We’re delighted to welcome participants and viewers from all over the United States. Thanks to our co-hosts, the U.S. Global Leadership Coalition. We are happy to welcome the Deputy Secretary for Resources and Management, Mr. Thomas Nides, who will be discussing the national security budget.
Now, participants should submit their questions at the bottom of the window that is titled, “Questions for Deputy Secretary Nides.” And go ahead and start submitting your questions in now, and over the next 30 minutes we’re going to get to as many questions as possible.
So, Mr. Nides, thank you for joining us, and we’d just like to open with any remarks you may have.
DEPUTY SECRETARY NIDES: Well, first of all, I want to tell my friends at USGLC how spectacular an organization they have. They’ve got a great leader in Liz Schrayer, who’s been my friend for many years. But the work that they do is spectacular. It’s probably one of the few organizations that combine both businesses, NGOs, the variety of military, ex-military officials together to do one thing, which is to talk about the importance of our national security budget, in particular the help that State and USAID does every day to help both American people here, help them with their jobs, but more importantly, the thought about the importance of national security on their daily lives. So I thank my friends at USGLC and thank my friend Liz and her whole group of people who are able to put an event on like this. So thank you.
MODERATOR: For our first question, we’ll go to the USGLC, and their question is: Secretary Clinton has recently been talking about economic statecraft, emphasizing that our national security and our economic prosperity are fundamentally tied in today’s global world. And you come from a strong business background, so why is this important to American business?
DEPUTY SECRETARY NIDES: Well, let’s be clear. Right now, it’s all about jobs. It’s about getting Americans back to work together, and getting them back to work is a very important part of what we do here at the State Department. It’s not intuitive, but be clear; one of the things that we need to do as a government is to make sure that the markets are open and that the people that work at this building understand that we are the ambassadors to the world. And we work hand-in-hand with U.S. companies, with diplomats, working on issues of importance to the U.S. economy every day.
And so one of our important parts of what Secretary Clinton has told us to do and to focus on is to make sure every day we wake up and think about how we improve the American economy, how we use statecraft in a way that statecraft is allowed to push our agenda forward on economic development. And so what we do every day around the world is diplomacy. But as Secretary Clinton talks about is the three Ds – diplomacy, development, and defense – but the default – the diplomacy and development piece are critically important to job creation here in the United States. So working with organizations around the world, local chambers of commerce, but more importantly with our diplomats being in the forefront of speaking about the United States is critical to job growth here at home.
MODERATOR: Our next question is a two-part question from the U.S. Advisory Commission on public diplomacy: State is arguably the leading organization formally responsible for preserving and strengthening the credibility of and public trust in the United States. So the first part is: How is the importance of this role being explained to budget decision makers in Congress? But also, what steps have been taken to develop a better understanding regarding how credibility and trust are developed?
DEPUTY SECRETARY NIDES: Well, first of all, it’s a very good question. The most important thing is for people to understand, with just 1 percent of the budget, 1 percent of the federal budget, we pay for everything we do at the State Department and USAID, for all of our diplomats, for all of our foreign assistance, for all of our global health programs, for everything we do on climate change, so what we do to help women and girls.
The activities of this Department and the men and women, the Foreign Service officers, civil service officers, the locally engaged employees, are operating – and in my view, on as – on 1 percent of the federal budget in which I should say, as a former businessperson, it’s a pretty good return on our investment. So I constantly, as Secretary Clinton is doing, is reminding the members of the Congress of the importance of our budget, but most importantly, to understand the value they’re getting from what we’re doing. And I think you just need to spend a few minutes in this building or, quite frankly, with the men and women in Afghanistan or Iraq or Pakistan or – and in Asia and in Europe, and spend time with our diplomats, and you’ll quickly realize that the investment that you’re receiving for 1 percent of the budget is significant.
So that’s the message we’re telling people. It’s getting through. We have bipartisan support for what we do here. I mean, there are friends of ours, it’s like a Lindsey Graham and Richard Lugar and people who are both Democrats and Republicans, liberals and conservatives. They understand the importance of supporting the State Department and USAID, but most importantly, understand the value proposition.
So every day, I wake up and think about how I present it. The good news is I’ve got a lot of support in doing so, and I think we’re – it’s during tough budget times, no question about that, but I think we are very focused on making sure they get the message, and I think it’s getting through.
MODERATOR: I’d like to just remind our participants to go ahead and, at the bottom of their window, go ahead and start submitting in their questions, and then we’ll move on.
First – another question now is: How does the military’s withdrawal of troops from Afghanistan and Iraq impact State and USAID.
DEPUTY SECRETARY NIDES: Well, it’s very interesting. As you know, the State Department is about ready to launch the largest civilian – military to civilian transition since the Marshall Plan. And we – it’s not without its challenges, but we’re ready. We have got an unbelievable group of people and leadership of people like Pat Kennedy, who’s our Under Secretary for Management, and Jim Jeffery, who’s our ambassador, and my chief of staff Stephanie Sullivan, who is spending time working with the likes of Ambassador Pat Haslach to basically send a very strong message about this is a different mission then we had with the military was there.
As you know, under the agreement that we had with the Iraqis, that our security arrangements change at the end of this year. So our troops are – approximately 50,000 men and women will be leaving Iraq, and the State Department will be stepping up their mission. It’s a civilian mission. It’s what the Iraqis want; that’s what we want. And we will have a huge impact. It’s a challenge. We’ve got – I think we’re up to the challenge, and I know we’re up for the challenge, but we understand the importance. Way too many lives were lost. Way too much money has been spent. We need to make sure that we are there, we’re there for the long haul, and to make sure we have a very robust diplomatic presence.
In Afghanistan, we are – as you know, the President Obama has announced that we will be withdrawing troops as we begin the transition between now and 2014. He announced that approximately 30,000 troops will be leaving in a period of time. And we, again, will be moving to a more traditional transition in Afghanistan over the next couple of years. The State Department is up for the task. The men and women of this institution are phenomenal. They understand the objective, and they will succeed in their mission.
QUESTION: We’d also like to remind our – those who are watching us, invited by the USGLC, you can also follow this conversation and stay in touch with us via Twitter @StateDept. And you can also engage with us on Twitter @EngageState.
Mr. Nides, moving on a similar vein, why should we spend so much in other countries when our own economy is suffering?
DEPUTY SECRETARY NIDES: Listen, I think it’s – first and foremost, I think we all understand how the American people are hurting. And I think there’s no question our priorities need to be very clear and very articulated. And our most important priority for the United States is to get the Americans back to work. Nine and a half percent unemployment is very difficult; a lot of people are hurting. But we have to make sure our priorities are set and we have to make sure we articulate to folks that it is in our national security interest to continue supporting lots of efforts around the world.
It’s not just about doing this because we want to; it’s because we need to. The fact of the matter is is that we need to be engaged in the world. As we understand there’s – between what we do on the economic piece, which I talked about earlier, how we open markets and allow for people to get jobs overseas, get people to – for us to sell our goods overseas, it takes diplomacy. It takes work. It takes us working with our colleagues in the Commerce Department, in the Treasury Department. But that’s a very important part of getting Americans back to work.
But it’s equally as important is in our own national security interest, what we do in places around the world in Africa, in places in the Middle East, where we’re focused on transition, it makes our country safer. I’d like to harken back to what our friend, Secretary – the former Secretary of Defense Mr. Gates once said, is for every dollar that we spend on diplomacy, we save five dollars with boots on the ground. That’s a great investment.
But I am sympathetic and certainly have enormous amount of concern to getting our economy here in the United States back on its feet. But it’s – part and parcel of that is is to make sure that we have the opportunities abroad to provide our open windows for manufacturing and technology and things that we are quite good at, and making sure we have the markets that are open to receive those goods.
QUESTION: And for our participants, if you may be experiencing some audio difficulties, go ahead and just submit your questions in the chat box at the bottom, and at the end, after we conclude, we’ll provide the link to the full video. Later on, it’ll be on YouTube and also on our website, state.gov.
Mr. Nides, we have another question from Barbora Nemcova. She asks: Since foreign aid is viewed as an effort to combat the root causes of extremism, why isn’t continuing aid more cost-effective and efficient in the long run than cutting it?
DEPUTY SECRETARY NIDES: I couldn’t ask that question better myself. I think that’s the argument we’re making. I mean, listen, we have to be smart about this. I mean, we – the State Department in – last year, in 2011, took about a 13 percent haircut from what we asked for. So we understand we have to give. And I think Secretary Clinton’s been very clear. One of the reasons she started the first ever QDDR, the Quadrennial Review, was to see how we could do things better, faster, and smarter. Most people don’t do those things unless there’s a problem. She decided to be proactive and get involved in a reform effort before she was asked to do that.
So we understand that we need to make sure that every dollar that we spend is used effectively. And we completely agree with the question, which is: Are these effective use of dollars? And I would say arguably without question. The issues – the monies that we spend on everything from Feed the Future to our Global Health Initiative, our PEPFAR programs, the things that we do in helping anything from what we do in an Africa to what we do in Tunisia, we do in Egypt, the world is changing. We have a limited amount of resources, but I fundamentally believe as, again, someone who’s spent plenty of time in business, to understand it’s all about the return of the investment, ROI. And I fundamentally believe that the return on the investment for the State Department is a double-digit return.
QUESTION: Our next question comes from Rolf Rosenkrantz. There are fears that USAID’s operating expenses will be cut up to 50 percent. What different scenarios are you anticipating, and how would you allocate the limited funds under each of them?
DEPUTY SECRETARY NIDES: Well, first, I don’t believe that that will happen. The USAID, under the spectacular leadership of Raj Shah, has done a very good job of articulating every day what we do. I mean, between the famine in Africa to flood relief in Haiti to floods in Pakistan, the USAID is all over the world doing things for children’s health, issues around PEPFAR and Feed the Future and programs all over the world, from educational programs to health programs. They’re bringing enormous value. I don’t believe that the Congress will cut their budget by that amount. But make no mistake, they will need to do more with less.
But we are – fundamentally believe that this is a bipartisan commitment to support USAID and the State Department, and we have a lot of great friends on the Hill. In fact, last week, we had a vote in the U.S. Senate where there was overwhelming support to avoid massive cuts to the State Department budget, both Democrats and Republicans. Almost 75 members of the Senate voted no on something that would have been fairly draconian for cuts in the Department. So I – we are going to have – there will be cuts, and we have to contribute like everyone else contributes. But I think, as they like to say, cooler heads will prevail, and we will have the resources to provide the needed things for not only the countries in which we serve but for the national security of the United States.
QUESTION: For our next question: What are some concrete examples of countries that have graduated, so to speak, from receiving foreign assistance from the U.S.?
DEPUTY SECRETARY NIDES: Probably the best of example of someone who has graduated is Korea. South Korea has become – was a recipient of aid for a long time. They no longer are. In fact, arguably, they are probably at the top of the list. As you know, we’re in the middle of finalizing a free trade agreement. The – we have a state visit coming in 10 days, and they’re a great example. And you see this all over the world. We – foreign assistance is not – no country wants to be a recipient of foreign assistance forever.
And quite frankly, the foreign assistance dollars is only a very small part of what we do for these countries. The diplomacy piece, quite frankly, is more important in some cases than the actual dollars spent. Having our diplomats on the ground working with these countries on rule of law, on democracy building, on conflict resolution, on creating financial systems, that’s the things that are important to these countries and that’s what we do most days and most nights.
QUESTION: We have another question from Barbora Nemcova with the Maternal and Child Health Integrated Program. And she asks: Do you think government aid agencies should do a better job explaining to the public that what they’re doing helps Americans, too, not only the people overseas?
DEPUTY SECRETARY NIDES: That’s a very question, and absolutely. I think that we talked about that a little bit earlier. We – when people are hurting here, and which people are, they need to understand that every dollar that we spent is being spent well. And I make a commitment on behalf of Secretary Clinton and all the men and women at the State Department – and again, there’s some fantastic people in this building. They wake up every day wanting to do what’s right for the American people and what’s right for the United States of America. So I think we have to remind people that with just less than 1 percent, or 1 percent of the federal budget, we are providing unbelievable value both on health issues, with global health, which you just talked about, but everything from Feed the Future to helping peace processes to helping people in floods, but more importantly, helping the country become more secure.
This is about our national security. It is about an integrated national security budget, which we’ve been really working on and focusing on, to make sure that people understand that part of our defense is also part of a very robust, very important diplomacy efforts, and that’s what we are doing every day.
QUESTION: Pat Kushlis from the Whirledview, she asks: How will cuts affect hiring for the Foreign Service and the civil service, both at State and at USAID?
DEPUTY SECRETARY NIDES: Well, that’s a great question. Secretary Clinton made a commitment when she got here to increase the Foreign Service officers by about 25 percent and include – and also to increase the civil service officers by about 17 percent. Those are what we call stretch goals, and she’s fulfilling that to date. We’re at about 20 percent for 2011 and about close to that or 17 percent for the civil service. We hope we get to 25 by the end of next year. We may make it, we may not make it depending on how the budget goes. But the commitment is there to basically – and has been – to dramatically increase the Foreign Service.
I think it’s very important to understand that Secretary Rice – Condoleeza Rice also deserves credit for this. She started the increase in hiring when we came in. The Secretary Clinton built upon that, made a double-down commitment to do it. But we’re also very cognizant of the fact that we have very strong budget winds in front of us. So we have to be smart about it, but we are deeply committed to increase the Foreign Service and the civil service to provide them the opportunities, the training, the education they need to succeed at their job.
But I – it’s interesting. Every day, I am amazed by the quality of the people in this building and the quality of the people that I meet all over the world. And I think by adding more Foreign Service and civil service officers, we’re able to use the best asset that we have, which is our diplomacy. Our ability to put people on the ground, to work with these countries every day, is the value proposition that we bring. No one else has it. No one else can do it. We can do it, and we do it with very superb execution, and it’s an honor to be part of that.
MODERATOR: We’d like to remind our participants and viewers that they can follow us on Twitter @StateDept, and also they can follow us on – @ EngageState.
So moving on, we have another question from the Advisory Commission on Public Diplomacy: In your opinion, how much of the cuts are the result of a lack of knowledge about, or appreciation of, the activities of the State Department?
DEPUTY SECRETARY NIDES: Listen, I think everyone’s well-meaning. I think when people are obviously concerned about the economy, people always look at how the U.S. Government is spending their money, and they should. It’s my money, it’s your money, it’s everyone’s money. And I – so I’m under no illusions that we have to prove to people every day. The one thing I can tell you is we wake up every day making sure that every dollar we spend is well spent. Secretary Clinton is fixated on making sure that we do things better, faster, and smarter.
And so I think there is – I wouldn’t say a lack of knowledge, but it’s an interesting statistic. There was a poll recently done that most Americans think we spend between 20 and 25 percent of the federal budget on State and USAID. I only wish it to be true. It’s not. As you know, it’s 1 percent of the federal budget is spent. And I – again, as I’ve said many, many times, it’s a great return on the investment.
MODERATOR: I have another question – we have a question from Didier Trinh, who’s with Modernizing Foreign Assistance Network, and asks: If you could name three ways in which State and USAID are ensuring that foreign assistance dollars are spent wisely, what would they be?
DEPUTY SECRETARY NIDES: Well, first, as you know, we started an initiative a year ago called the QDDR. The QDDR actually has 19 separate work streams, and many of those work streams are about doing things more efficiently – better, faster, smarter. It’s – USAID themselves had a USAID AFFORD, which was their commitment to doing things in a better, more – in a smarter, faster way. And it was their opportunity to be a reform effort.
The Secretary Clinton has talked about 21st century diplomacy. The QDDR effort was all about 21st century diplomacy. How do we think about things in a different way? How do we communicate in a different way? How do we organize ourselves in a different way? Doing all that has helped us think about the world in a new way, in a 21st century way. We call it Smart Power, but we call it doing things in a non-traditional way, and I think we have been very successful in doing that. So I’m very pleased by the efforts of the QDDR and the leadership that people have taken on. Reform’s not always easy. Change is not always easy. But this institution has embraced it in a way that I think would make most taxpayers feel quite proud.
MODERATOR: Our next question asks: I understand that State is now deemed a part of the national security budget. How does State work with other national security agencies?
DEPUTY SECRETARY NIDES: Well, that’s actually a good question. We – as you know, about two years ago, under the leadership of Jack Lew, a spectacular – he took my job; he probably did a much better job than I’m doing, but he went on to become the OMB director – he talked about this with Secretary Clinton, about the need to combine the State Department and USAID’s budget in the national security framework. And with the leadership of individuals like Liz Schrayer, we really made the case and, quite frankly, we were successful in doing that.
It’s not just about a national security budget. It’s about how the State Department and the DOD work together. The Department of Defense and the State Department has, under the leadership of both Secretary Clinton, former Secretary Gates, and now Secretary Panetta, realize that we’re a partnership. We work closely together at – in Afghanistan and Iraq and Pakistan, the frontline states. But we obviously have our prerogatives, which we need to protect. But that does not mean we shouldn’t be working together. And when we talk about the State Department and USAID, we talk about it in a way – we talk about it as a – it’s national security. It’s not just about defense. As I pointed out to you, it’s about defense, diplomacy, and development – all part of it. It was Bob Gates who said in testimony that every dollar that we spend at the State Department is a – is worth $5 of savings, which means that they don’t have to put boots on the ground. We see that every day.
And so the reality of this is that the national security budget is something that has evolved because the relationship has evolved, and we will be working closely with our friends at the Defense Department and the other national security agencies to make sure that we get our adequate resources. I have no doubt that Secretary Clinton, and with the leadership of the Department, will be very much focused on making sure that we have an integrated operation, more importantly to make sure the people understand the importance of State Department and USAID in kind of the context of the national security budget.
MODERATOR: Looking at U.S. assistance, what would be the impact of reductions to global health funding?
DEPUTY SECRETARY NIDES: Well, it’s a serious issue and I think you have to – as you know, we – about two years ago when we announced the global health initiative, that is obviously an initiative that included the PEPFAR initiative, work that we are doing on children’s and girls, as we did also in areas around malaria, and areas that the Global Health Initiative focused on.
We are concerned about it. And as Raj Shah has talked about, we’re very much concerned about massive cuts in this area. I feel confident that at least, specifically on the PEPFAR dollars, that there is bipartisan support for PEPFAR. I give former President Bush lots of credit for starting the initiative, but quite frankly what we have done, we’ve now taken that initiative and that platform and built upon it.
The platform is spectacular and it’s important to use that platform to help on the areas of malaria and TB, and then making sure that we take the energies and the work that’s been done on PEPFAR with people like Dr. Goosby, who’s a spectacular physician who’s run the PEPFAR program. and he understand that we needs the funds to basically not only continue to fight AIDS but, more importantly, to use the platform to help us work on other issues around global health that could change dramatically the population and the health of the population, but also make sure that our national security interests are very much in play.
QUESTION: On the same line of questioning, but a little bit more specific: How will cuts to food security funding and food aid affect the response to the famine in the Horn of Africa?
DEPUTY SECRETARY NIDES: Well, I’m concerned about it. I think we will have – and we have the funds currently to do what we need to do. And as you know, we’ve given probably $600 million already for this particular crisis. But make no mistake, we need to be funded, we need to have the resources, these crises come up and it’s not just about what the next crisis is, it’s about working with these countries on their own food production. Helping them think about how they better manage their agriculture productivity.
Conflicts are started because of food and resources. People need to be fed. And make no mistake: People who don’t have food have a very difficult time, not – obviously, surviving – but how they work against their governments and what they end up doing. People who are desperate do all sorts of desperate things. And they’re important for us to understand, it’s – we’re not doing food programs for – just because we want to be great humanitarians. That’s great, but that’s not what we’re necessarily all about. We’re all about our national security. It’s about protecting these countries, protecting the people, making sure they understand they have the tools they need to do the things they need, to make sure that they have the ability to not only feed themselves but feed themselves in the future.
QUESTION: Now looking at cuts, how could these cuts potentially impact the State Department’s activities with regards to countries that are a part of the Arab Awakening?
DEPUTY SECRETARY NIDES: Well, listen, I – of all times, this is not the time to, as I like to say, play small ball. I mean, we have, obviously, opportunities in places like Tunisia and Egypt and areas where we are very much – and focus on areas of Libya and places where we need to be making sure that we’re thinking about this in a big way. We’ve never had something like this happen in hundreds of years what’s happened in the Middle East. It’s transformed, and we aren’t sure exactly how it would all will play out over the long haul. But one thing I understand is that we need to be there. And we need to be there with our intelligence, we need to be there with our diplomats, we need to be there with our financial help.
It’s not just about writing checks, because we can’t do that. We can do enough; we need to there for loan guarantees and things that these countries need, areas where we look at different opportunities like enterprise funds where allows private section work with the public sector to develop opportunities. It is an opportunity that we cannot let go by. So we believe that the Congress will be smart about it because they understand, as we do, that this is a once in a hundred year opportunity. And we are focused on making sure that this – what’s happened in the Middle East for generations to come – that our kids benefit from the decisions we make today. And I think we’re on the road to it. We’ve done enormously – an enormous amount of good. But this is a critical time as these countries are now moving to democracy. They need our help, and we will be there, with the help of the Congress and with the help of some very smart diplomats.
QUESTION: Another question from the USGLC: If you’re not successful in getting the resources you need, what will be the impact on U.S. national security interests a year from now?
DEPUTY SECRETARY NIDES: Well, that’s a good question. I think the reality is, is that this is about the future. This is not about writing a check today or putting – opening up a new embassy in Tripoli or what are we going to do in Tunisia. It’s about the future. It’s about our kids’ future. It’s about our national security. This is not about Secretary Clinton or President Obama; this is about the future, this is about 10 years. We’re making an investment from – for 10 years, 20 years, maybe even 30 years of what we’re doing now. What happens in these countries will be – we have no idea the benefits this will have.
So obviously, we’re very much focused on making sure that we articulate the vision of what we need to do, and you know what the good news is? I think most people understand that. Even though people are concerned, if they believe that you’re spending the money the appropriate way, that they believe that it’s in our national security interest, if they believe that the leadership gets it, I think we’ll have the resources we need to do what we need to do.
QUESTION: Okay. Another question: What is the current state of play for State/USAID budget on Capitol Hill? And what’ll you be watching over the next few weeks?
DEPUTY SECRETARY NIDES: Well, that’s a very good question. We – as you know, the – or you may not know, the House of Representatives came out with a bill that dramatically cut our request. I think the bill was about – at about $39 billion. The Senate came out with a bill which was closer to $44 billion – again, a substantial cut from our request. My hope is that the two, the House and Senate, will get together and will be $44 billion. It is – I think there is a lot of good intentions. We have a lot of good friends who are working on our behalf. And I think, as I mentioned earlier, the Senate just two weeks ago had a vote that showed that there is massive bipartisan support to support the State Department and USAID.
And I think my view is that the parties will come together. We have friends like Chairwoman Kay Granger, who is the new chairwoman of our Appropriations Committee, working with Nita Lowey, who is the ranking member, with Lindsey Graham and – we have people who are committed to doing the right thing. And I am convinced that with the support of people who are watching or seeing this on their computer will understand the importance of it and will articulate that to whoever they may want to articulate it to about the importance of the State Department and USAID to our national security.
QUESTION: Well, before we wrap up, I’d like to give you the opportunity, if you have any closing remarks that you may have for our participants and our viewers.
DEPUTY SECRETARY NIDES: Well, first of all, thank you all very much for watching or listening or tweeting or doing whatever you might be doing. I appreciate all my friends at USLGC, who have been – really been – have been at the forefront of this battle for a long time, and my friend Liz Schrayer, who’s been focused on the issues about bringing the right message, because this is about message and about importance of making people understand that this is not about just doing good for good; this is about our national security. It’s about making sure that people understand there is the support between the U.S. military, the NGO community, the health community. The fact of the matter is the business community understands the importance of what we do about jobs in America and how we open up markets for them and how we give them opportunities.
So I am – although we’re very conscious at the State Department every day about how – the role we play here. The men and the women at the State Department get it. They wake up every day – many put their lives on the line every day. I was in Afghanistan just a month ago and just saw the commitment of our people, seeing hand to hand, shoulder to shoulder, with men and women of the military, and I see the commitment. But as I like to say, I’m kind of a bottom line kind of guy. I think most people would agree that with 1 percent – just 1 percent – of our federal budget, you’re getting your money’s worth. Even though it’s tough, even though it’s hard, I think people understand what we do every day for them is well worth the money, but they should understand that we’re committed to making sure we do it the right way.
So I want to thank everyone for watching, and thank you for putting this on.
MODERATOR: Well, that’s our time. Again, I’d like to thank our participants and viewers, and especially Deputy Secretary Nides, for joining us today. And especially for those who are experiencing any technical difficulties, you can continue the conversation on Twitter at @StateDept, and also @EngageState. And keep an eye out on our DipNote blog, where we’ll follow up on any questions that we weren’t able to get to today.
Thank you for your time.