A Conversation With Senator Brian Schatz

Senator Brian Schatz discusses the future of funding for U.S. foreign assistance and diplomatic engagement and the ability of the United States to address global challenges.

SALAMA: Hello, ladies and gentlemen. We’re ready to convene now my one-on-one with Senator Brian Schatz of Hawaii. My name is Vivian Salama of the Wall Street Journal, and it’s my pleasure to be with you all for this very timely and important discussion. The senator has lots to cover, as do I.

But first, I want to invite Senator Schatz up here. He’s going to deliver some opening remarks, and then we’ll get started. (Applause.)

SCHATZ: Good evening. It is an honor and a pleasure to be here with all of you. And I want to thank CFR for having me.

The toll of President Trump’s foreign policy, both on a human level and in policy terms, rises every day. Children are starving. Mothers are passing HIV/AIDS onto their newborns. Countries that were partners for decades are now turning to China for help. And our friends and allies, feeling confused and betrayed, are moving on without us. But this moment also raises an essential question about the future, which is: What would a modern American foreign policy, one that is smart and strategic, look like? How do we adapt to reflect the lessons of recent decades and face future challenges?

And here’s the truth, the existing tools of American foreign policy have served us well. American leadership has deterred conflict and forged peace, cured diseases, and slashed poverty. It has advanced equality, unleashed unprecedented economic prosperity, and powered extraordinary breakthroughs in science and technology. And so while I get the gravitational pull, especially among politicians like myself, towards newness, towards unveiling a new vision, we don’t need to outsmart ourselves. The world order that we’ve established, flawed as it is and as episodically counterproductive as our actions have been, is far better than the alternative.

But we now have a president and a secretary of state, in Marco Rubio, who are racing to shatter it. President Trump’s narrow and transactional view of the world is not news to anybody. But what is genuinely surprising to me is that Secretary Rubio is aligning himself so closely with it. This is someone who, up until four months ago, was an internationalist. Someone who believed in America flexing its powers in all manners, but especially through foreign assistance. And yet, he is now responsible for the evisceration of the whole enterprise. He’s a colleague. I voted for him. We talk all the time.

But what I’m trying to understand is, what happened? Has he suddenly changed his mind on all of this, or is someone else in charge? We could have done this well, and together. If the goal was to reform foreign assistance, rather than to gut it from top to bottom, then the administration was pushing on an open door. In fact, my first meeting with Senator Graham at the start of the year, when I became the ranking member of the Senate Appropriations Subcommittee on State and Foreign Operations, was about reforms. What’s working and what is not working? Does our work match our priorities? How can we better align our investments and our objectives?

But you don’t fix something by burning it down. Legitimate, lawful, lasting reform is not just possible. It’s essential. For foreign assistance, that means rethinking what we do, where we do it, and how we do it. The objectives are the same as they’ve always been, keeping Americans safe, strengthening American businesses overseas, saving lives and promoting rights and freedoms. The question is, how do we pursue them? And it’s through things like PEPFAR, which is the most successful global health program in history. It has saved twenty-six million lives to date and enabled local health systems to combat the spread of disease, making the whole world safer and healthier.

But because of this administration’s indiscriminate cuts to HIV testing and treatment, thousands of children have already died and an estimated half a million more could die in the next five years. 2030 was our goal to end the HIV/AIDS pandemic. But we’re now moving backwards, with more, not fewer, people dying. And kids are dying because we walked away. Kids are dying because we walked away. Our work in the Indo-Pacific is important for several reasons—geopolitics, security, trade, climate. But our security partnerships with Vietnam, for example, are possible because of USAID’s health and climate programs, which help to address the legacies of the Vietnam War. Abandoning those projects overnight hurt both countries. And on FMF, which has helped to make us the security partner of choice globally, the administration initially froze billions of dollars, forcing our allies to beg for the money that they were counting on.

Going forward the task is twofold, restoring the things that were clearly already working—and that requires processes that actually work and staff who are allowed to work, but most of all, it requires Secretary Rubio’s undivided attention. And second, we have to look at what we should be doing better. And that starts with doing fewer things—not less, but fewer things. And there is a difference. I’m not arguing that we shrink the scope of our ambitions or the scale of our investments. What I am advocating for is a more disciplined approach. Just because there’s a lot of great and worthy work that we could be doing does not mean that we should be doing it. We are not a private foundation.

Second, we have to reduce our over-reliance on big contractors with high overhead. Contractors shouldn’t be bigger than the agencies that oversee them. And less overhead means more money in the field actually doing the work. Along those lines, we need to stop over-regulating our implementing partners and be more flexible with how the money is spent. Third, there is a lot of private capital flowing in the world. The challenge sometimes is getting it to flow to the places and projects that we want it to. We can help to fix that with grant dollars that help private sector-led projects (pencil ?). It’s a good example where the U.S. government doesn’t have to assume the majority of the burden, but we can be smarter about leveraging our resources to achieve outcomes that are in our interests.

And finally, where possible, we should work to transfer the delivery of basic services—food, water, education—to partner governments. Otherwise, our development programs are not actually development programs, they’re service delivery programs with no end in sight. And that doesn’t help anybody. This is not an exhaustive list, but those are the kinds of reforms that we should be working toward in our annual appropriations bill. Now, the good news is that there is longstanding bipartisan support for this bill. And that continues, because leaders and members on both sides of the aisle understand that we can’t do foreign policy without the tools of foreign policy. It doesn’t matter where you are on the ideological spectrum. And so we are starting to work towards a bill on that basis. And we have a hearing next week with Secretary Rubio.

President Trump’s version of America—small, insular, mercenary—is fundamentally un-American. It is antithetical not just to our belief, but the world’s belief in America as the promised land. And it defies generations of American leadership, which helped to defeat the Nazis, rebuild Europe, prevent nuclear Armageddon, and take down terrorists. But whether this moment is a requiem or a recess for American leadership is up to all of us, because for all of the chaos and the suffering of the past four months we are still in a position to rebuild the enterprise. We can still return to being the indispensable nation. But that requires recapturing our ambition to once again be big, and bold, and expansive, and engaged, and innovative.

And it demands a forceful rejection of the false choices being presented about strength, and greatness, and patriotism. We did not become the most powerful nation in human history by walling ourselves off from the world or by trying to extort friends and monetize all of our relationships. We are the good guys. And that’s important for its own reasons separate and apart from geopolitics, though it’s helpful for that too. Being the good guys is a foundational aspect of how we move through the world. It’s not just “woke,” or “left,” or “soft.” It has been the perennial bipartisan consensus since our founding. Getting back to that is going to require all of us to do their part. And I really mean that about this room.

Many of you here have dedicated your lives to promoting our values and our interests. Your work and your voice matter now more than ever. This is a very hard time, but it is not the hardest of times. We have survived greater challenges before. And we can do it again. To save America as we know it, we all have a role to play, both in Congress but especially outside of it. And as my colleague Sarah McBride’s dad said, if everyone has just a little bit of courage that no one has to be a hero. So let’s get to it. Thank you. (Applause.)

SALAMA: Thank you very much for those remarks, Senator. And I just want to let everyone know that this conversation with the Senator is going to be on record. And after my—

SCHATZ: What! (Laughter.)

SALAMA: Come back, please. (Laughter.) Afterwards I’m going to open the floor for questions from CFR members, both in the room and virtually.

So very interesting remarks. Obviously a really interesting time that we’re in right now. And one of the things that you hear from Democrats who criticize President Trump’s rollback of these foreign—of the foreign aid is that it’s going to create a vacuum that other players, especially China, might step in where America withdraws. But the administration insists that U.S. is stronger than ever, and that these cuts will not impede America’s ability to have that influence. What’s your take on that?

SCHATZ: I mean, it’s just factually not true that we’re present where we used to be. We are collapsing the enterprise. We are shrinking our physical presence, our diplomatic presence. I have tons of resources on my staff, my clerk, my foreign policy advisor, my MLA, all the rest of it, but I’m going to give you a little tidbit from a friend of a friend. A friend of a friend was working in Fiji and was abruptly pulled. And two weeks later, China came in, not to do a similar program, but to literally take over the program. And that is happening absolutely everywhere. And I don’t know how much money we saved, maybe nothing, by flying this person home, possibly pay them while they’re furloughed. But this really is happening all over the world.

So even if—look, I’m left of center. I care about the humanitarian aspect of what we do. I think it is morally important for us to do all this good work. But even if you didn’t care about that at all, the idea that when there’s an earthquake in Myanmar and we pull our disaster response team from the ground, and then China says, well, we’ll do it, that’s a cheap way to get really good will all across the planet and embarrass the United States of America. I mean, we are absolutely cutting off our nose to spite our face.

SALAMA: But many in your party agree, and you alluded to this in your remarks, that there needed to be—oops—that there needed to be cuts. That there was—there was some wasteful spending in the foreign aid world going on that needed to be addressed. You mentioned contractors, for example, which I found really interesting. They did go after some—they did cut a lot of contracts, among other things. And so where is the middle ground between what Democrats would see as prudent and what you consider then to be just these sweeping cuts that make no sense?

SCHATZ: Well, I guess what I would say is alignment, and efficiency, and making sure that everything that we do has a rationale. And understand that we’re not the Ford Foundation. We’re not the Pew Foundation. That things that are nice to do or important to do, as a general proposition, still has to be—have to be justified in the context of American foreign policy and American interests. That doesn’t mean that we spend less. It means that we spend smarter. It also means that, as you look at the enterprise—which has grown for very good reasons—that maybe 10,000 contractors is just too many to manage effectively. But I am not suggesting we cut the top line. I’m suggesting that, as long as there is a child out there who needs PEPFAR support, as long as there are mosquito net—there is a mosquito net not yet deployed, that we should do the really important stuff, first and foremost. And these other things, maybe we can get to them, maybe we can’t.

But to me, it’s humanitarian aid, it’s economic partnerships, it’s FMF. And everything has to be aligned with the State Department. You know—a lot of you know better than I do—that it’s a bipartisan concern that USAID and the State Department were not always aligned, especially in-country. I think that is a fair thing to worry about. I think it is a fair thing to worry about, that the aid enterprise got so big that the contractors were bigger than the agency that was overseeing that. I think it is fair to worry about the inability for any individual administrator to even know what all these contracts were. But you don’t burn the whole thing down. It’s as simple as that.

And what is so maddening to me was that I just really think there could have been a bipartisan piece of—and there still can be. There really still can be. But all these reforms are not, like, some high principle that are going to—that Democrats are going to fight against. We understand the need to make this thing work better. But making it work better does not mean burning it down.

SALAMA: You do think there can be bipartisanship in this—on this issue right now, in this era?

SCHATZ: Yes, and I don’t want to—I don’t want to make any representations about my Republican colleagues, but what I will say is that, you know, there’s been some frustration with the way that the administrator and deputy administrator at USAID, in particular, operated. And the feeling among Republican legislators is the way to get this thing back on track is to start to have hearings, and markups, and sort of get back into the regular order. Does that mean we’re going to have a tough negotiation? Of course. But the article one branch has to express itself and write an SFOPs bill.

SALAMA: You know, I was really surprised that your remarks went after Marco Rubio in particular, because of something I wanted to ask you about.

SCHATZ: I thought I was gentle.

SALAMA: (Laughs.) As someone who—as someone who, until four months ago, was your Senate colleague, someone who got bipartisan support in his confirmation hearing, is he someone that can be reasoned with, do you think?

SCHATZ: He’s always someone who can be reasoned with. And I think his instincts tend towards internationalism and sort of a robust American foreign policy, which includes all tools of foreign policy.

SALAMA: There’s a “but” coming. (Laughs.)

SCHATZ: But the—yeah. But the question is, who’s in charge? And I understand that, you know, and when we’re interacting, he’s off to Doha, and he’s off to Munich. And it’s a hard job. It’s a busy job. But somebody has to manage the actual State Department and the actual USAID as an agency. And you can’t do foreign policy without the tools of foreign policy. You have to have diplomats. You have to have analysts. You have to have contracts. You have to have—you know, it’s boring, but you have to have an HVAC system. You have to have an email client that functions. You have to be able to push out contracts.

All of that stuff is mundane, but anyone who’s run anything larger than their—even their own household, knows that it would be nice to say, for instance, well, we’re going to just pay for lifesaving aid, and then it turns out that, well, you really can’t administer the lifesaving aid without, like, somebody to do the logistics chain in back of it. And so what I need, and what everybody needs, is Marco Rubio, from all of his career up until about 120 days ago, to re-emerge, reassert himself, and save the enterprise.

SALAMA: Is that realistic, though?

SCHATZ: Yes.

SALAMA: I mean, he’s—obviously, he becomes a little bit of the face of the face of a lot of this, but at the end of the day he serves the president, just as Tony Blinken, prior to him, served President Biden even during the Afghanistan withdrawal, when all of that was going on and the administration was receiving enormous criticism.

SCHATZ: Look, I can’t—I can’t, and don’t really, understand the sort of internal political dynamics in the Trump administration. I will say he’s skillful. He’s thoughtful. And I think that his leadership is very much needed on this.

SALAMA: I wanted to turn to the president’s Trump—President Trump’s trip to the Middle East, since he’s there right now. In particular, one of the big headlines that came out of it was his meeting with the new Syrian leader, Ahmed al-Sharaa, who helped to lead the push—this push to oust long-time dictator Bashar al-Assad, but at the same time is also a notorious former al-Qaida member and was imprisoned in Iraq. I’m curious about your views about President Trump meeting him. He was the first president in twenty-five years to meet a Syrian leader. He believes that, you know, you have to start fresh. And the Saudis obviously were very much encouraging of this. But it’s making a lot of people wary that he would meet with someone of this nature. Do you think that this is a positive step for U.S. foreign policy?

SCHATZ: I think there are some auspicious signs in Syria. I think that—I’m not going to nitpick Trump’s particular tendency to jump right into the principal-to-principal meeting. I know in the kind of diplomatic world, you know, you always have to have a pre-meeting, you always have to have a deliverable. The principal-to-principal meeting is actually a deliverable. You got to get something even before you do the meeting. That part is less worrisome than the idea of lifting all sanctions sort of on the front end. I think there are reasons to be at least mildly optimistic about the future of Syria, but we do have to see some progress in terms of minimizing or getting control of sectarian violence.

And so the new leader is saying some of the right things. And that probably is worthy of some engagement, and even a conversation about lifting some of the sanctions over time. But you want to do this incrementally because—you know, I think that the main criticism I would have is that Trump likes to execute a deal and move on to the next exciting thing. And if we give—if we give all the sanctions relief on the front end, and we don’t help with the economic development, then we may end up with another series of problems in Syria. So do I think engagement is important? Yes. Do I think we should be wary? Yes. My criticism of Trump is not so much that he does a meeting, but what comes out of that meeting is usually giving away a little too much.

SALAMA: I mean, I’m old enough to remember during the Obama years, and the Arab Spring, in particular, when the administration was very wary about engaging with the Muslim Brotherhood, who was receiving popular support from the Egyptian people after the ouster of its longtime U.S. ally. And so this is something that the U.S. continues to grapple with is do you embrace, some of these Islamist regimes especially, and how to do so in a way that still, you know, allows a little bit of wiggle room if things turn for the worst.

SCHATZ: Yeah, I think part of it is that we’re going to engage with the leaders that we have, not the leaders that we wish we had. And it remains to be seen what kind of leader, in terms of capability but also in terms of inclination and alignment with us. And so my view is, yes, we should engage, but we should be eyes wide open. We’re not suddenly buddies with this guy. We are just interested in engagement and seeing what’s possible. And I do think, you know, just Trump’s sort of attention span is a problem in this instance.

SALAMA: And sticking with the Middle East, one place where that meeting was not very well received is Israel, next door to Syria, where Netanyahu continues to be very wary of the changes there and even look to expand Israeli settlements in some parts. And so this has been—there was a lot of concern when President Trump came in about the future of the Israel conflict in Gaza, how that would turn. He started talking about, you know, the Riviera of the Middle East at one point. But he has since kind of come around and said to Netanyahu that he needs to be nice to the Palestinians. Where do you see the policy going—U.S. policy going with regard to Gaza, and in particular our relationship with Israel? It’s something that has splintered the Democratic Party, in many ways—

SCHATZ: I’m familiar.

SALAMA: And continues to be—(laughs)—continues to hang over—hang over that party’s head, in particular.

SCHATZ: So a couple of thoughts. First, I thought what Secretary Rubio said was at least mildly encouraging today, about the humanitarian situation in Gaza. I think the challenge is that, you know, if you don’t like Trump’s foreign policy, just wait till tomorrow. You know, it may change. And so it’s a little bit unclear that this is some new strategic vector, but rather kind of, like, who he met with, and who he wants to please, and how he thinks he can kind of configure a deal real quick. I worry about the attention span.

On the specific question of, kind of, in a couple of instances now we’ve seen Israel cut out of the conversation, sort of diplomatically, and being sort of the last to know. I do think that’s a problem. I have been a pretty vocal critic of the conduct of the war in Gaza, the Netanyahu government’s especially conduct in the West Bank. But they are still our best ally in the Middle East. They are still our security partner. And we got to talk to them. They should not find out about things in open-source contexts. So I’m just a little bit worried.

The problem with the American foreign policy right now is that there’s a tendency to kind of after the fact make it sound rational. But a lot of it is just he wakes up in the morning, he goes to a meeting, he says stuff. He wakes up the next morning, he goes to a meeting, he says stuff. I’m not ready to attribute a sort of strategic vector, other than he wants to please people, he wants to close deals quickly, and he wants to monetize all these relationships for his inner circle.

SALAMA: Really quickly, international aid organizations are saying now that one in five people in Gaza are starving. Do you see an opportunity—more of an opportunity, especially in the Senate, on the Hill, to really push for greater intervention? Especially since, going full circle, we’re in an era of foreign aid cuts right now, especially to the Palestinians. You know, where can we help?

SCHATZ: If you had asked that question yesterday, I would have honestly answered: no. But the fact that the secretary said what he said today leads me to believe that, you know, that perhaps Saudi or someone else is saying, look, we’re not going to get our normalization deal unless you settle this question in a humane way. And so I would open up a little aperture for hope here. I don’t want to be Pollyanna, but if we’re going to get to a two-state solution, if we’re going to get to economic prosperity, if we’re going to get to two states living side by—people living side by side, we need a ceasefire. And the fact that Trump, even if it’s temporary, seems to be tantalized by that possibility, I think we got to take advantage of it.

SALAMA: I only have a few minutes before I open the floor to questions. But obviously, you know, given Hawaii’s geographic location, Asia-Pacific is something that is heavy on the minds of folks over there. You know, there was a Guardian headline that caught my attention just this week. It said: Rearm, reassure, and spend big, how the Asia-Pacific is responding to a new era under Trump. And I’m curious, you know what you see as the future of, you know, security relations, particularly as we engage more with the Chinese. The Trump administration has been trying to work on a trade deal but also talk about other areas of cooperation. Are you optimistic that we can avoid hostility—greater hostility with China, especially anything that would turn to military intervention—that would require military intervention?

SCHATZ: Optimistic would be a little strong. Less panicked? Yes. In the Asia-Pacific region, I guess the way I would look at this is that it has been a—there has been the least upheaval, you know, compared to our relationship with Europe, compared to what’s happening in the Middle East. There has been less upheaval. You know, our relationship with Japan is rocky because of the tariffs. South Korea, you know, Australia, the Philippines. They all have their challenges. But those security relationships, those cultural relationships, those people-to-people ties, and the economic partnerships, have not fundamentally been shifted.

The thing that worries me the most in the very short run is that we finally got it right with respect to our Asia-Pacific island nation partners. And it was such a high leverage, low-cost thing to do. It had to do with physically showing up. It had to do with relatively small investments. And it had to do with the respect that you give sovereign to sovereign. I don’t care if the sovereign is a sovereign over a 70,000-person nation. It’s still a nation. And we were—we had dropped the ball. Many presidents, many parties. And we had these meetings with the PIF and others. And it was one of the cooler things that I had experienced in the foreign policy context. We started these meetings at the capitol. It was, like, I could get three senators. And it was a lot of, like, drop by, leave. And then sort of a bill of particulars complaining about the lack of presence of the United States. And this was—I feel like it was seven, eight years ago.

And over a period of time, with Secretary Blinken and others, and Kurt Campbell and others, we started to, like, work the list. And, again, low-hanging fruit, these weren’t impossible tests. We started to do all the stuff. And then we would have these convenings. And two things happened. First, the number of senators who would show up grew by—I mean, we were up to like fifteen, sixteen senators. The chairman of Intelligence would show up. And Jim Risch was there. And Chris Coons was there. And it was starting to really cook. Also, it wasn’t just a complaining session. There were a lot of thank-yous. And then we just let go of the rope.

And so to me, the more immediate—it’s certainly not as big of a deal in the foreign policy realm as, you know, our relationship with Japan, and China, and Korea, and all the rest of it. But this was—this is the biggest own-goal in the Asia-Pacific region. We just, like, for a couple hundred million dollars of savings, and probably not even that, we just let China rebuild all these relationships, and blew, like, ten years of progress.

SALAMA: One more quick question from me. You formally launched your campaign to take over the number-two Senate Democrat seat to become the Democratic whip.

SCHATZ: I’m sorry you’re breaking up. (Laughter.)

SALAMA: So I heard. And you vowed to really guide an emerging generation of party leadership. It seems like an unusual question for the Council on Foreign Relations, but one of the things I hear when I talk to foreign diplomats and foreign officials constantly is sort of, what the heck is going on with the Democratic Party? Obviously, we’ve heard a lot about former President Biden and, you know, that last year of his presidency. There’s a couple of books coming out at the moment on it, so it’s back in the news. But even congressional leadership in the party has been older. The trio of leaders has been, you know, in their eighties. And so, why do you think now is the time for this emerging generation? And what do you think has been happening over recent years in this general shift toward maybe the younger generation?

SCHATZ: I think people are ready for this generational transition. I don’t think it has to be, you know, politically violent, but I think people want to see in themselves—(laughter)—they want to see leaders that they can relate to, they want to see vigor. But that doesn’t mean everybody has to be under a certain age threshold. I will say that one of the things that gives me the most hope in the United States Senate is this freshman class is—I mean, it’s talented, right? It’s Angela Alsobrooks, and Lisa Blunt Rochester, and Adam Schiff, and Ruben Gallego, and Andy Kim. And, boy, I’m sure—oh, and Elissa Slotkin. Like, that is a—that is a really good, solid group of leaders that can—whatever party you belong to, or neither party, you can look at those people, and—those are capable people who deserve to be in the United States Senate.

And so to the extent that I’m interested in a leadership role in the United States Senate, I think of myself—believe it or not, I play basketball even though I’m 5’7’’. I think of myself as a passing point guard. I like the aspect of politics that is the team sport, and thinking about how to maximize everybody’s talents. And I don’t think we’ve done that sufficiently to kind of showcase—not just in the PR sense, but actually put people’s expertise to work. I mean, when you think about Elissa, when you think about Andy, these are serious human beings—Adam Schiff, right, Angela, with her own background as an executive. Like this is a really talented bunch. And at least part of my role should be to maximize everybody’s talent.

SALAMA: All right. Well, I want to open the floor to questions, definitely. The first one, I see the gentleman up here. Please don’t forget to introduce yourself so we know who you are.

Q: Hi. Thank you, Senator, for your remarks, and for taking on your leadership role on SFOPs. I’m Will Davis with U.N. Information Centre here in Washington, D.C.

Bilateral U.S. assistance has obviously been hit hard. Multilateral assistance is also on the chopping block. And we’ve already seen the impact on the U.N.’s ability to deliver many of our services. I’m curious, particularly given the need that we recognize—the U.N. has always got room to reform, and our secretary-general is leading an effort on this—I’d welcome your views on continued U.S. engagement and leadership through the U.N. system.

SCHATZ: We’ve got to do it. And the case that I’ve made to Republican internationalists who sort of still want to stay in good standing with MAGA world, is that we really do have a choice about whether we want to be in the room or not, right? I’ve talked to Marco about this. I talked to Stefanik, before her nomination was pulled. I’ve talked to a number of other members who are still friendly with Trump, are still in good standing with Trump, and have a different view of American foreign policy and American power, and how to project it, than I do. But my point is, even if we disagree on the substance of what we’re trying to accomplish, leaving the room is the dumbest thing in the world, right? If we want to reform these institutions, we have to be in the room, right? You don’t want to be relegated to observer status in every instance. And that’s what we’re doing. So, again, if you want to change an organization you have to belong to it. And we have to stay in that room.

SALAMA: I want to remind our virtual viewers that you can also ask any questions as well. But I’ll stick to the room right now. The lady in the back, yeah, over here. I know you had your hand up earlier.

Q: Hi. Daphne McCurdy. I’m actually a former USAID-er and State Department-er. And thank you so much for your leadership. I actually also worked on the Senate, and worked very closely with your colleagues, who are awesome. So thank you for everything you’ve been doing.

I wanted to start with a quick comment and then a question. The first is, I just wanted to pushback slightly on the characterization, having worked at both State and USAID, that these entities somehow are in conflict with one another. Neither institution is a monolith. And I would say when you saw—you saw conflict within State Department of people pushing short-term interests versus long-term interests, and similarly you saw that within USAID. And so sometimes USAID was the best tool.

Like in a place like Jordan, as you mentioned, foreign aid that was providing direct budget support was helping create water sanitation systems, was the best tool for, then, the diplomats to be able to cultivate strong relations with the government. And then, by contrast, our Foreign Service officers who were pushing human rights were oftentimes clashing with the political officers who want to cultivate good relations. So I just hope that leaders like yourself don’t fall in that trap of characterizing USAID and State as somehow working in conflict. Because I think, in many ways, they were working really well together. And it actually is the best when all three—development, defense, and diplomacy—can work in concert together. So that was my comment.

And then my question is on the very sexy topic of overhead costs, which you mentioned. (Laughter.) First, just to say that on this point about overhead costs, that’s actually a misconception that somehow development actors are negotiating overhead costs independently with USAID or with the government. There is a wide government overhead cost that all contractors receive. And so this isn’t a problem that is unique to just the development sector. Related to that, I think the big challenge with these big contractors is that there are such high compliance costs and oversight coming from Congress, because of the lack of risk tolerance to do really innovative, out front of the spear work in the development space, that is what’s causing these really bloated development contractors.

So my question—my very long-winded question to you, is do you think there is a political appetite within Congress to have more risk tolerance, to be able to get to a point where we don’t need these huge, bloated contracting systems, and where we can rely on nimble, localized solutions to these problems?

SCHATZ: So it’s a very good question. And I think you’ve got the tension in the negotiation over the bill, right? These things are in tension. And, you know, this happens at every legislature. Every person adds a new provision, a new requirement, a new oversight aspect. And then we expect them to do it all for free. And it’s not free to do all of this work. And then it also just turns everything clunky, right? Forget the actual cost part. You can’t execute quickly if it’s all sort of pre-audit versus post-audit. So my inclination, as we, you know, begin the process of writing the bill, is to lean towards a higher risk tolerance, and therefore less administrative burden, because that’s where we have to land.

I’ll also just say, on the overhead question, I understand that, government-wide, that there is an overhead rate. I don’t think that’s—I don’t think we should just stop there. Because I do think—and, you know, I think it’s not a secret I’m not a fan of DOGE. But I do think that there is a fair amount of work in the government and in any big bureaucracy—and, you know, I’ve got family in bureaucracies. I don’t use bureaucrat as an epithet. But in any big organization, there are—a lot of jobs are sorting of information. And it is not impossible to imagine a future in which AI is a tool that actually does reduce administrative expenses. Now, the kind of, like, violent way of doing it where we just go, like, oh, we’ll just run an LLM and replace all these people, that’s goofy. Like, no one thinks that’s how you reform an organization.

But it’s not impossible to imagine that, over a, you know, period of time—I’m thinking about, you know, Dick Durbin. This is a different enterprise. But he and Senator Blunt increased—I forgot the number—but they increased the amount spent on health research by a kind of imperceptible, like, it was 3 percent a year over ten years. And it’s sort of like the Dan Inouye rule. Dan was my predecessor. And he said, you know, try to get 40 percent of what you’re asking for, because by the third year you’ve got more than you’ve ever asked for. And so I just do think if we started to capitate overhead costs at a reasonable rate, and allowed organizations to adjust, it might be a little painful, it might make people a little grouchy, but that’s a realistic pathway towards a more modern enterprise. But I do recognize that these are real things. And some of the reason that the whole enterprise is clunky, and there are 9,000 things, and all the rest of it is us, not you.

SALAMA: Thanks for that question. We can come to the gentleman in the front.

Q: Michael Gfoeller, a retired State Department officer. Thank you for speaking with us today.

The Biden administration focused a lot of attention on the Armenian issue in the Caucasus, just south of Russia, and a great deal of progress was made in preventing a new war, despite the threats of the Aliyev regime from time to time to invade what they call Western Azerbaijan, which is currently the Republic of Armenia. Do you think—I think it’s fair to say the United States played a key role in keeping that region stable and in making gradual progress toward a peace agreement of some sort. Do you think there’s any hope for that policy continuing under the current administration?

SCHATZ: I don’t know the answer to that question, because it’s very hard for me to know who does that kind of diplomacy. I feel like they’re very attached to sort of headline-driven diplomacy. And wherever Trump is, is where the locus of foreign policy is. And if a criticism of Democratic administrations is it was too sort of sprawling—there were too many deputy secretaries, and assistant secretaries, and other State Department officials driving policy—this is like the center of gravity is wherever Trump physically is, and whatever he’s thinking about and talking about. It’s very unclear to me who’s even working these issues. And I think about, by the way, our relationships in the Asia-Pacific region likewise. It’s just there’s sort of—I don’t want to say nobody at the helm. That may be a little strong. But it is—I have no transparency into who would I even talk to about this.

SALAMA: And there’s also this—you know, the reports that the National Security Council may be completely reorganized. And so it’s going to be a little bit harder to know kind of where the channels go, in terms of—in terms of how these offices operate on these issues. So, yeah, thank you for that question.

Yes, ma’am. We’ll come to the back after.

Q: Hi. My name is Katie Crosby. I work for Mercy Corps, and also was previously with USAID.

Appreciate everything that that you are doing here on the stage, and hopefully next week, and moving forward. One of the things that I wanted to raise was you ran through a list of your priorities, including, you know, HA, economic partnership, FMF, all of which are fantastic. One of the things that I didn’t necessarily know where it fit, or if it did fit, was fragility. A lot of the, you know, places that USAID has worked in, and other organizations around the world, are not necessarily—they don’t fit into the bucket of a fantastic potential economic market ready to go with the DFC or with other American investment. But at the same time, it’s not necessarily appropriate or helpful for them or for us to do the truck and dump of just throwing humanitarian assistance at them. You have places that are in that in-between, which is usually where we would see development assistance or longer-term development to get them to that place. And that seems to be really a gaping hole in certainly the Trump administration’s thinking around this, and approach. And so wanted to give you the chance to talk about where you see that fitting in, certainly with the ’26 bill and beyond.

SCHATZ: It’s an important point. I’ll just generally say that we still—I mean, it was a really interesting phenomena. The senators on the Foreign Relations Committee, on the Republican side, senators on SFOPs on the Republican side, like, they’re all still talking as if it’s two years ago. that we should do this on a bipartisan basis, that we should do it because it’s a matter of principle that we’re the good guys, but also that we have geostrategic, geopolitical reasons to keep places from becoming failed, and from having instability metastasized, from radicalization, and also to give countries an opportunity to get on their own two feet. And there are so many success stories of where American foreign policy, and USAID in particular, has situated a country in a way that they can start to thrive.

So I continue to be, you know, I don’t want to say hoping against hope, because I still do think I would be much more—I’m angry. I’m frustrated. I am heartbroken about what is happening currently. But it would be way worse if the members of the committees that are relevant to this question on the Republican side were essentially ratifying all this. They are not. They are trying to guide this—in their, in my view, hypercautious way—but they are trying to guide this back into the consensus. Like, these guys are still doing CODELs. They’re still in Africa. They’re still in South America. They’re still in the Asia-Pacific region. And they’re still observing with their own two eyes what our absence causes. And so I remain hopeful. But your particular point about fragility is well taken.

SALAMA: I want to take a minute to take some questions from members who are watching virtually. If we could do that.

OPERATOR: We’ll take our next question from Allan Goodman.

Q: Hello. Can you hear me?

SALAMA: Yes.

Q: Yeah. Aloha. And thank you very much for your service, and all you do, and the impact on your family. My name is Allan Goodman. I’m president emeritus at the Institute of International Education.

We administer the Fulbright Program on behalf of the State Department. And OMB has zeroed out basically every educational and cultural exchange that you’ll be looking at in the bill next week. A hundred other governments contribute to Fulbright. Some more than we do, in fact. I worry about if we pull out, they will too. Can you help us?

SCHATZ: Let me make this very quick. Yes. And I’ll try not to be too senatorial and then take another five minutes, but I will say that I would be a little—look the SFOPs bill is still subject to the political weather, right? It is still going to succeed or fail based on whether or not we are doing appropriations, which remains an open question. If we do an appropriations bill in the SFOPs space, I would be pretty shocked if we ratified these quite radical cuts, that don’t really save, you know, anything that’s worth talking about. So the answer is, yes, with the caveat that we’re in such a weird time that I’m only at an 85 percent confidence interval for anything that I say.

SALAMA: I mean, I want to ask three follow-ups to that, but I want to give an opportunity. Yes, the lady here in the corner.

Q: Thank you. Hi. I’m Bay Fang, president of Radio Free Asia.

Thank you for all your help and support, especially with our Pacific Service. And I couldn’t agree more with what you were saying about ceding the influence in the world to China. We have actually seen that our shortwave broadcasts that, you know, since we are under attack by the Trump administration, the ones that we have had to give up have been snapped up by China. They’re broadcasting in Mandarin, and Tibetan, and Uyghur in those—on those same transmissions. But my question to you is, how do you make the argument to Americans, to people who might actually agree with Trump’s America first policy, that it is important for us to have this influence, to have—to wield the soft power in the world?

SCHATZ: It’s a really—as you know, this is—it was ever thus. It is always—foreign aid is always on the chopping block. It is always an easy talking point for certain, you know, kinds of legislators to say why a firehouse there and not a firehouse here. And so I don’t have a novel answer, except to say what is happening in three dimensions is so plainly, obviously damaging to America’s reputation and America’s safety that we actually now don’t have to describe this thing as an abstraction. If we don’t do this, then X, Y, Z happens. It’s now happening in three dimensions. And, you know, Ebola prevention, right? Measles, mumps, and rubella. Like, they’re—we’re no longer in a world where we have to describe what might happen if we collapse the enterprise. It is starting to happen. And people don’t like the results.

And so I want to—you know, there were some Democratic pundits that didn’t want us to talk about the importance of foreign aid. And I just—sorry for going a little long on this—but I just remember when President Trump first proposed the Muslim ban. It was very early in his first term. And there were some Democratic pollsters who came to us, sort of whispered in our ear, and said: You know, be a little cautious about this one. It’s polling underwater for you guys. And we—Cory Booker, Chris Murphy, a bunch of us—gave them the proverbial middle finger, and just argued against it anyway.

And you know what happened? Public opinion moved. Public opinion moved. And I think about what’s happening with Abrego Garcia and CECOT in El Salvador. You know, John McCain used to say if you don’t defend your honor people will assume you have none. We have to make the affirmative case for foreign aid. We have to make the affirmative case for America kicking ass, not just because we’ve got the strongest military in the world but because we are the good guys, and because we project power in multiple ways—cultural, economic, aid, and all the rest of it.

And so part of it, to me, is about being unapologetic and not finding the why a firehouse there and not here so compelling that we fail to make the argument. And so I just think we are not supposed to follow public opinion. We are supposed to change public opinion. Do I think this is more popular for Democrats than talking about saving Medicaid? I do not. But do I think this thing is inherently underwater and we should run away? I do not.

SALAMA: And you do think that this is a—there’s a—it’s a winning cause? Because I think about immigration, and Democrats really advocating for asylum seekers and the rule of law. But at the same time, the problem magnified under the previous administration. And it became a problem in the election last year for Democrats. And so when do you push back and when do you realize that something has to change also?

SCHATZ: People were responding on the immigration issue to disorder that they observed on the border. And so some of the same people who didn’t like the Biden border policy also see sending people to foreign gulags, and raids of churches, and mosques, and hospitals, and schools, as also disorderly and unlawful. And so some of these voters are the same people, who say: What I want is an orderly, lawful system. And what I think was fascinating about Chris Van Hollen’s leadership on the particular question of El Salvador, is the polling flipped almost instantaneously once we made an argument. That doesn’t mean we don’t have to be tactically clever and emphasize those things that, you know, are more popular than not.

But it also means that, as a general proposition, that if we look afraid, then people are going to figure out that we have something to hide or something that we’re not particularly proud of. So even if it’s a fifty/fifty issue, it can be turned—it can be turned into a fifty-five/forty-five issue, by virtue of the power of us showing that we have convictions about it. And I’m not, you know Pollyanna about sort of where the Democratic Party is on, in particular, immigration and border security. But some of those numbers are flipping in real time because people are thinking, well, I didn’t like what was happening on the border, but this is not at all what I had in mind.

SALAMA: Right. We have about ten minutes left, so let me take a few more questions. Yes, the gentleman right here.

Q: Senator, thank you very much for being here, and all your great work. I’m Witney Schneidman, former deputy assistant secretary of state for Africa. I’m at Brookings and also have my own consulting practice.

Today, President Trump was in the UAE. And according to the U.N. and many other organizations, the UAE is a major supporter of the Rapid Support Force in Sudan, which is the world’s largest humanitarian crisis. I saw no signs that Sudan was on the agenda of his conversations. So I’m interested in your thoughts. How do we get Sudan on the agenda, get this administration to focus on it, given the fact that Trump 1.0 they got Khartoum to sign on to the Abraham Accords. They did appoint a special envoy. But I just think it’s a major crisis that we’re ignoring. Thanks.

SCHATZ: I’m going to agree with what you said, but I’m not going to pretend I have some technique to get this onto the radar of the Trump administration. We were talking about this a little earlier with my staff. And, you know, it’s hard, right? This is the Council on Foreign Relations. You’re a bipartisan, nonpartisan organization. So I don’t want to just sort of fulminate about how terrible everything is in the Trump administration. But it is a difference. It is a fundamental difference in the foreign policy approach from any other president that I am aware of. Which is to say—and I thought the Washington Post actually—the headline was wrong, which was, like, Trump administration focuses on business in Middle East. It’s not business, generally. It’s business for them, right?

And that is a very big distinction that all of you are able to make, and all of the media is able to make. Whenever you’re observing the same stuff in a foreign country, right, you would say, oh, he’s enriching himself and his buddies. He’s impoverishing his country. This is the playbook, right? And so they went there looking for deals, not for American flagship companies but for themselves. And so it is not at all surprising that they not just deprioritized but failed to even mention UAE’s malfeasance in Africa.

So that doesn’t mean I have a good answer for it. But I do think we need to start describing the Trump American—excuse me—the Trump foreign policy, not in kind of—like, I do think people just turn it all into euphemisms, right? That it’s this kind of, like, retrenchment—because you kind of want to overlay some strategy to it. But it’s graft. That’s what this is.

SALAMA: If I can just add my two cents, as someone who covered the first and second Trump White House, my guess is that Egypt’s President Abdel Fattah el-Sisi, would have—you know, he has a rapport with Trump, and would probably—that would probably be something on the agenda because of the refugee crisis it’s spurred in Egypt. And they’re close with each other. So I wouldn’t be surprised that the Egyptians bring it up at some point.

SCHATZ: That was a better answer. (Laughter.)

SALAMA: Just my hot take, so. We’ll take the lady in the back corner. Yes, you. Yeah.

Q: Hi.

We’re talking a lot about messaging and communications in terms of what USAID and, you know, what was just discussed, Sudan. What seems to consistently be sometimes missing is the connection between Sudan and the Americans’ kitchen table. And connecting that thread, and why chaos in Sudan actually does impact the everyday American. Can you speak to—perhaps is it a strategy why that’s not being made? Or is that—is there a change of strategy that needs to be made so that Americans can actually understand it? Because on that question of Abrego Garcia and due process, I think some people are not understanding why it impacts their everyday life as well.

SCHATZ: I’m not sure that that rhetorical communications sort of bank shot is worth the effort. I would rather make the argument for American values and American foreign policy sort of on its own. I think there are—you know, there are opportunities to talk about, especially in the disease prevention space, especially in stabilizing countries so that disorder doesn’t metastasize, so you don’t have, you know, terrorists who could visit violence on our shores. Sure, you can make all those arguments.

But I would rather just say what we think about American foreign policy, about American foreign policy tools, and then separate and apart from that say—now I’m going to be a partisan, but you’re asking—they’re cutting Medicaid, right? And trying to make a bank shot to describe here’s why you should care about what’s happening in sub-Saharan Africa, and here’s why, you know, the—that’s too much, right? I think people want to know tariffs are ripping you off, right? They’re going to cut Medicaid. And they’re going to use those resources to give tax cuts to people you’ve never met. I think that is a much easier argument to make. It also happens to be absolutely true. And it has a more direct impact. It’s true that we could make the argument, but you have to—you kind of have to travel a windy road. And on the internet, you don’t have that amount of time.

SALAMA: I mean, as an elected official—I’d love to even springboard off that. As an elected official, why do you think it’s so hard to make people understand, and appreciate, and care about what’s happening overseas? I mean, we didn’t even mention the Ukraine conflict, which continues to rage on—Russia’s invasion of Ukraine. And yet, more and more Americans do not care about that because they believe that we’re spending money abroad when it should be spent here. And increasingly, we are turning our back on the world. And it’s resonating with the American people. It’s not just one party or another.

SCHATZ: I mean, look, I think that—first of all, public opinion is thermostatic. And now that—you know, the support for Ukraine is actually more popular not less popular since Trump was elected. So I’m not sure that I would concede the point that this is some impossible argument to make. I just think regular people got a lot of stuff to do, and are not—are paying passing attention to politics. So they are more concerned about things that are just right in front of them. And it really was ever thus, right? It is OK to make these arguments about things that are right in front of most Americans, and then if asked describe this vision of American foreign policy that, you know, peace and prosperity and a good reputation internationally. But it doesn’t have to be a point of emphasis, right?

I mean, I’ll just give you an example. When it’s time for my reelection we come up with a, whatever, X number, a couple of dozen main achievements. And then—they’re all true. They’re all things that I did. And then, without regard to what is most important to me or what I want to talk about, we go among that list of true things and then figure out which ones of those true things move the most votes. There’s nothing dishonest about that. In fact, winning is part of the enterprise. And so I’m still going to emphasize—even in my role, I’m still going to spend more time, at least on the public side, talking about the need to save Medicaid, because most of my constituents are more concerned about that and the cost of everything at, you know, Walmart on Kaimuki Avenue, than they are about what’s happening with USAID. They’re happy that I’m in this fight, but they don’t want me to live here rhetorically.

SALAMA: Thank you for that. We probably have time for one more quick question. Yes, the lady here was—has been very patient, so.

Q: Great. I’m—(off mic)—Maureen (sp). I’m at State Department. (Comes on mic.) Thank you.

As term members, we’ve been grappling with this question about how do we rebuild trust in public institutions in the United States. So across political spectrums people feel that they can’t trust the government, media, et cetera. Would love to hear your solution, as we end this out. Thanks.

SCHATZ: That’s a tough one. So I guess what I would say is it starts with an admission that big institutions are not functioning well. And that Democrats, generally speaking, have built up some of these institutions. And, you know, I think about the question about USAID and overhead. And, for good reasons, we add provisions, we add requirements, we add people, we add programs, we add lines. Members of Congress have their own project, even though the other project was pretty much doing the same thing, but you want your own thing. And so it adds, and it adds, and it adds. And then stuff doesn’t work very well. And so I think government has become sort of sclerotic. And our response to that has been rather Soviet, right? And so the alternative to that has become this, like, DOGE slashing and burning. And I think there’s got to be a middle ground in between let’s light the whole enterprise on fire, and everything is fine. We have to protect all institutions. And, by the way, they’re all working perfectly already.

And so I think about state government. Just at a kind of micro level, in the state of Hawaii a lot of really good people have layered a lot of really good rules, and laws, and thoughts, and whatever. Now we can’t build any housing. We can’t build any housing. A very progressive place is kicking out, effectively, nurses, and firefighters, and the elderly, and students, because there’s no housing. It’s not like someone wrung their hands in the 1970s and said, how do I make it really hard to live in Honolulu? But that was the impact of it. And so part of the reckoning that I think the Democratic Party has to go through is to say, we are not the defenders of every government institution. We are not the defenders of every government program. We understand things are not functioning well. But we have an alternative to that, which is not to just blow everything up.

SALAMA: I think we could have had an entire session just on that topic alone, but unfortunately we have to leave it there. I want to thank Senator Schatz for his time today and for this very important discussion. (Applause.) And I want to remind everyone that there is a video and transcript available online CFR.org. Thank you very much.

(END)

This is an uncorrected transcript.