Staff Reports
Congress has approved a $95 billion foreign aid package put forth by President Biden. This aid includes $61 billion for Ukraine, with most of the money being used to purchase weapons that will then be sent into the war zone. A portion of the aid, totaling $9 billion, is designated as a loan to Ukraine, although the likelihood of repayment is considered slim.
The new law allows the president, with congressional review, to entirely eliminate the $9 billion debt by 2026. The total aid for Ukraine now stands at around $75 billion since February 2022 when Russia invaded the country.
U.S. is loaning a slice of the $61 billion to Ukraine, but getting paid back is questionablehttps://t.co/pFJBuUUgVF pic.twitter.com/8GkR6msFSn
— The Washington Times (@WashTimes) April 29, 2024
Some critics have voiced concerns about the loan aspect of the aid, with Rep. Andrew Clyde, a Republican from Georgia, suggesting that President Biden will likely cancel half of the $9 billion loan, setting a precedent similar to his cancellation of student loan debt. He feels that the loan provision in the aid package is merely a façade, and that ultimately, this will result in transferring more debt onto the American people.
Despite these criticisms, the inclusion of the loan concept in the aid package helped gain the support of nearly a dozen Senate Republicans who had previously voted against it. The law sets two deadlines for canceling the debt: the first in November 2026, after the election, and the second on January 1, 2026.
Foreign policy and global economy expert Doug Rediker from Brookings expressed skepticism about the decision to loan money to Ukraine, stating that it poses a high risk with little chance of the country being able to repay the $9 billion. He believes that structuring the aid as a loan was not a wise move, even if it was the only politically viable option at the time.
It’s noted by experts that the United States has a mixed track record when it comes to collecting debts from foreign countries. For instance, the Lend-Lease Act during World War II provided $50 billion worth of war supplies to the Allies, a considerable portion of which was never fully repaid.
In conclusion, some experts and critics have raised concerns about the decision to include a substantial loan as part of the foreign aid package for Ukraine, expressing doubts about the likelihood of repayment and the potential negative implications for the American people.
