Biden Administration Seeks to Cancel $4.6 Billion of Ukraine’s Debt
The Biden administration told Congress it plans to cancel $4.65 billion in debt owed by Ukraine, according to a letter obtained by Bloomberg News, the latest in a series of moves meant to bolster support for Kyiv before President-elect Donald Trump takes office.
The White House will cancel half of a $9 billion loan delivered to Ukraine as part of a $60 billion supplemental package approved in April. The loan idea was first floated by Trump during the campaign and was a key tweak to the legislation made by House Republican leaders, though the administration had always signaled a part of it would be forgiven.
Canceling the debt, “thereby helping Ukraine prevail, is in the national interest of the United States and its EU, G7+, and NATO partners,” the State Department said in a letter to Congress dated Nov. 18.
The move is part of a broader effort by President Joe Biden to rush more support to Kyiv before Trump returns to the White House in January. He has said his priority is pushing Russia and Ukraine toward peace negotiations, and Kyiv’s supporters fear he may cut off aid as part of that push.
In recent days Biden agreed to allow Ukraine to use US-provided long-range missiles to strike targets deep inside Russia. On Wednesday, the administration announced a new security assistance package worth $275 million, including anti-personnel land mines.
The State Department confirmed the transmission of the letter and said the administration’s actions were consistent with the authority provided by Congress in the legislation.
The plan, however, drew objections from Republicans. Senator Rand Paul of Kentucky said in a post on X Wednesday that he would seek to force a vote on the Senate floor to “stop the Biden Administration from making Ukraine’s debt the responsibility of the American people.”
Both houses of Congress would need to approve Paul’s resolution, something that’s unlikely to happen given that Democrats control the Senate. Biden could also veto the resolution if it were to pass. A US official said Wednesday evening that Biden was within his rights to cancel 50% of the debt.
In a trip to Brussels intended to reassure allies days after the election, US Secretary of State Antony Blinken said the Biden administration was committed to ensuring “every dollar we have at our disposal” is pushed out to Ukraine.
The loan is separate from the nearly $9 billion left in weapons assistance the administration has pledged to spend by the end of Biden’s term. About $7 billion of that money must be spent primarily on arms supplies from US stocks, a challenging task as the Pentagon’s supplies of some key missiles and other systems are already running low.
The rest of the funding is set to go toward defense production contracts that will ship supplies directly to Ukraine once they’re ready. The Trump administration could choose to cancel some of those contracts at a cost if they chose to do so.
