Episode Notes:

The supplemental authorizing the transfer of large amounts of U.S. military equipment to Ukraine expired last week, amidst considerable debate in the House of Representatives about the future of U.S. funding for Ukraine. To discuss the dynamics at play and what it may mean for Ukraine's war effort, Max Bergmann, the director of the Europe, Russia, and Eurasia Program and the Stuart Center in Euro-Atlantic and Northern European Studies at the Center for Strategic and International Studies (CSIS), joined the WarCast. Max wrote about this scenario in March 2023 for War on the Rocks.

[:32] The supplemental for Ukraine expires

[3:21] Presidential Drawdown Authority

[5:24] How U.S. aid works for Ukraine

[6:46] Cold Turkey?

[9:11] A pathway to reauthorize funding?

Episode Transcript

Aaron Stein: My name is Aaron Stein, and I am the Chief Content Officer at War on the Rocks. You are listening to the WarCast, the members-only podcast for what you need to know now. Hello and welcome to the WarCast where, today, I'm joined by Max Bergmann, who is the Director of the Europe, Russia and Eurasia Program, and the Stuart Center in Euro-Atlantic and Northern European Studies at the Center for Strategic and International Studies. Max, it's good to have you on the show.

Max Bergmann: Thanks so much for having me.

Aaron Stein: I wanted to have you on because you and Sophia Besch wrote a pressing article a couple of months ago for War on the Rocks about what to do if funding for Ukraine runs out on the US side. For those who have been following domestic politics here in the United States, Kevin McCarthy was ousted as Speaker of the House, leaving in Fluxx the future of the Republican leadership.

Although, if you are following people who report on this for a living, it's looking more and more likely that the House will not bring to the floor a supplemental bill to extend or to re-appropriate money to continue the US funding of weapons purchases so that it can transfer stockpiles of its own equipment to, this case being the US, the Ukrainians. That was a mouthful. But Max, can you tell the listeners what's been going on, and what it may mean for Ukraine?

Max Bergmann: The Ukraine supplemental funding has run out. It ran out on September 30th. There's still some residual funds from last year, and that gives the administration a little bit of a runway. But essentially, what Ukraine is looking at is being cut off from US funding. I think what's important to understand is that sometimes there's a conception that the president has some magic wand and can do whatever he wants with the US military. While that's in some ways true, the president can order an invasion, can deploy US forces, what he cannot do is actually give away US military equipment, just willy-nilly. In fact, there's lots of legal restrictions on the president's ability to do that.

The major thing that's happened, the major problem right now for Ukraine, is the presidential drawdown authority. Now, this is the authority that is normally capped at $100 million a year. $100 million, as an M. That essentially allows the president to go in and take equipment from US stocks, body armor, ammo, and send it to countries such as Lebanon, or any country in crisis. Congress increased that cap to $14.5 billion. This is really how we've been supporting Ukraine. We've been taking equipment from US stocks and then sending it to Ukraine, and then using some of the other money appropriated by Congress to buy replacement equipment.

But now, as of October 1st, that cap has gone from $14.5 billion back to $100 million. So the president can't now just pull equipment from US stocks, and that will greatly impact, right now, Ukraine's ability to fight, because we're talking about the basic things that the US has in its inventory that Ukraine needs right now. Whether it's DPICM, whether it's our other artillery, those sorts of shipments will begin to run out. So, that is going to put real strain on the Ukrainian forces.

Aaron Stein: Again, this isn't a show about domestic politics, but what we do have to talk about a little bit is that there was talk about bringing this back, IE to re-authorize, at some level, that higher number on the cap for the presidential drawdown authority. But, it appears that that's stuck. Can you add anything to that?

Max Bergmann: Well, what happened over the weekend was that there was a CR, a continuing resolution, to keep the government open for another 45 days. But the thought was that, in order to keep the government open, there was also going to need to be a supplemental appropriation for Ukraine, which the administration's request was around $24 billion, but then also would maintain that ability to use presidential drawdown authority at the $14.5 billion, so you could keep the pace of support up.

What's happened is that those two, the CR and the Ukraine supplemental, got decoupled. The CR passed, but there was no Ukraine supplemental. So that meant everything reset, and you can't now take from US stocks. However, what does still exist is, because there's a continuing resolution and government is still operating, there is the Ukraine Security Assistance Initiative, so these security assistance funds.

But the thing about security assistance funds, whether it's at DOD, or the foreign military financing at the State Department, this is not equipment pulled from the US military. This, you have to go to defense companies and buy the stuff. Now, maybe they have some of it in stock. But most of the time, you have to pen a contract, they then have to build it. That takes time. So everything that has to be put under contract takes time. Ukraine is fighting counter offensive right now, and probably will be through the winter and spring of next year. Who knows when the deliveries of many of these systems will actually pick up where you can actually take them from industry and give them to Ukraine.

Aaron Stein: I think that's an important distinction. On one hand you have the drawdown authority, which is the stuff that comes out of US inventories, is sent to Ukraine, and then the money is used to buy that stuff back, right?

Max Bergmann: Yeah.

Aaron Stein: Then, to resupply the US supplies. Whereas there's other funding, and sometimes they get amalgamated inappropriate together, that would help Ukraine finance its purchase of US-made weapons, right?

Max Bergmann: Yes. Yes. Let's be clear, oftentimes there's talk of, "Oh, all this money is going to Ukraine." Well actually, no security assistance money is going to Ukraine. All the money stays in the United States. It either goes to the Pentagon to replenish their supplies, but most of it goes to US companies which then are employing American workers to build weapons. So Ukraine gets the equipment, not the funding.

But the difficulty now is that just balancing the inability to pull from US stocks will really inhibit, potentially, our ability to support Ukraine. Because, right now, they may discover that the Ukrainians need some mine-clearing equipment that maybe hasn't been made in 15 years, but the US has that in stock. It may take industry a while to build that, but the US could just provide it. But now, we're going to be heavily curtailed in our ability to do that.

Aaron Stein: Where is this going? It seems like it would be... I guess the word that comes to my mind is cold turkey, IE that you had the opportunity to get your fix on what you needed off of the presidential drawdown authority. Then, all of a sudden, it's just turned off. Yes, there's a couple more days, perhaps a couple more weeks, that this can be stretched out with some accounting measures, I assume, in the Department of Defense, in terms of how they quantify the amount of material given to Ukraine versus how much money is available. But, at some point, you're going to cross the threshold, and we're talking about weeks.

Max Bergmann: Potentially months. People may have seen the story about how the Pentagon found $5 to $6 billion more for Ukraine through an accounting error. It's not really an accounting error, it's just, what does a round that is now expired actually cost? What is the value of that round? What is the value of a 30-year-old Humvee? What they did is, they were like, "Well, no. Actually, the value should be much lower. So there's $5 to $6 billion more for the US government to give to Ukraine.

Our current burn rate or spend rate has been about $2.5 billion a month for Ukraine, so that gets maybe to an early Christmas, but then it starts running out. So, that creates huge dilemmas for the Ukrainians. If you think about it, they need to be resupplied, not just with ammo on the front lines, but also for air defense interceptors. So there's an expectation that Russia is going to be bombarding Ukrainian cities in infrastructure, but Ukraine is not going to probably know if they're going to be able to get a consistent resupply of interceptors.

So does that mean they have to conserve them, protect troops on the front, let their cities be bombarded? These are going to be some really awful choices. Then, if Ukraine feels like they're pressing an advantage right now on the front, do they keep going not knowing in two months that they may be significantly short of munitions? You don't want to fight a war like this. The idea was that we were going to be this responsible ally. It really throws a huge wrench in Ukrainian war planning, and how they may have to think about not just the next few months, but really the next six months or year, if Congress is enabled to sort this out.

Aaron Stein: What's the future here? Is there a pathway that, say there's a new speaker elected to reaching compromise and bringing it back? Because, by all accounts, it seems like a majority in both the House and the Senate do support this. It's just the rules that are getting in the way in terms of bringing a bill to the floor. That's one. But two, let's say an agreement can't be reached, is there a possibility for other options to continue to resupply Ukraine?

Max Bergmann: The prospects, right now in the House, do not look particularly good. A, there's no speaker of the house. Fair to say, the far right that brought down Kevin McCarthy, our anti-Ukraine funding, the basic problem is that any new Republican speaker that is reliant on Republican votes has to be reliant on people who are vehemently opposed to Ukraine funding. So, that makes the way ahead here look very difficult. It also makes the way ahead look very difficult for how to fund the government.

So, I think we're in an uncertain situation. I would never say never, but it currently looks fairly bleak. The hope is that something is worked out. Maybe we're in a different place a month from now. There is a question of, what can Europe do here? The piece that I wrote for War on the Rocks was actually back in early March. It was not long after Kevin McCarthy became speaker, where I think this was clearly going to be a problem of how Ukraine funding gets through because the basic issue as a Republican speaker of the house is not going to want to bring something to the floor that divides his caucus.

The same would be true on the democratic side, so that presents a challenge. Are there things that Europe could do? Well, it would've been better if we were hitting the alarm bell on this six months ago. But now, I think Europeans are just waking up to the fact that, "Wait a second, America might not be able to do this, so what can we do?"

The problem for Europe is that they opened their warehouses, they're fairly empty. Decades of underinvestment. They have a war. They've been giving a lot to Ukraine. They actually have been giving a lot to Ukraine. But they really need to dig deep here. I think they need to dig deeper, and perhaps there's a way for the US to maybe reassure by maybe bolstering our forced posture in Europe as European readiness depletes even further. But, that's the prospect of what we're looking at.

Aaron Stein: Fairly bleak seems to be a classic understatement there, but certainly something that we'll be watching. Thanks, Max, for coming on the WarCast.

Max Bergmann: Thanks so much for having me.