Washington ‘can afford two wars’ – US Treasury secretary

The US Treasury is more than capable of supporting country’s overseas interests, Janet Yellen has said

US Treasury secretary Janet Yellen said on Monday that Washington can “certainly” afford to support wars on two separate fronts, saying that its coffers are in good shape to continue backing US interests overseas in its support for Ukraine and amid ongoing tensions in the Middle East.

“America can certainly afford to stand with Israel and to support Israel’s military needs and we also can and must support Ukraine in its struggle against Russia,” Yellen said in a Monday interview with UK broadcaster Sky News in advance of a meeting with Eurogroup finance ministers in Luxembourg.

Yellen added that the United States’ financial outlook is sufficient to back its allies abroad. However, she warned that the potential economic ramifications of a larger conflict in the Middle East remains unknown, particularly amid an already volatile global oil and natural gas market that has contributed to a cost-of-living crisis in several Western economies in the past year.

A former chair of the US National Reserve, Yellen also noted that inflation is easing but called on Republicans to expedite attempts to appoint a new House Speaker to ensure that financial aid can flow overseas. California Republican Kevin McCarthy was removed from the position earlier this month, leading to concerns of a possible economic and legislative logjam in Washington.

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McCarthy was ousted as Speaker after his GOP colleague, Florida Representative Matt Gaetz, called a vote to sack him, following claims that McCarthy had bowed to Democratic demands to pass an expansive spending bill. He was also accused of forging an agreement with US President Joe Biden to continue funding the Ukrainian military.

“We do need to come up with funds, both for Israel and for Ukraine,” Yellen said, adding that this remains a “priority” of Biden’s administration. “It’s really up to the House to find, seat a speaker and to put us in a position where legislation can be passed.”

Yellen’s comments follow her appearance last week at an IMF/World Bank conference in Morocco during which economic leaders discussed the possible fallout of a deepening crisis between Israel and the Palestinian militant group Hamas.

To date, the United States has already approved at least $113 billion in aid to Ukraine, according to recent calculations from the US State Department Office of Inspector General. However, CNN reported last week that the US military has called on defense producers to ramp up production to make up for shortfalls in stockpiles due to arms being transferred to Ukraine, in order to ensure it can supply munitions to Israel.

Amid renewed focus on the Israel-Palestine conflict, Ukrainian President Vladimir Zelensky has warned in recent days that “international attention” should not be shifted away from his country.

Polling conducted in August, also by CNN, reflected a swelling discontent in the US over the authorization of additional funding to support Kiev in its conflict with Moscow – with 55% of respondents calling for Ukraine spending to be withdrawn.