Senator Paul Defies a Push To Seize Russian Assets, Saying It Would ‘Breed Contempt’ for America

The Kentucky contrarian evokes Democratic missteps in decades past to bolster opposition to hitting the Kremlin in the pocketbook.

Anna Moneymaker/Getty Images
Senator Paul at the U.S. Capitol, September 26, 2023. Anna Moneymaker/Getty Images

No matter how united Americans may be on any given issue, one can always count on a debate over money — especially when it involves other countries. In respect of Ukraine, into which the Biden administration has poured billions of dollars to help the country defend against Russian invaders, those squabbles are heating up on different levels.

Senator Paul opposed the $95.3 billion foreign aid bill that passed in the Senate this week but faces a bumpy road in the House. Writing in the news portal Responsible Statecraft, he has since called out the Washington foreign policy establishment for “making yet another strategic blunder” on the war in Ukraine. 

The Republican of Kentucky states that a separate Senate bill that would give President Biden the authority to seize Russian sovereign assets that are currently frozen and transfer them to Ukraine to aid in its reconstruction “will absolutely boomerang” and do more harm than good. 

Whether or not the Rebuilding Economic Prosperity and Opportunity for Ukraine act would boomerang is a question not even the most prescient economist could answer. Should the REPO act be signed into law this year, it would mark the first time that Washington would be confiscating the sovereign assets — albeit already frozen — of a country with which it isn’t at war.

For Dr. Paul that is problematic, for it would, he writes, amount to nothing less than “an act of economic war.” That could be overstating things, but Dr. Paul argues that seizing Russian funds could give other countries, Communist China included, a case of the jitters about America’s trustworthiness as a guarantor of the global economy.

It could, the Kentuckian cavils, make them want to “move away from the dollar and hold their reserves in other currencies.” That phenomenon, called “de-dollarization,” would, in Dr. Paul’s estimation, ultimately “degrade America’s financial strength and ensure the prosperity Americans have come to expect is no longer attainable.”

In Europe, too, there have been some doubts as to the prudence of seizing  Russian assets, as well as logistical concerns, but lately the EU seems to be coming around. Dr. Paul, in any event, has long been one of President Biden’s fiercest critics in terms of how the White House has used, or misused political capital to manage the effort to boot Russia from Ukraine. 

Mindful of his constituency, Dr. Paul said of the foreign aid package last week that “this bill sends the message to Americans that their elected officials don’t care about them. I’ve never met any Kentuckian who says, ‘Fix the border of Ukraine before you fix our border.’”

On Thursday Dr. Paul took a rhetorical battle-ax to what he calls the “border bill,” which in its earlier iteration would have meant that “Ukraine, the biggest beneficiary of all, was to receive $60 billion more to fund their war, in addition to $7.85 billion for the lavish salaries of Ukrainian bureaucrats.”

The package that was passed also included “$9 billion in humanitarian assistance for Gaza, which will more than likely end up in the hands of Hamas terrorists.”

“U.S. senators are duty-bound to ask whether our actions will ensure American security and prosperity,” Dr. Paul asserts. The risk of further antagonizing Russia, a nuclear power, runs high. The senator writes that “FDR’s decision to freeze Japan’s sovereign assets and implement an embargo on oil and gasoline exports led to Tokyo’s decision to attack Pearl Harbor.”

Not every historian would agree with that assessment. Dr. Paul is on firmer ground, though, when he writes that “American leaders speak of a ‘rules-based international order’ but the theory that the United States can confiscate the assets of another country we are not at war with is legally dubious.”

The bigger risk of President Biden’s Cold Warrior mentality, Dr. Paul seemingly implies, is that if its assets are seized Russia could simply retaliate in kind, by confiscating Western assets. Moscow has already threatened to do just that.

Which means that bankers and lawyers will have plenty of work ahead of them, but Russia will be no less likely to cut and run. Without some bigger ideas from Mr. Biden and Secretary Blinken, President Putin is likely to linger longer in Ukraine than anybody (except for  him) wants.

The New York Sun

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