Daniel Kochis testifies before the House Foreign Affairs Europe Subcommittee on reviewing and reforming for the State Department.
Written Testimony
Chairman Self, Ranking Member Keating, and distinguished members of the Subcommittee,
My name is Daniel Kochis, I am a Senior Fellow in the Center on Europe and Eurasia at the Hudson Institute. I am grateful for the opportunity to submit this testimony for your consideration. Please note that the views I express in this testimony are my own and should not be construed as necessarily representing those of Hudson Institute.
As observed by the Congressional Research Service, Congress “last passed legislation that authorizes appropriations across a broad range of SFOPS accounts in 2002.” The more than two decades which have passed since that time have resulted in significant global changes. Reorienting State Department resources for the current era of great power competition is a necessary task which will help steer US policy towards accomplishing the most important outcomes. In taking up this effort, the Committee is helping to emphasize that US soft power can and should go hand in hand with efforts to maintain the world’s most lethal military through the Department of Defense.
When thinking through US foreign aid, the driving factor should always be the question: does this advance US national interests? There are clear examples during the past few years of US foreign aid dollars funding projects which do not advance this interest clearly. These however, I believe, are only a small component of overall US foreign aid. It is more important than ever that the US not only remain active in the world, but that we focus our efforts on three key areas: those where US support is crucial, those where the US has a strong comparative advantage, and regions or points of interest which are on the cusp of magnified significance.
The Importance of Europe
Europe is and will remain a foundational partner for the continued prosperity and security of the United States. The US and Europe retain deep cultural, economic, political, and security ties. It was a Dutch Governor on the island of Sint Eustatius in the Caribbean who in returning the salute of vessel of the Continental Navy, first bestowed recognition on the nascent nation as an independent country. Familial bonds with Europe are likewise durable. The 2020 Census found large numbers of American have European ancestry, with the largest contingents being citizens with English ancestry (46.5 million), followed by German (44.9 million), Irish (38.5 million), Italian (16.8 million), Polish (8.5 million), Scottish (8.4 million), and French (7.9 million). It should also be noted that nearly one million Americans trace Ukrainian ancestry. In addition to historic and familial ties, the US and Europe share common values such as democratic governance and respect for the rule of law, many of which have found their best expression in our republic. Today, 81 percent of Americans believe these shared democratic values are important for strong US-European relations.
The US-European economic partnership is the engine of our mutual prosperity. The $8.7 trillion transatlantic economy supports a combined sixteen million jobs in Europe and the US Forty-eight states export more to Europe than to China, with Oregon and Washington the only two exceptions. Over half of cumulative inward foreign direct investment to the US comes from Europe. This trade, investment, and intellectual exchange is the foundation upon which our way of life is built.
Europe also remains important strategically. The North Atlantic Treaty Organization (NATO) for nearly 76 years has served as the bedrock for transatlantic security. A safe and secure transatlantic community allows for the continued flowering of cross-Atlantic trade and shields the US from harm. Europe is the front line for the defense of the US homeland. The lessons learned in the 20th century about the infectiousness of instability in Europe still hold true today. A revanchist Russia which has over the past quarter of a century rebuilt pieces of an ill-gotten empire through violence and coercion is a Russia which is more aggressive, dangerous, and one that represents a fundamental threat to the US and its allies. Russia understands its current war against Ukraine to be merely one component of a larger ideological struggle against the West in general and the US in particular. The Kremlin has acted in accordance with this belief; Russian hybrid attacks have and continue to target the United States homeland. In Europe, US allies and interests are constantly under siege from Russian aggression in an active shadow war just under the threshold of direct military confrontation.
The rise of China has cast a further spotlight on the importance of Europe for the ultimate success of US efforts to pushback against the most nefarious aspects of the regime in Beijing. China and Russia reaffirmed their “no limits partnership” in February, three years after an agreement announcing the alliance was first signed by Xi Jinping and Vladimir Putin. This partnership shows no signs of slowing down. China is the key enabler of Russia’s ongoing war against Ukraine, with the two nations etching new linkages, including the build out of new natural gas pipeline connections, and the ramping up of joint exercises including in the Arctic. At this moment, prying one great power adversary from the other is in my view simply not possible. The shared Sino-Russian goal of insulating their illegitimate regimes and forcibly bringing an end to the Western led global order and by extension decreasing US power and influence has bonded Beijing and Moscow in a way which US diplomacy will be unable to overcome.
It remains in the US national interest to help Europe guard against the existential threat that for many nations on the continent, Russia poses. The US in turn will need European support to successfully deter Chinese aggression in the Indo-Pacific. In recognition of this reality, Chinese diplomatic and economic ingratiation efforts in Europe have sought to promote the narrative of a third way in which Europe sits astride the American and Chinese poles, rather than moving in greater alignment with the US This soft neutrality, were it to come to fruition, would greatly hamper future US strategy to constrain China.
Just as Europe has an interest in taking sides in the ongoing struggle between a future led by the US and its democratic allies and one led by China, so too does the US retain an interest in seeing Russia dealt a strategic defeat in Ukraine, and in applying methods at our disposal to lessen Russia’s influence in eastern Europe. One of those methods is the continued appreciation of foreign aid as a tool to advance US policy.
How Aid Can be a Force Multiplier for the US
In 2017, Secretary of State Marco Rubio, then a Senator from Florida stated, “Foreign aid is not charity. We must make sure it is well spent, but it is less than 1 percent of budget & critical to our national security.” Broadly speaking, this sentiment remains true today. Foreign aid in FY 2023 represented 1.17 percent of the federal budget. If utilized wisely, federal aid can serve as a force multiplier to advance US interests overseas and may in part help offset the decreasing ability and perhaps interest of the US in deploying military assets around the globe in the same quantity as has been the case over the past quarter of a century.
Foreign aid is not the primary locomotive driving the $36.2 trillion national debt, and in many cases undoubtedly provides an excellent return on investment. That is not to say policymakers and US government officials do not have an ongoing responsibility to be good stewards of taxpayer money. That imperative remains. However, stepping back from Europe in a major way will invariably harm US interests. As the US recedes, the vacuum left behind in many nations most vulnerable to diversion off a western pathway will be filled by adversaries. China, for example, is systematically competing with the US for influence in Europe. From 2013-2021, China invested $133 billion in infrastructure projects throughout Europe compared to only $12 billion from the US over that same span.
Balkan Rumblings
The Balkans are a region which fulfills components of all three focus areas I enumerated: it is once again on the cusp of returning to top geopolitical relevance, US support remains crucial, and with this support, particularly in the energy sphere, the US has significant comparative advantages.
The Balkans continue to remain home to unfinished business. Ethnic, historic, and religious tensions brew just under the surface, occasionally bubbling up in dramatic fashion. The region suffers from high unemployment, lack of connectivity, and the distorting impact of Chinese and Russian influence, investment, and media penetration. History has shown that volatility in the region usually reverberates far beyond immediate geographic boundaries. The continuous tensions between Kosovo and Serbia, which flared again in 2023 and led to the injury of dozens of Kosovo Force soldiers, underscores the ever-present potential for violence and political instability. As more pieces in Europe come off the geopolitical chess board, the Balkans remain a patch of contestation seen by China and Russia as an entry point to undermine Western cohesion and distract and frustrate US efforts to maintain regional stability.
In addition to the geostrategic perils to be avoided, the Balkans also present significant upside. Abundant natural resources, a low cost of doing business, and youthful demographics are advantages which can help drive economic growth and make the region more appealing for inward investment. However, despite significant potential, the energy picture in most Balkan nations remains stubbornly stark. Legacy Russian energy permeation in the region provides Moscow with a useful means of destabilization and influence. Regardless of the ongoing war against Ukraine, the amount of Russian gas flowing through Bulgaria increased 27 percent from 2024 to 2025. So long as Russian energy companies remain active in the region, Moscow will maintain powerful and consequential leverage. In Bosnia and Herzegovina, Russian gas remains critical for heating in Sarajevo and for running key industrial facilities despite representing a small component of the nation’s overall energy mix. While the Federation of Bosnia and Herzegovina continues its efforts to diversify gas supply via new connections to Croatia, Republika Srpska has doubled down on its relations with Gazprom.
For its part, China seeks opportunities to expand its role in the Balkan energy sector and holds an important presence in Albania, Bosnia and Herzegovina, Bulgaria, Montenegro, Romania, and Serbia across both renewable energy platforms (hydro, solar, wind) and non-renewable energy generation (coal, oil, gas). Despite this, the US has a valuable opportunity to leverage its knowledge and energy abundance to positively impact the Balkans through supporting the build out of energy interconnections and infrastructure.
The Bureau of International Security and Nonproliferation has a central role to play in promoting greater civil nuclear energy cooperation in Europe. This effort dovetails US government plans to expand liquid natural gas exports, which will directly help ease Chinese and Russian energy influence in the region.
Independent Media
US aid is also crucial to counter adverse media narratives fueled in large part by Russian information operations. This makes support for independent media in places like Belarus, Bulgaria, Georgia, Moldova, Serbia, the Slovak Republic, and Ukraine a worthwhile investment. In many cases, US funding is a crucial lifeline for journalists and helps to counter Russian and Chinese narratives. In explaining the value of US aid in Moldova, one journalist active there stated: “In Moldova’s case, foreign donor support is vital to balancing the media landscape.” She added that “Many television networks and media institutions are funded by Russia so there needs to be a counterbalance.”
In contrast to the conventional picture of Russia as lumbering and stodgy, the nation’s media and information campaigns are often nimble and widespread. One tactic employed by the Kremlin is leveraging mushroom websites which appear quickly in mass around important events and mirror Western news sources in all but content. Russian mushroom sites have been employed in NATO allies such as Bulgaria. Last year, these sites helped spread lies around the purpose of NATO’s Steadfast Defender 24 exercise.
Russian media penetration in Europe and Eurasia is antithetical to American interests. Russia pushes false stories through articles, social media posts, and payment to TikTok influencers with a key target of eastern European nations. In addition to anti-western, anti-NATO themes, Russian media has sought to undermine the integrity of elections in Europe and dissuade nations from continuing upon a Western pathway. With this framing in mind, candidate countries for European Union (EU) membership – Albania, Bosnia and Herzegovina, Georgia, Moldova, Montenegro, North Macedonia, Serbia, Türkiye, and Ukraine – will remain priority targets for Russian information campaigns and therefore should also be priorities for US aid to journalists.
The Arctic
As the Committee thinks through the framework of State Department priorities and staffing, I would also suggest a greater focus on the Arctic region, one clearly on the cusp of significance for the remainder of the century. The Defense, Energy, Interior, and State Departments all have important roles to play in US Arctic policy; with the State Department leading diplomatic engagement, which is for now the main pathway for interaction in the region. While the Office of Ocean and Polar Affairs has the lead on the Arctic, six of the eight Arctic nations, Denmark, Finland, Iceland, Norway, Sweden, and the Russian Federation (the others being Canada and the US) are within the purview of the Bureau of European and Eurasian Affairs. The Arctic has long been viewed by Russia as a key national interest, and as such, Moscow has embarked upon a more than decade-long effort to build out civilian and military infrastructure in the region. China for its part has sought to forge a role for itself in the Arctic, pursuing greater access via its partnership with Russia.
Ukraine
In FY 2022, 2023, and 2024, Ukraine was the largest single recipient of US foreign assistance. In FY 2023, a total of $16.6 billion in foreign aid was disbursed in support of Ukraine. The bulk of this aid took the form of economic development assistance ($14.64 billion) administered by the US Agency for International Development, with smaller components consisting of humanitarian assistance ($1.12 billion), peace and security assistance ($312.7 million), as well as lesser amounts in support of democracy, environmental initiatives, education, health, governance, program support, and social services. While US economic assistance to Europe has risen significantly in recent years, it is not much different from that provided to Europe during the tumultuous years following the end of WWII.
It is a misnomer that the US has been carrying an outsized burden for supporting Ukraine. Since the start of Russia’s full-scale invasion, the US and Europe (the EU and European nations) have provided a roughly equal amount of aid to Ukraine, with Europe allocating a slightly greater amount. Of Europe’s assistance to Ukraine, “65 percent have been provided as grants or in-kind support and 35 percent in the form of highly concessional loans.”
The US retains a national interest in ensuring that Ukraine survives as an independent, sovereign nation, and that Russia and its allies are dealt a strategic defeat. Russia and China are drawing clear lessons from the outcome of the ongoing conflict, with significant implications for the future of global stability. Therefore, aid to Ukraine is an investment in a more secure and stable European theater. A nation whose economy collapses, or which cannot provide basic governmental services, would soon lose the capacity to defend itself.
For a nation with as large a debt as the US has, it is prudent to scrutinize every dollar leaving the federal treasury. And while the sums of foreign aid being disbursed in support of Ukraine are not insignificant, they still represent a fraction of US gross domestic product (GDP). From January 2022-December 2024, US financial support for Ukraine was equivalent to 0.215 percent of GDP, with humanitarian assistance equivalent to 0.016 percent of GDP.
This assistance, alongside that provided by our allies in Europe, North America, and the Indo-Pacific has been a lifeline for the Ukrainian people to resist Putin’s naked aggression. We, the United States have an interest in the outcome of this ongoing war against Ukraine, we are not simply neutral observers. A permanent pause on aid to Ukraine would be a historic mistake. As the US Administration works towards a ceasefire and potential negotiated settlement, the role of US assistance for Ukraine will remain keenly relevant.
Without the continued engagement of the US and western allies, an independent Ukraine post-settlement would likely find itself prey to Russian coercion, corruption, economic pressure, and misinformation campaigns. In other words, we could find that a ceasefire today morphs into a passing away of Ukrainian autonomy and sovereignty tomorrow.
It is imperative that any negotiated settlement contains robust security guarantees. On the economic front, these guarantees will afford the people of Ukraine and western investors the confidence to stay and rebuild the country. While it would be natural for the US to consider tapering its aid after any potential ceasefire, it is important this decrease in aid is not a cliff. The US should remain engaged via economic and humanitarian assistance as Ukraine transitions from active warfare to guarded settlement.
I also believe that regardless of the success of the Administration in forging a negotiated settlement in 2025, Russia will continue to pose an existential threat to Europe for the foreseeable future. Russia has long term time horizons and any pause in the fighting will be viewed as an interlude, rather than a conclusion, by the Kremlin leadership. This view is supported by the Danish Defense Intelligence Service which wrote in January, “Depending on how the war in Ukraine evolves, Russia could, within two to five years, rebuild the military capability required to pose a credible military threat to NATO.”
Lieutenant General Charles Costanza, Commander-in-Chief of the V Corps of the US Army in a recent interview echoed this same strand of judgement when he said, “I think there's a view that Russia is going to take three to 10 years to reconstitute, and I think that we need to look at that a little differently. Russian armed forces, ground forces right now, are actually bigger than they were before the war with Ukraine started.” He goes on to note, “They may not be as well trained, but they're bigger. Their industrial base is on a wartime footing. Their mobilization base is on a wartime footing. They know they're fighting a Western-trained, West-equipped country with Ukraine. They're learning how to defeat those capabilities and those systems.”
The continued threat which Russia will pose to US European NATO allies highlights the relevance and importance of the State Department’s Foreign Military Financing and International Military Education and Training coordinated by the Office of Security Assistance. Assisting European NATO allies in purchasing US military equipment, providing training, and enhancing interoperability bolster alliance deterrence and serve the national interest.
Conclusion
In a 1981 statement, President Reagan noted the difficultly in sustaining support for foreign aid, saying “Foreign aid suffers from a lack of domestic constituency, in large part because the results of the programs are often not immediately visible and self-evident.” Yet foreign aid is important to safeguarding US national interests. It represents a small component of the federal budget but brings outsized positive impacts to the nation. It is prudent to scrutinize aid programs to ensure that expenditures are advancing the national interest, and it is clear there are examples where the answer to that question has been no. However, I have sought to illuminate in my testimony investments which Congress would be well disposed to consider a net benefit for the nation. Future US security lies in no small part upon ensuring stability in Europe. As such, it is not only advantageous to remain engaged in the European security theater, but also an excellent return on investment for US policymakers.