Sen. Blumenthal: U.S. Economic Contraction Partly Caused by ‘War in Ukraine’

By Janey Olohan | August 1, 2022 | 4:55pm EDT
Sen. Richard Blumenthal (D-Conn.)  (Getty Images)
Sen. Richard Blumenthal (D-Conn.) (Getty Images)

(CNS News) -- When asked what was causing the U.S. economy to contract for two straight quarters this year, resulting in a $515-billion budget deficit, Senator Richard Blumenthal (D-Conn.) blamed the “war in Ukraine” and other “economic issues.”

At the U.S. Capitol on July 28, CNS News asked Blumenthal, “Senator, the economy has now contracted for two straight quarters. What do you believe is causing that contraction?”

He replied, “Partly the war in Ukraine, partly bottleneck issues, partly a variety of other economic forces. But, I’m very hopeful that that track will be reversed.”

Senator Blumenthal, like most members of Congress, has been a strong supporter of providing humanitarian and military aid to Ukraine in its war with Russia, a conflict that started in late February.

Blumenthal, along with 85 other senators, voted for a $40.1 billion package for Ukraine in May: HR 7691, the Additional Ukraine Supplemental Appropriations Act, 2022.

As reported by Al-Jazeera news agency, “The legislation provides $6bn for weapons, training and financial support for Ukraine’s military and $4bn in military financing over the next five months through the end of September, according to a House Committee on Appropriations summary of the legislation.

“It also includes $9bn to replenish US stocks of weapons being sent to Ukraine and nearly $4bn for expanded US military operations in Europe,” said the news outlet.

Total U.S. assistance to Ukraine so far is over $50 billion. That's about the annual cost of both the U.S. Treasury and Energy Departments combined.

President Joe Biden.  (Getty Images)
President Joe Biden. (Getty Images)

On June 15, the U.S. State Department announced an additional $1 billion in “military assistance” for Ukraine. Another $650 million was provided that day from the Defense Department’s Ukraine Security Assistance Initiative. On July 15, it announced an additional $400 million in military assistance.

In fiscal year 2021, before the war even started, “Ukraine received $275 million under DoD’s Ukraine Security Assistance Initiative (USAI),” said the State Department.  “This included $75 million in lethal assistance.”  In addition, the Defense department “provided Ukraine $115 million in Foreign Military Financing (FMF) and $3 million in International Military Education and Training (IMET) funding.” 

On Aug. 1, the Biden administration announced it was allocating another $550 million in military aid to Ukraine.

At a June 30 press conference, President Joe Biden said, “We are going to stick with Ukraine, and all of the alliance is going to stick with Ukraine as long as it takes to in fact make sure that they are not defeated.” 

Senator Blumenthal also voted to pass the CHIPS bill,  Creating Helpful Incentives to Produce Semiconductors. Despite opposition from many Republicans, the bill passed the Senate 64-33 in June. The legislation provides $52 billion in grants and other assistance to U.S. semiconductor manufacturers apparently to give them a competitive edge against Chinese makers of semiconductors.

(Getty Images)
(Getty Images)
 
 

In the first nine months of this fiscal year, the government collected $3,835,390,000,000 in taxes, a record amount. During those same nine months the government spent $4,350,457,000,000, creating a deficit of $515,067,000,000. There are three months left in the fiscal year.

The Treasury Department reports that as of July 26 of this year, the national debt was at $30,598,262,922,849.72.

By traditional economic measures – two months of negative GDP growth – the U.S. is now in a recession.

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