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The US Congress’s willingness to support ongoing aid to Ukraine in its bid to repel Russia’s ongoing invasion of the country’s eastern and southern regions may be coming to a head. Emerging opposition to further security assistance among House Republicans is a major deterrent to ending the looming threat of a government shutdown. Although Ukraine spending was stripped from a continuing resolution that will fund the federal government for 45 days, buying Congress time to agree to a budget for the full fiscal year, standalone carveouts will likely allow Congress to allocate bits of new funding to Ukraine without including it in budget plans.

Republican voters and members of Congress have become increasingly skeptical of the billions of dollars pumping into Ukraine’s war effort, following the disbursement of nearly $44 billion over the past 18 months. Part of that hesitance is likely due to the limited effectiveness of US-supplied equipment on the ground. Thus far in 2023, Ukraine has lost more territory than it has gained on net, and the highly-anticipated southern counteroffensive has nearly ground to a halt with few meaningful gains. Kyiv’s European allies would likely struggle to support Ukraine’s current capacity on the battlefield if the US were to take a step back.

Related ETF: SPDR S&P Aerospace & Defense ETF (XAR)

In the final hours preceding a potential government shutdown last week, a continuing resolution was agreed upon by the House of Representatives and the Senate. This short-term stopgap bill would fund the government for 45 days, delaying a still-looming shutdown, but it was only passed on the condition that lawmakers would remove $6 billion in various forms of support for Ukraine. That sum was scaled back from an original White House request for $25 billion, $13 billion of which would have been related to security aid.

This left the Pentagon with approximately $5.5 billion in previously allocated funds to keep transferring weapons to Ukraine past September 30, which marked the end of fiscal 2023. Per the Department of Defense, the US has thus far committed nearly $44 billion in security assistance to Ukraine since Russia initiated its formal invasion of Ukraine in February 2022. The latest round of assistance, promised on September 21, marked the 47th drawdown of equipment from Defense Department inventories for Ukraine since August 2021.

The passage of the continuing resolution without funds for Ukraine does not mean the country will get nothing more from the US once a new budget is passed, but it does show that funds meant to back Kyiv’s war effort are becoming a harder sell in the Republican-controlled House of Representatives. A separate carveout measure…

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