Industrial production in the U.S. defense and space sector has increased 17.5% since Russia launched its full-scale invasion of Ukraine two years ago, according to Federal Reserve data.
Biden administration officials say that of the $60.7 billion earmarked for Ukraine in a $95 billion supplemental defense bill, 64% will actually flow back to the U.S. defense industrial base.
“That’s one of the things that is misunderstood…how important that funding is for employment and production around the country,” Lael Brainard, director of the White House National Economic Council, said in an interview Wednesday.
The latest money, on top of previous commitments, could inject funds worth about 0.5% of one year’s gross domestic product into the U.S. industrial defense base over several years.
Biden administration officials say funding allocated for Ukraine is rebuilding America’s defense industrial base, jump-starting and expanding production lines for weapons and ammunition, and supporting jobs in 40 states.
The administration might also hope for political benefits by noting the impact on employers in electoral swing states such as Pennsylvania and Arizona, each of which will receive more than $2 billion, according to the Department of Defense.
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