| EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. 20503
| STATEMENT OF ADMINISTRATION POLICY (THIS STATEMENT HAS BEEN COORDINATED BY OMB WITH THE CONCERNED AGENCIES.)
June 26, 2000
(Senate)
S. 2522 - FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS APPROPRIATIONS BILL, FY 2001
(Sponsors: Stevens (R), Alaska; McConnell (R), Kentucky)
This Statement of Administration Policy provides the Administration's views
on S. 2522, the Foreign Operations, Export Financing, and Related Programs
Appropriations Bill, FY 2001, as reported by the Senate Appropriations
Committee. Your consideration of the Administration's views would be
appreciated.
The President has requested urgently needed supplemental funding to fight
against drug production and trafficking in Colombia, to provide disaster
assistance to victims of hurricanes and floods in the United States and
abroad, to lift crippling debt burdens for the world's poorest countries,
and to sustain our military and civilian operations in Kosovo and the
region, thereby protecting military readiness. Funding for UN peacekeeping
and other stabilization measures in Kosovo is especially important to the
eventual successful withdrawal of U.S. troops. The House passed emergency
supplemental legislation addressing some of these urgent needs on March
30th.
Regrettably, the President's supplemental request has moved slowly in the
Senate and now appears to be bogged down by a number of controversial
provisions. These include provisions that would severely hinder the
Federal Government's pending tobacco litigation, significant cuts to key
international programs, as well as a number of anti-environmental riders
and other objectionable provisions. Moreover, the Senate has fragmented
our consolidated request into separate bills, slowing the process
dramatically and jeopardizing this urgently needed funding. If a bill
containing such provisions listed above were presented to the President,
the President's senior advisers would recommend that he veto the bill.
The President's FY 2001 Budget is based on a balanced approach that
maintains fiscal discipline, eliminates the national debt, extends the
solvency of Social Security and Medicare, provides for an appropriately
sized tax cut, establishes a new voluntary Medicare prescription drug
benefit, in the context of broader reforms, expands health care coverage to
more families, and funds critical investments for our future. An essential
element of this approach is ensuring adequate funding for discretionary
programs. To this end, the President has proposed discretionary spending
limits at levels that we believe are necessary to serve the American
people.
Unfortunately, the FY 2001 congressional budget resolution provides
inadequate resources for discretionary investments. We need realistic
levels of funding for critical government functions that the American
people expect their government to perform well, including education,
national security, law enforcement, environmental protection, preservation
of our global leadership, air safety, food safety, economic assistance for
the less fortunate, research and technology, and the administration of
Social Security and Medicare. Based on the inadequate budget resolution,
this bill fails to address critical needs of the American people.
The Administration appreciates efforts by the Committee to accommodate
certain of the President's priorities within the 302(b) allocation.
However, the inadequacy of the 302(b) allocations has forced the Committee
to make choices that are simply unacceptable. As a result, the Committee
bill is more than $1.7 billion, or more than 11 percent, below the program
level requested by the President. A bill funded at this level would be
grossly inadequate to maintain America's leadership around the world. It
would inevitably require reductions from previously enacted levels for
programs managed by the Departments of State and the Treasury, the Agency
for International Development, and others, as well as preclude funding for
important new Presidential initiatives. In addition, the bill does not
provide urgently needed FY 2000 supplemental funding to provide debt relief
to the world's poorest countries for which the President has proposed an
offset.
Finally, the bill contains numerous objectionable provisions and a
substantial number of earmarks that would seriously limit the President's
ability to conduct an effective foreign policy. If the Congress were to
enact a bill that does not provide the resources necessary to conduct an
effective foreign policy and resolve the significant language problems in
the current bill, the President's senior advisers would have no choice but
to recommend that he veto the bill.
FY 2001 FOREIGN OPERATIONS LANGUAGE AND FUNDING
Language Issues
As noted above, the bill has numerous objectionable earmarks and language
provisions. The following items are particularly objectionable.
- Russia/Chechnya. The Administration shares the concern of the
Committee over the Government of Russia's massive use of military
force against civilians in Chechnya and continues to push for access
for the Organization for Security and Cooperation in Europe (OSCE),
the International Red Cross, and other observers to investigate
possible abuses of human rights. However, the Committee's language
cutting off all aid to the Government of Russia if progress is not
made on this front would shut down threat reduction and infectious
disease programs vital to U.S. national security interests. The
Administration looks forward to working with the Congress to find a
mutually acceptable way to ensure Russia's cooperation in this arena.
- Kosovo Burdensharing. The Administration shares the Committee's
goal of ensuring that our allies carry the lion's share of the burden
of the costs of reconstruction and recovery in Kosovo. However, the
Committee's formula making any U.S. obligations contingent on
certification that U.S. contributions do not exceed 15 percent of
total obligations and expenditures by all donors is problematic. This
approach would cede U.S. sovereignty to foreign nations by handcuffing
our contributions to their contributions and it would call U.S.
credibility and commitments into question. We have been pressing our
European allies vigorously on moving rapidly on their pledges of
assistance, and our allies have responded. Making our assistance
contingent upon the actions of the international community, however,
would hinder our ability to influence events on the ground. We need
to move quickly to construct democratic institutions, revive the
economy, and reestablish public security, reducing the burden on our
troops and the rest of the Kosovo Force (KFOR).
- Early Disbursement for Egypt. The Committee has not included
language requested by the President to permit early disbursement of
the planned FY 2001 Foreign Military Financing (FMF) outlays for
Egypt. The proposed language responds to a House Appropriations
Committee report, which calls on the Administration to develop
mechanisms that will make our assistance to Egypt more flexible and
effective, and a Senate resolution urging the Administration to
provide Egypt access to an interest bearing account. The
Administration developed a proposal that reflects concerns expressed
by the Committee during last year's budget process and meets, we
believe, the previously stated congressional objectives.
- Constitutional concerns. Several provisions included in the
Senate Committee bill, including sections 514, 565(b), and 584(b)(1),
purport to direct the vote of United States representatives to
international financial bodies. Section 565(g)(3) also purports to
infringe upon the President's authority over diplomatic negotiations.
These provisions raise serious constitutional concerns regarding the
responsibility of the President to formulate the position of the
United States in international fora. As such these provisions will be
construed as precatory.
Section 576 "Kyoto Protocol," which purports to prohibit
implementation of the Kyoto Protocol is unnecessary, as the
Administration has no intention of implementing the Protocol prior to
ratification. To the extent that these provisions could be read to
prevent the United States from negotiating with foreign governments,
it would be inconsistent with the President's Constitutional
authority.
Section 6101(a)(2), provides that "[t]he Secretary of State shall
consult with internationally recognized human rights organizations
regarding the Government of Colombia's progress in meeting conditions"
relating to human rights. In order to avoid constitutional concerns
regarding the President's sole negotiating authority we would not read
this provision to mandate such consultations to the extent that the
President determines that such consultations would interfere with his
diplomatic initiatives.
Finally, in order to avoid intrusion into the President's
negotiation power and his ability to maintain the confidentiality of
sensitive diplomatic negotiations, we would not interpret sections 567
or 6104(a) as requiring the President to disclose either the contents
of diplomatic communication or specific plans for particular
negotiations in the future.
Funding Issues
As noted above, the Committee bill does not provide sufficient funding for
a range of programs.
- International Debt Reduction. The Committee bill cuts the
Administration's request of $262 million for debt reduction programs by
$187 million, or 71 percent and, as discussed below, also does not fund the
supplemental request. Funding at this low level would stall debt relief
under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. In
particular, the lack of sufficient resources, and authorization, to provide
a U.S. contribution to the HIPC Trust Fund would mean that there would be
insufficient resources to provide debt relief to many of the poorest
reforming countries in Latin America and Africa, in part because other
bilateral donors will base their future contributions to the HIPC Trust
Fund on a substantial U.S. contribution. This provision is especially
troubling in light of the strong, bipartisan action earlier this year by
the Senate Foreign Relations Committee to authorize the full Administration
request. Funding at this level would also significantly limit the ability
of the United States to encourage countries to invest in their tropical
forests through innovative debt treatment mechanisms under the Tropical
Forest Conservation Act (TFCA). Furthermore, it does not provide the
advance appropriations requested for multilateral and bilateral debt relief
in FY 2002 and FY 2003, respectively.
- Nonproliferation, Anti-terrorism, Demining, and Related Programs
. The Senate Committee bill cuts the Administration's request of
$311.5 million by $96.5 million, or 31 percent. In particular, the
Committee has cut $20 million from the $55 million request for the
Korean Peninsula Energy Development Organization (KEDO), leaving
insufficient funds to purchase necessary shipments of fuel oil, which
we are required to provide under the 1995 Agreed Framework. The
Committee's recommendation of $20 million for Science Centers in
Russia, Ukraine, and Kazakhstan is $25 million, or 56 percent, below
the Administration's request and $39 million less than the $59 million
provided in FY 2000. This massive reduction would result in less
support for scientists with expertise in weapons of mass production,
thus increasing the risk they will work with rogue states. The
Committee zeroes out the $38 million requested for a new
anti-terrorism and security training center and imposes large
reductions in Export Control Assistance, the Comprehensive Test Ban
Treaty (CTBT) Preparatory Commission, the Terrorist Interdiction
Program, and the important new small arms destruction program, all of
which would severely hinder programs to help reduce the threat of
proliferation and terrorism.
- Peacekeeping Operations. The bill cuts the Administration's
request of $134 million by $49 million, or 37 percent, which would
seriously jeopardize our peacekeeping efforts around the world,
forcing dramatic cuts to programs such as the U.S. component of the
civilian police contingent in East Timor, support for regional
peacekeeping initiatives in Africa, and our efforts to train African
militaries for peacekeeping operations. Such a reduction would
additionally leave us without the means to pay our fair share of
Organization for Security and Cooperation in Europe (OSCE) mission
assessment for elections and governance programs directly supporting
the peace processes in Bosnia and Kosovo.
- Multilateral Development Banks (MDBs). The bill cuts the
Administration's request of $1.354 billion by $326 million, or 24
percent. This cut would result in an increase of $159 million, or 35
percent, in arrears -- to a total of over $600 million, continuing to
reverse the progress made in the FY 1998 and FY 1999 appropriations
towards meeting our past-due obligations to these institutions. The
impact of lower funding and, in turn, additional arrears has
implications for all the MDBs, and in some cases, threatens new
operations in the near term. Of specific concern are the proposed
cuts to the International Development Association (IDA) ($85.6
million, or 10 percent) and the Global Environment Facility (GEF)
($125.6 million, or 72 percent). These cuts, combined with
significant reductions in overall MDB funding, would limit the
institutions' ability to achieve U.S. priorities, such as
well-targeted support for the poorest, and would undermine our ability
to exercise leadership and leverage in these institutions.
- International Narcotics Control and Law Enforcement. The bill
cuts the Administration's request of $312 million by $92 million, or
29 percent, which would reduce this funding to pre-1999 levels. This
would force the State Department to scale back many small programs,
such as Caribbean counter-drug initiatives, that had been expanded in
accord with congressional direction and funding increases. Taken
together with the fact that the bill does not provide the requested
$256 million in Plan Colombia funds for FY 2001, this funding cut
could represent a large step backward in America's ability to stop
drugs at their source. At this critical time, it is important for the
United States to maintain its worldwide effort to reduce the plague of
drugs on our society.
- Assistance to the Independent States. The bill cuts the
Administration's request of $830 million by $55 million, or seven
percent. These funding reductions are exacerbated by earmarks that
restrict the Administration's flexibility to respond to unforeseen
needs. While many of the earmarks are for programs or levels that the
Administration and the Committee both support, the combination of
earmarks and lower-than-requested funding would hurt our ability to
insure that scarce funds go where they will do the most good.
- Economic Support Fund (ESF). The bill cuts the Administration's
request of $2.313 billion by $93 million, or four percent. When
combined with the Middle East and various other earmarks, this would
result in a 22-percent cut to other crucial foreign policy programs,
including Indonesia and Nigeria, two of the four countries that the
Secretary of State has identified as key transition democracies. In
addition, such a cut would have an adverse impact upon regional
programs, particularly in Africa, and upon human rights and democracy
programs worldwide.
- U.S. Export-Import Bank. The bill cuts the Administration's
request of $963 million for program resources by $195 million, or 20
percent, which would reduce the Export-Import Bank's ability to
support U.S. exports by 17 percent ($2.6 billion) from the FY 2000
enacted level and by 20 percent ($3.2 billion) from the President's FY
2001 request. Lower export levels translate directly into lower
employment opportunities for U.S. workers and lower revenues for U.S.
companies. The requested level is necessary to help the Export-Import
Bank pay for the higher cost of international lending caused by higher
risk levels resulting from the international financial crisis and
represents only a modest increase over the Bank's capacity for FY
2000. The Committee's mark, therefore, represents a de facto
reduction in the Bank's capacity to support U.S. exports when compared
to the FY 2000 enacted level.
- Peace Corps. The bill cuts the Administration's request of $275
million by $55 million, or 20 percent, which would force the Peace
Corps to reduce the number of new volunteers by 1,250, effectively
reducing the total number of incoming Peace Corps volunteers by 16
percent, to a level not seen since FY 1987. The Peace Corps would
also likely be required to close up to 11 Peace Corps posts. A
reduction of this magnitude is in stark contrast to the overwhelming
bipartisan support shown for the Peace Corps program and would reverse
progress toward the 10,000 volunteer level mandated by Congress.
- U.S. Agency for International Development (USAID). The bill
cuts the Administration's request for development assistance and
health programs of $2.124 billion by $172 million, or eight percent.
Although in the aggregate these programs are increased above the FY
2000 operating year budget level, the large number of directives and
earmarks proposed by the Committee for the Development Assistance
account, including $100 million in funding for the basic education
program -- heretofore appropriated under the Child Survival and
Disease Programs account -- would effectively cut other discretionary
Development Assistance by almost 19 percent compared to the current
year. A cut of this magnitude would severely restrict USAID's ability
to support a variety of programs aimed at helping poor countries
develop economically, cope with environmental degradation, and support
fragile democracies. For example, at the Committee's funding level,
it would be impossible to fully fund the Administration's requests for
increased assistance to preserve biodiversity in tropical forests and
to promote clean energy technology without cutting deeply into these
other activities.
While the Administration appreciates the Committee's increase for
international family planning funding to no less than $425 million, we
urge the Senate to provide the full request of $541 million, including
$484 million to be budgeted from AID's Development Assistance accounts
and $57 million requested from other accounts.
The Committee's decision to increase funding significantly for
tuberculosis and malaria, among other things, would result in a
29-percent decrease in funds for other child survival and infectious
disease programs compared to the current year. Such reductions would
restrict appropriate responses to needs in child survival, other
infectious diseases, and development of effective health systems in
recipient countries. Although the Administration appreciates the
Committee's increase in global HIV/AIDS funding, to $225 million, we
urge the Senate to provide the full request of $244 million, thereby
demonstrating strong bipartisan support for the fight against this
deadly disease.
The bill cuts the Administration's request of $520 million for
USAID Operating Expenses by $10 million, or two percent. Since much
of the Agency's operating costs are fixed, including the cost of
replacing USAID's computerized operating system in FY 2001, the
proposed cut would force the Agency to delay planned replacement of
financial and procurement system, and engage in yet another round of
staff reductions.
Finally, the omission of transfer authority for USAID's
Development Credit Program would impede the Agency's ability to
mobilize local private capital for development purposes, including
microenterprises in the countries in which it works. The proposed
50-percent cut in USAID's credit administrative expenses would
likewise impede the Agency's ability to carry out newly implemented
credit reforms and effectively oversee its current $14 billion
portfolio and would be a further drain on USAID Operating
Expenses.
- Inter-American Foundation (IAF). The bill would terminate
funding for an agency that has effectively promoted U.S. development
interests by fostering self-help poverty reduction programs and
democratic practice at the grassroots level in Latin America and the
Caribbean. The IAF has successfully addressed its management issues
and set in motion a system to vet all grants with American Embassies
to prevent any unintended funding of groups with views antithetical to
peaceful, market-oriented, democratic development.
- International Organizations and Programs (IO&P). The bill cuts
the Administration's request of $357 million by $16 million, or five
percent. This would force sizable cuts of nearly 20 percent to
unearmarked but important democracy and environmental programs such as
the Organization of American States (OAS) Fund for Strengthening
Democracy and Montreal Protocol Fund for the Protection of the Ozone
Layer. The Administration appreciates the Committee's support for the
Global Alliance for Vaccines Initiative (GAVI) (funded in the USAID
Global Health account).
- African Development Foundation (ADF). The bill cuts the
Administration's request of $16 million by $1.6 million, or 10
percent. While the Administration appreciates the Committee's efforts
to support the ADF, the Committee's funding level of $14.4 million
falls short of the amount necessary for the ADF to implement new
HIV/AIDS prevention strategies in all ADF projects and launch a major
program in Nigeria.
- Migration and Refugee Assistance (MRA). The bill cuts the
Administration's request of $658 million by $43.2 million, or seven
percent. This level would be insufficient to fund anticipated refugee
admissions, humanitarian protection and assistance programs, and the
administration of these programs at an acceptable level. In
particular, this cut would have an adverse impact on the Up to
Standards initiative, which is designed to bring refugee assistance
programs in Africa up to a life sustaining level, and programs for
Palestinian refugees administered by the United Nations Relief and
Works Agency (UNRWA). The reduction would also have a severe impact
on the refugee admissions program, requiring reductions of 5,000 to
10,000 admissions from the request level. We are also troubled by the
congressional notification requirement for all U.S. contributions to
the United Nations High Commissioner for Refugees (UNHCR), which could
severely jeopardize the health and well-being of refugees and conflict
victims by limiting our flexibility to respond to refugee situations
in a timely manner.
- Trade and Development Agency (TDA). The bill cuts the
Administration's request of $54 million by $8 million, or 15 percent.
The Administration believes that the full request would enable TDA to
continue its support in developing export opportunities. In recent
years, the growing demand worldwide for TDA assistance has stretched
its existing resources to conduct its programs effectively.
- Foreign Military Financing (FMF). The bill cuts the
Administration's request of $3.538 billion by $19 million, or one
percent. After taking into account funding levels for vital Middle
East programs, the reduction is a 13-percent decrease in funding for
the rest of the world. When combined with the Committee's $22 million
in earmarks in the bill, this reduction would decrease our ability to
strengthen capabilities and vital ties with the militaries of new NATO
nations (Poland, Hungary, and the Czech Republic) and the nations of
South-East Europe. This reduction would also jeopardize our support
for the Philippines as they engage in efforts to ensure stability in
the region, and hamper our efforts to support building the
peacekeeping capabilities of African nations where peace is so fragile
in so many places.
FY 2000 SUPPLEMENTAL APPROPRIATIONS CONTAINED IN THIS BILL
The Administration opposes the three-bill approach taken by the Senate
regarding supplemental funding for critical domestic and foreign policy
needs. Our specific concerns with these portions of the supplemental
legislation attached to the Military Construction and Foreign Operations
bills are described below. We want to work with the Congress to ensure
that supplemental funding is enacted quickly and that urgent needs are met.
Kosovo and Southeast Europe
The Administration strongly opposes the lack of funding for any of the
requests relating to vital U.S. interests in the Balkan region including:
$107 million requested for critical United Nations (UN) peacekeeping
operations ($91 million for Kosovo, $16 million for East Timor); $195
million in SEED funds, of which $93 million would contribute to stabilizing
Kosovo; and, $285 million for the security and operational needs of
Americans carrying out these programs. The $35 million in requested
funding for the Foreign Military Financing Program and the International
Military Education and Training, both of which were supported by the House
supplemental, will enhance our efforts and ability to assist military
reform and reorientation in important nations in the Baltic region and
southern Europe.
Failure to provide this funding would sabotage U.S. efforts to gain greater
burden sharing by our European allies on economic reconstruction, and put
at risk the eventual, successful withdrawal of more than 10,000 U.S.
troops. SEED programs constitute the major component of our "exit
strategy." Not to provide these funds would be penny-wise and
pound-foolish and would undercut our leverage in the multilateral effort to
restore peace and democracy in the region. It would also prevent our
efforts to carry out the ongoing stabilization process and endanger
hard-won progress that has been made to date. Furthermore, continued delay
in providing peacekeeping funds would only cause us to accumulate new
arrears to the UN and undercut our efforts to reform the UN and reduce our
assessment rates.
Heavily Indebted Poor Countries (HIPC) Debt Forgiveness Initiative
The bill fails to provide any of the fully offset $210 million supplemental
that the President has requested for a contribution to the HIPC Trust Fund,
which helps to finance multilateral participation in the Initiative.
Without a significant U.S. contribution to the Trust Fund in FY 2000, other
donors are unlikely to make additional contributions, and countries that
would otherwise be eligible for HIPC debt reduction in FY 2000 will not
receive it. In particular, the lack of a U.S. contribution is likely to
prevent Bolivia and other eligible Latin American countries from receiving
HIPC debt treatment. We urge the Senate in the strongest terms to
reconsider its decision not to help reform-minded developing countries
focus their internal resources on health, education, and other social
sector investments that will reduce poverty for millions of the world's
poorest people.
Plan Colombia
The Administration commends the Committee's support for the governments of
Colombia and other countries in the region in their fight against drug
traffickers and would oppose efforts to reduce this funding. However, the
Administration has a number of concerns with the Committee's proposed
treatment of funding for Plan Colombia.
Plan Colombia is a comprehensive approach to combating drug production in
the region and requires the sustained effort delineated in the
Administration's proposal. Under that proposal, funding was requested
through both Defense and State Department accounts. The Committee splits
this comprehensive approach by addressing needs in the Military
Construction bill and the Foreign Operations appropriations bill. This
bifurcation is not a sensible way to address an integrated plan.
Setting aside that basic issue, the Administration appreciates the
Committee's consideration of the funding requests, particularly in the
Military Construction bill for the construction of essential Forward
Operating Locations in Ecuador, Curacao, and Aruba. However, we have
serious concerns with several funding issues and problematic provisions in
both the Military Construction bill and the Foreign Operations bill. The
problematic provisions in the Foreign Operations bill include the absence
of FY 2001 funding, restrictions on Colombia funding, many cumbersome
reporting requirements, and the substitution of Huey II for Blackhawk
helicopters, which would greatly hinder the implementation of the Plan.
In particular, the Administration strongly opposes the limitations in the
Foreign Operations bill on support for Plan Colombia. This provision,
which would forbid the use of funds not appropriated in the FY 2001
Military Construction or Foreign Operations appropriations bills from being
used to support Plan Colombia, absent a Presidential request and
congressional approval, is very onerous. This language could halt all
ongoing counter-drug programs, air traffic surveillance activities, routine
military training, intelligence collection activities, basic human needs
and development work, agricultural development, and U.S. Customs programs
linked to the Andean region, including those funded from appropriations
already enacted into law. This amendment also places an extremely
restrictive cap on the number of personnel who can operate in Colombia,
leaving far too little flexibility to carry out essential training,
development programs, and Plan Colombia oversight as needed.
The substitution of the 60 Huey II helicopters for the 30 Blackhawk
helicopters is also objectionable. The Huey II helicopters are
significantly less capable than Blackhawks, with slower speeds, smaller
capacity, and less range. In addition, it would take twice as many Huey
IIs as Blackhawks to fulfill the same mission, which means twice as many
helicopter pilots would need to be trained, and twice the amount of
infrastructure, such as hangar space, would be required.
Mozambique Relief and Reconstruction
The Administration has requested $200 million in emergency funding for
Mozambique and the region. The Foreign Operations bill provides $25
million, which is utterly inadequate to meet the massive reconstruction
needs in Mozambique and other affected countries. We urge the Senate to
provide the additional emergency supplemental resources to help Mozambique
and the other countries of the region continue their democratic and
economic progress.
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