international law around the world. the stakes could not be higher. with time of the essence, i want to thank all of our witnesses for appearing for us today. i know each of you and your teams are doing incredible work in the face of very challenging circumstances. i hope this hearing provides a chance to talk about why russia's war of aggression in ukraine remains an urgent and dangerous threat to united states security interests. by the partnership between the united states in ukraine is so critical. and why the senate must pass supplemental funding for ukraine, israel, taiwan and other priorities. the supplemental funding will strengthen governments and anticorruption. it will improve the resilience of our economies and our energy supply. it will support efforts to come out of the other side of this war already, for ukraine to join the eu and also nato.

but this investment in ukraine goes far beyond its borders. by degrading russia's military capabilities, we are degrading the capabilities of those who russia works with, like iran, hamas, and hezbollah. we see these actors in concert, not in isolation, which is why we consider the whole supplemental package. providing this is not a case of assistance for charity. without any american troops on the ground, ukraine fighters have already exposed russia's weaknesses in its failures. continued funding is important for our partners, our allies, and reaffirming america's leadership. the biden administration has been very careful with the american taxpayer dollars. u.s. personnel on the ground, ukraine are focused on oversight, including three inspector generals. last week, the ambassador told

fox news that no american provided assistance, including security assistance, humanitarian assistance or direct support has been used for anything other than its intended purpose. finally helping ukraine strengthen america's credibility with our allies. it shows our partners we are reliable to stand by their side when times get tough. and it puts the united states on the right side of history. defending the liberty and sovereignty of ukraine in the face of brutal, unprovoked russian aggression. to our witnesses, i hope you are telus our thoughts on the importance of this in the supplemental funding request. the urgency of passing that hen the importance of the united states security interests. i am optimistic that we will pass the supplemental, but i would like to hear what you think the effects of a delay would be. i look forward to your testimony and let me turn it over to my friend and colleague.

greg thank you very much, mr., and to the witnesses, i want to thank you, you have an important job helping everyone come together on this issue into its rate for the america people on financial security. it's important for this committee and the american people to fully understand how russia's war in ukraine affects american security. this is different from simply making the case for supporting ukraine as it fights for freedom. this is a balancing matter that all of his work -- who work in national security must work towards. we are not and cannot be complacent in the world. on the other hand, it is also important we always keep an eye on what's happening in other countries, particularly with countries friendly to us and the ones who enter into defense agreements with us. it is incredibly important. we all know there's a number of wars going on in the world. we are not participating in the

vast majority of them, but we do have to participate when our national security demands it. our hope -- i hope our witnesses can be clear with us about the reality on the ground in ukraine and whether russian victory would mean for american national security and economic prosperity. i hope to talk about our defense agreements and the importance of those defense agreements and the alliances we make and how they affect our national security and how our reputation affects how those are carried out. there's a global competition for power and influence. russia, iran and china are trying to weaken united states with dominating things that are vital to our interest. in that vein, i hope u.s. witnesses can layout -- with hamas in hezbollah and the ties among russia, iran and china.

there is more evidence that our enemies were working together against the united states and our allies have the same basic goals, to undermine american leadership in the laminate the basic freedoms that has helped the entire world prosper. the attack against israel highlighted the factors. the bride and of mensuration has refused sanctions against iran, which has allowed more than $80 billion to iran. this money iran has used is not to help people but the finance weapons given to russia. russia has helped iran improve its drones and missiles, weapons used against israelis, they have offered to equip hamas. we cannot help israel without confronting these realities. sadly, the administration thought -- it failed to force -- with no impacts. no wonder iran sent weapons to

russian warehouses. chinese purchases of russian gas help both countries circumvent international sanctions and we have seen growing alignments between these actors and multilateral meetings and they present -- present themselves as a credible alternative to the west. the administration should synchronize strategy with such connection that is lacking. i've been asking the ministration to clearly articulate its goals in supporting ukraine. the american people deserve this clarity, yet we have not heard it. we need details and i hope you will provide that today. i hope to hear frank assessments of success on -- and failures on the russian and ukrainian side. you need to paint a clear picture of how and what ukraine needs to win this war, and explain the president's request of supplemental package, how it

will help them achieve their goals. i have been very satisfied with the quality and level of oversight that we, the u.s. government, has had over our a to ukraine. i am very much unhappy with the way that has been not produced to the america people, and i hope you would talk about that. members of this committee, held a meeting with inspector generals who laid out what they have done from the beginning and their efforts are incredibly well done. corruption with u.s. dollars will not be tolerated. i'm glad to see detailed information that gives me confidence our money is being used appropriately. technology and new approaches to oversight allow the u.s. military to maintain unprecedented levels of accountability over our weapons, inspectors general's in the defense department have been

very open with this committee about their investigations. we should all thank them for the work. the world is going to become more dangerous. we have seen multiple threats u.s. national security come folding in the case of ukraine and there is no plan and if there is one, it's long past time that we heard it. i hope you will address these concerns in your discussions today. >> i hope you can take from our opening comments that the two of us are committed to do everything we can to help ukraine and to provide leadership in the united states to demonstrate that not only to ukraine but the international community. i look forward to working with members of this community in order for our actions to reflect that objective. we have three witnesses today. i want to thank each of them for their public service and commitment to what they do.

they are extremely engaged in spending a great deal of their efforts to help america, and we thank you very much. your entire statements will be made into our record. we asked that you summarize in five minutes. let me introduce you in the order in which you will present your testimony. estate for european and eurasia affairs, assistant secretary o'brien in this role last month after serving a sanctions coordinator and the state department is a former career employee of the department receiving numerous performance awards and serve to previous u.s. administrations in a special presidential envoy for hostages in the balkans. the career has allowed them to hit the ground running. next would be the assistant secretary for energy resources. no stranger to the committee, career diplomat and he has been in his current role since 20 22.

he served as u.s. ambassador to greece in ukraine and has held numerous leadership positions throughout the department and has won numerous awards. our third witness is assistant administrator aaron mcgee, who serves as the assistant administrator and the bureau for eurasia at usaid. she was the u.s. ambassador to papa new guinea and to the islands prior to her ambassador appointments as a member of senior foreign service she served in numerous roles throughout usaid and the agencies abroad. before her u.s. government career, she developed private-sector experience, including throughout the soviet union. we will start with secretary o'brien. >> thank you, mr. chairman and ranking member for the strong statement of support. i will try to address four questions that i hope will lay the framework for what we are discussing today and provide

some detail. the first is, why ukraine. i think you have begun to touch on this, but ukraine is a place where we are on the cutting edge of freedom today. since world war ii, americans were to widen the range of freedom but also of stability on the european continent. this is the base from which we work around the world along with our allies, korea, japan, australia, new zealand. this is stability as opposed to the 100 years before we begin this effort in europe was a source of instability that forced america into two world wars. it's also about standing up for core human values. about the torture of human rights or their children stolen from their parents. with all of those things, we feel it's important we work in ukraine, but this is also the core foundation of america

strength around the world. the coalition we are leaving with regard to ukraine and that ukraine helps to join. that is the basis from which we will confront threat to the international order, whether they emanate from the european space or the in pacific space going forward. if we turn our backs here, we are turning our backs on those who would confront us around the globe. secondly, how does what we are discussing now help ukraine win? there will be classified settings to discuss military tactics, but it's clear president putin is playing a waiting game. he thinks if he can wait for our elections are for ukraine to get tired, that he could survive. so secretary blinken said today, what we need to do are several things at the same time. we need ukraine to continue fighting and thrive while this work goes on, and to soften russia's hold on parts of ukraine so that when the decisive battles come, they are

able to fight effectively. how do we do that? the supplemental we have proposed goes through the end of our fiscal year through the fall of 2024 and sets ukraine up to thrive through 2024. it also provides an answer to the all-out war that putin is waging against ukraine. that may just offer one example, this is around the black sea and crimea. ukraine has, through its own ingenuity, and with weapons that have been provided, loosened russia's script. they tried to blockade the ability of ukraine export but now ukraine is starting to export more metals and this is enabling it to pay for more for itself. just a few numbers as we go through this. ukraine is hoping to get about 8 million tons of grain and metal out to the black sea over the course of the next year. if it does that, it will provide

five to $6 billion more for its tax base then it does now. that helps to make up the shortfall that the supplemental will cover for the meantime. it also then provides employment for millions of its citizens to work within ukraine. that is a path to victory where we help ukraine by providing assistance to have its energy grid strengthen. in the export routes it needs so that it's able to fight this fight over the long-term and to hold russia off thereafter. the military assistance in the supplemental is 45 billion. that goes to acquire american equipment that ukraine will then use to pay for american service people to support ukraine and to pay other countries to acquire american -- american equipment after they provide equipment to ukraine. the direct budget support that we provide to ukraine enables ukraine to put all of its tax dollars to support the war.

ukraine pays for 60% of the cost of this war right now. the direct budget support pays for hunched of thousands of educators, first responders, firefighters, and health care professionals to work within ukraine. that's what the supplemental does. who wins if we don't do this? president putin says if we walk away, ukraine falls to the week. as you both mentioned in your opening statement, president putin has hosted hamas recently in moscow. and he has visited china. that is the coalition that is against us. that's who wins if we walk away. the next question is, who's with us? we have more than 40 countries. they provide more assistance ukraine than we do. it's an out -- about 91 billion tower 70 billion. they hosted 4.5 million ukrainian refugees. they are proposing another $50

billion in assistance just from the european union. that's our foundation for global reach and that's who we have to stand with as we go forward. mr. chairman and ranking member, i've always been taught a few leave with a job is done, you have to go back and do it again. right now, ukrainians are willing to do this job because it's in their territory. if we abandon them, than somebody else will have to do this job later and it's likely to bs. i'd rather confront russia and its destabilizing attitudes right here, right now, and we can finish the job with the supplemental we proposed, for your consideration. thank you, i look forward to the question. >> ranking member, members of the committee, thank you for the opportunity to discuss the importance of continuing the united states support ukraine. for over year, vladimir putin has tried to break the will of

the ukrainian people for attacks on infrastructure, seeking to achieve, through missile and iranian drone strikes in civilian charges what troops have failed to achieve on the battlefield. in response, working closely with our g7 partners, the private sector and humanitarian groups, we have worked to help ukraine keep the lights on and thousands warm, ensuring that putin's efforts to weaponize wet -- winter ends in failure. for ukraine, this coming winter promises to be even more challenging than the last. ukraine's generation capacity has degraded about 50% since the start of the war. ukrainian energy workers have wavered, day and night, often under fire to repair, restore and harden generation facilities. most spare parts by now has been consumed in russia has resumed its bombardment of power plants

and refineries, including justice morning in eastern ukraine. during the november 2022 -- secretary of state blinken launched a new coordination for states to mobilize for broad support to ukraine's power grid. since then, my team and the bureau of energy resources has convened more than 40 meetings to include three chaired by secretary blinken, we mobilize resources to repair the balance. identified partners who had equipment that could be repurposed, and reached out to manufacturers and governments. since february of 2022, thanks to congressional action, the united states has mobilized 500, led by colleagues at usaid, the united states has delivered thousands of tons of critical energy sector equipment, some of

which was installed and operated within hours of delivery. but our g7 plus partners have done more, providing hundreds of millions of dollars in energy related assistance, including repair equipment, power generators and support. the european commission and its partners manage the complex logistics chain and successfully delivered over 7000 tons of equipment from 35 countries. we cannot let up now. the world bank has estimated that after last winter, ukraine needed at least 411 billion dollars to rebuild its infrastructure. that was eight months ago. every day that number grows. electricity grid damage amounted to 10 billion in 2022. ukraine's economic future depends on investment for the private sector and energy is key to unlocking.

the recent deployment of the secretary, the president special representative for ukraine's economic recovery will intensify our efforts in this direction. american energy companies like halliburton, ge have been active partners in this, providing vital equipment to ukraine and exploring future commercial opportunities. we are working together to build a better future for and with ukraine. modern, cleaner, with a more decentralized power sector integrated with europe, even serving as a power export to the rest of the european union. but enough against putin's war has been manipulation and a cutoff off of energy supply. that effort has failed things to the rapid response through the repowered eu package and u.s.-eu cooperation through the energy tax and energy counsel.

u.s. lng producers stepped up to usurp supplies as our allies turn away from russia as an energy source. since 2022 u.s. exporters have applied 90 million tons of lng, three times as much as the next largest supplier. last year, 70 percent of exports went to europe. europe shipped away for russia energy has happened much faster than predicted and marks a permanent shift in the energy map. the brutal invasion of ukraine has laid bare russia will never again be viewed as a reliable supplier of energy. this will result in long-term losses for russia in terms of its global energy influence in future energy revenues. it has huge implications for a country that has historically relied on oil and gas revenues for 45% of its federal budget. on the sanctions front continuing to work with them as a leading energy supplier by

targeting the expansion of russia's production. the energy pillar of our ukraine-russia strategy is working in congress continue support is vital to u.s. interests. putin has targeted the infrastructure because he sees it as essential to his wargames. the energy sector funding included in the national security supplemental is essential for ukraine success on the battlefield. i'd appreciate the opportunity and look forward to your questions. >> thank you for your testimony. the assistant administrator mcgee? >> distinguish members of the committee, thank you for the invitation to speak to you today about our ongoing efforts in ukraine. as you say, we are at a critical moment with our partners fighting for a war for survival in our adversary seeking to exhaust our will to support ukraine's vital needs. since putin began its war, the people of ukraine have

demonstrated courage and resilience in the face of their brutal, unjustified onslaught. gremlins invaders threaten the people of ukraine and atrocities including documented evidence of war crimes that has been sexual violence, gender-based violence against children, women and men. human trafficking and other abuse. russia's forces have ripped ukrainian children from their homes. this is an orchestrated effort to transfer children to occupy parts of ukraine or to russia itself, where they are subjected to pro-russia indoctrination, and military training. ukraine has outperformed all expectations on the battlefield. we understand there is concern for how long the war may take and i want to reinforce that our assistance ukraine has strengthen ukraine's ability to withstand russia's aggression and strengthen the united states partnership with ukraine and the other european democracies under threat from the kremlin.

usaid is providing humanitarian and early economic recoveries. combined with direct budget support we support ukraine's recovery and the shock of a full-scale invasion and help ukraine return to financial independence. in response to the you immediate crisis, usaid has provided $2 million of humanitarian assistance to ukraine. the generosity of the america people has supplied emergency health care, agriculture support, ukraine's most vulnerable population. thanks to the congressional appropriation usaid discoursed reliable direct budget support ukrainian government along with unprecedented levels of oversight. this enabled first responders, teachers and others to continue their vital work and sustain ukraine's economy and institutions while they defend their country's freedom and sovereignty. the respondent russia's

weaponization of hunger, usaid launched an initiative to keep farmers afloat. we also work very closely with the private sector to improve ukraine's energy security and transform ukraine's energy sector into a modern engine of growth. with our energy efforts is to support to small and medium enterprises, helping ukraine increase jobs and generate revenue. without continued funding for this economic development and -- embattled ukraine will remain dependent on donor support. at this time there is no funding left for direct budget support. without further appropriations, the government of ukraine we need to use emergency measures such as printing money are not paying critical salaries that could lead to hyperinflation and severely damage the war effort. usaid has exhausted its supplemental humanitarian assistance fund. additional funding is critical in the face of what remains in anonymous need. if congress does not approve

supplemental funding without reducing the number of people getting this assistance by up to 75%, or suspend the humanitarian programs entirely. while our priorities respond to the immediate needs of the people of ukraine, usaid looks to the future to build a resilient infrastructure and institution that will support ukraine's path toward the european union integration. for decades usaid -- usaid has transparent and accountable governance. the united states continues to help carry out judicial reform, financial systems and respond to the people of ukraine zero tolerance for corruption. none of what we achieved together would've been possible without the generosity of congress and the american people. through your support we have been able to deliver consistent, reliable, lifesaving assistance to people in need, and leverage

and mobilize the support of our partners and allies to do the same. we now face a critical crossroads. it's vital we continue to do everything in our power to avoid the disastrous consequences of unchecked aggression by the kremlin. the besieged people of ukraine are fighting for their country survival as a sovereign democratic state and they are fighting for basic needs such as food, water, medicine, electricity, putin must not succeed, we must continue to support the people of ukraine for free, secure and independent countries. democracy rooted in a rule of law in a place were all has dignity, human rights and the opportunity to reach their full potential. i look forward to your question. >> let me think all three of you for your comments, we will start a five minute round, and i want to start by just saying what i said in the opening statement, i strongly support the president supplemental you request for

ukraine, i think we should've passed it yesterday, not weight and getting it passed. i think your testimonies here point out the urgency of those dollars for ukraine to be able to have the military assistance to survive the winter and to plan for the spring and be prepared for the spring. i think the testimony of them initiated mcgee points out the desperate need to have civilians order if it doesn't have the budgetary support to maintain basic services and the ability for ukraine to defend itself because it is still challenging for the circumstances. i recognize that. let me just point out, as you have, that europe and the coalition partners are contributing more than america is contributing in total dollars. they are taking on the burden of the displaced individuals if you

don't have the issue. they are doing on the energy sector. so, tell me the challenges. we didn't include the a for ukraine that it's in a terrible message to the international community. i know many of us are unable to get a included in that, personal phone calls that our allies and to the ukrainians to let them know they were not forgotten so we intended to bring this up at the earliest possible date. it's becoming less and less likely we complete the supplemental. tell us how this impacts ukraine and the international support for ukraine the further delays in united states congress in passing the supplementals and

how that is being played by mr. putin in russia. >> thank you, i think a couple of elements are critical. three weeks ago i was with secretary pritzker and several hours with president zelenskyy. the first thing he noted was his people need to know that we continue to stand by them. they know this winter will be difficult as the ambassador just mentioned, but if they know we remain with them he feels we will come through strong and willing. our allies need to know we are with them. the european union is considering a proposal for a 50 billion euros, $60 billion over the next four years of support for ukraine. if we fail to provide the assistance, that will call into question whether their efforts will be enough.

we have already spent the money that has been appropriated. we spoke about the need for additional funding for military assistance that is needed. this may all end in a week if we walk away. >> i was impressed by president zelenskyy's commitment to root out corruption. can you tell us how important the supplemental appropriation is to further president zelenskyy's campaign to deal with corruption in this country? >> thank, mr. chairman. we have witnessed not only the resilience and courage that they vote against the kremlin, but

they have not skipped a beat in the reform agenda. the report just came out this morning and both ukraine, moldova ed other countries received support. that's because our support to strengthening and deepening the institutions, fighting corruption city ukraine received the top priorities for the president. they had to meet conditionality they put on the budget support and did so without blinking. while they are fighting for their survival, they are 100% dedicated to ensuring the political economy model they inherited during the soviet unit is dismantle, which reflects the will of the ukrainian people. ukrainian people want to see accountability and consequences and the government of ukraine has stepped up with our support to do so.

>> her testimony was encouraging on the lng imports. do you see this increasing, because i think it's encouraging to see that policy that many of us had been urging, looks like it's taking hold. >> i think you are right, one of the real success stories in the tragedy of this war is that europe has turned away from its dependence, up until 2022, on russian gas. i see it as a permanent change in the landscape, it's reflected in the billions of dollars that european countries have invested in reclassification facilities. it's reflected in the contracts being signed with american lng producers and it's also reflected in europe's renewed and double commitment to accelerating the pace of its energy transition. ironically, putin's weaponization of his energy resource as induced europe to break its former ability.

i think that's a permanent change in the landscape, it's also a positive benefit for american energy producers. >> i have additional questions in regards to russia and iran. >> i'm tempted, but i will focus on a really narrow lane. that is an issue that is incredibly important, but on which most of our congress is not informed him i hope you will help us get through that. i want to talk about the nuclear reactors we have at the united states, which is 95, give or take a would you tell the committee please, where does the fuel come from to operate these nuclear facilities? >> ranking member, about 20% of

the fuel that operates our nuclear fleet here in the united states still comes from russia. the president has included in his latest supplemental a request for about $2.2 billion to help rebuild the nuclear enrichment capacity that we need here in the united states to end that dependency. and the administration has also stated its support for a ban on the import of russian nuclear fuel. >> i was hoping that would be your answer, not only on this committee but also intelligence and energy. this issue comes to a confluence in all three of those committees. senators barrasso and manchin and i introduced the nuclear fuel security act. are you familiar with that? >> i am, ranking member. >> ok. i think that will go a long way to doing something here. we're also working on the ban as you indicated. obviously, we can't have that ban, but it's stunning to me that we're sending money to russia to buy nuclear fuel when we've got bans in all kinds of other places.

but we have to because of the dependence we have there. this is part of the problem we've got with the supply chain around the world and that is we have not paid attention to it and we really need to particularly in this very, very critical area in any event. what, what are your thoughts on? we've got to get this industry up and going. obviously, it's moved offshore. we need to get it going. give me your thoughts on that. how quickly can we do it? how much is it going to cost? what can we as the government do to move this along? could you talk about that, please? >> thank you, ranking member. i could talk all day about this. i'll try not to. >> please don't. >> let me first note the importance of ukraine, a country that operates one of the largest nuclear fleets in all of europe. one of the few countries in europe that has the industrial supply chain to contribute to a future non-russian nuclear industry. when i was ambassador in kiev, i worked directly with president

poroshenko with westinghouse to enable the ukrainians to refuel their reactors with non-russian fuel assemblies. it was incredibly controversial. i remember one time foreign minister lavrov called secretary kerry in the middle of my night to complain that we were going to cause another chernobyl by putting westinghouse fuel into these wonderful russian reactors. that of course was a lie. and since then, ukraine has steadily incorporated westinghouse fuel assemblies into its nuclear fleet. as we look to the future across central and eastern europe, civil nuclear power is going to be a key part of those countries, non-russian energy mix. and i would also flag ranking member, the critically important role of the work that's being done here in the united states on the next generation of nuclear reactors, small modular reactors. i've been following closely the challenges in your home state and the work with new scale. i hope very much that we can

find a way forward in that regard as well because we have, we have to maintain american leadership in this area. ukraine is going to be one of our principal partners because it has the workforce, because it has the industrial capacity, because it has the nuclear knowledge in helping to bring clean nuclear power to countries in europe like poland that have made that choice but do not currently have the human capital or industrial base to fulfill that requirement. >> well, thank you. and i hope we can all join together to move this important issue forward because this is something we can and should lead on. uh you made reference to the uh smr and the new scale problem. i uh that's obviously been very disappointing to us, but the smr is going to change the world. obviously, russia, china, and france for that matter have all jumped on board on this and uh are looking at ways to exploit their standing on the issue.

we shouldn't let that happen. we should be the leaders on this , and i hope we will be. you'll be happy to hear we've had a number of discussions as to how we can do that at the i national lab, which is, of course, is the flagship laboratory in the united states on nuclear energy. and i promise you, we're going to continue to do that. thank you for your attention to this issue. it's incredibly ironic to me that we are sending money to russia to purchase fuel when we've got all these other things going on and they're using it to fight against us in ukraine, so we need to stop it and the sooner we do it the better. thank you for your work. >> thank you. >> thank you, senator coons. >> thank you, mr. chairman, ranking member, and thank you for continuing to show strong bipartisan support for ukraine. i agree with the points just raised by the ranking member about the urgency of our making our nuclear fuel system more independent of russia and the future of smrs being critical for a zero carbon american

developed energy source for the future. thank you to our witnesses. the brutal russian invasion of ukraine has been a profound strategic failure for putin . nato, instead of being divided or weakened, is expanded and strengthened. as you've testified, there is a global coalition of 50 countries providing more than $90 billion in direct support, both humanitarian direct budget support, military for ukraine. although we are the single largest donor of the contributions to the fight for freedom on the front lines in ukraine is genuinely global. and as you laid out, secretary o'brien russia's coalition , includes folks like iran and north korea while ours is literally the entire free world, but we are at risk of failing,

of handing putin a victory right when he is on the verge of defeat, if we do not take up and pass the president's full supplemental. administrator mckee, some of my colleagues have said to me privately that they are enthusiastic about continuing to send military equipment and hardware to ukraine but not direct budget support. you testified about the importance of direct budget support. could you help us just briefly understand three things? what are the sorts of services that are being provided through our direct budget support? as secretary pyatt had testified, there continues to be a brutal bombardment of the electorate grid. -- electric grid. what would happen if direct budget support were to end to ukraine's ability to respond to the daily bombardments of their electric grid, for example. second, you said that the accountability and oversight measures that are needed are in place and are working robustly , if you just briefly speak to that. and then most importantly, how time do we have? if we kick this can down the road a month or two or three through a continuing resolution? and we fail to take up in advance the full supplemental

for budget support and humanitarian how much time do we , have before that begins to really have bite for the people of ukraine? >> thank you, senator for your question. on the as we've noted the types first point, of services right now, ukraine is able to spend all of their national budget in the fight. they are paying their soldiers salaries, they are dedicated to defeating putin on the front lines. that means they don't have any resources to take care of their people and govern, which is as vital to keep up the unity of purpose and the resilience that we've seen from the ukrainian people because they're all in , both on the civilian and the military side. so the types of services that would be suspended are first responders who rush into the building and save lives, medical care to make sure that inoculations stay up so that the ukrainian population stays healthy, particularly children, routine immunizations.

we heard reports of polio outbreaks and some other concerns during the early days of the mass emigration of folks fleeing the conflict. we also are um supporting teachers and continuing education so that they don't lose a generation as a result of putin's attacks on civilians and civil infrastructure so that the kids can stay in school. >> am i correct that the direct budget support requested gradually goes down over the next year as the economy becomes more vibrant and we assess ukraine is able to generate more revenue? >> correct. the direct budget support and their fiscal stability is also vital for the imf program and other donors stepping in our leadership in this space. yes, we were first, the leadership unlocked the other support that we've seen mobilized from the eu other donors as well as boosting the confidence in the multilaterals to be able to contribute to ukraine's economic stability, which is as vital as winning the war.

if their economy collapses, putin will have won. on your point of accountability. absolutely, there has been no finding of any misuse or misdirection, and at multiple tiers and multiple reviews and stock checking, not just by the three igs in terms of end use checks and making sure that, we can follow the resources we , have third party monitoring to ensure that the systems by which those are delivered, both reimbursed and validating, are also ironclad and unassailable. in terms of timing, we have no more direct budget support. the last tranche was dispersed at the end of the fiscal year. this jeopardizes particularly over the coming months ukraine's ability to maintain its economic stability while it continues to fight the war. it's urgent. >> thank you for the clarity of that answer. let me just close by making an observation the chairman made, which is the fight going on in

israel and the fight going on in ukraine are not distinct. putin welcomed the head of hamas . wagner is offering to provide air defense possibly to hezbollah. there is a linkage between these coalitions that supports terrorism in the middle east and a brutal and ongoing invasion and occupation of eastern ukraine for us to pick one piece of this supplemental and not the full supplemental. not to provide direct budget support, not to provide humanitarian support to ukraine, not to provide support to israel and to continue to push humanitarian support for dozens of countries would be a grave mistake. thank you for your testimony. >> thank you, mr. chair, senator paul. >> i think it's easy to look around the world and find places where the us taxpayer can be asked to send money to fix the world's problems.

but there is an important question we might want to ask before we start sending $100 billion more. where are you going to get it? you know, we don't have any money. every bit of our tax revenue goes to medicare, medicaid, social security and food stamps. those four programs consume all of our tax revenue. everything else is borrowed. in fact, the entire discretionary budget right now is being borrowed. we borrowed a trillion dollars in the last three months. interest rates are have doubled. interest payments have doubled. so you can have all this goodwill and try to fix the world's problems, but you're ignoring the rot and ruin you're creating in your own country. mr. o'brien, in russia's weakened state. it's tempting to forget that they are a nuclear power. but i think our foreign policy decisions need to take into account the dangers of war escalating in ukraine. as harvard's graham allison points out if putin is forced to choose between humiliating defeat on one hand and escalating level of destruction, there's reason to believe he would choose the latter. there's a great deal of evidence

that the war in ukraine has come to a stalemate. even ukraine's commander in chief of the armed services has admitted as much. in graham allison's view, the ukraine war has escalated far enough to see how bad things would become if we end up in a world where nuclear weapons are used. allison believes that where we are now both for putin's russia and for the biden lead u.s., and the western alliance, it's time to search for an offramp for all the parties. what is being done at the state department to search for an off ramp? >> thank you, senator. a few points. i can speak to the foreign policy implications. my belief is if we don't stand with ukraine now, we will be spending much more on defense in the future. much of this supplemental goes to reinvest in the united states so far from rotten ruin. we're actually shoring up the foundations in our energy sector as the assistant secretary -- >> so your argument is that war and funding war around the world is good for the armaments industry? >> i'm saying the supplemental

is good for the economy. >> for the armament industry, so really, it's a justification of war. to me, that's sort of reprehensible. the idea that, and this is coming from my side as well. glory be, the war is really not that bad. broken windows are not that bad because we pay people to fix them. broken countries are not so bad because, hey, look, the armaments in, she's going to get billions of dollars out of this. i think that's a terrible argument. i wish you would go back to the freedom argument or something. but the idea that you're going to enrich the armaments manufacturers, i think is reprehensible. >> well, senator, i'm not making the argument war is good. i'm making the argument in this case, war is necessary and that . >> and then we can make a little profit on the side it's not so , bad since the armaments guys will make a lot of profit on their throat? >> no, senator, i think you're posing a kind of false choice that i either have to say that or say nothing. what i'm saying is that our economy rests on a foundation of innovation and in the supplemental we're investing in our energy sector is just for -- >> it is money borrowed.

we're borrowing the money, we don't have it, we don't have a pot of money. so what you're arguing is in essence that we borrow the money from china, we send it to ukraine, sends it back to buy arms from us, and that's a win-win. how do we win when we're borrowing money to pay people? see, this is this sort of false sort of argument that, oh, look, we'll create five jobs for every dollar we spend, but we're borrowing the money. it doesn't make any sense. it's coming from somewhere where it would be in a productive use , to where it is a use basically of fomenting a war and continuing a war. >> no, that's not the choice in front of a senator. and i'm sorry that you feel, you know, that that's the way you want to frame it. the choice in front of us is do we invest in the capacities that allow this war to be won? those include capacities in energy, defense, in i.t. -- in the original question, let's get away from funding the armaments people. you know, i'm not for that. but the original question is, what are you doing to develop an off ramp? you know, when i listen to your presentations, it sounds like the department of war. i don't hear the department of diplomacy in front of me. where are the diplomats? is anybody talking about negotiation?

do you really believe the ukraine will push russia out of ukraine, out of crimea, and zelenskyy's position, we will not negotiate until they're gone from ukraine, is viable and there will not be any negotiation beforehand? if you believe that though, the meat grinder continues and ukraine will be an utter destruction and tens of thousands of more people will die if there is no negotiation, . you would think that as a superpower, we would be involved somewhat with encouraging negotiation. but i've heard nothing from you and nothing from anyone in your administration frankly that talks about negotiating. >> well, senator, then i hope you would, you know, sit down and talk with me about what we're doing in this regard here. i'll give you a little sense of it. all wars end with the negotiation. we've made clear we'll do that with ukraine. not over ukraine's head. it takes two parties to negotiate the end of a war. president putin is not serious about negotiating the end of the war. he has said he wants to wait and

see what happens in november 2024. so we're preparing for that eventuality so we can have a negotiation that will actually stick as opposed to the track record of broken agreements that president putin has made with a whole range of his neighbors up until now. so that's successful diplomacy, not near diplomacy. >> there are actually some who say we're back to about where we started as far as negotiating and tens of thousands of people have died both sides and we haven't been successful. but i still hear only war and i don't hear diplomacy. >> no, but i think what we're looking at is successful diplomacy. i just spent last weekend with 66 countries talking about the basis of a successful peace in, ukraine. russia didn't show up. that again is the problem. you don't have a willing partner on the other side. so simply saying that there must be talks, you're asking for a monologue, not diplomacy. >> senator merkley. >> secretary o'brien? >> senator merkley.

>> am i correct that russia is spending about 25% of its funds on the war in the united states is spending about 1.5% smart >> i think russia is spending more. i think it's 30% of the public budget and they have a secret budget that is even more. >> thank you. in your testimony, you start by talking about how putin is testing the world's resolve to defend most basic principles , that sovereign nations cannot have their borders changed unilaterally, that dictators cannot punish countries for seeking closer ties with the u.s., and that the united states will stand up when the freedom of our friends and allies is threatened. i certainly agree with all those. i have a series of questions. i hope you can give me a short answer so i can get through them if possible. do you agree that failure to fund ukraine will do deep damage to the atlantic alliance? yes. -- >> yes. >> do you agree that failure to fund ukraine will also put some cracks into nato? >> yes. >> do you believe that if the

u.s. appeases putin by throwing support for ukraine overboard, that somehow putin will never do aggression elsewhere? >> president putin has made clear that once he gets what he wants in ukraine, he will start looking at the baltics, he will start looking at poland and other key allies. >> thank you. and if the u.s. appeases putin by throwing ukraine aid overboard, will it enhance china's appetite for military force on taiwan? >> china will see us as weaker, . >> will it encourage other dictators around the world to take additional land? >> yes. >> i'm really struck by the parallel to the journey of chamberlain to munich to say, , ok, hitler, you can, you can take a third of czechoslovakia and then he declared peace in our time under the assumption

that somehow this would not whet hitler's appetite. did chamberlain strategy work? >> no. >> will the strategy of the u.s. bailing on ukraine now up use -- a piece putin work? >> no, it will invite more aggression. >> i think this is one of the most important decisions we've faced in the time i've been in the senate, probably the most important decision. i'm astounded that colleagues who supported corrupt government in afghanistan and an invasion of iraq now want to bail on the freedom loving democracy, defending people of ukraine who are dying with the cause. i must say, i think it will be one of the biggest foreign policy mistakes we could make in generations if we bail on ukraine. do you agree with that? >> yes, senator. >> if there is an emergency

supplemental in which the funding for ukraine has been thrown overboard, should we pass it? >> we have asked for this united supplemental because it is one fight globally. >> so we should reject it? >> yes, i think the senate should pass the full supplemental. >> will president biden veto a bill in which the funding for ukraine is thrown overboard? >> that's ultimately the president's decision. but he's asked for the supplemental he believes should be passed. >> will you encourage the president to veto a bill in which the funding for ukraine has been thrown overboard? >> i'd encourage the president to make whatever statements needed to get the full supplemental that we need. >> my concern is we're going to see a repetition of what we saw earlier when we were facing a continuing resolution in which, you know, the senate procedures are very, very slow. it takes a week to get a bill to the floor. it takes a week to get the

amendment that has the basic proposal in place and it takes only one hour in the house for a proposal to be put up and voted on. i'm afraid they're going to send us a continuing resolution that throws the funding for ukraine overboard. should we reject such a strategy from the house of representatives? >> yes, senator. >> thank you. >> senator ricketts. >> thank you, mr. chairman. and again, thank you to our, panelists here today to talk about ukraine. as we discuss ukraine and we think down the road about rebuilding ukraine, i think there's an important point to make which this should not be done solely on the backs of american taxpayers or european taxpayers. russia began its full scale war against ukraine. and it's there's public reports that more than $300 billion in russian sovereign assets have been frozen globally and estimates are the cost to rebuild ukraine will be about $400 billion. now, there's a phrase, i'm sure you've all heard it before

called. you break it, you buy it. and one of the things i'd like to highlight here is ranking -- the ranking members repo act that would require this russia to basically pay for the damage they've done. it's common sense legislation . it has bipartisan, bicameral support. it gives the president the legal authority to confiscate russian sovereign assets that have been frozen in the u.s. and transfer them to assist ukraine's reconstruction efforts. the house foreign affairs committee marked up its version of the bill yesterday and mr. chairman, i would encourage us to work on this as well to be able to get this bill done. i think it's going to be important. assistant secretary o'brien. do you agree that russia has legal and moral responsibility to compensate ukraine for the damage its illegal invasion has done to the country? >> yes, senator, do you think . >> do you think russia will ever compensate ukraine for its aggression or pay for ukraine's reconstruction? >> so the president and his g-7

colleagues, and the secretary just today reaffirmed that russia must pay and that russia's immobilized funds, which as you say are about $300 billion, will not be returned to russia until it does pay. so we have leverage in this discussion. >> do you know that putin is unlikely then to pay for the damage he's done, and will continue to use russia's veto power in the un to block traditional mechanisms for compensation. do you agree the u.s. and our allies and partners should consider all options to ensure russia pays rather than taxpayers in this situation? >> yes. >> great. so just again, want to encourage us to be able to continue to take up this repo act. i think it is an important piece of legislation. also, assistant secretary o'brien, a couple weeks ago in our black sea submit hearing, we discussed the dangers of the people's republic of china involvement in ukraine reconstruction. obviously, this would go against our interests and those of our

allies and partners. the prc would use its involvement to collect intelligence on ukraine and foreign supplied military capabilities as well as the intellectual property. they steal from all around the world already. they would do that in ukraine and its track record of spreading corruption and undermining the rule of law will only serve to undermine ukraine's efforts to be able to fight corruption in their own country. given the reconstruction efforts will cost at least $400 billion. there's going to be a temptation for the ukrainians to take money from beijing and we've already seen it. there were reports last month that ukraine hasn't excluded the p.r.c. telecom suppliers. . . . . from supply equipment to rebuild damaged infrastructure. our country's deputy digital minister -- the ukraine's deputy digital minister said that the u.s. and our allies had not provided any official proof of security risk associated with

the p.r.c. of vendors, and as a result, ukraine would have to give the contracts to the lowest bidder which could be huawei or zte. couple weeks ago, you said that you felt confident we would have the ukraine firmly in our camp where we were comfortable and ultimately, it's their choice. but that's why we need to stay in the game. from a financial standpoint, it may be the ukrainians choice whether they allow the prc to be part of the reconstruction effort, but it's our choice with regard to us census benefit in beijing. do you think we should condition us aid to prevent us tax dollars from supporting p.r.c. owned or controlled entities from providing the reconstruction ? >> senator, we do. that's why it is so important to have the supplemental so we remain in the game and can set the conditions that make it impossible for opaque, illegitimate contractors like the chinese to enter. i know my colleagues can speak at some length about energy telecoms and other sectors.

we do exactly that. but if we're not there, then we can't, we can't provide the guarantees you want. >> i just want to go back to something that the secretary was talking about earlier as well , with regard to putin's next steps. if he's successful in ukraine, you made a reference to him talking about the baltics. has he made overt statements that the baltics are renegade states that he sees them as part of the greater russia, that sort of thing? >> yes, he has. >> great. >> thank you very much, senator booker. >> thank you, mr. chairman. the the existential nature of where we are right now. mr. o'brien is something that can't be understated if we do not rise to meet this moment in the united states of america . from china to iran, people are watching the resolve of this nation to protect the democratic ally. failure in this moment could have a catastrophic costs not only to russia's continued territorial ambitions, which they've made clear and laid plane, but also china and iran as well. i want to thank the the biden administration for putting penny pritzker in charge of really focusing on reconstruction.

i think we have a little bit of historical amnesia about how critical that is to preserving democracy. years before the end of world war ii, years before, we began work on the marshall plan, and we saw after world war ii that countries that have been devastated war are very susceptible to the winds of the extremism, whether it's fascism or communism that undermine the ability for governments to sustain themselves. i think we are at that moment right now, we are discussing reconstruction at this point that is so critical. investments made now are not only important for the war effort but sustaining the ukrainian people going forward. there seems to be a lack of understanding that the supplemental resources that are being debated in congress right now are for critical investments, not just for winning the war effort but in

helping for the critical long-term reconstruction. i was wondering if you could speak to the urgency not just supplying the military with resources, but the urgency right now, in the immediacy and long-term why the supplemental is critical investment that will pay dividends for the security and strength and victory we are looking for in ukraine. >> thank you you, senator. i will try this, and i know each of my colleagues have a piece of this as well. i think that's very well said. and what we see in the integrated supplemental request is an effort to address each part of what's needed for ukraine to thrive during the war and be prepared to succeed after the war. so right now, if we provide the air defense that's needed, the economic industries that drive ukraine's economy can begin to

work again. that's employment and hope for ukrainians. it's tax dollars that go to make up the shortfall that we are currently meeting with our partners on the direct budget support. if we can then create the space for the energy supply to be reliable, then we have employment and ukraine's economic activity working. that's what ambassador pyatt is working on. there are about $2.2 billion to go to both the energy supply and to the economic act that's needed for ukraine to begin to repair its its access to the outside world. that's also important to us when russia invaded ukraine, grain prices went up six times in many places around the world because ukraine is an incredibly important part of the global grain trade. the work that aid does to help ukrainian farmers get their products to market in the supplemental, the $100 million that is for demining will help farmers get their product to market all of that directly benefits the markets in which our consumers are apart. so if we do all that, then

ukraine has, as i mentioned in my statement, if we can get them to about pre-war export levels, that's an extra $6 billion a year in tax revenue just from the exports as well as what the industries pay and what happens around the society. now, secretary pritzker and she should come and testify this herself, she is doing an outstanding job at building a strategy that lets us focus our efforts in key places so that ukraine's economy will begin to work and contribute to the global economy. even while this war is going on, all of that works together to make sure that ukraine can succeed and has the leverage needed when we get to a negotiation as senator paul wants. >> and in my seconds left, it is so frustrating to me to see that people do not understand,

essential to winning the war is investments in this space. if you listen to the ukrainian people and folks that i've talked to, they are looking for resources to strengthen their democratic institutions, their energy sector, their nuclear sector, anticorruption efforts that are going on right now that are critical to winning, government reforms, european cooperation integration, modernizing and diversifying key elements of their economy. without this, we cannot win and to be penny wise and pound foolish really is to undermine ultimately the war effort and the effort to win the peace. yes or no. you agree? >> yes. >> thank you. thank you, mr. chair, senator . >> senator schatz. >> thank you, chair and vice chair. and thank you all for being here. i want to start with the, the basic question for secretary o'brien. and i don't want you to overdo it. i want you to really give me your blunt assessment. what do you think the connections are between russia and hamas? we've seen that they had a delegation in russia. we've seen an unwillingness to

designate them as a terrorist organization. what else do we have in terms of a through line? i believe we're in a fight against global fascism, but that doesn't necessarily mean they have operational ties to the extent that we can prove them. so give me, give me the real scoop on how closely they're aligned right now. >> so i think there are probably details that are more suitable for another shirt venue. president putin sees hamas as a way to distract us and to weaken the coalition that we have built against him. so his unwillingness to condemn what hamas did october 7th and his unwillingness to use any leverage, he might have to get them to say move out of gaza city so that it's not the

subject of the focus it is now is a sign that he prefers to see us distracted by this fight and he prefers to see hamas a sort of second front against us and that's the connection that's most troubling. >> if putin is successful, we obviously understand he has additional territorial ambitions, but obviously, but my question is, if he's successful, does he deepen ties with some of these terrorist organizations because he's now got some new capacity, having having won the war? i don't want to contemplate this, but i think that that's what we're really talking about here. if we don't provide funding, that could be it. we hope that we provide funding and we hope that if we don't , somehow the ukrainians and the europeans and everybody else pulls a rabbit out of a hat. but i think that we need to be clear eyed about what it would mean for a second time to vote no on a supplemental, or israel only, or a cr with no hope of a

supplemental. i want to understand what does putin do next if he wins? >> he wants instability around his borders. so if ukraine loses, he will promote instability in the baltics and around eastern europe, across the black sea. he will also reach into africa and the middle east where we see him already active. he'll try that anyway, but he'll be much more powerful if we walk away. >> thank you. mr. pyatt. how are we managing the energy infrastructure question? obviously, putin is trying to weaponize civilian infrastructure against the people of ukraine. how do we help? what can we be doing? >> so the most important thing we've done is mobilized our allies and partners around the world. the united states has provided significant assistance. i was in kiev in december the week that the first tranche of department of energy sourced hardware from the united states

was delivered to poland and then onward into ukraine. there was a profound sense of relief as if the cavalry had arrived. but since then, as i mentioned, we've built this g7 plus coalition involving our g7 allies and the regional neighbors and key institutions like the ebrd, to mobilize assistance, to listen to the ukrainians, to source this stuff. to give you an example. one of putin's principal targets last year were these high voltage auto transformers which connect the national ukrainian grid. his objective was to fracture the grid to deny ukraine the ability to move power around the country and keep houses warm. we have worked with japan, we have worked with korea to source the auto transformers and the equipment that putin is destroying. we have a lot in the pipeline , but we face supply chain challenges. the other aspect of this senator, if i can for a minute, on your question to my colleague, assistant secretary

o'brien. i was ambassador in ukraine when the occupation of crimea happened. and i remember vividly at that moment, working with many members of this committee. i remember the analysts stating confidently that that would keep putin busy for a decade. that was not the case. in fact, a few weeks later, i had a code was hosting. i remember distinctly senator barroso and senator mccain were coming to ukraine. we were going to go to donetsk to the capital of donbas that . that trip was scrubbed at the last moment because russian supported forces had begun to flow into donbas. i think we need to take putin at his word. his objective is the dismemberment of ukraine. if he is successful in that effort, he will then move on to his next targets. so i fully agree with my colleague jim, but also would underline the immediate tactical relevance of the support we provide in the energy sector.

as i said, that equipment delivered last december, some of it was plugged into the grid in a matter of days. the ability to continue to do that kind of procurement is directly linked to the resources that are part of this emergency supplemental. >> so in other words, we need this money to get for ukraine to get through this winter. set aside the defensive and offensive capabilities in order for people in kiev to not freeze, we need some resources so that we can backstop whatever mischief putin may be doing to the grid. >> that is exactly right. and on ranking member risch's point about connecting the dots, i would point out that the greatest threat to the energy grid today are the shahid drones , which russia is now beginning to industrialize the production of those. we can talk about that in a classified setting, but there is a direct iran russia nexus in the attacks on ukraine's energy system. >> thank you. >> thank you, senator schatz.

i am up next and i would like to bring the conversation back to what i think we talk about a lot, but sometimes we forget the human cost of this war. last year, i met with a group of ukrainian women soldiers and one of the things they've said to me, i have repeated multiple times since that meeting and that is, give us the weapons to fight the russians so that the united states doesn't have to. i had a chance to meet with one of those young women again recently, this is andriana. some of you may have met with her when she was in washington a couple weeks ago. she was driving in a civilian car on the front lines of the war because they didn't have armored cars.

she hit a russian antitank mine and she was temporarily paralyzed. as you can see from the photos, she spent some time in recovery . nine months. she had to relearn how to walk. but as she said to me when she came back to congress, she's planning to go rejoin her unit because she's committed to this fight. we had a really fun exchange about ukraine's motto, which is freedom or death, and how she could identify with new hampshire's state motto, which is live free or die. well, ukraine is fighting so that we don't have to. people are dying to make sure that they can be a free country that is not occupied by russia and they are fighting for democracy in the united states and around the world. the united states, i believe,

needs to continue to support this effort because not only is it in ukraine's and nato's and europe's interests, but it is in our own national security interest. and senator schatz, i think was asking about the nexus between russia and hamas. but secretary o'brien, can you talk a little bit more about what that nexus is? how does the u.s. response to putin's war in ukraine serve the broader national security interest of not only defeating russia but of deterring iran and beating back our other adversaries? >> thank you, senator. and there's no one more eloquent than a ukrainian fighter. talking about her commitment to freeing her country.

as i said in my opening statement, this is about the foundation of freedom and stability that the u.s. has spent 80 years building. ukraine has after a few decades of finding its way as an independent country, unequivocally made the commitment that it wants to be a part of that foundation. so the rest of the world looks at us and, and asks, are we ready to take this opportunity and bring 35 million talented people into the space that will help us as we move forward over the next decades. if we say no to that, they will judge us as having turned our backs on the world and not caring about other places. that also want to be a part of that foundation. so it will set us back decades . and will i think just make hollow the commitment that thousands of americans made

starting in the 1940's if we miss this opportunity. >> thank you. i certainly share that. assistant secretary pyatt, last month i chaired a subcommittee hearing on the importance of the black sea region. can you talk about how russian actions in the black sea specifically affect europe's energy potential? and what can happen as the result of the vision that would allow energy from central asia to come across through the black sea region and supply southern europe. >> first of all, senator, thank you for your strong focus on the black sea region because you're exactly right. this is one of the the fulcrums of the energy map of europe today. i think one thing that will be true whenever this war comes to

an end, the center of gravity of europe will shift to the south and the east. so the black sea becomes vitally important and the redrawing of the energy map around the black that taking place, romania's investment and the work that romania is doing with support from my bureau to develop its offshore wind industry in the black sea. the new pipeline infrastructure that i have been involved in supporting through multiple jobs, the southern gas corridor to bring gas from central asia to european consumers, the investment that we made to support new pipelines linking greece to the countries of the western balkans to allow them to break their 100% dependency on gazprom. so what's happening in this black sea region is of vital importance right now. it's significantly impeded by russia's occupation of crimea and the military threat that russia has presented to the black sea. an important aspect of that

which directly impacts american companies is the pipeline which goes from kazakhstan to bring crude oil produced by chevron and exxon mobil out into the black sea, which is vulnerable to the conflict that russia has brought to the region. so as i look at in this global responsibility that i have today, i have to think about the geopolitics of our energy interests around the globe. but the region that you focused on in the black sea is of absolutely critical importance and we're fortunate there to have very strong allies. i've been to bulgaria, turkey, romania three times in this role, precisely because of how important it is to shaping the energy geopolitics of europe and the wider region as we look to the future. >> thanks very much. i agree. senator murphy. >> thank you very much, senator shaheen. thanks to all three of you for being here today and for your great work on behalf of the united states and our interest

in supporting a independent and sovereign ukraine. i don't understand the games that our republican friends are playing with ukraine aid. i think this is an existential moment. we are at the zero hour with respect to ukraine's needs. i want to pass comprehensive bipartisan immigration reform as badly as anyone, but a hold ukraine hostage to unlocking that very difficult knot is dangerous for us and the world. but i'm there in good faith trying to listen to my republican friends to try to get a path forward here. but this is really one side of the equation, the support that ukraine needs. and i hope that we find a path in the next two weeks to be able to get ukraine the supplemental assistance it needs. the other side of this equation is what we can do to make it harder for russia to be able to

sustain this level of operation. and so i wanted to ask maybe both of you, ambassador pyatt and ambassador o'brien, about how russia's long term prospects look to be able to afford this war and what the united states can do. you know, here's a note russia started out spending about 4% of gdp on military endeavors. this budget for the upcoming year will have them spending 6% of gdp on their military. that puts them in the top five in the entire world in terms of the percentage of their economy dedicated to military spending. note that number one on that list is ukraine that is spending 33% of its gdp, 33% of its gdp, the military. the iea projects that russia's share of globally traded oil is going to fall by 50% by 2030 and that their net income from

gas sales will fall from $75 billion to $30 billion. you're spending already 6% of your gdp and you have a potential catastrophic fall coming in oil and gas revenue. that is one of the things, maybe the primary factor that may push russia to the table to try to drive a conclusion to this conflict. so what can we do as members of congress? and how can we support your efforts to continue to make it harder for russia to finance this war? and how much of that is dependent on our allies in india and our adversaries in china making different decisions than they are today? i'll stop there and ask both of you to comment on that quickly so quickly. >> so thank you for the question, and you're exactly right in terms of the structural decline in oil and gas revenue that russia is confronting. we are working as hard as we can to accelerate that trend. we do that through two mechanisms.

one is by accelerating our energy transition, both here in the united states but also globally as the biden administration has done through the inflation reduction act to reduce the dependence on fossil fuels. but the other aspect of this is what we are doing systematically to reduce russia's future energy revenue. just last week for instance, we leveled new sanctions against a project in the arctic, arctic lng two, which is novichok's flagship lng project which they set in motion with the aspiration of developing russia as the largest lng exporter in the world. our objective is to kill that project and we are doing that through our sanctions, working with our partners in the g7 and beyond. i think the other aspect of this and it goes back to senator shaheen's point about the black sea, is how we work with the countries that have historically

depended on russian energy and have been paying into the kremlin's resources. we have done that quite successfully in europe. we need to keep focusing on the asian front. we do that through the price cap coalition. and i think it's important also to recognize that the price cap has worked in its dual objectives of reducing the kremlin's revenues while also keeping russian crude oil on global markets in order not to destabilize further a global energy market that the kremlin has profoundly destabilized. but let me invite jim to add, i . >> i completely agree with what geoff has just said. i'll try to focus a little more on the future here. russia is losing its lucrative markets. that's what got it rich enough to afford this war. it's losing out in the sectors of innovation that are going to drive economic development in the future. so we look at this and say, does it put pressure on putin to get to the table?

well, yes, it does. it's going to take a little time. he started the war with 640 in a rainy day fund by the start billion of this year. despite record profits last year, he was down around 500 $80 billion. we immobilized 300 billion of that and he spent down further from there. so that gives him a year, two years, maybe of run room on that rainy day fund that all came from selling oil and gas. so that's gone. the second thing is that we don't see russia able to play in the sectors that are going to drive innovation and economic growth in the future. the areas of quantmechanics, artificial intelligence, the energy transition, including the new nuclear technologies that are coming on board. and senator risch, your work on this, i really appreciate because russia entangles countries in these long term networks of corruption with generation long rosatom contracts. we're now competing for those again and taking those sectors

away from russia. that changes the long term prospect from what it was. the result of all this is we anticipate that russia's gdp is going to be at least 20% smaller by 2030 than it would be if putin had not started this war. so it's a long term strategic loss for him. and it creates a great opportunity for us and a number of important sectors, senator . >> senator van hollen. >> thank you, mr. chairman and thank thank all of you for your service and your, your testimony. and i just want to underscore what the chairman and others have said, which all of, you know, this is a moment of truth for the congress and for the united states in terms of the need, urgent need to continue to support our ukrainian friends. they are losing lives and giving blood. the least we can do is provide military assistance. and as all of you indicated, it's important in itself to protect sovereignty and democracy in ukraine.

but this is also a much broader challenge. if we don't go forward with continued assistance, it will undermine the nato alliance and other european partners. and we all know other autocrats around the world like like president xi are watching very closely as he keeps one eye on taiwan. it would send a terrible message to our allies in the indo pacific, japan republic of korea and everybody else. so this is really a critical moment for the congress. and i want to thank all of you and the president for his leadership on this master pyatt. . master pyatt. thank you for your service in greece. and as you well know, you worked on this, one of the key facilities that was built to help supply u.s.-based lng to ukraine and others in the

region was at the port of alexandra bullis. thank you for that effort. i do want to pick up on some of senator murphy's points with respect to the oil price gap. i'm a big supporter of it. i think it was an innovative approach by the president and our allies to put this price cap on russian oil. and the impact, as you said, has been to reduce russian oil revenues. and of course, oil revenues are the primary source of revenue for russia and its war machine. but i do want to talk about further implementation and enforcement of the price cap. reuters reported that russian oil and gas revenues more than doubled in october just last month compared to september. so a doubling in revenues and the reports indicate that russia is using a shadow and gray fleet to help avoid sanctions. it also raises the question of

the extent to which we, the united states, and our partners, are really enforcing the price oil cap if revenue is doubled in one month. could you speak to that, please? >> thanks, senator. i think your question and the data you put on the table illustrates the challenge that markets will try to find a way around these things. so the work we do with the office of the sanctions coordinator and the state department working closely with both fact to keep turning the screws is absolutely critically of critical importance. that's why we recently delivered sanctions against two shipping companies who were found to be operating outside of the price cap. notwithstanding the attestations. that's why both the treasury and the state department have been intensively engaged with shipping operators and with insurance providers to encourage high standards of scrutiny of the attestations that are part of this process.

i think i would also, i would also highlight the importance of the dialogues that i've had personally with key ship owners in shipping countries, in order to highlight our resolve to continue putting a very bright spotlight on activities which are brushing up against the edge of the price cap. fortunately, the vast majority of the global shipping fleet, these are publicly traded companies oftentimes with headquarters that are housed in london or new york. so they are extremely sensitive to the kind of scrutiny that the u.s. and our price cap coalition allies can provide. but we do need to keep an eye on this shadow fleet, the growth of the shadow fleet and the reality that what was up until last year a fairly homogenized global crude oil market has now been bifurcated into two channels. >> thank you.

if i could, because my time is running out, thank you. we have to keep the pressure on. my last question relates to the reconstruction effort. we had scott nathan, the head of dfc before this committee, not that long ago. as you know, we took opec and tried to beef it up into the dfc. but one of the things that apparently was left behind is opec allowed for much more easily available political risk insurance the way omb scores it than dfc, that was not the intention. the intention was for that to be more robust. are you aware of this issue? and can we fix it so that when it comes to getting more investment in ukraine under politically and other risky circumstances, we have all the tools available. >> thank you, senator for your question. and yes, i am aware and i do know that dfc carries political risk insurance which embedded in which is war risk insurance

identified as one of the constraints to mobilizing new investors. in addition, we are working very closely to ensure that there's access to finance and capital and other key drivers of growth for those companies that never left ukraine, including american companies in the agriculture sector, the i.t. sector in particular, as well as energy and other key areas of opportunity. and i know that secretary pritzker is working closely with scott to make sure that we do all we can collectively to help buy down some of that risk and make those tools available so that we can stimulate the economic growth necessary. >> i just understand that the way omb is scoring this right now is handicapping those efforts. and so i look forward to following up with all of you on that question. thank you, mr. chairman. >> thank you, senator rubio. >> thank you. thank you all for coming in. it's my personal belief and i've tried to make this argument that the three challenges of what's happening in the south china sea in the taiwan straits. what's happening with iran's desire to build a islamist regional order centered on

tehran, and what's happening and what putin has done in ukraine , that those three things in combination, any one of the three can holds a real risk of escalation and spiraling into something worse. but the combination of the three really are an inflection point that will determine in my view, much of what the rest of the century is going to look like. it is in that context i think we have to analyze what's happening in ukraine. i want to be frank with you about our problem. our problem is i'm not sure that that argument from a growing number of people -- let me just be colloquial about it and tell you what i hear. people come up to me and say the following. we have 5000, 6000 people a day crossing our border. we've got all these other needs. we're running up this enormous debt. now, obviously, we got to help israel. we still have to build up our military because the real risk is china. why is ukraine important in that context? i hear that constantly. and i hear that from people that a year and a half ago, you know, wanted to do more. i hear that from people, you know, that are not necessarily fans of vladimir putin. i think it's unfair to say that people that have questions about the effort in ukraine are somehow pro putin.

i also think one of the dangers we face in these challenges that i think are definitional for the rest of the century is the tradeoffs that are going to have to happen. we're going to have to make policy decisions because one of the risks we run is being overextended. i understand, i'm not critical, i agree that all the things about we can't allow borders to be changed unilaterally and we have to stand with our allies. i'm not diminishing any of those things. but these arguments are too vague. they make sense here, but i'm telling you they are too vague. there's also a notion of we need to do whatever it takes for however long it takes is also misguided. not because that's not because that not necessarily what we need to do, but because that's not going to be enough for people who are asking these questions. so i would just say if you had an opportunity. any of you three are all you three to talk to someone that say someone that came up to me a week ago and said, why are we still putting all this money in ukraine? i hate putin. i hate what he's done, but we've got all these other things

domestically and in other parts of the world that are more important, including china. and now what's happening in the middle east, how are we going to be spending $60 billion every six months? how long given the debt that we already have? what would you say to them? and how would you explain to them that this fits into our national interest in that perspective that i've just outlined? >> that's really well framed senator. so i will do my best here. i think the first thing i'd say is you got to shore up your own base. if we're going to confront the china over the next decades, it's one in 1.4 billion people. that's looking to write the rules that the world economy will run on. we go at them with a coalition of 50 odd countries. europe is about 6 to 700 million of that. we're 350 million with that already. we're set to compete really effectively. ukraine though is a challenge by putin trying to fray that foundation.

so we have to shore that up if we're, if we're going to have the heft to compete with china over time. the battle over ukraine also allows us to reinvigorate our own industrial base. we're creating new energy technologies and putting them in place around the world. we're building new defense technologies, the work that's being done in it, all of that's included in this supplemental. and that's going to make us better able to defend taiwan to work in the south china sea than we have otherwise. the final point i'd make is this is the wrong time to walk away because ukraine is winning. it's already taken back half the territory putin seized since february 22. it's opened up the black sea grain lanes that putin tried to shut down in july did that mostly with its own creativity around a whole set of interesting drones and other technologies that are going to contribute to our security as ukraine gets closer to nato. so those are all reasons you don't walk away when you're part way through the job. >> i would just add my -- and

thank you for the question. it was well framed. my dad asked me the same question. why are we supporting ukraine? and i, the answer that i gave him was that if we don't, american leadership has unlocked the alliances and the mobilization of all of the support that we've seen. number one, we're not alone, we are in this together. and number two, if we falter in our support russia will win and they won't stop at ukraine. and we have been able to support, through economic assistance, humanitarian assistance and security assistance without having our own soldiers on the ground. and we want to do everything we can to prevent that from happening. >> senator duckworth? thank you, mr. chairman, and thank you all for the witnesses appearing today. secretary o'brien. it's good to see you again so

soon. after our discussion during the recent hearing that senator shaheen and ricketts convene on black sea regional security, i also had the opportunity to meet with penny pritzker just last week and just yesterday, i sat down with the ukraine's energy minister as well. all of our conversations focus on how bolstering ukraine's economy today can give them direct returns in terms of their gdp and also more immediate revenues to get them on a stronger path to self sustainment. even during an active war bottom line, there's still a lot of work to be done, but also a lot of opportunity here and moving quickly to pass a supplemental support package is necessary to capitalize on that opportunity. i feel that sense of urgency, particularly as we approach the winter months and the anticipated increase in threats to ukraine's energy sector. they mentioned to me that last year, there were 300 direct hits on uh ukraine's energy sector, a grid or, or a power station or something like that. and, and certainly they anticipate even more drones being massed against their, their power system.

so i, you know, i want to associate myself with my colleagues. and i also appreciate your testimony, secretary, about the united states leadership and support of ukraine's energy sector. so i'd love to give you a chance to chat about how important ukraine is to the region in terms of energy and what it can do going towards the future. i sat down yesterday and talked at length about -- with the minister of energy about smrs their leadership role in nuclear, their ability to develop nuclear technology, in particular, with american firms like westinghouse. what romania is doing with smrs and all of that, i would love for some for you to speak to that. and, and how it's important to make these investments now because they can actually contribute towards that energy future, that clean energy future. >> thank you, senator for the question and i think you framed it very well. it's important to recognize that ukraine is not a charity case in economic and development terms. it's an opportunity, developing

that opportunity depends on restoring a level of peace. but as we look to the future, you're going to have a europe which has decoupled from russian energy supplies, which means that there is a hole of about 130 bcm per year in energy supply that europe is going to have to fill over the short term. some of that is american lng, but that's a very expensive option. ukraine has fantastic resources on wind and solar on biomass. it has europe's second largest civil nuclear industry, it has developed and has demonstrated an extraordinary technological acuity. just look at how clever ukrainian soldiers have been in the application of satellites of drone technology, the same. these are all the skill sets that ukraine will need to prosper as a member of the european union. my colleague, citizen administrator mckee referred to

the statement which european president von der leyen delivered today, welcoming the significant progress that ukraine has made on its reforms , and her and the commission's determination to move ahead with ukraine's accession to the european union. and i would say as somebody who served as an american ambassador in the eu for six years, europe, what ukraine represents, a demographically young population, a population which is fantastically committed to the values of the european union. ukraine is the only place in the world where people have fought and died under the flag of the eu for the values that are represented in the european constitutions. so i think the investments and the leadership that secretary pritzker is providing to help our companies and companies around the world begin to make plans for the day after and to work with the ukrainians to keep pushing forward the reforms, which are fundamental to creating the environment where american energy companies, renewable energy companies can

come into ukraine, where we can use ukraine to help to fill the huge challenges that our global supply chain faces. ukraine in the soviet union. ukraine was the center of soviet metallurgy, the center of soviet petrochemicals industries. all of those latent skills are still there. you talked about nuclear. ukraine has a company in kharkiv , turbo atom which is one of the few facilities in all of europe that has the industrial capacity to produce the large steel enclosures that are part of building modern nuclear reactors. so i applaud your focus on this and i know i speak for all three of us and how systematically we are focused on trying to lay the foundation for that better future that the ukrainian people so richly deserve. >> thank you, i'm out of time. thank you, mr. chairman. >> senator menendez. >> thank you, secretary o'brien. maybe you can work with me and going through a series of questions here and some rather brief answers.

isn't it true that our support of ukraine avoids the need to risk american lives in a larger potential european war by denying russia the opportunity to send forces into potentially nato allies? >> yes. >> isn't it true that the impact of a ukrainian defeat would be far more expensive than remaining committed to ukraine? >> yes. >> isn't it true that what we are doing is creating american jobs by spending funds on modernization of our military replacing comparatively older weapons that we provide to ukraine that are not essential to us readiness. >> yes. and secretary austin was very clear about that in his testimony last week. >> isn't although this is not our purpose? but isn't it true that ukraine's operations on the battlefield have exposed russian weaknesses and operational capacity and

readiness, which benefits the united states as we learn about any potential conflict against russia? >> yes. >> is it also true that this conflict has catalyzed the us defense industrial base, enabling it to set up production lines necessary to support the united states and other partners? for example, taiwan down the road, if necessary. >> yes, the us and the base of our allies as well. >> now, isn't it also true that xi jinping in china is watching what is going on in ukraine and how we the united states and the western world is responding to that conflict? >> i imagine he is and i would -- he is. >> and i would think that not only is he watching, but he's calculating. he is calculating as to can my military do what i think they can do. and i saw the much vaunted russian military against at that time, a inferior fighting force by size and capacity, be able to stand up to russia. he's got to be saying that to

himself as it relates to any desires on taiwan. he's got to be saying that to himself as it relates to whether the international community is going to respond as the international community has responded on ukraine by sanctions and other efforts. is that a fair assessment? >> it makes sense to me, senator. >> ok. and isn't it also true that the supplemental dollars, much of which will be spent in the united states here in creating jobs here at home as we support an ally abroad. that, that's a positive economic opportunity for us. but the impact of a russian victory on the european economy and us european trade. if that was the case, wouldn't that be a huge negative? >> yes. >> so, and then lastly, if we

were some of our colleagues here who seem to want to link the critical elements necessary to support ukraine. and for that fact, the state of israel and to support taiwan uh that is all called for in this supplemental. they want to link it to things that have nothing to do with the ability for us to help these countries be able to help us stand up for the international proposition that you cannot by force, take another country's territory and that there are consequences for it. what would the europeans, what would the world say if we walked away from ukraine, if we said ok, no mas, enough, what would be the consequence of that? >> oh i, i think the world would judge us weaker and foolish for walking away from a tremendous opportunity to build the alliance. that's, that's brought us here. >> not only would it to say that we're weaker and foolish who

would join us if they know that at some point we will cut and run? >> i think, senator, the question answers itself. no one. >> thank you. >> senator barrasso. >> thanks, thanks so much, mr. chairman. just wanted to ask this to just listening to senator menendez using the words weaker and foolish. so in late 2021 the state department sent an interim international energy engagement guidance to embassies essentially barring the us government support for future fossil fuel projects. this could affect terminals in europe currently would be receiving u.s. lng. shortly after the cable went out, putin's armies invaded ukraine. it's astonishing to me that the same administration that issued this foolish anti-american energy guidance refused to impose sanctions on putin's nord stream two pipeline before the war. it seems like the administration would rather sanction american energy. so does the policy outline in this cable still remain in effect?

>> senator, the energy engagement guidance remains in effect. but i would also note that the geopolitics of energy after february of 2022 looks different. the united states is now the world's largest lng producer and we are going to retain that status for years and years to come. europe looks to the united states for its energy security. europe is the largest market for american lng that will continue for years to come. 70% of our lng exports last year helped europe to escape its dependence on russia. so i think the landscape has changed. and i would note also that the energy and guidance was drafted with carefully defined exceptions, including exceptions, both for humanitarian development reasons and also for geopolitical reasons. and that's a lot of the work that i do and my team does is thinking about those geopolitical arguments. >> well, thank you. i regret that it still remains in effect and i would love to

see it, see it eliminated. >> mckee, i want to talk about ukrainian children. one of the biggest victims of russia's unprovoked war are ukrainian children. since russia's invasion of ukraine, the world watched russian president putin bomb orphanages, attack schools, shell children's hospitals. that's not enough. russia is also abducting, transferring and forcefully, forcefully adopting thousands of ukrainian children. they are just taken away. almost a year ago, the us ambassador to russia committed to me on this committee to address the issue. she pledged that to coordinate with us ambassador to ukraine bridget brink. and i met with ambassador brink last week to document and expose these horrible practices. ambassador tracy also promised to help get these children back to their parents. so please update me on the status of the efforts. >> thank you, senator, for your

question and, and i would agree wholeheartedly that the most tragic victims of the conflict are, are the ukrainian children who have been forcibly ripped from their homes and their homeland. we are working closely with several organizations to not only connect those dots that ambassador tracy and ambassador brink signaled to you that we are committed to, but we are documenting and ensuring that the follow up to be able to return them if they were orphans to some family member who can be identified through dna testing and other tracing elements as well as ensuring that the pipeline, if you will from russian occupied territory back into russia and other places is severed as quickly as possible. and that requires courage and bravery on the part of those that are inside those areas to identify, stand up for, and share the names and locations with us. so i can't in this setting,

share with you a significant amount of detail, but i can tell you that we are laser focused and that i know ambassador o'brien and the state department and another ambassador are also focused on this terrible collateral if you will of putin's wanton aggression. >> do you have a general range on how many ukrainian children in the us may have helped reunite with their families at this point? >> i'll have to get back to you with that number. >> ok. and in the setting, what you can, in terms of what system has been established, you said you couldn't go into all the specific details, but could you talk a little bit about the system that's been established to document and expose the practices by russia? >> we have a network that started before the invasion of basically access to justice and sort of legal aid clinics. the that network employed about 20 attorneys and we had seven s sites. today, we have over 22 with over 70 attorneys that are providing legal advice and guidance to those who fear their children have been taken as well as starting to document and create the file so that ultimately

accountability and prosecution can take place. >> and the final question if i may, mr chairman, this is to mr o'brien in terms of a counteroffensive. five months ago, ukraine launched its counteroffensive against russian forces. since then, the gains of the front line have been limited , positive but limited. last month, president zlin said -- president zelenskyy said ukraine's success in the battle for the black sea will go down in history books, although it's not being discussed much today. so what's needed for ukraine to be even more successful in their counter offensive and you know, what strategies have been most effective in pushing back? >> certainly a military briefing in a classified setting would let me go to more and maybe a more expert witness. i'd tell you two things. ukraine has won back. 50% of the territory russia took since february of 22. the second piece that's important, putin is playing a waiting game like many muscovite rulers before him. so it's difficult to get a decisive battle. so what we need is what's in the supplemental, that is the ability to fight this fight over some time. and we do see real success.

so in the black sea, russia attempted to stop ukraine from exporting. in july, exports were down 2 to 2.5 million tons. they are already more than doubled, and we expect to see them go up substantially more. that's because of what ukraine has done with its technology and its new weapons systems, more of which would be provided by the supplemental. >> thank you, mister chairman. >> thank you. senator risch. >> thank all of you for your service. i appreciate it, a good message that you had here for us today. if i can send one message back to the administration and that is this thing can't go on forever. there's no question about it. patience will wear thin and uh it's not a good situation. i've been an advocate from the beginning about uh giving the ukrainians everything that shoot short of nuclear and the administration has always responded with, oh, we don't want to escalate. you've got to escalate. if you don't escalate, you're

going to lose. and so they -- by the way, they've done eventually, everything i've asked them to do, they still need to do more on the attack them. and i want to see the f-16s give it to them and let them get this thing over with so we can move on. so that's my message is, let's, let's act like we want to win this and let's move it as quickly as we can. thank you, mr chairman. >> the record will remain open to the end of business tomorrow. for questions for the record, ask that you respond friday's uh legal holiday and with that and our thanks again for everything you've done for our country and for being here today, the hearing will be adjourned. >> very good. [indiscernible chatter]

his accomplishments in the state of florida.