Today, there is new urgency. If the White House can act quickly, its full support for the initiative could also be a means of getting Republicans to approve lifesaving Ukrainian military aid.
For more than a year, the administration resisted a bipartisan effort to pass legislation that would give President Biden the authority to seize Russian sovereign assets currently frozen in U.S. banks and give them to Ukraine. In November, the House Foreign Affairs Committee voted 40-2 on its version of the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act (Repo Act).
Just last month, House Speaker Mike Johnson (R-La.) said the legislation could help him persuade House Republicans to vote for the administration’s emergency supplemental budget request, which includes about $60 billion for Ukraine in military, economic and humanitarian aid. “It would be pure poetry to fund the Ukrainian war effort with Russian assets,” Johnson said. “As you can imagine, that idea has been met with great enthusiasm on the Republican side.”
Johnson was fudging reality. The $300 billion of Russian assets frozen in U.S. and European banks would not be given to Ukraine right away; it would be used for funding reconstruction in the years ahead. Therefore, passing this law would not replace the need for Congress to also approve military aid to Ukraine as soon as possible.
But it could provide political cover for Republicans who want to support Ukraine but are afraid of backlash from the MAGA part of the GOP. “Many Republicans want to vote for Ukraine aid but they are scared of their base. If they can say we are making Putin pay for the rebuilding of Ukraine, it will be easier for them to vote yes,” former congressman Tom Malinowski (D-N.J.), an early leader of this effort, told me. “And since the fate of the free world depends on getting every last vote for the supplemental, my hope is that the administration won’t make the perfect the enemy of the good.”
Behind the scenes, the White House has been involved in a long internal policy debate, extensive diplomatic outreach and simultaneous negotiations with Capitol Hill as it inches closer to publicly embracing the idea. There is legitimate concern inside the Treasury and State departments about seizing foreign sovereign assets, even under these conditions.
Also, only about 2 percent of those funds are held inside the United States, officials told me. Most of Russia’s frozen assets are in Belgium or Switzerland. And there is resistance in Europe, especially in Berlin, about whether the move is justifiable under international law and whether it might undermine confidence in the euro. The Biden administration is centering its diplomatic efforts around the Group of Seven and has called on those countries to come up with a way forward by the end of February.
But on Capitol Hill, the unspoken deadline for passing Ukraine aid in Congress is Jan. 19, the date by which Congress must also pass new government funding, several congressional aides told me. There’s frustration among the Repo Act’s supporters over both European objections and the perception that the White House has been dragging its feet.
“Yet again, Europe is arguing with itself, and its divisions on this issue only help Russia, which has already expropriated European companies,” a senior GOP congressional aide told me. “Common sense dictates that Russia should pay for the damage it has done to Ukraine.”
The White House wants to maintain the flexibility to give Russia back the assets if Putin compensates Ukraine on his own. Although that is unlikely, it bolsters the argument that the West is not taking Russia’s money — that it’s using it as a down payment on Russia’s future international obligations to Ukraine.
The Russian government is warning that the measure would be met with drastic retaliation. But when the U.S. and European banks froze the money last year, Moscow made similar threats and nothing came of them. Similarly, many warned that freezing the assets would undermine confidence in the U.S. dollar. That, too, has not come to pass.
Administration officials told me that without European buy-in, the plan won’t work. That’s true. But passing the Repo Act would show that the United States is deadly serious, thereby possibly inducing fence-sitting allies to fall in line. Moreover, the law simply gives Biden the authority to act. He would maintain broad flexibility in when and how he chooses to move forward.
The critics have a narrow point when they say this is an unprecedented use of America’s economic power for national security purposes. But unprecedented times call for unprecedented measures. Without Russia’s seized assets, Ukraine could lose its ability to survive as a functioning country. And that is exactly Putin’s strategy.
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