The US Federal Reserve is currently struggling to tackle the country’s soaring inflation, which started reaching heights not seen for decades in November 2021.
US Deputy Assistant Secretary of State for European and Eurasian Affairs Dereck Hogan has pledged that over “the next four to five months”, the Biden administration will allocate about $1.5 billion monthly for support of the Ukrainian government, in a statement that comes as inflation has shown no sign of easing in America.
Speaking at a conference of the Washington-based Wilson Centre think tank on Monday, Hogan said that since the beginning of Russia’s special military operation in Ukraine on 24 February, around $53.6 billion in assistance, including military aid, has been allocated to Kiev by the White House.
Apart from the economic hardships the US is going through, with inflation and average gas prices reaching new record highs, the vow comes on the heels of renewed concerns that the American money might be “diverted” or “stolen”. Last month, Republican Senator Rand Paul called for fiscal accountability on the money, arguing that “unless we put an end to the fiscal insanity, a day of reckoning awaits” the US.The Wall Street Journal (WSJ) quoted US officials as warning that although there are no instances of malfeasance, more efforts are needed to prevent the money from possibly being misused.
John Sopko, the Special Inspector General for Afghanistan Reconstruction, told the WSJ in this context that “even if it’s a noble cause, there’s going to be theft, […] misconduct, [….]” and “[…] stupid decisions being made”.
The remarks were preceded by President Joe Biden signing legislation in May to support Ukraine with another $40 billion in US assistance, with the objective of backing Kiev through September. It dwarfs an earlier emergency measure that provided $13.6 billion.
The legislation authorises roughly $20 billion for the Defence Department to spend on security assistance for Ukraine, including the provision of military equipment. The bill would also provide almost $9 billion in economic assistance, over $4 billion in humanitarian aid and another $4 billion in foreign military financing through the State Department.
Senate lawmakers passed the bill in a 86-11 vote, with the opposition coming from Republican Senators, including Rand Paul and Josh Hawley, who expressed concerns about the legislation’s potential impact on the US economy and other domestic priorities. Paul previously delayed attempts to fast-track the bill, citing concerns about spending billions of dollars on Ukraine amid rising inflation and disrupted supply chains in the US.
US Department of Labour data released late last week showed that inflation in America hit an annualised rate of 8.6 percent in May, the worst such index since December 1981.
The date indicated that the jump in the Consumer Price Index – a basket of goods and services whose prices are measured meticulously, increased most dramatically for energy, which surged 34.6 percent over the year, and food, which jumped 10.1 percent. So-called “core inflation”, which includes all items except energy and food, jumped six percent over the year, according to the Department of Labour.
Biden blamed factors ranging from the coronavirus pandemic to Russian President Vladimir Putin to explain the inflation surge in the US. The White House dismissed the idea expressed by some fiscal conservatives that the policy of pumping trillions of new dollars into the economy on COVID stimulus and POTUS’ ambitious infrastructure spending plan might have played a major role in sparking the current crisis.
On 24 February, Russian President Vladimir Putin announced the beginning of a special military operation to “demilitarise and de-Nazify” Ukraine following request for help from the Donbass republics amid increasing attacks on them by the Ukrainian Army, something that prompted the US and its allies to slap a spate of “severe” sanctions on Moscow.