The implication is that foreign aid is just a no-strings-attached gift. It isn’t. About two-thirds of foreign assistance is spent via U.S.-based entities, according to the Congressional Research Service. For instance, food aid must be purchased in the United States and by law must be shipped on U.S. carriers. Except for some aid given 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 mostly about military aid, that means they are really jobs programs in the United States, which in turn bolsters the U.S. economy. The Senate approved the spending package on Tuesday and President Biden signed it into law on Wednesday. Let’s explore.
The full package was estimated to cost $95.25 billion. But information provided by the White House budget office and a detailed review of the bill shows that nearly 80 percent went either to weapons manufacturers in the United States to replenish stocks or supply weapons or to fund Defense Department operations in the United States and overseas (including the training of Ukrainian soldiers).
Just over $20 billion was reserved for humanitarian or economic assistance, which, as noted above, can often require that the funds go to U.S.-based organizations. About $8 billion of this amount is reserved to assist the Ukrainian government, including $50 million to address food shortages. Another $5.6 billion is for general international disaster assistance and $3.5 billion for refugee assistance.
While previous Ukraine-related bills provided funds to help the government maintain old-age pensions, this bill prohibits the direct payments for pension support. Indeed, the bill calls on Biden to negotiate an agreement with Ukraine to repay economic support, though 50 percent of the debt could be waived after Nov. 15 with congressional notification, with the remaining 50 percent able to be waived after Jan. 1, 2026.
As is often the case with appropriations bills, there are different ways to run the numbers. To look at the package another way, about $60 billion will support Ukraine, $14 billion will support Israel and about $8 billion is directed to help countries in the Indo-Pacific region, especially Taiwan. Another $9 billion is for humanitarian assistance in conflict zones (including beyond Ukraine and Gaza) and $2.5 billion would support Central Command operations. Nearly $500 million is for refugee resettlement of Ukrainians in the United States.
60 percent will not leave our shores
Nearly $57 billion — about 60 percent — is never leaving the United States. Instead, these funds are being invested with weapons manufacturers located in dozens of states. (So far, according to the Pentagon, manufacturers in all but 11 states have received Ukraine-related weapons contracts.)
About $24.5 billion is for stock replenishment for weapons given to Ukraine, Israel and other countries, such as 155mm ammunition rounds. The United States has been providing defense items to Ukraine and Israel via presidential drawdown authority, under which Biden can authorize the immediate transfer of articles and services from U.S. stocks. Now, those stocks will be rebuilt, meaning U.S. weapons factories will be working nonstop.
Nearly $14 billion will pay for purchase of advanced weapons systems for Ukraine, such as the High Mobility Artillery Rocket System, a light multiple rocket launcher built by Lockheed Martin in Arkansas.
Another $1.6 billion will be to replenish U.S. military stocks that are located in Israel, including artillery shells and missiles. These are pre-positioned for U.S. military use, but also available for Israel if necessary.
Nearly $5 billion is to expand military production capacity to manage the needs to Ukraine, Israel and other countries. For instance, the production rate of 155mm-caliber artillery shells was about 10,000 a month, and the administration wants to boost that to 1 million a year — a substantial increase that will include buying additional casing, explosive charges, warheads and fuses.
More than $7 billion — half directed to Israel — is for a State Department program called Foreign Military Financing, under which U.S. grants or loans are provided to countries to buy U.S. military equipment. (The bill also amends that program’s loan authority provided in a previous Ukraine law to allow for up to $8 billion in direct loans and $8 billion loan guarantees for NATO and major non-NATO allies to buy U.S. military equipment.)
Nearly $3.3 billion will be used to boost production of submarines, such as Virginia-class submarines, from an average of 1.3 per year to two per year. Each Virginia-class submarine costs about $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 U.S. intelligence
The bill has nearly $18 billion for defense spending to help the Pentagon and intelligence services fund the cost of managing the fallout from a war in Ukraine and the war between Israel and Gaza. The bill both replenishes money that already has been spent and money that will be needed for the rest of the year, officials said. The bill specifically references $2.4 billion for U.S. Central Command, which overseas operations in the Middle East, $1.9 billion for additional maintenance, and $2.4 billion for combat expenditures and other spending, including at U.S. bases in the United States. But money for intelligence activities is classified, so it is not possible to provide a detailed breakdown of all the spending.
21 percent will mostly go to aid and diplomacy
This line item includes the $8 billion to assist the Ukrainian government, $5.6 billion is for general international disaster assistance, and $3.5 billion for refugee assistance. The bill has many other smaller spending categories, such as additional money for the State Department to bolster diplomatic efforts in the Middle East and increased funds for inspectors general.
Allies are refilling their shopping carts here
An underappreciated aspect of the Russian war in Ukraine is how NATO allies have also spent significant funds buying advanced U.S. weapons to replace materiel they have given to Ukraine. Finland, Norway, Denmark, the Netherlands and Poland have flooded U.S. manufacturers with orders since the war started. For instance, Poland gave 250 older tanks to Ukraine and then signed more than $6 billion in deals to buy 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 U.S. companies has spiked to these percentages: the Netherlands (99 percent), Italy (89 percent), Norway (89 percent), Britain (89 percent), Denmark (70 percent), Germany (63 percent) and Poland (45 percent).
Grenell did not respond to a request for comment.
The one thing Grenell got right is that the bill cost nearly $100 billion. It was emergency spending and thus not paid for with offsetting revenue, which if you are a deficit hawk may be troubling.
But it’s highly misleading to say these funds are going 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 be for the benefit of foreign countries — such as Ukraine in its war against Russia — but the money is mostly being used to create jobs in the United States.
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