U.S. can ‘certainly’ afford military support to both Israel and Ukraine, Janet Yellen says

Janet Yellen, United States Secretary of Treasury, participates in global infrastructure and investment forum in New York, Thursday, Sept. 21, 2023. 

Pool | Via Reuters

U.S. Treasury Secretary Janet Yellen said the country can “absolutely” afford to financially support both Israel and Ukraine in their respective war efforts.

President Joe Biden in a post on X (formerly Twitter) on Sunday reiterated Washington’s “unwavering support” for Israel in its war against Palestinian militant group Hamas, and said he had provided Israeli Prime Minister Benjamin Netanyahu with an update on both U.S. military support and efforts to protect civilians as the conflict escalates.

Though the White House has so far fully endorsed what it terms “Israel’s right to defend itself,” Biden noted in an interview with the CBS program “60 Minutes” that an Israeli re-occupation of Gaza would be a “big mistake” and that although Hamas should be eliminated entirely, there “must be a path to a Palestinian state.”

Secretary of State Antony Blinken made an unscheduled return to Israel on Monday, the 10th day of an Israeli aerial bombardment campaign of the Gaza Strip as part of an all-out siege that has seen water, food and electricity cut off to around 2 million people.

Asked in an interview with Britain’s Sky News on Monday whether the U.S. could afford to be providing military support to Israel and to Ukraine in its ongoing war with Russia, Yellen said “the answer is absolutely.”

“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, adding that the U.S. economy is doing “extremely well.”

“Inflation has been high and it’s been a concern to households, it’s come down considerably. At the same time, we have about the strongest labor market we’ve seen in 50 years with 3.8% unemployment. And at the same time, America, the Biden administration, has passed legislation that is strengthening our economy in years to come for the medium term.”

Yellen said the need to release funds for both allies was a “priority” and called for Republicans in the House of Representatives to seat a speaker so that legislation can be passed, following the ousting of former Speaker Kevin McCarthy.

“We stand with Israel. America has also made clear to Israel, we’re working very closely with the Israelis, that they have a right to defend themselves,” Yellen told Sky News’ Wilfred Frost.

“But it’s important to try to spare innocent civilian lives to the maximum extent possible.”

More CNBC coverage of the Israel-Hamas war

Israel’s siege, which has been widely criticized by human rights organizations, came as a response to a brutal and large-scale terrorist attack carried about by Hamas on Oct. 7.

The death toll from the conflict has risen to at least 1,400 people in Israel and almost 2,700 in Gaza, and Israel’s military has urged residents of northern Gaza to evacuate south as it promised to ramp up its bombardment, with the evacuation orders widely criticized by humanitarian agencies on the ground.

Yellen said it was too early to gauge the potential economic impact of the conflict in the Middle East, as oil prices remain volatile amid concerns that neighboring powers in the region, such as Iran, could be pulled into the Israel-Hamas war.

Source: CNBC