Oct 15, 2023 - Politics & Policy

Team Biden looks for creative ways to help Ukraine

Biden with Ukrainian President Volodymyr Zelensky at the White House last month. Photo: Drew Angerer/Getty Images

With Congress paralyzed, the Biden administration is exploring — and implementing — creative ways to achieve its goals in Ukraine without signoff from Capitol Hill.

Why it matters: U.S. allies are depending on military aid to fight wars in both Europe and the Middle East. The U.S. government itself faces a shutdown in a month.

  • But without a speaker of the House, it's hard to see how either war — or the U.S. government — will be funded.
  • That's putting pressure on Biden officials to minimize the potential collateral damage from a problem — GOP infighting — that they didn't create.

Driving the news: In Luxembourg this week, Treasury Secretary Janet Yellen plans to encourage European officials to take concrete steps to capture the interest generated on some $200 billion in Russian assets held in European accounts, according to a U.S. official.

  • In Marrakech last week, Yellen helped convince G-7 finance ministers and central bankers to publicly announce they are exploring the idea.
  • This month, the Pentagon announced it sent Ukraine more than 1 million rounds of Iranian ammunition that it seized en route to Yemen.
  • The Biden administration is also considering using an existing State Department grant program to help Ukraine purchase weapons, Politico reports.

But, but, but: Biden officials are clear that there are limits to their ability to provide aid to Ukraine and Israel and fund the government.

  • "There's no gigantic set of resources that we don't need Congress for," Yellen told the New York Times last week.

Between the lines: There's a difference between skimming off interest from Russian sovereign assets and seizing them outright, as former Treasury Secretary Larry Summers and former World Bank President Robert B. Zoellick have called for.

What we're watching: The Biden administration is preparing to send a new supplemental spending request to Congress this week, asking for more money for border security, Ukraine, Israel and potentially Taiwan.

The bottom line: A protracted government shutdown, coupled with a drawn-out war in the Middle East, could tip the economy into recession. The political fallout from an economic slowdown will be felt by both parties.

  • While the White House plans to pin the political blame on that on the GOP, Biden might not escape unscathed, especially if U.S. workers feel the pain at home.
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