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Anne C. Richard, Director Office of Resources, Plans and Policy Remarks to the Hispanic Council on International Relations U.S. Foreign Policy Conference U.S. Department of State Washington, DC, April 26, 2000

Resources for American Leadership

Thank you all for coming today. I feel very privileged to speak to this group. I want to thank Mr. Valdez, Mr. Gomez, and you all for turning out and for being engaged in international affairs. I am going to talk from this handout that you should all have in your packets in front of you. So I'd like to walk through this briefly and then take questions at the end.

The first chart shows you how the federal budget is divided up. This chart varies very little from year to year, a few percentage points, perhaps. And to pick up on what Ambassador Sherman was saying, only 1%, that red segment, is devoted to the international affairs budget, which is the funding that I advise the Secretary about.

And, as Wendy said, most Americans would guess that that is much more. And in fact, I peeked ahead to Undersecretary Pickering's remarks for your lunch today, and he's going to tell you that most people think it's more and that it's actually only 1%. And that will be the third time, perhaps the fourth, you've heard that today.

So when he says that, since he is the number three person at the State Department and he is a very senior member of our career foreign service, I would appreciate it if you all look shocked and surprised to hear that for the very first time. But it's no mistake that we keep reinforcing it because I think there is a big misperception among the American public about this. And if there is one message I'd like you to take away, perhaps it is this one -- that we are only 1% of the pie.

Looking at the other pieces, you'll see that large amounts go to entitlement programs for Americans -- transfer payments, as we call them. Sixteen percent is for the "050" budget, which is our budget-speak for the defense budget. I am envious of my colleagues in the military who manage to get much larger budgets out of the Congress than we do. I do not begrudge them that funding. But I do make the point that people who believe that there should be a strong national defense should also want to put money in our budget, because we believe "an ounce of prevention is worth a pound of cure."

And then also that orange segment, which should be shrinking, is the interest on the national debt.

The next slide shows you how our budget is split out -- the way Congress looks at it. Congress appropriates money in appropriations bills, so $15.1 billion of the President's $22.8 billion request for fiscal year 2001 is in what's called the "Foreign Operations Bill." And this funds bilateral and multilateral assistance programs, largely -- some managed by the State Department, such as voluntary peacekeeping operations, assistance to the former Soviet Union, and assistance to Eastern Europe. But it's also all the development assistance programs that the U.S. Agency for International Development funds. It's our contributions to multilateral development banks and the regional development banks through the Treasury Department.

It's all the funding through the trade agencies that support U.S. business: Export-Import Bank, Overseas Private Investment Corporation, TDA (or the Trade Development Agency), and the Peace Corps, where I used to work. That 1% of the 1% is the Peace Corps, but I think that's well worth our funding.

The Commerce, Justice, State, and the Judiciary Bill also has a segment of the international affairs budget in it. This almost $7 billion is for the operations of the State Department, a global enterprise with embassies and posts all over the world. It also is where we have the funding for our contributions to the United Nations -- to pay our dues to the UN, and also to pay our share of the assessed peacekeeping operations that the UN conducts in global hot spots.

Finally, this part of the budget is where funding that used to fund the U.S. Information Agency and the Arms Control and Disarmament Agency can be found. Those programs and the funding has been folded into our budget. These agencies have been folded into the State Department. And so for example, the cultural and educational exchanges like Fulbright, which USIA used to manage, are now managed by the State Department in our budget.

Finally, the food aid the United States contributes overseas is in the Agriculture Appropriations Bill. And that and a small amount of funding for the U.S. Institute of Peace is what gets you up to $22.8 billion. We say it's only 1%. But for the person in the street, hearing $22.8 billion still sounds like a lot of money, and so I think what we have to do is make a good case justifying that money.

I believe Ambassador Sherman did touch on many of the things that are in our national interest that we are currently doing. Let me show you, though, how this has changed over time.

The next slide shows you the decrease since the high point of the mid-1980s and how we have suffered a 40% decrease in our funding since that time. And the low point was a few years ago. One of the things I like about working for Secretary Albright is that she has made resources a priority. Perhaps she's done that because she worked on the budget committee with Senator Muskie shortly after it was first created. But more likely, she's done it because as our ambassador to the UN, she saw the failure of the United States to pay its dues really undermine our ability to lead in that international arena.

So she has made a big effort to get our resources and to speak out on behalf of our resources. And so whenever she speaks, if you go on the State Department web site and you look at her speeches, toward the end of almost every speech she gives, probably every speech she gives she makes a pitch for our international affairs budget.

So I'd like to walk you back to the mid-1980s and that's why I have this slide that talks about what has happened in the post Cold War environment. During the Cold War, we spent money, essentially, in the war against communism, and we were going against the Soviets all over the world in trying to win friends and allies. And so you have seen since the end of the Cold War, the end of long-running assistance programs such as the Base Rights programs that we had in the Philippines, Greece, and Turkey, where we had military bases.

You've seen a very large decrease in the number of U.S. Agency for International Development missions all around the world since they have narrowed their focus on the number of countries that they are present in and the number of programs that they can carry out. At the same time, we've had an enormous expansion in the number of countries where the State Department works. And that would be a big expansion into Eastern Europe and the former Soviet Union. Also the break-up of Yugoslavia has increased the number of places we have to be in the Balkans.

There's been a big increase in UN peacekeeping missions. At the same time, because our funding for peacekeeping did not keep pace with the expansion and the missions, our bills mounted, and only last year did we reach a deal, the Helms-Biden Agreement with Congress, to actually start to pay down some of these arrears.

At the same time that our bills were going up, Congress increased its scrutiny of these programs, so there's been a great deal more discussion back and forth between the Executive branch and the Legislative branch about the purposes of these programs. And the guest who raised the question earlier about multilateral programs, certainly the focus on the UN has picked up since the end of the Cold War.

We've also had an increase, a change in the types of programs that we carry out overseas. Back during the Cold War you would have seen U.S. assistance going to large infrastructure programs: building dams, building roads. Now you will see more of an emphasis on technical assistance, such as training to promote democracy, to instill a respect for human rights, to instill respect for the environment, to fight terrorism, and to support our counter-narcotics programs.

If we zoomed in and we looked at just the tail-end of that slide that showed the sad decrease over time since the mid-1980s, you'd also see another phenomenon in the last couple of years. And this is the rather colorful slide that shows bar charts.

The yellow bar is the President's request of Congress each year for what we believe we need for the international affairs budget. And what we've been seeking for the last few years is $21-22 billion. And then what happens is that in our negotiations with Congress, there's pressure to push us into a sort of a smaller shoe box, to get us down below $20 billion.

Events over the course of the year unfold that require U.S. response. Sometimes these are opportunities, such as countries going from dictatorships to democracies. Sometimes they are threats or natural disasters, or complex humanitarian emergencies.

In fiscal year 1999, for example, the President requested $20 billion dollars; Congress enacted a little less than that. But over the course of the year, we had to seek $3.7 billion in additional supplemental funds. This was also in response to the bombings in Nairobi and Dar es Salaam, where we realized that the State Department needed much more money for security of its buildings. This was in response to the refugee crisis in the Balkans, in response to the Kosovo bombing campaign in support of the Kosovars, and in response to Hurricanes Mitch and Georges in Central America and the Caribbean. The red bar on this chart shows you where we end up at the end of the year, in fiscal year 1999. And in fiscal year 2000, it reflects our supplemental request that went up in February of money for Plan Colombia, money for Kosovo, reconstruction and putting Kosovo back to some sort of stability and normalcy in the lives of the people there, and also funding for debt relief for the heavily indebted, poorest countries, often referred to as HIPCs.

So that second red bar for fiscal year 2000 shows you where we would like to be this year. We've just sent up another supplemental, $200 million to address the flooding in Mozambique. We have enough money to address the immediate aftereffects, but we believe that additional U.S. assistance is needed for reconstruction in Mozambique.

The final two bars show the President's budget request of $22.8 billion, and the blue bar is where the concurrent budget resolution that the House and Senate just agreed to comes out -- $20 billion. This is a 12% cut. You see that the dance has already started again where we have this upward pressure in our budget in order to respond to all of the things going on in the world where we believe U.S. leadership is needed and called for. And then, the downward pressure to fit us into a much smaller budget. And so I fully expect this to be another one of these sort of dismal negotiations back and forth with the Congress.

The next slide that says, "Priorities of Fiscal Year 2001 Budget Request" shows you what we are seeking that's new and different in the fiscal year 2001 budget that was formulated starting last spring. The Secretary had a series of reviews over last summer, where she asked bureaus what they needed and they made presentations to her. She spent a lot of time on this. She takes it very seriously. The list, therefore, reflects where we felt we were severely lacking in funding and what we were then able to get the President to endorse before submitting to the Hill.

Over a billion dollars is sought for the construction of secure embassies and for other measures to secure our embassies and posts abroad. This is obviously an issue that's right at the top of the Secretary's list. Also, we are seeking funding though, for the promotion of democracy. And Ambassador Sherman already mentioned the four key priority democracies of Columbia, Nigeria, Indonesia, and Ukraine.

Colombia, obviously, is not just an issue in terms of promotion of democracy. We'll also address them below in transnational threats. The next issue is southeast Europe. This is clearly a priority for the Clinton Administration. We found that we had great support from Congress when we wanted to respond to the refugee situation and provide humanitarian assistance. We find it's much harder now to get agreement over the amounts of assistance that we should provide for the recovering Kosovo and the economic and political integration of the entire Balkans region into the rest of Europe.

We are seeking continued funding for the New Independent States. Wendy Sherman already mentioned our ETRI, our Expanded Threat Reduction Initiative. The idea there is to prevent the transfer, the movement of scientists from the former Soviet Union to other countries. These scientists who used to work on weapons of mass destruction, we don't want them to take their knowledge and take it elsewhere. We want them to stay put and devote their scientific efforts to friendlier aims. It's also to prevent the movement of materials and weapons that we don't want to fall into the wrong hands.

But we also have efforts underway to promote democracy and economic reform in the former Soviet Union. And so some of our funding goes for those goals. One of the Secretary's efforts is a commitment to increase support for Africa, and so this is on our list. And we do that in many different ways, both in terms of conflict resolution, but also in terms of promotion of democracy and economic reform. I had already mentioned that Nigeria was one of our key countries. And our focus on Africa also sort of blends then with our next issue on transnational threats.

Because Africa is one of the theaters where we are fighting the war against the spread of HIV/AIDs, and we have significant funding in this budget to fight deadly diseases such as HIV/AIDs, we are seeking funding for a global alliance for vaccines. We're working with UNICEF and others in New York to raise money to make sure that people overseas can get access to the vaccines and that children can get inoculated.

The other transnational threats I mentioned are a big effort to fight terrorism and also to put narco-traffickers out of business. Obviously, that's a big thrust of our Plan Columbia proposal.

I'll just wrap this up by saying that the Secretary is committed to returning family planning programs to fiscal year 1995 levels. These are programs that U.S. Agency for International Development runs, and also for environmental initiatives. And debt relief, as I mentioned, the Treasury Department manages these programs, but they are focused on freeing up resources in the heavily indebted poorest countries that could be perhaps better spent on schools, health clinics, and local needs.

The final slide here takes our seven national interests that we have developed in our international affairs strategic plan: National Security, U.S. National Security, U.S. Economic Prosperity, Protection of American Citizens and U.S. Borders, Law Enforcement, Promotion of Democracy and Human Rights, and that abiding one of providing Humanitarian Response in times of crisis, which we find is very well supported by the public.

And then these global issues of environment, population, and health. These seven national interests are what we organize our budget around and try to explain and try to justify to folks why this funding is not just a giveaway program to foreigners, but instead, is funding that is indeed in the U.S. national interest and benefits U.S. citizens and taxpayers.

Finally, we use our funding also for our diplomatic presence overseas, where we have to pursue all of these interests and all of the various competing at times for goals on behalf of U.S. citizens. So this last slide, I won't go through the whole thing, but I wanted you to get a sense of the range of programs and the variety of initiatives that the State Department takes the lead in pursuing and that the Secretary takes the lead in pursuing as the chief Cabinet member among these international affairs agencies and on behalf of the international affairs budget.

So my final message to you before I take questions is, we are only 1% of the federal budget, and secondly, these are not aid to foreigners, in terms of that sort of traditional 1980s view of foreign aid, but instead, this is spending in our national interest. Thank you very much.

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