Saving by Spending: The True Value and Cost-Effectiveness of U.S. Aid to Ukraine

Oscar Wilde is rarely quoted as an expert on strategy, warfare, and international relations, but one of his more famous quips is all too relevant to some of the efforts to reduce U.S. assistance to Ukraine. In one of his plays, Wilde had a key character state in response to the question of who is a fool that he is “a man who knows the price of everything and the value of nothing.” Some critics of U.S. aid to Ukraine—including some in Congress—meet this definition of a fool all too well. 

It is not a definition that applies to those who demand that Ukraine keep careful control over the aid and weapons it receives and actively fight corruption and carry out anticorruption drives. These are essential aspects of military effectiveness and discipline. As the United States learned the hard way in World War I and World War II, Vietnam, Iraq, and Afghanistan, it is vital to control the flow of money, weapons, and services as tightly as possible and to make aid conditional on how well and honestly it is used. The cost of such abuses is more than a waste of money and weapons; it is a loss of discipline, a growing focus of taking money over winning a war, and a critical damage to morale and faith in military leadership.

The story is very different, however, when criticism focuses on cost alone. The end result not only chooses price over values like freedom and democracy. It ignores the fact that while the rising number of billions the United States is spending on aid to Ukraine keeps growing, the cost of aid to Ukraine is almost certain to remain comparatively low when compared to the total cost of U.S. security, is a vital investment in deterring future Russian and Chinese aggression, and is likely to save the United States substantial amounts of national security spending in the future.

The U.S. national defense budget is now projected to cost $827 billion in FY 2023, and the Department of Defense portion alone is $802.4 billion. The total cost of U.S. national intelligence is $67.1 billion, and the military intelligence budget adds $26.6 billion more. This, however, is only part of the real price tag. Somewhat strangely, the president never submits an estimate of the total cost of national security, Congress never reviews it, and the media never reports on it. Nevertheless, the real cost of U.S. national security spending is far higher.

 Much of the cost of the Department of Homeland Security does go to domestic security, but the department’s budget includes the U.S. Coastguard, which has played a critical role in major wars, and whose FY 2023 budget request is $11.54 billion. The Department of State performs a wide range of civil functions, but the project cost it direct national security and security assistance efforts add at least another $15 billion and arguably a great deal more. The FY 2023 budget of the Veterans Administration—whose functions are a critical part of funding all-volunteer forces—is a truly massive $301.4 billion.

This means that the price of the actual cash flow of aid to Ukraine must be compared to a total national security budget of over $1.2 trillion, and by that standard the price tag is limited. According to press reports, Congress had approved some $113 billion in aid to Ukraine by the end of 2022, which included $47.3 billion of emergency funding to provide humanitarian, military, and economic assistance to Ukraine and another $65.8 billion that had been approved in three other emergency funding packages.

The Committee for a Responsible Federal Budget estimates that about three-fifths ($67 billion) were allocated to defense needs and $46 billion to nondefense concerns that provide the civil support the Ukrainian need to survive Russian attacks and keep fighting, such as general Ukrainian government aid, economic support, and aid for refugee resettlement pending where the basic human values in protecting a free people may be far more important than the price tag. 

Moreover, these totals are the current totals for all current and future funding now authorized and not for the money actually spent to date. Not all of this money was spent in FY 2022 or will be spent in FY 2023. The Congressional Budget Office estimated that $6.6 billion of the $113 billion was spent in FY 2022, and another $37.7 billion will be spent in FY 2023. It estimated more than half of the approved funds will be spent by the end of FY 2024 and more than three-fourths by the end of FY 2026. The United States is already pledging more, but the total annual burden on the U.S. national budget is determined by actual cash flow in a given year, not the total size of the pledge.

This means that any challenge to continued aid must fully consider the true value of the price of continuing annual aid. Not only are current pledges and actual cash flow a fraction of the total annual cost of national security, but they also put immense pressure on Russia and raise its cost far more than the United States spends as it actually has to fight a war. They reassure our allies that we can be trusted and help ensure that they make major spending contributions of their own. They show that leaving Afghanistan is not a sign of failing U.S. international leadership, and they show China that our efforts to build up a fully credible deterrent in Asia are backed by our willingness to support our Asian national security partners.

This does not mean the flow of aid should be open-ended. It needs to be cost-effective, and some form of compromise peace settlement seems likely to be necessary. However, the value of continued aid spending goes far beyond the value of supporting Ukraine. Consider how much more the United States might have to spend on defense in the future if we do not show a major commitment to Ukraine. What would the impact be on the actions of Russia, China, Iran, and North Korea if we cut back and let Ukraine fail, and how much would we then have to spend on deterrence and war? How many of our current strategic partners in Europe, Asia, and the rest of the world would trust and support us in a crisis and provide aid if we do not? What would the risks and costs of an avoidable future war be to the United States, not only in money but in blood?

Once again, Oscar Wilde is scarcely a master strategist like Clausewitz or Sun Tzu. He normally is never quoted as an expert on strategy, warfare, and international relations. But U.S. aid to Ukraine is a case where the value is high, and the price is low, compared to the cost of doing nothing. It is a case where “a wise man considers both the value and the price of everything.”