Pentagon says accounting mistake frees up $3 billion more for Ukraine

The Pentagon has significantly reduced its estimate of the value of weapons it has sent to Ukraine, freeing up at least $3 billion to keep Ukrainian troops supplied in their war against Russia over the next several months.

The Biden administration has faced intensifying pressure to explain how it intended to continue supporting Ukraine without asking Congress to replenish its budget. On Thursday, Pentagon and State Department officials told congressional staff members that they had discovered an accounting issue that could make more resources available before Ukraine’s planned counteroffensive this summer.

Pentagon officials realised their mistake almost two months ago, according to a senior White House official, who spoke on the condition of anonymity to discuss accounting processes.

But instead of placating Congress’s concerns, the revelation was met with frustration and anger, as some lawmakers criticised the Biden administration for what they said was an extremely troublesome error.

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“These funds could have been used for extra supplies and weapons for the upcoming counteroffensive, instead of rationing funds to last for the remainder of the fiscal year,” Republican Reps. Michael McCaul of Texas, the chair of the House Foreign Relations Committee, and Mike Rogers of Alabama, the chair of the House Armed Services Committee, said in a joint statement.

They called on the administration to “make up for this precious lost time” by sending long-range missile and cluster munitions to Ukraine, which it has resisted doing.

Administration officials said their mistake was one of improper valuation, explaining that they had been calculating the price of each item based on how much it would cost to replace it with new equipment, instead of its sale value, which is lower. They plan to make the same change in an assessment of their remaining authority to send Taiwan weapons from existing Pentagon stocks, according to administration and congressional officials.

“This overvaluation has not constrained our support to Ukraine nor impacted our ability to flow capabilities to the battlefield,” Pentagon spokesperson Sabrina Singh said in a statement.

Congressional staff members expressed a combination of incredulity that it had taken the administration 15 months of war to identify such a basic and yet pivotal accounting mistake. Some said they thought that the revision might be a way for officials to maintain supplies at a time when available funds for Ukraine were in danger of running out.

But they added that they had not yet determined whether the adjustment would result in a windfall of additional weaponry for Ukraine.

Lawmakers from both parties have repeatedly asked the administration how it intended to stretch its dwindling budget authority to supply Ukraine with weapons quickly — called presidential drawdown authority — without handicapping Kyiv’s efforts to mount a decisive counteroffensive against Russia this summer.

“I’m worried that it’s going to leave a gap,” Sen Susan Collins of Maine, the top Republican on the Senate Appropriations Committee, said in an interview Wednesday, before staff members were told about accounting revision. “I am concerned that the administration has not been forthcoming on how much more money they need, and at what period will the funds that we’ve appropriated run out.”

“They need to have the munitions they need and the capabilities that they need, and I think we need this big push this summer, to punch Putin in the mouth a few more times,” Rep. Elissa Slotkin, D-Mich, a former CIA, State Department and Pentagon official who is on the House’s Armed Services Committee, said, referring to Russian President Vladimir Putin.

Presidential drawdown authority allows the administration to pull from existing weapons stocks, instead of waiting the several months or years it can take for defense contractors to manufacture weapons under new contracts. The Biden administration has highlighted the program as one of its signature achievements in helping Ukraine battle Russian forces.

Under drawdown authority, the administration decides which weapons to send out from existing stocks and how to determine their value. Since the start of the conflict, the Pentagon has announced a new drawdown package about every two weeks, with each valued in the hundreds of millions of dollars.

But according to the administration’s own calculations, its coffers had been running low. Congress approved $14.5 billion in drawdown authority to last through the fiscal year, which ends September 30. As of Wednesday, according to congressional aides, only $2.7 billion of that was left. That is not enough, they said, to sustain the current pace and size of military aid packages without running out of funds by July or August.

Several Democratic and Republican staff members said that State Department and Pentagon officials had sympathised with their concerns in private briefings, including during one last week.

The White House, the staff members added, had staunchly resisted the idea of approaching Congress to augment those authorities before the end of the fiscal year. According to some congressional aides, White House officials said Ukraine had stockpiled enough equipment from previous military assistance packages to mount a long-awaited counteroffensive against Russian positions.

Some lawmakers said in interviews that they were told by administration officials that if Ukraine experienced a shortfall nonetheless, European suppliers like Germany would be able to bridge it with extra military donations.

But many senior congressional aides responsible for overseeing the Ukraine military assistance programs, in both parties, remained unconvinced by those arguments. Several of them speculated this week that the Biden administration was resisting making an appeal for more funds and drawdown authority because of concerns that it would be awkward to approach Congress while negotiating a deal on the debt ceiling, in which Democrats are trying to preserve nondefense discretionary spending that Republicans are threatening to cut.

The senior White House official said colleagues wanted to see how Ukraine’s counteroffensive progressed before determining what other weapons it needed and how to request congressional permission for aid to support that.