The US is spending an additional $61 billion in aid to Ukraine. But most of the money will go to the U.S. economy first.
The new law would allow the Pentagon to send all existing weapons, from bullets to missiles to tank parts, to Kiev while simultaneously backfilling its inventory with new manufacturing efforts for U.S. arsenals.
According to a study by the American Enterprise Institute (AEI), there are 117 production lines in about 71 cities in the United States slated to produce these weapons systems.
President Joe Biden signed the bill Wednesday morning as part of a larger package that provides additional aid to Israel and the Indo-Pacific and could ban TikTok in the United States next year.
“We are sending Ukrainian equipment from our own stockpile, and then we will replenish that stockpile with new products manufactured in the United States by American companies,” the president explained shortly after signing the bill.
“We are supporting Ukraine and at the same time investing in our own industrial base,” he added, noting that the funds would be spread across 40 states.
AEI Fellow Mark Thiessen and his colleagues agree with Biden that while the number of states is a bit small at 31, the impact will be significant.
“Military aid to Ukraine is energizing manufacturing communities across the United States,” Thiessen wrote in a recent Washington Post essay.
AEI has identified a number of regions that will benefit most directly, from Ohio to New Hampshire to Missouri to California. Many of these states are prominently represented by lawmakers who voted against the bill this week.
One example of AEI data is deep-red Missouri, where Boeing (BA) and RTX (formerly Raytheon) Corporation (RTX) make things like glide bombs and tracking radars.
Similarly, companies such as BAE Systems (BAESY), General Dynamics (GD), and Lockheed Martin (LMT) produce combat vehicles, howitzer parts, and Javelin surface-to-air missiles in Alabama.
RTX also has operations in Alabama, where it recently broke ground on an expansion of its missile facilities there.
Lockheed Martin and General Dynamics also reported quarterly results this week and used the releases to tout their relationships with the Pentagon and how defense contracts contribute to their bottom lines.
The United States is currently sending well over $100 billion to Ukraine in a series of aid efforts that follow a similar pattern, starting with stimulating American manufacturing. Observers also point out that the funding will allow the Pentagon to upgrade and modernize America's weapons in ways that would not otherwise be possible.
Mark Cancian of the Center for Strategic and International Studies recently wrote about how cutting aid could have other consequences, from underfunding existing U.S. forces to weakening humanitarian relief efforts.
The aid package passed this week also includes more than $26 billion for Israel. Some of that money is designated as military and weapons support, and is likely to follow a similar pattern of benefiting U.S. weapons manufacturers (and their employees) first.
Ben Werschkul is Yahoo Finance's Washington correspondent.
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