enough.

The funding, many members say, needs to continue to flow without interruption, especially as Kyiv prepares to launch what’s expected to be a sweeping counteroffensive and retake ground in the east from the Russians.

“It is critical that the administration provide Ukraine with what it needs in time to defend and take back its sovereign territory,” Sen. Susan Collins (R-Maine) told Pentagon leaders during a hearing on Thursday. “We expect the administration not to wait until the eleventh hour if the Ukrainians need more before the end of the fiscal year.”

The White House is discussing a new package, and it will be timed to keep support for Ukraine flowing, said a senior administration official who was granted anonymity to speak ahead of an official announcement.

But this isn’t the same Congress that approved the last big batch of money, nor is it the same set of circumstances.

Keeping the money flowing

The original $48 billion package approved in December included about $36 billion for the Pentagon to craft a wide range of military aid to Kyiv. The U.S. sent millions of artillery shells, funded tanks, and shipped armored vehicles and advanced air defense systems into the Ukrainian military’s hands. The aid allowed them to beat back Russian attacks while preparing for the coming offensive meant to break the grinding stalemate across hundreds of miles of front lines.

Outside the hearing on Thursday, Collins said she is concerned about giving Ukraine what it needs for the coming counteroffensive and the pace of U.S. aid deliveries.

“It’s clear that it will” happen, Collins said. “I expect there will need to be a supplemental at some point. It’s also clear that it’s taken far too long to get munitions and tanks delivered to the Ukrainians.”

Frustration is also becoming evident on the Ukrainian side about the pace of those shipments.

When Collins on Thursday pressed Defense Secretary Lloyd Austin about why Abrams tanks pledged by Washington weren’t arriving sooner, he noted that some had already arrived in Germany for Ukrainians to train on. Kyiv’s troops would be ready when the rest “certainly” arrive in early autumn, he added.

Figuring out the X-date

Collins and a host of other lawmakers POLITICO interviewed were unclear about when exactly the Ukraine military aid would run out, and how large the next package might be.

The massive U.S. supplemental has been used to steadily supply Ukraine with everything from Patriot air defense systems to spare parts for Humvees. The Biden administration has settled into a mostly regular pace of doling out several hundred million dollars every week to 10 days.

One congressional aide who closely tracks the issue estimated that, based on the rate of announcements, the money to draw down existing U.S. stockpiles will expire in July. That would mean the flow of equipment could be disrupted if Kyiv has to wait an extended period for a new tranche of funding.

Sen. Ben Cardin (D-Md.) said he’d been told recently during a briefing with administration officials they would have sufficient funds for Ukraine for the next several months, therefore that the appropriations process — or an emergency supplemental funding bill around then — would likely be the next time Congress doled out more funds.

“We’re OK for the next several months,” he said in an interview.

Back to the budget

Timing for the next round is a major issue, especially as lawmakers continue to grapple with a host of other issues.

Congress will spend the next several months debating the fiscal 2024 defense budget, a wrinkle that could complicate Ukraine funding, even as lawmakers from both parties say they fully support keeping the aid spigot turned on.

Sen. Lisa Murkowski (R-Alaska), a senior appropriator, indicated the appropriations process would likely be the next time Congress would provide funding unless the situation changed substantially on the ground.

“I think you’ll see it in appropriations,” Murkowski said in an interview. “It’s not making the front page or the second page. It kind of continues to be out there — we know it’s there — but not at a level that is going to get people really focused.”

Alluding to those in her party skeptical of providing additional resources to Ukraine, Murkowski said that “it’s hard to say that the way that people are talking now is going to be the way that they will talk [in the future]. I just think there are so many uncertainties.”

Sen. Lindsey Graham (R-S.C.), one of the biggest backers of Ukraine in Congress, agreed lawmakers would eventually have to pony up more funding and predicted the annual government funding process would likely be the next best shot.

Mark Cancian, a senior adviser at the Center for Strategic and International Studies, said he expects several smaller Ukraine packages to be proposed by the White House to get through the rest of the year.

Once the budget passes, another funding package could be nestled within that annual bill since “at that point, they’re going to want to buy some time to see where the war is going and how the counteroffensive is going,” Cancian said By then, Ukraine will be planning its war strategy for 2024.

But more money isn’t guaranteed, especially in this environment in Washington.

Sen. Marco Rubio (R-Fla.), vice chair of the Senate Intelligence Committee, said it would be a “mistake” for the Biden administration to bank on an additional Ukrainian supplemental funding measure.

“It looks like they’re expecting some sort of a supplemental at some point — they’re going to come back and ask for more money,” Rubio said. “I think that’s a mistake. I think it should be in their baseline” budget.

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