Will American Money for Ukraine Be Lost on October 1

While in Ukraine, as in many countries of the world, the fiscal year ends on December 31, in the United States it ends on September 30.

And here in Kyiv, representatives of non-governmental organizations are sounding the alarm: what will happen to the money that the United States has budgeted for defense assistance to Ukraine, but has not yet had time to use? Will they be lost on October 1? The Ukrainian authorities are also concerned about the same questions.

Every dollar that goes to the military is important to us. Because it is air defense, planes and tanks, missiles and shells, body armor and helmets. It’s defense on the front lines. This is the defense of schools and hospitals, hydroelectric power plants and transformers in the rear. These are the lives of Ukrainians saved.

Stable financial and military assistance from the United States to Ukraine is also one of the conditions under which, as many politicians and experts believe, it will be possible for Kyiv to negotiate with Moscow from a stronger position.

But as Volodymyr Zelenskyy told NBC News, Ukraine has yet to receive the military aid envisioned by the congressional decision. “There is a positive result regarding the decision of Congress, but there is also a negative result as we in Ukraine are still waiting all for the voted aid packages. These processes are slow, so we cannot totally reinforce our brigades to stand strong,” Zelenskyy said.

So, is the money Congress allocated to Kyiv going to be lost on October 1?

In order to answer this existential question for Ukraine, it is first necessary to understand the complicated and convoluted scheme of providing military aid to Kyiv and its financing, which is used by Washington.

We would like to remind you that after a six-month debate, Congress passed the 118-50 Act in April. Among other things, it provides for additional appropriations for fiscal year 2024 to several federal agencies to supply aid to Ukraine. We are talking about $61 billion. Let us be clear: not all of this huge sum is military aid. And not all of this money is intended for us. One of ZN.UA’s interlocutors noted that about 50 percent of this sum goes to the Americans to replenish the US army with military equipment to replace the equipment given to the Ukrainians, to cover logistics services, etc.

At the same time, there are several programs and mechanisms through which the United States provides defense aid to Ukraine. The main ones are:

• Presidential Drawdown Authority (PDA). The PDA allows the president, under the Foreign Assistance Act of 1961 and under authority granted to him by Congress, to transfer weapons to foreign partners directly from US Army stockpiles. Such assistance can begin to flow within days or even hours of approval, as equipment, weapons and ammunition are already in US Army stockpiles;
• Ukraine Security Assistance Initiative (USAI). The USAI provides for the purchase of weapons from manufacturers, rather than their transfer from US Army warehouses. In this case, the delivery may take from several months to a year or two. However, according to Mark Cancian, an adviser at the Center for Strategic and International Studies (CSIS) in Washington, the advantage of this mechanism is that the weapons and military equipment have a full service life, are the latest version and do not compromise the US military readiness;
• Foreign Military Financing (FMF) program. The FMF provides grants and loans to foreign governments to finance the purchase of US weapons, defense equipment, services and training.

According to the State Department’s Bureau of Political-Military Affairs, the United States has provided Ukraine with $55.7 billion in military assistance since the full-scale Russian invasion through September 6, 2024. At the same time, as was noted in a report prepared by the Congressional Research Service (CRS), as of May 2024, the PDA, USAI and FMF assistance allocated to Ukraine by the United States in 2022–2024 accounted for $52.77 billion.

Although Act 118-50 is for fiscal year 2024, that doesn’t mean that all that money from the 61 billion not used by September 30 will be gone on October 1. That money is spread out over several years!

If you open Section B concerning Ukraine, you will see that some funds must be spent by September 30, 2024, others by December 31, 2024, others by September 30, 2025, and others by September 30, 2026. And while in fiscal year 2024, Congress planned to allocate $5.9 billion to Ukraine, in fiscal year 2025 it will allocate $16.3 billion. In 2026, it is expected that more than 60 percent of the $61 billion in aid approved by Congress will be spent.

This is the peculiarity of the American legislation that allows fulfilling financial obligations regardless of the end of the fiscal year. Given the danger of Donald Trump’s return to the White House and the risk that he would cut off defense aid to Ukraine, congressmen resorted to it in April 2024.

The Congressional Research Service notes that Ukraine’s security assistance packages for FY 2024 are provided primarily through a supplemental appropriation of $28.8 billion. At the same time, Section B of Act 118-50 specifies that $13.77 billion is earmarked for USAI and $1.6 billion is earmarked for FMF as part of assistance to our nation and “countries affected by the situation in Ukraine.” These funds will be available through September 30, 2025.

But the case with the aid allocated to Ukraine under the Presidential Drawdown Authority is quite different from the appropriated money. After all, PDA is not real money.

Last week, several US civil society organizations asked the State Department not to miss the opportunity to use the remaining $6.2 billion still available under the PDA until September 30 to help Ukraine, otherwise “the money will be lost.” Pentagon spokeswoman Sabrina Singh responded by saying that Washington plans to use the available funds to support Ukraine “in any way possible” after the end of the fiscal year. At the same time, Singh did not specify what would happen with the remaining funds, but emphasized that the US announces aid packages to Ukraine almost weekly.

However, as a fact sheet from the State Department’s Bureau of Political-Military Affairs notes, “the PDA is an authority, not a funding source.” It is a mechanism that allows the head of the White House, bypassing Congress, to quickly transfer arms, military equipment and ammunition from Pentagon warehouses to a foreign country in response to an unforeseen situation. After that, DoD stockpiles are replenished using funds budgeted for the fiscal year. For fiscal year 2024, about $13.41 billion is budgeted to replenish DoD stockpiles sent to Ukraine through the PDA.

The bill also sets a limit on the amount of money per year beyond which the president may not go in providing emergency aid to a US-friendly country. As a rule, this limit is $100 million. However, the ceiling can be raised and the limit has been extended for Ukraine for several years in a row.

So for the PDA for Ukraine, Congress set a cap of $11 billion in fiscal year 2022, $14.5 billion in 2023 and $7.8 billion in 2024. Meanwhile, according to CRS, the Biden administration authorized $9.225 billion in aid in the 2022 fiscal year, $9.6 billion in the 2023 fiscal year, and $14.6 billion in the 2024 fiscal year, And if in previous years Washington did not fully exhaust its quota when it provided military aid to Kyiv under the PDA, the money was not lost because it was not there as such.

This is how US diplomats explain the features of the PDA: “Once notified to Congress, there is no ‘expiration date’ for the provision of defense articles and services up to the value that was notified. Any additional space within previously notified PDAs, identified as a result of DoD’s recalculation of the value of previous PDAs therefore remains available for Ukraine regardless of the end of the fiscal year.”

This comment from the State Department, an agency that is a key element in implementing assistance through the PDA, is the latest clarification of the statutory provision.

Therefore, when last summer, as a result of an audit of US military assistance to Ukraine under the PDA, the Pentagon revealed that the real value of the weapons and military equipment provided had been overestimated, it would be a mistake to assume that this $6.2 billion would be lost with the end of the fiscal year. This is not the case. Through the PDA, Washington can supply us with additional air defense equipment, armored personnel carriers, missiles and shells for this amount. And this assistance is added to the limit set by Congress for the next fiscal year.

On 6 September, the US announced the allocation of additional assistance to Ukraine under the PDA in the amount of $250 million. In particular, the package includes: missiles for air defense systems and artillery, armored vehicles, patrol boats, anti-tank weapons... According to rough estimates, in the first eight months of 2024, Ukraine received about $3 billion dollars worth of arms and military equipment under the PDA. It is obvious that Washington will not have time to exhaust the remaining part of the quota for fiscal year 2024 with arms deliveries in the last days of September.

US aid is coming to us slowly and is not enough not only for victory but even for defense.

So is Washington going to spend money on Ukraine and its victory over Russia? Why has Ukraine still not received the military aid envisioned by the decision of Congress? After all, the warehouses of the US army are filled with weapons, military equipment and ammunition. For example, there are hundreds of F-16 jets. If there was the political will, Washington could, using the PDA format, transfer significant amounts of aid to Kyiv.

However, the current administration does not appear to have the will.

Why?

ZN.UA interlocutors claim that Washington is guided by the following military-technical and political motives when providing defense aid.

First, US policymakers and the military fear that excessive transfers of equipment and ammunition from Pentagon warehouses to Ukraine will deplete its stockpile and leave the United States unprepared for conflicts elsewhere. For example, in the Indo-Pacific region or the Middle East.

Second, in keeping with tradition, no decisions are made in the run-up to a presidential election that could tie the hands of the incoming president.

Third, Washington is providing us with defense assistance within the strategic framework it set for itself in February 2022 — a war limited to Ukrainian territory.

Fourth, the Biden administration fears not only that a Russian-Ukrainian war will spill over into NATO member states or turn nuclear, but also that Russia will collapse as a result of a Ukrainian victory. In addition to the problem of controlling weapons of mass destruction, conventional weapons and the possibility of civil wars on Russian territory (reasons that drove George Bush Sr. in his desire to keep Ukraine within the collapsing Soviet Union), Washington does not want to realize the nightmare of returning to “home harbor” the resource-rich “ancestral” territories of China once annexed by Russia.

One of ZN.UA’s interlocutors recalled a study by a certain think tank prepared on the White House’s recommendations for the NATO summit in Washington. It says that the West would have to provide Ukraine with $900 billion dollars in aid to win the war, and the country should have a much larger army. For the White House, this means only one thing: Ukraine should negotiate with Russia.

Joe Biden is constrained by an inner sense, formed back in the 1970s, of the Soviet Union and Russia as a strong enemy to be feared and not to be pushed. Therefore, although the Kursk operation of the Armed Forces of Ukraine showed the absence of the Kremlin’s “red lines,” the framework outlined by Putin means more to Biden than to the younger members of his administration. It is possible that if Kamala Harris wins, the US will take a tougher stance against Russia and provide more support to Ukraine.

After all, providing defense assistance to Ukraine is a matter of strategic goals not only for our country but also for the United States. And of Washington’s ability and willingness to provide us with what we need for these goals.