[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                     ANALYZING THE FISCAL YEAR 2025
                      STATE AND FOREIGN OPERATIONS
                       BUDGET REQUEST FOR EUROPE

=======================================================================

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON EUROPE

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             June 26, 2024

                               __________

                           Serial No. 118-112

                               __________

        Printed for the use of the Committee on Foreign Affairs
        
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-----------------------------------------------------------------------------------                       

                     COMMITTEE ON FOREIGN AFFAIRS

                   MICHAEL T. McCAUL, Texas, Chairman

CHRISTOPHER H. SMITH, New Jersey     	GREGORY MEEKS, New York, Ranking 
JOE WILSON, South Carolina               Member
SCOTT PERRY, Pennsylvania		BRAD SHERMAN, California		
DARRELL ISSA, California		GERALD E. CONNOLLY, Virginia
ANN WAGNER, Missouri			WILLIAM KEATING, Massachusetts
BRIAN MAST, Florida			AMI BERA, California
TIM BURCHETT, Tennessee			JOAQUIN CASTRO, Texas
MARK E. GREEN, Tennessee		DINA TITUS, Nevada
ANDY BARR, Kentucky			TED LIEU, California
RONNY JACKSON, Texas			SUSAN WILD, Pennsylvania
YOUNG KIM, California			DEAN PHILLIPS, Minnesota
MARIA ELVIRA SALAZAR, Florida		COLIN ALLRED, Texas
BILL HUIZENGA, Michigan			ANDY KIM, New Jersey
AUMUA AMATA COLEMAN RADEWAGEN, 		SARA JACOBS, California
    American Samoa			KATHY MANNING, North Carolina
J. FRENCH HILL, Arkansas		SHEILA CHERFILUS-McCORMICK,
WARREN DAVIDSON, Ohio				Florida
JIM BAIRD, Indiana			GREG STANTON, Arizona			
MICHAEL WALTZ, Florida			MADELEINE DEAN, Pennsylvania	
THOMAS KEAN, JR., New Jersey		JARED MOSKOWITZ, Florida
MICHAEL LAWLER, New York		JONATHAN JACKSON, Illinois
CORY MILLS, Florida			SYDNEY KAMLAGER-DOVE, California
RICH McCORMICK, Georgia			JIM COSTA, California
NATHANIEL MORAN, Texas			JASON CROW, Colorado
JOHN JAMES, Michigan			GABE AMO, Rhode Island
KEITH SELF, Texas			KWEISI MFUME, Maryland
RYAN K. ZINKE, Montana			 BRAD SCHNEIDER, Illinois
JAMES C. MOYLAN, Guam

                    Brendan Shields, Staff Director
                    Sophia LaFargue, Staff Director

                         Subcommittee on Europe

                 THOMAS KEAN, JR., New Jersey, Chairman

JOE WILSON, North Carolina           WILLIAM KEATING, 
DARRELL ISSA, California                 Massachusetts,Ranking Member
ANN WAGNER, Missouri		     DINA TITUS, Nevada
BILL HUIZENGA, Michigan		     MADELEINE DEAN, Pennsylvania
MICHAEL LAWLER, New York	     JIM COSTA, California
NATHANIEL MORAN, Texas		     SUSAN WILD, Pennsylvania
KEITH SELF, Texas		     GABE AMO, Rhode Island

                    Michael Callessen, Staff Director

                            
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

O'Brien, The Honorable James, Assistant Secretary, Bureau of 
  European and Eurasian Affairs, U.S. Department of State........     7
McKee, The Honorable Erin Elizabeth, Assistant Administrator, 
  Bureau for Europe and Eurasia, U.S. Agency for International 
  Development....................................................    13

                  INFORMATION SUBMITTED FOR THE RECORD

Article submitted for the record by Representative Keating: The 
  Guardian Dealing with Orban's Government Increasing Efforts to 
  Crack Down on Independent Voices...............................    19

                                APPENDIX

Hearing Notice...................................................    37
Hearing Minutes..................................................    39
Hearing Attendance...............................................    40

            RESPONSES TO QUESTIONS SUBMITTED FOR THE RECORD

Responses to questions submitted for the record..................    41

 
                  ANALYZING THE FISCAL YEAR 2025 STATE
            AND FOREIGN OPERATIONS BUDGET REQUEST FOR EUROPE

                        Wednesday, June 26, 2024

                          House of Representatives,
                             Subcommittee on Europe
                      Committee on Foreign Affairs,
                                                    Washington, DC.

    The subcommittee met, pursuant to notice, at 2:02 p.m., in 
room 2172 Rayburn House Office Building, Hon. Thomas Kean, Jr. 
(chairman of the subcommittee) presiding.
    Mr. Kean. The Subcommittee on Europe of the House Foreign 
Affairs Committee will come to order.
    The purpose of this hearing is to examine the President's 
State Department and foreign operations budget request for 
Europe and Eurasia for Fiscal Year 2025.
    I'd also like to welcome the gentleman from Illinois, Mr. 
Schneider, who is joining us today. He will participate 
following all other members in today's hearing.
    I now recognize myself for an opening statement.
    We are here to consider the President's Fiscal Year 2025 
budget request for the State Department and USAID's operations 
in Europe.
    Ultimately, Congress has the power of the purse as the 
House will determine this week by voting on the State and 
Foreign Operations Appropriations Act on the House floor.
    However, we appreciate the opportunity to consider the 
Administration's budget request for Europe because it indicates 
what resources the Administration believes it needs to address 
pressing national security challenges on our continent--on the 
continent.
    Money is policy and where the Administration intends to 
allocate its funding is indicative of its policies and its 
priorities.
    I'll start by highlighting the importance of congressional 
engagement in our Nation's foreign policy. While the Congress 
appropriates money we also have the duty to the American people 
to ensure that their hard-earned taxpayer dollars are being 
spent responsibly and with the necessary amount of oversight to 
prevent waste, fraud, and abuse.
    During today's hearing I hope that our witnesses are 
prepared to address whatever concerns that members raise in the 
interests of transparency. A constructive policy in Europe and 
in Eurasia is crucial to U.S. national security.
    As a bloc the European Union is the U.S.' single largest 
trading partner with an estimated $1.3 trillion in trade in 
goods and services in 2022.
    As of 2022 U.S. foreign direct investment in the EU was 
$2.7 trillion with European foreign direct investment in the 
U.S. totaling $2.4 trillion. Moreover, Europe is home to our 
closest and longest standing allies and security partners.
    The vast majority of the NATO alliance is located in Europe 
and I am glad that for the first time in many years a majority 
of the alliance will hit the minimum 2 percent of GDP defense 
spending threshold.
    This is due to transformative investments in defense on the 
part of our European allies. That said, there are still 
numerous allies who will not yet hit this important defense 
spending target this year and I strongly urge them to meet this 
target immediately or have a credible plan to do so as soon as 
possible.
    I look forward to welcoming our fellow NATO members to 
Washington during next month's summit to hear a direct update 
on status of alliance spending.
    The United States cannot go it alone in the face of the 
unholy alliance of dictators assembling around the world.
    Simply put, we need allies. Throughout Russia's unprovoked 
and illegal war of aggression against Ukraine our European 
allies have made sure that the U.S. is not standing alone with 
Ukraine against the greatest threat to Europe in decades.
    While the Biden Administration dithered European nations 
moved first on providing Ukraine with Stinger and Javelin 
missile systems in February 2022 to stymie the initial Russian 
assault.
    European nations also led on providing modern main battle 
tanks, long-range missiles, and advance fighter jets to 
Ukraine. Europe has even outspent the U.S. on nonsecurity 
assistance commitments to Ukraine by a difference of $50 
billion.
    I applaud this leadership from our European allies. That is 
what burden sharing does, indeed, look like. Additionally, I 
encourage our partners in Europe to continue waking up to the 
dangers posed by the Chinese Communist Party as well.
    Democracies of the world have a sacred duty to defend the 
values that we preach and which the CCP openly opposes. Given 
the avenues for the CCP to exert influence over our free 
societies throughout coercive economic practices is 
unacceptable.
    We must be clear eyed about the threat that China poses to 
peace and prosperity in Europe and around the world. I look 
forward to our conversation today to discuss the 
Administration's policy in Europe.
    With Putin's war continuing to rage in Ukraine, democratic 
backsliding in Georgia, high tensions in the Western Balkans, 
and many other pressing challenges to peace and stability on 
the continent, this is truly a critical period for the future 
of Europe and for the United States.
    The chair now recognizes the ranking member, the gentleman 
from Massachusetts, Mr. Keating, for any statement that he may 
have.
    Mr. Keating. Thank you, Chairman Kean, for holding this 
important hearing today, and to our witnesses for their 
testimony in the Fiscal Year 1925 European budget request.
    The European continent has long been a region critical to 
U.S. national security interests. Our transatlantic bonds with 
some of our oldest allies like the United Kingdom and France as 
well as Germany, the Baltics, and Poland are based in our 
shared beliefs in democracy, rule of law, and freedom of 
speech.
    Beyond our shared values, robust and active U.S. foreign 
policy in the past year has brought a landmark nuclear energy 
partnership to Poland, a surge in humanitarian and economic 
support for displaced Armenians from Nagorno-Karabakh, and 
increased multilateral cooperation through the Ukraine Defense 
Contact Group.
    At the same time, the reconstitution of the Northern 
Ireland Assembly, accession of Finland and Sweden into NATO, 
and democracy support for partners in Belarusian opposition and 
in Central Europe are representative of the importance of U.S. 
engagement across the continent.
    Yet, remaining challenges in Europe continue to demand U.S. 
engagement. Nowhere is this more important than in Ukraine.
    In April, the chairman and I met with President Zelenskyy 
in Kyiv for over an hour to discuss the state of the conflict, 
the desire to transfer Russian sovereign assets, and the 
battlefield needs of air defense and long-range missiles.
    The U.S. continues to approach these challenges with 
creativity and tenacity, devising mechanisms like a $50 billion 
loan to Ukraine by using the interest of Russian sovereign 
assets as collateral and adapting policies to reflect the 
evolving needs of the Ukrainian military such as allowing 
strikes into Russian territory with U.S. origin weapons.
    These actions saved Ukraine lives and I urge the 
Administration to continue to adapt and innovate policies that 
ensure Ukraine's victory over Russia.
    I also commend allies and partners including Romania, 
Denmark, and others who have provided air defense systems to 
Ukraine. The chairman and I led a letter in April following our 
trip to Kyiv calling for allies and partners to provide 
additional air defense and long-range missile stocks to Europe.
    It's reassuring to see our allies step up to the plate in 
Ukraine's time of need. While Ukraine fights to preserve its 
democracy leaders across Europe have sought to undermine 
democratic principles, the rule of law, and the values that 
underpin our transatlantic alliance.
    Most recently in Georgia the Georgian Dream Party forced 
through a Kremlin-inspired foreign agent law and signed a 
strategic partnership agreement with China, a country actively 
supporting Russia's war in Ukraine, even as the Kremlin 
continues to occupy 20 percent of Georgia's territory.
    Meanwhile, in Hungary Prime Minister Orban has clamped down 
on dissent and escalated persecution of the LGBTQ+ people and 
other minorities, all the while embracing Russian malign 
influence and Chinese investment in Budapest. The actions of 
Orban as well as the Georgian Dream are an extreme concern and 
they undermine the long-term interest of the Georgian and 
Hungarian people.
    Meanwhile, elections across Europe this year have given 
rise to far-right parties who promote an isolationist anti-
immigrant world view which has no place in our vibrant and 
diverse societies.
    As we await upcoming elections in France and the United 
Kingdom and our own elections later this year we must stand 
ready to reject those extremist ideas that contradict our 
sacred democratic values of inclusion and acceptance.
    Finally, as we approach the NATO summit in Washington 
marking the 75th anniversary of this alliance we must redouble 
our commitment to Article 5 and again make clear that any 
attack on any NATO member will result in a full and undeniable 
response.
    The unity of our alliance is our strength and we must use 
this opportunity to deepen our cooperation with Ukraine, ensure 
adequate defense spending on our allies, and strengthen 
partnerships in the Indo-Pacific.
    Unfortunately, just as the threats we face are most acute 
and the desire for U.S. engagement, particularly in Europe, is 
the most warranted, House Republicans have proposed a 12 
percent cut to the State and foreign operations budgets.
    These cuts will undoubtedly undermine the State Department 
and USAID's ability to carry out their mission. As Russia 
continues to commit to war crimes in Ukraine, deepens 
partnerships with North Korea, China, and Iran, and acts 
brazenly on the world stage, we should be expanding our 
diplomatic engagements around the world.
    Anything less will send a message to the autocratic world 
and particularly to China that our actions will go undeterred.
    I look forward to questioning our witnesses on this 
important issue of adequately funding the State Department and 
USAID for Fiscal Year 1925 to ensure they can carry out their 
missions and continue to do the hard but enduring work of 
expanding our national security.
    Thank you, Chairman Kean. I yield back.
    Mr. Self [presiding]. Thank you, Ranking Member. Other 
members of the subcommittee are reminded that opening 
statements might be submitted for the record.
    We are pleased to have a panel of distinguished witnesses 
before us today on this important topic. Ambassador James 
O'Brien is Assistant Secretary in the Bureau of European and 
Eurasian Affairs at the Department of State. Ambassador Erin 
McKee is the Assistant Administrator for the Bureau of Europe 
and Eurasia at the U.S. Agency for International Development.
    Thank you for being here, both of you. Your full statements 
will be made part of the record and I ask you to keep your 
verbal remarks to 5 minutes.
    I now recognize Ambassador O'Brien for his opening 
statement.

  STATEMENT OF JAMES O'BRIEN, ASSISTANT SECRETARY, BUREAU OF 
    EUROPEAN AND EURASIAN AFFAIRS, U.S. DEPARTMENT OF STATE

    Mr. O'Brien. Thank you, Mr. Chairman and Mr. Ranking 
Member. I'm really heartened that I can agree with nearly every 
sentence in both opening statements.
    I'm reminded that we sit in the building named after Sam 
Rayburn, who led the charge to prepare America to enter World 
War II, and I think we're at a stage where we have to prepare 
ourselves for the long term and turn away from the call of 
isolationism that I think would endanger our allies and 
ourselves.
    So what we're discussing is a budget request from the 
Administration. I understand there are other proposals around. 
What we are suggesting is it's $1.26 billion.
    Of that about $722 million is for the assistance accounts 
and there's about $583 million that is for the operating 
capacity of the Bureau of European and Eurasian Affairs, which 
I lead.
    These are about 3 to 6 percent increases. They're also 
meant to normalize our spending because we have been greatly 
dependent on supplemental expenditures to deal with the 
extraordinary threats posed by Russia's further invasion of 
Ukraine.
    As just one example, if we're not able to maintain these 
levels we could end up losing 70 percent of the staff that 
manages the sanctions programs against Russia and Iran.
    I realize that's nothing that this committee wants but 
that's the consequence of some of the cuts that are proposed.
    Now, how do we propose to spend that money? In rough 
proportion, 38 percent of the funding will be spent on Ukraine. 
About 26 percent will be spent on Euro-Atlantic integration--
that is that bucket of, say, 11 countries that run along the 
southern part of Europe from the Adriatic to the Caspian Sea--
and about 26 percent of what I'll call global governance 
challenges, the ability of us to compete and defeat China 
economically, the ability of us to work with our European 
partners.
    As Chairman Kean's opening remarks noted, these are our 
largest trading partners and when we cooperate we are able to 
succeed because we're the most powerful, prosperous economic 
bloc in the world.
    Now, how exactly will we propose to spend the money? And we 
can go into this more in questions but I'll look at each one of 
those three buckets in order, first on Ukraine.
    So the goal of our strategy is pretty simple. We want 
Ukraine to win. We want it to thrive while it's fighting on its 
way to victory.
    How does it do that? It does it by holding Russia in the 
east, destabilizing Russia's firing positions and the places 
from which it threatens Ukrainian territory in Crimea and right 
up against Ukrainian lines, and restoring its economic life.
    That means having adequate air defense and the ability to 
export through the southern ports. When that happens we know 
that Ukraine's economy recovers, its tax base improves, and 
it's able to begin paying much more of its own way.
    We saw that over the last winter when Ukraine's grain 
exports began to reach prewar levels and economic life in its 
core industries, especially its iron and steel industries, 
began to recover from essentially single-digit utilization 
rates.
    So that's where we're putting our money to work, and 
Ambassador McKee and I can describe specific programs we're 
using there.
    The second bucket--again, about a quarter of the spending 
we're proposing is for Euro-Atlantic integration. Over the last 
2 years we have had a historic movement of consolidation that 
the EU has offered nine of the countries along that graph some 
future as part of the EU and NATO is having discussions about 
either admitting or bringing closer many of the countries.
    We're now also seeing a bit of a reaction. Elites in some 
of those countries--the ranking member mentioned Georgia and--
well, Hungary is a current member but also within Bosnia and 
some other countries some elites are bucking against having to 
make the hard reforms that are needed to join the EU and NATO.
    We have to work together to see that that does not 
continue. We're also seeing Russia trying to be very active in 
that area and we are having some success in countering Russia's 
malign influence.
    For example, with Canada, the U.K., and support from the EU 
we uncovered a Russian disinformation plot to destabilize the 
democratically elected European-oriented government in Moldova.
    The third bucket, again, about a quarter of what we're 
discussing is on global governance issues and this is 
especially important with regard to China, and I'm happy to 
describe more what we are doing with our European allies in 
that regard.
    Thank you for your time and for having us here today.
    [The prepared statement of Mr. O'Brien follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mrs. Wagner [presiding]. We thank you. We thank you, 
Assistant Secretary O'Brien.
    I'd now like to recognize Ambassador McKee for 5 minutes of 
your opening remarks.

  STATEMENT OF ERIN ELIZABETH MCKEE, ASSISTANT ADMINISTRATOR, 
 BUREAU FOR EUROPE AND EURASIA, U.S. AGENCY FOR INTERNATIONAL 
                          DEVELOPMENT

    Ms. McKee. Thank you, Chairman, Ranking Member, 
distinguished members of the Subcommittee on Europe, and I 
really appreciate the invitation to speak to you today on 
USAID's assistance and, of course, the budget for Fiscal Year 
2025.
    I welcome the opportunity to discuss the agency's 
priorities to advance and support, obviously, our foreign 
policy and national security goals in Europe and Eurasia, and 
to that end the President's request for Fiscal Year 2025 
includes $722.3 million for Europe and Eurasia through the 
AEECA account and this will directly support U.S. leadership in 
international development with the aims of achieving a durable 
peace and a dignified peace in the region.
    Starting with Ukraine, we are very grateful for the 
overwhelming bipartisan support shown for desperately needed 
funding this past April. Our highest priority remains--has been 
and remains ensuring Ukraine's victory.
    As Ambassador O'Brien already indicated, that is 
fundamental to peace and an enduring peace throughout Europe 
and Eurasia.
    In the face of Russia's recent attacks on civilian energy 
infrastructure USAID, together with our other interagency 
colleagues, are rapidly deploying assistance to bring back 
significant electric power, heat generation, by this winter 
through repairs and delivering materials that will protect 
families that have been repeatedly targeted--families and 
facilities.
    We will continue to lay the groundwork for private 
investment in new power generation, support reforms in the 
energy sector, and increase regional energy security through 
investments in diversified generation and decentralized 
distribution.
    We cannot talk about the region without starting with 
Ukraine. The Fiscal Year 1925 request is driven by recognition 
that economic and security assistance to Ukraine go hand in 
hand.
    Putin knows how critical Ukraine's economy is in this fight 
and that's why he's actively targeting Ukraine's grain exports, 
energy infrastructure, civilians, to derail this strategy, to 
erode confidence and undermine morale.
    It is our hope now that U.S. resources will help Ukraine 
eventually build the economy it must have to generate greater 
revenue, sustain livelihoods, and decrease reliance on support 
from us and other donors.
    One way that we're doing this is support to small and 
medium enterprises. In May 2024, just last month, USAID had 
supported over 26,000 small and medium enterprises in the 
agriculture, IT, and manufacturing sectors.
    What does this mean? We helped create or sustain over 
156,000 jobs. Those are taxpayers. Those are folks that are in 
it for the long haul to help Ukraine not just win the fight but 
win the future.
    In Moldova right next door we have enabled the energy 
sector to break away from Russia's 30-year coercive grip by 
diversifying energy sources and increasing their integration 
with the European energy market.
    Compared to a near total dependence on Gazprom in 2021 the 
government of Moldova met 100 percent of its gas needs with 
non-Russian supplies in 2023. That is a big success.
    In the Caucasus, as both the chairman and ranking member 
mentioned, we are responding to new challenges but we also see 
new opportunities.
    In Georgia we are focused on ensuring that Georgia remains 
on its democratic path and runs a free and fair election in 
October and, hopefully, regains momentum toward EU accession.
    The ruling party's passage of the foreign influence law and 
anti-Western rhetoric gravely threatens civil society, 
independent media, and demonstrate the importance of USAID's 
assistance to bolster the democratic forces there.
    In Armenia we are seizing an important opportunity to help 
this reforming democracy strengthen its economy and build its 
overall resilience against external pressure.
    Additionally, we are increasing our work on the Middle 
Corridor as a major gateway connecting Central Asia to Europe, 
which diversifies movement of goods, services, and reduces 
dependence on routes through Russia, the PRC, and Iran.
    We continue to watch the Western Balkans closely to ensure 
stability is maintained and build on gains made in democracy, 
anti-corruption, and economic growth.
    So thanks to the ongoing and essential support from 
Congress, USAID has demonstrated tangible results and clear 
progress.
    We have and will deploy congressionally allocated funds to 
demonstrate U.S. leadership, counter Putin's influence, and 
fortify democratic institutions.
    Thank you for the opportunity to discuss our work today.
    [The prepared statement of Ms. McKee follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mrs. Wagner. I thank you very much, Ambassador McKee. I now 
recognize myself for 5 minutes for questioning.
    I want to start by thanking both of our witnesses for their 
time today and certainly for their service to our country.
    The integrity of the Dayton Accords and the sovereignty of 
Bosnia and Herzegovina itself are constantly under attack by 
Milorad Dodik, the president of Republika Srpska.
    The State Department has rightly sanctioned Dodik and many 
of his accomplices and enablers, and I have repeatedly called 
for these sanctions which would be codified under the Upholding 
the Dayton Peace Agreement Through Sanctions Act, my 
legislation that recently passed the House with overwhelming 
bipartisan support. Yet, Dodik's dangerous provocations 
continue.
    Ambassador O'Brien, what further actions are being 
considered to tighten the screws on Dodik and his corrupt 
cronies?
    Mr. O'Brien. Thank you, Madam Chair, and thank you for your 
support on this issue. I think you've been a very strong voice 
in favor of what is one of the longest lasting peace 
arrangements in the world, and I was pleased to play some part 
in it in 1995 and to try to make sure that it is fit so that 
Bosnia and Herzegovina can move toward a future as part of the 
European Union. So that provides a few additional tools.
    The first item is that there is no support for what 
President Dodik discusses whether it's dissociation, 
dissolution of Bosnia, independence of the Republika Srpska. 
Prime Minister Plenkovic in Croatia has said publicly that he 
opposes it and we have seen no sign of support from Serbia 
either.
    Serbia knows that its path toward any kind of European 
future depends on respecting the international borders of the 
region and that includes Bosnia.
    So when Mr. Dodik talks this way it's an attempt to rile up 
his base and one that we should not take as a sign of anything 
that's possible.
    Now, how do we then begin to enforce this and encourage him 
to work only within the legal procedures of the Dayton 
agreement? Here there are a couple of things.
    One is sanctions are important. I will not preview any 
specific sanctions. We just announced some additional 
sanctions----
    Mrs. Wagner. Yes, and I am grateful for those sanctions 
against Dodik.
    Mr. O'Brien. And those are intended to make the case that 
public entities like Republika Srpska should operate on public 
budgets, not on the capture of state-owned enterprises or on 
nontransparent loans from unknown foreign sources.
    So that's what the sanctions are intended to get at. We'll 
add to that close cooperation with our European colleagues. 
They have both through these accession----
    Mrs. Wagner. And to that point, Ambassador, if I could 
interrupt.
    Mr. O'Brien. Please.
    Mrs. Wagner. The EU has not imposed its own sanctions on 
Dodik and how important is it for the Europeans to follow suit 
and to--and how are we using our U.S. pressure on our partners 
to join the U.S. in holding Dodik accountable through sanctions 
or other means?
    Mr. O'Brien. Yes, I think it's the other means in this 
case. I think we have the tool of sanctions readily available. 
The EU, because it needs to get consensus among all the 
members, finds it sometimes difficult.
    Mrs. Wagner. Do you have some perspective on the other 
means?
    Mr. O'Brien. Yes. So what it can do is withhold funding as 
it did to Republika Srpska over the past year, deny benefits, 
in particular the benefits of joining a regional common market 
unless the Republika Srpska is fully compliant with the Dayton 
agreement, and we're working very closely with our EU 
colleagues on the roadmap necessary for that to happen.
    And if I may just--sorry for going on so long. I just want 
to call out the spectacular work of our Ambassador in Bosnia 
and Herzegovina, Michael Murphy.
    Mrs. Wagner. He was with us last night for the incredible 
film ``Kiss the Future'' and the president of Bosnia is here 
also.
    Mr. O'Brien. I'm seeing him in 2 hours.
    Mrs. Wagner. Wonderful, and we have had a tremendous back 
and forth. And I agree with you he's been a wonderful envoy and 
representative.
    Mr. O'Brien. And I just think it's a mark of how well he's 
done that President Dodik singles him out for special insult 
and recognition at every opportunity.
    Mrs. Wagner. Me, too.
    In its 2024 annual threat assessment the U.S. intelligence 
community warned of a heightened risk of localized inter-ethnic 
violence in the western Balkans including in Bosnia and 
Herzegovina, and you both--I'm going to run out of time so I'd 
ask you both to respond in writing if you could, how are State 
and USAID working to lower the risk of ethnic conflict in 
Bosnia and Herzegovina?
    I wish I had time to have you answer orally but if you 
could get back to us in writing I would be greatly 
appreciative.
    And now it is my honor to represent the ranking member for 
questions for 5 minutes.
    Mr. Keating. Well, thank you, Madam Chair. Mic--there it 
goes. Thank you, Madam Chair. I thank our witnesses again.
    Yesterday, Transparency International Hungary as well as 
one of the country's best known investigative outlets received 
notifications they're being investigated by Hungary's new 
sovereign protection office which seeks to target independent 
voices and organizations in Hungary.
    If I may, I'd ask unanimous consent for the record to 
submit this article from the Guardian dealing with Orban's 
government increasing efforts to crack down on independent 
voices.
    Mrs. Wagner. So ordered.
    [The information referred to follows:]

   [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Keating. I'd like to ask our witnesses how does Orban's 
crackdown on opposition influences and its use of Russian style 
laws undermine democracy in Hungary?
    Ms. McKee. Thank you for your question, Congressman.
    So it's unfortunate--extraordinarily unfortunate democratic 
backsliding and we deeply appreciate Congress' recognition of 
this back in 1921 where we reengaged in Central and Eastern 
Europe with a focus on Hungary and Poland, although I will say 
Poland has shifted both its posture and its approach somewhat.
    So in Hungary with the resources and our reengagement we 
are strengthening civic engagement in public life to be able to 
withstand and build greater resilience to these draconian laws 
that try and shut down vital voices.
    In 2023 we trained 22 municipal offices in Hungary on 
citizen engagement practices that involve citizens in dialog 
and decisionmaking, and so in response to the sovereignty law 
recently passed we have offered through this network and 
through these folks that have greater capacity now to respond 
to threats from the national or central level government to 
help them understand the new legislation, how it may impact 
them, and then utilizing access to legal resources should they 
become threatened or even worse.
    And so we recognize it and, luckily, we were able to get a 
bit out ahead of the curve and have a network of support in 
place.
    Mr. O'Brien. Hungary is isolating itself and I think here 
working with our European colleagues has been important. They 
are withholding close to $50 billion euro in European money for 
Hungary over Hungary's violation of rule of law requirements.
    We are reinforcing that as best we can and we see the 
effect in NATO and other diplomatic arenas where Hungary, 
increasingly, is isolated. I think Orban's relatively poor 
performance in the elections earlier this month is an indicator 
that his inability to bring home either the money or to show 
the kind of leadership that he wants is a real--is doing real 
damage to his ability to affect democracy everywhere.
    But that's something we have to watch, particularly as 
Hungary takes over the rotating chair of the European Union. We 
have to make sure that he's seen as a leader who uses 
illegitimate tactics, not as a full partner.
    Mr. Keating. I agree. I think that it's not surprising to 
see that after a poor performance this greater crackdown on the 
media itself, which is really a crackdown on the people of 
Hungary themselves.
    I do not know if we have time but if we could go a little 
further on Georgia's Dream and their support for Kremlin-
inspired foreign agent laws and their touting the relationships 
with China and how this affects their position on the Euro-
Atlantic community.
    We have touched upon it but in the minute that remains I'd 
like to give you the chance to have greater detail on what we 
can do to help shape this sad turnaround and backsliding that's 
occurring.
    Mr. O'Brien. In broad terms, in Georgia's constitution, put 
there by a Georgian Dream-led government, it says they want to 
join the EU and NATO.
    The EU this week, and we repeatedly have delivered publicly 
and privately the message that this violence against the 
opposition, the foreign agent law, the awarding of the--a port 
contract to a Chinese company, all of these things jeopardize 
the path toward the EU and NATO which more than 80 percent of 
Georgia's citizens support.
    Mr. Keating. Yes. I was at a dinner last night with many 
Ambassadors from Europe as well as the EU Ambassador and we 
talked about the Russian disinformation and the effect it's 
having on democratic process and elections.
    We have free elections. They do not. Russia does not, so 
they feel they were at liberty to use this tactic. It's 
something they're concerned about in Europe. It's something we 
should be concerned about here in the United States.
    With that, I yield back.
    Mrs. Wagner. The gentleman yields back.
    The chair now recognizes the gentleman from South Carolina, 
Mr. Joe Wilson, for 5 minutes for questioning.
    Mr. Wilson. Thank you, Madam Chair.
    And, Ambassador O'Brien, I realize and the world continues 
to watch in horror as war criminal Putin leveled cities. He 
began with Aleppo, Syria. That shouldn't be forgotten, the mass 
murder conducted there, and then it was continued in Mariupol 
in Ukraine.
    Again, unnecessary total destruction of a city, and now to 
go after Kharkiv, a city in Ukraine of 1.4 million people, 
targeting civilians in the war of murderous aggression.
    The entire world is in a global battle of dictators with 
rule of gun invading democracies with rule of law. War criminal 
Putin invaded Ukraine on February 24, 2022, and the Hamas 
puppets of the regime in Tehran invaded Israel on October 7, 
2023.
    Last year I visited Bucha, Ukraine, where Putin troops 
murdered innocent families, tying their hands behind their 
back. Last week I visited Kibbutz Nahal Oz where, again, 
Iranian puppets murdered innocent families, fulfilling the 
Hamas covenant Article 7 which provides for killing of all 
Jews.
    Sadly, today it seems the Administration is not committed 
to Ukrainian victory of territorial integrity as we would 
support for every American State and territory. War criminal 
Putin and his forces have determined the exact range to strike 
Ukraine from within Russia and such that Ukraine cannot strike 
back.
    While some restrictions on Ukrainian counter attacks 
against these attacks have been lifted it's clearly not enough, 
and I appreciate that in fact Ranking Member Greg Meeks has 
been promoting the ability to strike back.
    Assistant Secretary, Ukraine must win this war and they are 
motivated for their existence. But only if we let them. Putin's 
false escalation threats have been proven time and time again 
to be false.
    Will this Administration commit to victory by allowing 
Ukraine to strike all legitimate military targets in Russia? 
And I want to make it clear that it's bipartisan support for 
the ability of Ukraine to defend itself.
    Mr. O'Brien. Thank you, and thank you for your outspoken 
leadership on this issue.
    As I said in my opening statement, our goal is that Ukraine 
win and that it thrive while it's preparing to win, and I know 
we have a strategy that's due to be provided to the House and 
that's--we're working to get it here as quickly as we can.
    Ukraine has the right to strike Russia where it can with 
its weapons. The discussion we have is about how best to use 
the weapons we provide to them.
    Since those weapons arrived and for too many months--and I 
know many on this committee were very strong supporters of the 
supplemental bill--for too many months Ukraine could not fight 
back and so Russia was able to launch tactical air strikes 
using horrific weapons from very close in.
    Now Ukraine can strike back and we're seeing it reclaim 
territory, push Russia back, and destabilize Russia's ability 
and also prevent Russia from reequipping itself in the way that 
it wanted.
    This is the right path for Ukraine to win and we're happy, 
maybe in another forum, to talk about the tactics of that. But 
thank you, Mr. Congressman.
    Mr. Wilson. But, hey, again, this is bipartisan. This 
should not be a partisan situation and already the 
Administration understands the international law provides that 
you can strike back as was done against the Houthis as they are 
attacking by rocket the Red Sea shipping lanes.
    And then as I mentioned, Mr. Secretary, last week I was 
grateful to be in Israel where I discovered the famine that 
wasn't as correctly editorialized on June 21st by the New York 
Post.
    Quote, ``Gaza's supposed famine never happened. It was 
never more than Hamas propaganda equally consumed by the left. 
The chief U.N. food insecurity agency announced this month that 
it finds the analysis suggesting a famine wasn't plausible and 
lacks supporting evidence.''
    It's really sad to me that this turns out from the Famine 
Early Warning System, a USAID project, and that the--this 
particular project, and I'm a strong supporter of USAID. I just 
cannot imagine the incorrect analysis, and we do not have time 
to answer except this needs to be looked into.
    To come up with a famine that did not occur and then we 
find out that it was actually a study paid for by American 
taxpayers. This is not right, and we know a famine did not 
occur and we know that if there is a problem with famine it's 
called Hamas.
    I yield back.
    Mr. Kean [presiding]. Thank you, Mr. Wilson.
    I now recognize Mr. Amo from Rhode Island for 5 minutes.
    Mr. Amo. Thank you, Mr. Chairman. Thank you, Assistant 
Secretary O'Brien and Ms. McKee, for being here today and all 
of the work that you do. You conduct work that is essential to 
projecting American strength, influence, and partnership in 
Europe.
    However, instead of projecting strength the current 
Republican State and foreign operations budget proposes massive 
cuts that would decimate your work.
    We're talking about using a meat cleaver to hack 13 percent 
off the Department of State's budget and 28 percent off of the 
USAID operational budget.
    This side of the dais knows that the State Department and 
USAID are essential to safeguarding our national security and 
believes in making sure that you have the resources to carry 
out that work. Budgets reflect our values and these proposed 
Republican cuts reflect a dangerous political agenda that wants 
to retreat from America's global leadership.
    One area of concern to me is the harmful and partisan cuts 
to LGBTQ programs during a time of rising violence and hate 
speech against that community. Countries like Hungary have 
passed laws that restrict the essential freedom to love.
    So, Assistant Secretary O'Brien, if enacted how would 
poison pill provisions in the Republican budget including a 
funding ban for the special envoy to advance the human rights 
of LGBTQI persons, harm your work in Europe to protect the 
rights of LGBTQ people?
    Mr. O'Brien. Thank you, and thank you for your outspoken 
leadership on this issue. I'll offer a few general thoughts and 
maybe Ambassador McKee will have something to add.
    I'm proud to advocate U.S. law and U.S. values, 
particularly when it comes to the protection and inclusion of 
LGBTQ people. The special envoy is a very good partner in 
working particularly with many of our European allies and their 
populations who want to see more protection.
    So we have seen over this last year same-sex marriage in 
Greece, legalized marriage equality this year in Liechtenstein, 
and continued work by governments across Europe and they are 
good partners for us as well and along with the special envoy.
    I note another issue. Often the groups who organize around 
these issues are extraordinarily effective examples of freedom 
of association, one of the prized American values, and I'd hate 
to be put in the position of having to say that I can support 
some freedom of association but not others based on the content 
of what people are advocating.
    That would put our diplomats in a really terrible position. 
So I think the best way to support U.S. values and to support 
the populations who often need our protection is to continue 
these programs and particularly the work of the special envoy.
    I'd note the Administration has issued a statement that it 
would veto the bill that you described. So I hope that we can 
move toward a discussion of where we agree on supporting U.S. 
law and U.S. values rather than the early approaches that will 
not be enacted.
    Mr. Amo. Thank you.
    Ms. McKee?
    Ms. McKee. And if I could just briefly add----
    Mr. Amo. Yes, please.
    Ms. McKee [continuing]. That with an eye toward this and as 
we have seen in democratic backsliding in closing spaces 
whether in Central and Eastern Europe and elsewhere, we have 
increased our support to civil society and other activist 
groups as well as legal aid for those who are persecuted for 
their beliefs or their preference for who they love, and so 
with those tools in our toolkit to make sure that there's 
greater protection.
    That said, countries that claim to be a democracy but deny 
voice, access to services, or participation by parts of their 
citizenry are not democracies and we know that, and so we're 
going to hold them to account consistently and with this body 
we appreciate your support.
    Mr. Amo. Well, I stand in concurrence on that point that 
those democratic values have to be lived. And you brought up 
the vested interest that the United States has in preventing 
democratic backsliding in Europe and I'm going to highlight 
quickly some of the work that you're doing at USAID with the 
Democracy Delivers initiative.
    This initiative, you know, helps fledgling democracies 
demonstrate that economic empowerment goes hand in hand with 
democratic reforms and I know that it's currently working in 
Armenia and Moldova to support their continued democratic 
development.
    We know that when citizens experience the benefits that 
democracy delivers they have an incentive to stand firm against 
democratic backsliding.
    So if you could in writing submit--would love to hear how 
this initiative is working and how it combats the People's 
Republic of China's Belt and Road Initiative and where we need 
to continue to support the Democracy Delivers initiative, going 
forward.
    So thank you. I yield back.
    Mr. Kean. Thank you, Mr. Amo. I now recognize myself for 5 
minutes.
    It is well known that China has provided enormous support 
to Russia's defense industrial base. The Administration has 
taken limited steps to try to sever this malign relationship 
between Russia and China.
    However, numerous experts and even senior officials of this 
Administration have publicly admitted that Russia's defense 
industrial base is improving and that China's support has been 
indispensable to this development.
    Assistant Secretary O'Brien, this Administration's attempts 
to curtail China's support of Russia's illegal war in Ukraine 
are failing.
    Why is this Administration not taking greater action to 
sever this malign relationship?
    Mr. O'Brien. Thank you, Mr. Chairman.
    It's true Russia stays on the battlefield because of 
Chinese support. The greatest threat to European security now 
is being bankrolled by China.
    What we have done in particular over the last 6 months as 
other sanctions have limited Russians' options for markets is 
highlight this role China is playing. I see a marked difference 
in the way our European allies discuss their relationships with 
China as a result.
    China is being put to a test of whether it believes it has 
a future of economic relationships in Europe or it wants to 
support Russia in this war that we will not allow it to 
succeed, and that choice is one that will, frankly, take a 
little time to work through.
    We are attempting to focus their minds with a whole set of 
export controls and sanctions that--including a package 
recently released. We were joined by the European Union in its 
fourteenth package of Russia sanctions including several 
Chinese companies as a part of that.
    So the coalition that has been successful in supporting 
Ukraine and taking away more than $400 billion from Russia--
that's 4 years of its military budget--is very much focused on 
China's role and that is putting China into quite a difficult 
position.
    Mr. Kean. Assistant Secretary O'Brien, the State Department 
has announced today that you will be visiting Azerbaijan later 
this week and that you will meet with President Aliyev.
    What message will you deliver to President Aliyev and will 
you make clear that there will be consequences for any future 
threats or aggression against Armenia?
    Mr. O'Brien. Thank you for that.
    Yes, I will be there on--tomorrow night.
    We are very clear with President Aliyev that this is a time 
to make peace and it's a matter of not just Azerbaijan, which 
is hoping to be respected as a global leader when it hosts the 
Conference of Parties on climate change, but it's a matter for 
that entire region and for Central Asia.
    All of those countries now export to the world only through 
China or Russia. For them to have a path out they need to work 
through Azerbaijan.
    One road goes through Georgia to the Black Sea but another 
potentially much larger road would go through Azerbaijan, 
Armenia, and Turkey, and in that regard we need a peace 
agreement between Azerbaijan and Armenia to put an end to the 
war and the horrible conflict that has existed since the 
1990's.
    And our message is it's time to make peace and it's only in 
that context that we can resolve many of the issues of the war.
    We also talked to him about the importance of respecting 
human rights--that's a regular topic of conversation--including 
Secretary Blinken with him in just recent days, and I look 
forward to taking up that conversation with him as well.
    Mr. Kean. And then a third question to you, sir, if I may.
    The Administration's policy regarding Ukraine's ability to 
use U.S.-provided weapons against targets inside Russia can 
best be characterized as with other decisions in this regard to 
Zelenskyy's ability to use weapons and get weapons from 
America, sometimes characterized as too little too late.
    The initial policy change to allow Ukraine to hit targets 
in Russian territory did not occur until after Russian troops 
opened up a new front near Kharkiv and even then the 
Administration's initial change was only a half step.
    Policy has been revised but it's still unclear to Congress 
what exactly the policy is. Recent reporting indicates that the 
Administration is restricting the use of U.S.-sourced weapons 
on Russian--you know, on Russian territory to within 62 miles 
of the border of Ukraine, well short of the full 190-mile range 
of the ATACMS.
    How many air bases are within range of the ATACMS is the 
Administration preventing Ukraine from hitting?
    Mr. O'Brien. Thank you. So as you know from our visit to 
Ukraine together, the greatest gap in Ukraine's ability to 
obtain weapons was when the supplemental was not made available 
for five or 6 months, and as General Cavoli said the side that 
cannot shoot tends to lose wars.
    So thank you for your leadership and your outspoken 
assistance in getting that supplemental passed, and as you 
heard from President Zelenskyy that changed the situation. What 
we saw was President Putin attempt to rush an offensive into 
the field before the weapons that were provided for in the 
supplemental could reach Ukraine.
    What we have been trying to do is provide the weapons and 
focus them in areas that were of most immediate need. So first 
that was where Russia was pursuing the initial offensive in 
that box right near Kharkiv and now, as Jake Sullivan said last 
week, if Russia attempts to widen the front Ukraine can reach 
out more.
    In terms of specific numbers, I think we should get a 
military briefer to talk to you. We are seeing dramatic shifts 
in Russia's ability to sustain its campaign against Ukraine 
because of the loss of facilities in the targeted area.
    Mr. Kean. Thank you. I will work with you to arrange that.
    I now yield 5 minutes to Congresswoman Titus.
    Ms. Titus. Thank you, Mr. Chairman.
    We have heard a lot about democratic backsliding and in 
Europe you think of Hungary, you think of Belarus. But it's not 
limited there. We have seen anti--democratic parties elected in 
France, Germany, Italy. You've seen leaders coming out of the 
Netherlands and Slovakia.
    I wonder how the U.S. is going to try to deal with these 
new partners and how it's going to kind of affect the whole EU 
relationship, and kind of related to that we're going to be 
hosting a NATO summit here in--75th anniversary in just a 
couple of weeks in Washington and how do we think that the 
rhetoric that we see coming from the other side or coming from 
the former president is going to impact our relationship with 
some of these same actors through NATO?
    Mr. O'Brien. Thank you. I think there are two main themes 
in the way we approach the elections in Europe and they're 
somewhat similar to how we approach ours here.
    One of them is that it's very important for responsible 
parties to work together and to demonstrate that we can deliver 
on what people care about.
    So we see agreements to manage migration and then we see 
the vote for extremist parties go down. We see agreements to 
provide adequate security and NATO is now stronger than ever. 
European states have increased spending by more than 18 percent 
in the last 2 years.
    We're now at 23 states meeting their commitments to pay for 
NATO. When this Administration entered office the number was 
nine. That's responsible parties doing what the citizens want 
to see and that has a direct effect on when others come in.
    I'm encouraged that in the European Union now it is a set 
of very strong pro-European parties who will have the primary 
positions, going forward, and that will be confirmed over the 
next week.
    The second thing is we have to address the very real 
threat, particularly from Russia and some of its friends in and 
around Europe, to our democratic processes.
    So we have really stepped up our efforts to counter 
disinformation, cyber attacks, sabotage, other efforts that are 
attempting to skew our politics, and I think, though I only do 
foreign policy, I'd really like to make sure that we're mindful 
of that here as well.
    In terms of the NATO summit, I think what will emerge is 
that NATO is stronger and better prepared for the future than 
ever. Not only is spending up but will announce that we have 
all of our regional defense plans now in executable form.
    That means we're spending the money in smart ways to keep 
our people safer and I think that's the best answer to those 
who say that the only way forward is isolationism or to cut 
deals with dictators.
    We can stand up for ourselves and that's what people want 
us to do.
    Ms. Titus. Thank you. Speaking of NATO, we just talked 
about a big anniversary for the Turkish occupation of Cyprus, 
and Turkey has not proven to be a very reliable ally. It's kind 
of an outlier in NATO in terms of Azerbaijan, in terms of 
Hamas, not to mention the Cyprus issue.
    Are you going to talk to Turkey in any way or make any 
suggestions to them at the NATO summit?
    Mr. O'Brien. So we have a very robust and wide-ranging 
relationship with Turkey. We have managed, I think, in recent 
months to focus on the issues where we often disagree and we're 
beginning to find some ways forward.
    I mean, particularly with Cyprus and the 50th anniversary 
is something I think many of the citizens on both sides of the 
Green Zone would like to see resolved, that one of the most 
important things is that the U.N. Special Representative Ms. 
Holguin is reappointed.
    She has a set of very practical ideas that I think could 
make life better for all the citizens on the island and we'd 
like to see that process continue, and that's something we are 
very direct and have really open discussions with our Turkish 
allies about.
    Ms. Titus. Thank you. I yield back, Mr. Chairman.
    Mr. Kean. Thank you. I now recognize Mr. Moran from Texas 
for 5 minutes.
    Mr. Moran. Thank you, Mr. Chairman.
    Mr. Secretary, unfortunately, China's influence, as you 
know, in the Western Balkans is very strong and in cases 
growing.
    How exactly would this budget request help counter China's 
efforts to expand its influence in the Western Balkans?
    Mr. O'Brien. Thank you, sir. It's great to see you again 
after the train ride to Ukraine.
    This is a really important top, China and Russia's efforts 
to disrupt the region. I see that region having its future 
being in Europe.
    So the first thing we need to do is make clear that Chinese 
involvement either in critical infrastructure or in debt 
arrangements across the region is unacceptable, that it 
jeopardizes the path forward.
    That's a message that many states in the region have 
undertaken. When I was recently in Belgrade, Serbia, a Serbian 
government official was careful to point out to me that there's 
a Huawei office building but they've been removed from the 
telecom infrastructure, and he pointed out that that office 
building remains two stories tall when the Microsoft building 
next to it has grown to more than six stories.
    So that's the path that they are choosing and I think those 
are the kinds of choices we need to confront them with. This 
budget allows us--and maybe Ambassador McKee can talk about 
specific programs--but it lets us help instigate the European 
integration of these economies so that they're buying trusted 
technology, not Chinese.
    Mr. Moran. Yes, and, Ambassador, I wanted to give you a 
chance to weigh in on that. I'm sorry I did not provide you a 
greeting actually when I started my questioning.
    I'm normally saying hello and thank you for being here and 
I would like to extend that courtesy to you. Thank you for 
being here.
    Ambassador McKee, from the USAID perspective what do you 
think?
    Ms. McKee. So we are working very hard to reduce the space 
for the PRC to operate--in other words, to give them choice to 
mobilize, as Ambassador O'Brien mentioned, create better 
conditions for U.S. companies to come in.
    When there's a vacuum, you know, less than desirable 
options if there are even options will fill that void. And so 
we're working, for example, in Kosovo on bolstering their 
energy sector and diversifying their energy supply with 
indigenous solar panels on the renewable end versus having to 
purchase them from the PRC.
    We are working closely in Serbia to mobilize greater U.S. 
investment in the IT space and we're working on advancing 
private sector engagement, particularly business to business 
exchange in Bosnia and amongst the other Western Balkan 
countries.
    That opportunity and that growth--that economic 
prosperity--reduces the opportunity for the PRC to get its 
hooks in in an economic manner.
    Mr. Moran. So let's talk a little bit about the PRC's 
influence in Moldova. So we know that this budget request $55 
million in funding for assistance to Europe, Eurasia, and 
Central Asia, funding specifically from Moldova through that 
funding program.
    What does the State Department and USAID intend to do with 
this funding if it is appropriated?
    Ms. McKee. So I'll start quickly.
    Right now we are laser focused on the Presidential election 
and referendum--EU referendum in October. The Kremlin has 
increased on a horrific level the disinformation and disruption 
and attempts at vote and other capture and so we are working 
hand in glove with the interagency and with the government of 
Moldova to try and thwart some of those efforts and ensure that 
the both the referendum and the election are free, fair, 
transparent, and not disrupted by Putin and others.
    In terms of the economic space, particularly energy, as I 
mentioned in my opening remarks, last year signaled Moldova's 
full independence from Gazprom and the Kremlin in terms of 
access to energy supply.
    We want to keep that up and so we're investing in their 
energy sector to build a new transmission line with Romania as 
well as working on stabilizing the grid and other factors that 
are very necessary, back to what our colleague raised, as 
showing that democracy can deliver and that partnership with 
the West is the true future for the Moldovan people.
    Mr. Moran. Thank you.
    Secretary, I want to come to you for the final question and 
comment based on this energy issue exactly because Moldova and 
China this past month actually looked like they announced some 
closer ties in the area of energy.
    The deputy prime minister for Moldova and the foreign 
minister from China announced China's new energy and 
infrastructure investments in the country and that's curious to 
me and also concerning to me, especially because Moldova is 
such a center point for munitions, as you know, in the region, 
and Russia's already got a little hand in there.
    So, Secretary, what can we do to get in front of that 
building tie between China and Moldova?
    Mr. O'Brien. So why do not we come back to you with some 
more detail on the status of that announcement? What we just 
did--Secretary Blinken visited a transformers station which is 
helping Moldova bring in power from Romania. We're looking at 
an additional line from Romania.
    We're under discussions to either repair an old thermal 
power plant or otherwise to provide additional power so that 
Moldova is both off Russian power but isn't dependent upon 
unreliable technology as well.
    That's very much the direction the prime minister and 
President told us they want to go.
    Mr. Moran. Thank you both. I yield my time. Thank you.
    Mr. Kean. Thank you, Congressman Moran.
    I now yield 5 minutes to the Congresswoman from 
Pennsylvania, Madeleine Dean.
    Ms. Dean. I thank you, Chairman Kean and Ranking Member 
Keating, and I thank the two witnesses for being in front of us 
again. More importantly, I thank you for your work on behalf of 
our country and the world.
    It's an honor to have traveled to Ukraine just following 
our vote on the supplemental to increase, obviously, the 
support that was so long awaited.
    As the chairman just said to me, we're putting the band 
back together. So it's Kean, Keating, Moran, and Dean back in 
front of you today.
    So but it was an absolute honor to travel and be able to be 
there at that time, to visit with the president there, to visit 
with the military generals and support teams.
    And then I had the chance to go to Normandy and again visit 
with President Zelenskyy there, of course, on the extraordinary 
commemoration of the 80th anniversary of D-Day, all very 
powerful to me.
    I want to hearken back or really talk about frozen Russian 
assets and what we can look forward to there. In his testimony 
before the committee in May Secretary Blinken spoke to the 
efforts being undertaken to start making Russia pay for the 
damage caused by its full-scale invasion of Ukraine and the 
funds that could be leveraged to aid Ukraine's reconstruction.
    He spoke of the work to leverage frozen Russian assets in 
Europe and how we are seeing some of the results of those 
efforts.
    The G-7 recently announced plans to use frozen Russian 
assets as collateral for a $50 billion loan to, among other 
things, begin rebuilding damaged infrastructure in Ukraine.
    Assistant Secretary, maybe I'll start with you, if you do 
not mind. What signal and, more importantly, what substance 
does this prospective G-7 loan send to Russia and what are the 
next steps in this plan?
    Mr. O'Brien. Thank you for the support of the supplemental 
and for the visit. It was a great honor to be on the train with 
you guys and to----
    Ms. Dean. My honor.
    Mr. O'Brien [continuing]. Exchange notes after we finished 
our meetings and--our respective meetings in Kyiv. This is a 
matter of real vital importance.
    We have made clear that the supplemental is something that 
we do not expect to be repeated. What Ukraine needs to say to 
Putin is we can beat you on the battlefield. We are holding in 
the East.
    We're destabilizing your firing positions and we're 
restoring our economy with air defense and by keeping our 
export routes open.
    For that to continue they need to be able to make and buy 
the weapons they need going forward and to keep the economy 
alive. That means finding sources of money and Russian money is 
the best money for this.
    So this $50 billion in essence gives Ukraine the 
opportunity to say in 2025 we can continue beating you on the 
battlefield, or if you want to discuss a responsible, 
reasonable peace we may be open to that.
    That's Ukraine's choice. But this is fundamental to the 
broader choice that's in front of us, the ability of Ukraine to 
continue the fight past the end of this year.
    Ms. Dean. I thank you for that.
    Ambassador?
    Ms. McKee. I was just going to add to respond to your query 
on sort of where we are in the process.
    As you can imagine, with multiple jurisdictions of the 
immobilized assets it's complicated, but we are working 
tirelessly, probably more hours than exist in a day, to work 
with the G-7 partners, obviously, greater legal minds than ours 
to sort out how that can happen.
    But we are dedicated and committed to making sure that the 
loan takes place and that the reflows from the mobilized assets 
are used to pay off the loan, and as we work through that we 
will report to Congress on our progress.
    Ms. Dean. I appreciate it.
    And, Ambassador, if I could stay with you. You know, we're 
looking this week at top line proposals that Republicans have 
put forward for the State and foreign operations appropriations 
bill with cuts of 11 to 12 percent in total from Fiscal Year 
1924 and 19 percent below the President's budget request.
    Could you tell me--could you identify for us what those 
kinds of deep cuts would mean at this time of incredible 
challenge globally not only to State Department--and, 
Secretary, you can help us here too--but also USAID?
    Ms. McKee. So those cuts would, indeed, be devastating when 
we see the uptick in humanitarian crises and conflict around 
the world only increasing, and so what that means for us were 
the cuts to hold is that we'd have to make even harder 
tradeoffs and prioritization.
    We're here for Europe and Eurasia so I fight as hard as I 
can within the interagency to make sure that we can do all we 
can at this historical moment for, you know, the future of 
democracy in the free world, as I see it or as we see it.
    But I will say that that's what we're going to face is 
having to make really hard choices between what seems 
impossible to choose between and that's saving lives and 
stemming off crises and conflict around the world as we see it 
just growing even further.
    We will not be able to--if the cuts do stick we will not be 
able to provide the sustained support and leverage which has 
been the power of the resources that we brought to the table 
with both the supplementals as well as what we hope to do in 
terms of normalizing the budget.
    So it would be, frankly, devastating.
    Ms. Dean. I know my time has expired but maybe if you do 
not mind we could continue the conversation offline but--or if 
maybe somebody else wants to ask and give you the opportunity 
I'd love to hear from you also.
    Thank you, Chairman.
    Mr. Kean. Thank you for yielding back your time.
    I now recognize Mr. Self from Texas for 5 minutes.
    Mr. Self. Thank you, Mr. Chairman.
    Mr. O'Brien, I would love to--I had to step out--I would 
love to have a debate with you 1 day about what is worse, 
isolation, which you mentioned in your opening statement, or 
weakness, and we would--I would appreciate that debate.
    But at the time when we are facing a new axis of evil 
around the world I think that we are also showing weakness 
around the world and I would point back to President Reagan 
that projected peace through strength.
    So my first question to you is how do we expect our 
European allies to wean themselves off of Russian oil and gas 
when we at the same time are limiting our exports to our 
European allies and, yet, we are not enforcing our sanctions 
against Russian oil and gas.
    And I was actually pleasantly surprised to see that the 
Wall Street Journal had an article just today about how we are 
pulling our punches on sanctions against Iran and Russia.
    So the question is how do we expect our European allies--
are we not driving them back into the Russian oil and gas 
family?
    Mr. O'Brien. Thank you, Congressman. I'm happy to have a 
debate but I do not think the choices are isolation or 
weakness. I think the choice is strength through a very robust 
coalition.
    We have now got a stronger NATO set of allies who are 
spending more on defense than ever.
    Mr. Self. Well, we can have that debate later.
    Mr. O'Brien. We have over 50 countries that are supporting 
Ukraine.
    Mr. Self. What about our--the question is our European 
allies----
    Mr. O'Brien. Yes.
    Mr. Self [continuing]. Russian oil and gas.
    Mr. O'Brien. So I think a couple things here. So one point 
is we seen Russian dependence on gas--European dependence on 
Russian gas has plummeted over the last several years. 
Ambassador McKee mentioned just one country, Moldova, which has 
gone from 100 percent dependence to zero.
    We have seen all of our European allies reduce their 
dependence on Russian gas, and part of the reason for that are 
sanctions. So the European Union just this week adopted a 
sanctions package against Russian exports of LNG and so we 
expect to see Russian LNG exports drop down.
    So that's an example of them working with us and following 
our lead on accomplishing just what you say we want.
    Part of the reason for that is that U.S. has more than 
doubled our exports of LNG to Europe and I appreciate the point 
you're making that the pause has been controversial for some.
    I think just factually the pause was intended to study--
Secretary Granholm has said it will be in a few months that 
we'll be in a position to evaluate it--and in the meantime we 
have more than enough space under existing permits to further 
double our exports of LNG to Europe.
    So I do not think this is relevant to the choices our 
European allies will make.
    Mr. Self. OK. Very good. So now let's move to our sanctions 
on Iranian airline. You probably know that simply landing on an 
airport is material support.
    Our European allies, several of them, are not supporting 
our sanctions on Iranian airlines which are transporting 
military equipment to Russia for their fight in Ukraine.
    So what are you doing to make sure that our European allies 
are not allowing Iranian airlines to use their airports for 
material support?
    Mr. O'Brien. Congressman, we are working with our European 
allies to enforce sanctions against Iran and we have taken a 
number of steps against Iranian firms who are either 
manufacturing or helping to transport goods from Iran to 
Europe, and our European allies are joining us in that.
    I actually--the link you're drawing I, frankly, have to 
research and come back to you. I do not believe the airlines 
who are flying into our European allies are the same companies 
who are transporting but I'm happy to research that and come 
back to you with an answer.
    Mr. Self. Yes. I have letters from our European allies that 
I'd be happy to share with you.
    In the limited time I have left I would ask you what you 
are doing on the association of Serbian majority municipalities 
signature. This is vital.
    You are not going to pull Serbia out of the Russian orbit. 
So when are you going to support the ASM signature?
    Mr. O'Brien. By the government of Kosovo?
    Mr. Self. By both sides.
    Mr. O'Brien. Yes. So it's a condition of the EU-led dialog 
that the two sides continue to cooperate and that Kosovo in the 
initial phase has to submit the statute to its constitutional 
court.
    Mr. Self. Kosovo tells me it does not violate their 
constitution, and I'm about out of time so I'd just ask you--I 
would like for you to come back to me when you're going to 
support it, OK.
    Mr. O'Brien. Well, we're actively supporting it. We work on 
it all the time. I'm happy to give you more detail on where we 
are.
    Mr. Self. I yield back, Mr. Chairman.
    Mr. Kean. Thank you. Mr. Self yields back his time. I now 
recognize Congressman Huizenga from Michigan for 5 minutes.
    Mr. Huizenga. Thank you, Mr. Chairman.
    I'm actually going to pick up where my colleague was. I too 
am concerned about the LNG export throttling, and while it's a 
study we know it has also paused actions here in the United 
States for developing that in our capacity.
    We have a vital interest in weaning our allies--all of our 
allies--off of Russian energy, also Iranian energy. I happen to 
sit on the Financial Services Committee where most of those 
sanctions run through and, sir, there is a lax of enforcement 
with sanctions both in Russia and in Iran.
    We know it. There is $12 billion sitting in a Qatari bank 
and $10 billion sitting in an Omani bank right now, based on 
what has been coming out of Iran. We're not here to talk about 
Iran. We're here to talk about Europe.
    But last night myself and a group had dinner with the 
Ambassador from Sweden and Denmark and a group of Swedish 
legislators. The Swedish legislators brought up what they 
called the shadow fleet, the shadow fleet of Russian off the 
books energy transportation that's happening in the Baltic Sea, 
and they're very concerned about that.
    They're either unregistered, unflagged, or they're changing 
flags midstream or they are turning off their transponders. 
This is exactly what's happening with Iran as well.
    So that has to be part of the discussion when it comes to 
sanctions, how we are working with our allies to make sure, as 
Colonel Self was saying, we are not weakening our allies on 
that.
    I want to turn a little bit, though, as well to nuclear 
energy, and given China's dominance in renewable energy 
technologies and growing nuclear power industries the 
dependence from our adversaries that many of our allies have 
needs to change.
    And I'm curious what presence does China already have in 
the European energy market and has its nuclear power industry 
made any headway in the European market?
    Mr. O'Brien. So our position on China's investment in any 
kind of critical infrastructure including energy infrastructure 
is that it's incompatible with having trusted vendors.
    What we are working on with a number of our European allies 
is to see American companies, along with our trusted partners, 
provide nuclear power.
    Mr. Huizenga. OK. So that's going to actually get--leads 
into my next thing is how are you promoting and how is this 
Administration promoting the, quote/unquote, ``all of above'' 
kind of approach supporting energy security in Europe, 
including nuclear?
    Mr. O'Brien. So one step is we're very active advocates. 
I've been with the President when he spoke with the president 
and prime minister of Poland about the importance of us moving 
forward with an additional U.S.-provided nuclear reactor in 
Poland on top of the one we are doing.
    I was just with the Secretary in Prague when we talked to 
the Czechs about bringing in this. Same with the Romanians last 
week, as well $97 million so basically, about----
    Mr. Huizenga. So you're all in on nuclear?
    Mr. O'Brien. We are all in in providing, yes, trusted 
nuclear power, both small modular reactors and the larger----
    Mr. Huizenga. And I know that there's a lot of work being 
done on the SMRs right now and have yet to come online.
    But I want to talk about--because, Ambassador McKee, you 
were saying cuts would be devastating, as was proposed or 
discussed by my Democrat colleague about the budget. I want to 
talk about debt.
    We're sitting at $36 trillion in debt. This is the first 
year that interest on that debt has surpassed our defense 
spending. It has become the largest line item--I'm sorry, 
second largest line item in the Federal budget, not just 
surpassing defense but also Medicare, and the increase is 
clearly linked to greater debt and higher interest rates.
    So what I would like to know is is our fiscal situation 
leaving us vulnerable as well to being unable to respond to 
emergencies as they arise and does our national debt propose a 
threat to our national security, much as you were and my 
colleague were arguing that any cut to a line item would?
    Ms. McKee. I'll have to get back to you on the specifics of 
our national debt and how it relates to our foreign assistance 
budget because that's sort of my narrow scope. But----
    Mr. Huizenga. Sure, but the point is is that as we have 
squeezed out other things--I mean, we have a finite amount of 
money----
    Ms. McKee. Right.
    Mr. Huizenga [continuing]. In tax revenue. We have been 
borrowing. As we borrow we're having to do more and more 
interest payments on that. I guess what I'm concerned about, 
and I'd love to have this conversation, is are we worried about 
rising interest rates limiting your department's ability to 
respond to these emergencies that are going on around the world 
and I think that is a legitimate conversation that we have to 
have as well.
    I know my time has expired, Mr. Chairman, but I'd love to 
continue the conversation.
    Ms. McKee. I look forward to the conversation.
    Mr. Huizenga. I yield back.
    Mr. Kean. Thank you. With no further questions from our 
members, I want to thank our witnesses, Ambassador McKee and 
Assistant Secretary O'Brien, for their valuable testimony as 
well as the members for their questions.
    Members of the subcommittee may have some additional 
written questions for the witnesses and we ask that you respond 
to these promptly and in writing.
    Pursuant to committee rules, all members may have 5 days to 
submit statements, questions, and extraneous materials for the 
record subject to the length limitations.
    Without objection, the subcommittee stands adjourned.
    [Whereupon, at 3:19 p.m., the committee was adjourned.]

                                APPENDIX
                                
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