107–814 Foreign Operations, Export Financing, and Related Programs Appropriations for Fiscal Year 2003
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S. HRG. 107–814 FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS APPROPRIATIONS FOR FISCAL YEAR 2003 HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE ONE HUNDRED SEVENTH CONGRESS SECOND SESSION ON H.R. 5410/S. 2779 AN ACT MAKING APPROPRIATIONS FOR FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS FOR THE FISCAL YEAR END- ING SEPTEMBER 30, 2003, AND FOR OTHER PURPOSES Agency for International Development Department of State Department of the Treasury Nondepartmental Witnesses Printed for the use of the Committee on Appropriations ( Available via the World Wide Web: http://www.access.gpo.gov/congress/senate U.S. GOVERNMENT PRINTING OFFICE 78–474 PDF WASHINGTON : 2003 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 COMMITTEE ON APPROPRIATIONS ROBERT C. BYRD, West Virginia, Chairman DANIEL K. INOUYE, Hawaii TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina THAD COCHRAN, Mississippi PATRICK J. LEAHY, Vermont ARLEN SPECTER, Pennsylvania TOM HARKIN, Iowa PETE V. DOMENICI, New Mexico BARBARA A. MIKULSKI, Maryland CHRISTOPHER S. BOND, Missouri HARRY REID, Nevada MITCH MCCONNELL, Kentucky HERB KOHL, Wisconsin CONRAD BURNS, Montana PATTY MURRAY, Washington RICHARD C. SHELBY, Alabama BYRON L. DORGAN, North Dakota JUDD GREGG, New Hampshire DIANNE FEINSTEIN, California ROBERT F. BENNETT, Utah RICHARD J. DURBIN, Illinois BEN NIGHTHORSE CAMPBELL, Colorado TIM JOHNSON, South Dakota LARRY CRAIG, Idaho MARY L. LANDRIEU, Louisiana KAY BAILEY HUTCHISON, Texas JACK REED, Rhode Island MIKE DEWINE, Ohio TERRENCE E. SAUVAIN, Staff Director CHARLES KIEFFER, Deputy Staff Director STEVEN J. CORTESE, Minority Staff Director LISA SUTHERLAND, Minority Deputy Staff Director SUBCOMMITTEE ON FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS PATRICK J. LEAHY, Vermont, Chairman DANIEL K. INOUYE, Hawaii MITCH MCCONNELL, Kentucky TOM HARKIN, Iowa ARLEN SPECTER, Pennsylvania BARBARA A. MIKULSKI, Maryland JUDD GREGG, New Hampshire RICHARD J. DURBIN, Illinois RICHARD C. SHELBY, Alabama TIM JOHNSON, South Dakota ROBERT F. BENNETT, Utah MARY L. LANDRIEU, Louisiana BEN NIGHTHORSE CAMPBELL, Colorado JACK REED, Rhode Island CHRISTOPHER S. BOND, Missouri ROBERT C. BYRD, West Virginia TED STEVENS, Alaska (Ex officio) (Ex officio) Professional Staff TIM RIESER MARK LIPPERT PAUL GROVE (Minority) JENNIFER CHARTRAND (Minority) Administrative Support ELNORA HARVEY (II) CONTENTS TUESDAY, FEBRUARY 26, 2002 Page Agency for International Development .................................................................. 1 WEDNESDAY, MARCH 6, 2002 Agency for International Development .................................................................. 61 Department of State ................................................................................................ 72 TUESDAY, MARCH 19, 2002 Department of the Treasury: Office of the Secretary ........................................... 97 WEDNESDAY, APRIL 24, 2002 Department of State: Office of the Secretary ........................................................ 127 Nondepartmental witnesses .................................................................................... 195 (III) FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS APPROPRIA- TIONS FOR FISCAL YEAR 2003 TUESDAY, FEBRUARY 26, 2002 U.S. SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, DC. The subcommittee met at 10:20 a.m., in room SD–192, Dirksen Senate Office Building, Hon. Patrick J. Leahy (chairman) pre- siding. Present: Senators Leahy, Durbin, Landrieu, and Bond. AGENCY FOR INTERNATIONAL DEVELOPMENT STATEMENT OF ANDREW S. NATSIOS, ADMINISTRATOR OPENING STATEMENT OF SENATOR PATRICK J. LEAHY Senator LEAHY. Good morning. I apologize for the delay, but we have been voting, and Senator McConnell is also tied up on the floor because of the next piece of legislation coming before the Sen- ate. Obviously, I will keep the record open for any questions that Senator McConnell has, or any statement he wishes to make. I do want to welcome USAID Administrator Natsios, who has the distinction of being our first witness at the first hearing of this sub- committee this year. Mr. Natsios, who is here to testify about the administration’s fis- cal year 2003 budget request for USAID’s programs, came to USAID after a successful career both inside and outside of Govern- ment. In a relatively short time, he has brought a very needed burst of energy and enthusiasm to the Agency. Mr. Natsios, I com- mend you for boosting morale the way you have. I am also pleased that you have given greater autonomy to USAID’s field missions, which are among the Agency’s greatest strengths. But you also have to deal with some extremely difficult problems that have plagued USAID for decades. I know you are willing to tackle these problems that include a cumbersome, overburdened procurement system and dysfunctional personnel and financial management systems. Fixing these problems is not going to be easy, but we will help you. Now, there are other serious challenges. One we often hear about is that proposals brought to USAID from private organizations, universities, and others from outside the Agency, including Mem- bers of Congress, too often receive only superficial consideration. People seeking funding for projects are often sent back and forth (1) 2 between Washington headquarters and field missions, only to be told that a final decision has to be made at the other location. It’s sort of like Major-Major in Catch-22. The major is out whenever he is in, and he is in whenever he is out. I have often said that USAID’s greatest asset is its employees, who are dedicated, hardworking professionals. But, no one has a monopoly on good ideas, and contracts should be awarded to those with the best projects, not just those who work the system the best. I am also concerned the administration has decided to let go some of its most capable people in USAID’s Legislative and Public Affairs Bureau. While they are political appointees, I would feel the same, regardless of who appointed them, because they have con- sistently acted in a professional and nonpartisan manner. They built solid relationships with both Republicans and Democrats and were outstanding advocates for USAID on Capitol Hill. By dis- missing these experienced public servants, I think that the admin- istration has probably hurt its ability to get what it wants from Congress. I have read your statement, and I agree with a good deal of it. The whole statement, of course, will be put in the record, as I know you will want to summarize it. While you make a convincing case for more funding for foreign assistance, the budget request itself falls far, far short. The $7.3 billion you request for USAID’s programs from the Foreign Ops Subcommittee represents only a modest increase over the fiscal year 2002 level. It is actually a decrease from last year if you factor in emergency spending. This budget appears to reduce funding for programs to protect child and maternal health, combat infectious diseases like TB and malaria, and assist vulnerable children. That is not a budget wor- thy of a great Nation. I will give you one specific example. In your statement, you discuss USAID’s Africa initiatives, but for education programs in sub-Saharan Africa, a continent of a billion people, many of whom are illiterate, you propose just $22 million. That is only a few times more than we spend on education for Vermont’s 100,000 students. I have no doubt that you probably asked OMB for additional re- sources, and that USAID could put more resources to good use. I know there are tough choices that have to be made, but if the ter- rorist attacks of September 11 taught us anything, they taught us about our mistaken sense of invulnerability. We should have learned that what happens in far-off places can have very terrible consequences for Americans here at home. Whether it is a terrorist attack on an American city, the prolifera- tion of weapons of mass destruction, or the ravages of AIDS, our security is directly and indirectly linked to events and conditions around the globe. With the exception of the cost of deploying our Armed Forces, the international affairs budget is what we spend on programs to protect our national security outside our border. Some may have asked a year or so ago whether illiteracy in Indo- nesia, Pakistan, or Afghanistan affects us here in the United States. Today, you don’t hear that question being asked. People who are educated can earn money to feed their families and partici- pate meaningfully in the political life of their country. In short, 3 these people are often among the greatest assets to efforts to pro- mote peace and prosperity around the world. Some of the organizations working on the front lines in these countries, as well as Senator McConnell and myself and others in Congress, have appealed for a lot more spending on foreign assist- ance to combat poverty and all the interrelated causes which in- clude unchecked population growth, political and economic insta- bility, corruption, destruction of the environment, drug trafficking, and terrorism. Year after year, regardless of which party is in the White House or whoever is in control of Congress, we do not pro- vide the amounts of foreign aid that we should. The President’s budget provides only $165 million for education for the world’s 2 billion poorest children. The President’s budget provides $1.3 billion for health care for the world’s poorest 3 billion people. That is barely half the amount we spend on health care for Vermont’s 600,000 residents. This is not acceptable. Year after year, this committee struggles to find a few more dol- lars to alleviate the suffering in refugee camps, which can be fertile grounds for recruiting terrorists. We argue about $5 or $10 million for micro credit to help the world’s poorest families start busi- nesses. We rob Peter to pay Paul to get a few more millions to vac- cinate against measles, which needlessly kills 900,000 children each year.