The Blubber

The Biden administration has informed Congress of plans to cancel $4.65 billion in debt owed by Ukraine, according to a letter obtained by Bloomberg News. The move is part of a series of efforts to bolster Kyiv's support ahead of President-elect Donald Trump’s inauguration.

The cancellation affects half of a $9 billion loan provided to Ukraine as part of a $60 billion supplemental aid package approved in April. The concept of the loan originated during Trump’s campaign and was later incorporated into the legislation by House Republican leaders, although the administration had indicated from the outset that partial forgiveness was likely.

Forgiving the debt is “in the national interest of the United States and its EU, G7+, and NATO partners,” the State Department wrote in a letter to Congress dated Nov. 18, emphasizing the importance of aiding Ukraine’s efforts to prevail against Russia.

The decision reflects President Joe Biden’s push to provide as much support as possible to Ukraine before Trump takes office in January. Biden has prioritized facilitating peace talks between Russia and Ukraine, but Kyiv’s backers worry Trump might reduce or halt aid as part of those negotiations.

Recent actions include Biden approving Ukraine’s use of U.S.-supplied long-range missiles for strikes deep inside Russia and announcing a $275 million security assistance package on Wednesday, which includes anti-personnel land mines.

The State Department confirmed the transmission of the letter, stating that the administration's actions align with the authority granted by Congress in the supplemental aid package.

The debt cancellation plan has faced objections from some Republicans. Senator Rand Paul of Kentucky announced on social media that he would seek a Senate vote to prevent the Biden administration from making Ukraine’s debt “the responsibility of the American people.”

For Paul’s resolution to pass, it would require approval from both houses of Congress, which appears unlikely given Democratic control of the Senate. Even if passed, Biden could veto the measure. A U.S. official stated Wednesday evening that the president is within his rights to forgive 50% of the loan.

In Brussels, Secretary of State Antony Blinken reassured allies following the election, asserting the administration’s commitment to ensuring “every dollar we have at our disposal” reaches Ukraine.

The loan cancellation is separate from the nearly $9 billion remaining in weapons assistance the administration has pledged to allocate before Biden leaves office. Of that, approximately $7 billion must be used to provide arms directly from U.S. stockpiles—a challenge given dwindling supplies of certain key missiles and systems.