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Powelll On FY 2004 Budget (As Delivered)

President s International Affairs Budget for 2004

Secretary Colin L. Powell Testimony before House Cmte on Appropriations Scmte on Foreign Operations, Export Financing and Related Programs Washington, DC March 13, 2003

CHAIRMAN KOLBE: The Subcommittee on Foreign Operations, Export Financing and Related Programs will come to order. Mr. Secretary, it's my pleasure to welcome you here this morning. Before I do, let me also welcome our other -- our new members who are here. I should say new and old members returning. Ms. Kaptur has been on this subcommittee before and we welcome her back --

MS KAPTUR: Mr. Chairman, if I could ask the gentleman to yield, I would hope you don't say "old," but "former."

CHAIRMAN KOLBE: Former member, thank you. Thank you. I stand corrected. Definitely.

And new members that are on this subcommittee for the first time and on the full Committee for the first time include Mr. Kirk at the end there. We also have Mr. Vitter and Mr. Crenshaw who I believe will be with us here shortly. So we welcome them as members of this subcommittee.

Mr. Secretary, your country and certainly this Committee holds you in very high esteem, as the primary foreign policy advisor to the President in what I think are clearly very challenging times. I know that all the members are anxious to ask questions and exchange views with you, so I'm going to make my remarks brief.

The topic of today's hearing is the fiscal year 2004 budget. But with a showdown looming with Iraq and a costly supplemental expected, I have to say that it's not always easy to focus on the 2004 budget, but I'm going to try anyhow.

The President's request for fiscal year 2004 is $18.8 billion. That's a 15 percent increase over last year. Mr. Secretary, it's a bold, it's an ambitious request. And as one who has consistently argued that we must see our foreign assistance budget as part of a national security -- a larger national security strategy, I applaud you. But I do have many questions about the details. And in the end, of course, it will be the details that will determine the levels this subcommittee recommends to the committee and the committee recommends to the House. I have to say we will need vigorous support by the President if we are going to see this increase materialize at the end of the appropriations cycle.

It will be difficult to secure the requested increase unless our members are shown effective executive branch management of international programs. The budget contains three new presidential initiatives, all of which raise management concerns. There's a $100 million request for a complex contingency fund, a $200 million request for a famine fund, and there's a $450 million request for an emergency plan for AIDS relief.

I confess that I find myself a bit perplexed as to which agency is going to administer the funds for each of these and who will be answerable to this committee in regards to its implementation. Consider for a moment the proposed $450 million emergency plan for AIDS relief. It is still unclear what role the President contemplates for USAID, for the State Department, and for the Department of Health and Human Services in implementing the implementation of this third initiative that deals with AIDS.

The funds for complex emergencies and famine relief would be under the President's direct control. Hence, they will largely be managed by the Office of Management and Budget, which raises some real concerns for us since they are outside our reach to talk to and to have them testify for us.

The Millennium Challenge Account, the multi-billion dollar proposal first unveiled a year ago provides another case in point that raises organizational questions. The President requested a new Millennium Challenge Corporation that would reside outside of both the State Department and USAID. Let me be clear, I support this initiative. I was very enthusiastic to be with the President in Monterrey, Mexico, when he announced the 50 percent increase in development assistance, and I'm a very strong supporter -- in fact, I wanted to include a pilot program in the 2003 omnibus bill. Unfortunately, we didn't have the details worked out at that time to make it possible for the administration to have an implementation and marketing strategy for this program.

Mr. Secretary, your role as well as the role of USAID and the Department of Treasury is not clear in all of these initiatives. I don't understand why the Secretary of Treasury would be on the board of this new MCA corporation but not the administrator of USAID. Maybe the tone in my voice reflects some anxiety about the future of foreign aid without USAID and the State Department at the center. But it presents a challenge for you and Administrator Natsios to convince the President that your agencies can do the job, that your officials can live up to his vision of effective delivery of foreign assistance. The very fact that I express this anxiety suggests that I have that confidence in you and I know that the President does as well.

Let me be very blunt. To my thinking, many of these initiatives appear to challenge the primacy of the Secretary of State as the President's primary advisor and chief executive -- chief executive officer for foreign affairs. At a time when the respective roles for the Department of State and USAID are undefined and often overlapping, a vacuum has emerged that encourages the Executive Office of the President and the domestic Cabinet agencies, such as Departments of Health and Human Services and the Treasury to seize important roles in managing international assistance program. Perhaps U.S. national security and foreign policy challenges are so great that some of this mission creep is inevitable.

Finally, let me turn to Iraq. The committee has not been consulted in depth about the overall requirements for Iraq between now and the enactment of the promised supplemental. We're aware that 2003 funds that were appropriated for other programs are in the process of being reprogrammed. But that approach won't be sufficient to meet the likely requirements for reconstruction and relief that will be needed during the next several months. This is a cavalier approach to Congress by the Executive Office of the President that follows a pattern we encountered while seeking to identify funding requirements for Afghanistan.

I want to make it clear as I did just a moment ago, Mr. Secretary, my remarks are not aimed at the Department of State. I not only have great confidence in you, but I want to thank -- personally thank you and Deputy Secretary Armitage, Assistant Secretary Paul Kelly for your efforts to keep the committee fully informed. Your team, frankly, I think, could serve as a model for superb executive-legislative branch relations.

I am going to do something just a little bit out of the ordinary at this point. Before I turn to the Ranking Member for her statements and for the other opening statements, I'm going to exercise my prerogative as Chairman to address one issue that I think deserves special attention today. And that is the co-relationship between the issues of Iraq and Israel. Recently, the discussion of our policy in Iraq has included considerable speculation about the extent to which the state of Israel and its American supporters drive that policy. Last week, columnist Robert Novak questioned the wisdom of our policy because, in his view, many current members of the Bush administration have, in the past, publicly linked the removal of Saddam Hussein with support for Israel. Yesterday, The Washington Post published an editorial entitled, "Blaming the Jews," that stated it wouldn't necessarily be anti-Semitic, just demonstrably wrong to argue that Mr. Bush's Iraq policy is motivated primarily by a desire to protect Israel.

I'm hesitant to raise this issue, but I think it's a timely opportunity for you, as Secretary of State and the chief foreign policy spokesman for the United States, to remind all of us of the actual origins of our Iraq policy. You can help end any speculation that our policy was developed and is being pushed by some kind of conspiratorial manner by supporters of, whether it's Israel or Saudi Arabia or any other group -- nation or group, ethnic or otherwise that attempts to influence the workings of our government.

And so before I proceed to the other opening statements, I would like to respond to that last point if you would, Mr. Secretary.

SECRETARY POWELL: Well, thank you very much, Mr. Chairman, and I'm very pleased to be here with you and let me respond to that last point. U.S. policy with respect to Iraq is not just something that has been developed in the last month or so. One can go back many years to the end of the Gulf War; and when that war ended resolutions were passed that said Iraq should disarm itself of its weapons of mass destruction, and you well know the history of the last 12 years of continued Iraqi defiance of their obligations under their resolutions, a total of some 16 resolutions; and finally 1441 was passed by the United Nations where a whole international community came together. Arab nations and European nations and nations in this hemisphere came together and said Iraq must be disarmed. And it has been U.S. policy for many years that Iraq should be disarmed.

In 1998, when there seemed to be no progress toward the disarmament of Iraq, the administration at that time put in place what called, "Regime Change Policy," which seemed to be the only way to get this regime to disarm -- was to change the regime, itself and that policy was also put in place by the United States Congress, which in legislation passed in 1998 supported efforts as may be necessary to get a change in the regime.

This administration came in. The President examined very carefully our policy with respect to all the nations of concern to us, whether it was Iraq, Iran, North Korea, other nations, and he continued the policy of regime change didn't -- not expecting that there was any other way to disarm Iraq. But the President took one last chance for peace, and that's when he went to the United Nations to see whether or not this regime would change itself in the presence of 1441 and massive international political pressure as well as the build up of military forces to support diplomacy or to militarily change the regime. This is a policy that was developed over two administrations over many years and it remains our policy today; it is driven by our own national interests, it is driven by us trying to help the United Nations do its job, it is driven by our concern for the people of Iraq.

Of course we have a concern for the state of Israel. We have been one of Israel's strongest supporters if not its strongest supporters for many years, 50 years, and we will continue to do so. But we have other friends in the region, as well. All across that part of the world we have close alliances, whether it's Saudi Arabia, whether it's Egypt, these are nations that have been friends of ours for many years. We also have a commitment to trying to help the people in the Occupied Territories to create a Palestinian state; and President Bush is committed to that.

So we have a comprehensive policy for the region, and the strategy with respect to Iraq, has derived from our interests in the region and our support of UN resolutions over time. It is not driven by any small cabal that is buried away somewhere that is telling President Bush or me or Vice President Cheney or Condi Rice or other members of our administration what our policies should be.

I would also point out that this past fall, the Congress of the United States passed another resolution supporting the President's efforts to cause Saddam Hussein to come into compliance; and the joint resolution passed by the Congress said we should do it through the UN and if that doesn't succeed, then we should be prepared to use United States armed forces in a willing coalition. So this is not just the result of a few individuals who are running loose as some suggest, but it's a comprehensive policy developed over the years over several administrations with the support of the United States Congress as reflected in last fall's joint resolution and the action that Congress took in 1998.

CHAIRMAN KOLBE: Thank you, Mr. Secretary. I think it's important to have that response on the record. Ms. Lowey, I will turn to you for your opening statement.

MS. LOWEY: Thank you, Mr. Chairman, and welcome, Secretary Powell. I know you are extremely busy with other national security matters and please be assured that we are especially grateful that you have taken time to be with us today, and I personally want to tell you how much I appreciate, and I know the chairman does, as well, your continuous briefings that you and Deputy Armitage provide; and I thank you very much. I intend to take a few minutes as we open this hearing to express some concerns I have, not only about world events, but also about the FY 2004 request.

Anticipating that we are about to commence a campaign to disarm Iraq and bring about a regime change, I would first commend you, Mr. Secretary, for your continued efforts to secure the support of our allies in this endeavor. As you may know, I supported the Congressional resolution on Iraq last fall and I continue to support efforts to disarm Saddam Hussein. However, I do have several concerns.

I am most concerned about the manner in which the United States has approached the UN and our allies during the diplomatic process of determining how best to disarm Iraq. Constant public declarations from the highest-ranking administration officials that what our allies believe and what the UN does have no bearing on U.S. policy have, in my judgment, eroded our legitimacy as an honest participant in global diplomacy. I believe we have approached this process cloaked in hubris rather than humility, refusing to adequately and patiently justify the legitimate need for action to the international community.

Whether we go to war or not, and even now I sincerely hope we do not, I believe it will take years to rebuild our relationships with many of our major allies and our stature in the global community. I'm not saying that it is fair or that our actions justify such loss of standing, but the simple fact is that it appears to me it is just happening and it could curtail our ability to achieve a wide array of foreign policy and international development goals as time goes on.

Turning to the budget, I commend the administration for including significant increases in the FY 2004 budget request for foreign assistance. It is gratifying that there finally seems to be broad recognition of the strategic importance of foreign aid. Unfortunately, however, if you look beneath the surface of this request, you will find that virtually the entire $2 billion increase has gone into new initiatives, which are to be administered by new entities tasked with taking the corporate approach to problem solving.

This new framework results from a push to package new funding in the context of presidential initiatives rather than reforming and improving the delivery of aid through the Agency for International Development. This demonstrates for me a high degree of dysfunction and dislocation within the administration's overall foreign aid strategy, and I fear it will adversely affect the good work we do around the world.

Virtually the entire $2 billion increase above the FY 2003 level is devoted either to the Millennium Challenge Account, the HIV/AIDS initiative, the Complex Emergency Fund or the Famine Fund. The primary accounts providing for other health, education, child survival, environment, trade capacity building, agriculture and democracy programs have either been straight lined or cut from last year. This translates into cut in country-level funding in most of the countries in Africa, Asia and Latin America, again, with the exception of HIV/ AIDS programs. OMB made a unilateral decision that our aid programs in Russia and Ukraine should be shut down within two years and have cut USAID's programs there almost in half in 2004.

The uncertainty surrounding Iraq reconstruction, for $150 million has already been borrowed from 2003 resources also threatens to disrupt ongoing assistance programs. With respect to the Millennium Challenge Account and the HIV/AIDS strategy, I do applaud their broad purposed and welcome the new resources being allocated for these initiatives. However, the proposal to create a new corporation in the case of the Millennium Challenge Account and a new State Department coordinator in the case of HIV/AIDS initiative will needlessly delay and complicate the process of reaching people in need.

I'm not convinced that the corporate approach or the use of the venture capital model, with either the MCA or the HIV/AIDS initiative will lead to more effective programs. While I do not question the motives of those who have adopted this conceptual approach, I do question their range of experience in actual program implementation. The assumption on their part that innovative solutions to perennial development challenges will emerge magically from this top down approach is simply, in my judgment, wrong and hopeless naïve. The creation of a new HIV coordinator, with all the attendant bureaucratic and policy shifts will needlessly slow implementation of badly needed HIV programs and is completely unnecessary in light of the excellent resources all ready available within the U.S. Government.

Again, I never hesitate to say we should improve these programs, make them better, make them more efficient, change them around, but to delay, delay to create a whole new process is really questionable in my judgment.

We thus find ourselves in a position of confronting cuts to many country programs in 2004 while devoting resources instead to Presidential initiatives, the structure and potential impact of which remain unclear. Moreover, the budget request reveals a cavalier attitude on the part of many administration officials who are willing to sacrifice progress in developing countries to make way for these untested presidential initiatives.

USAID, meanwhile, has been left out of the strategic planning loop in a position of uncertainty. So at a time when we should hail increased resources for foreign aid, we instead must focus on proposed cuts in existing programs and unnecessary delays with new resources while new, top-heavy bureaucracies are created.

I do hope, Mr. Secretary, Congress will intervene to save the administration from itself and will recommend changes to the request that will maximize the effectiveness of ongoing aid programs. I also should add that there are some bright spots, particularly the administration's willingness to reexamine our assistance programs in the Middle East in response to the war on terrorism. And I am confident that Congress will find ways to spend the additional requested resources wisely and efficiently. We just don't need, in my judgment, to reinvent the wheel to do so.

Finally, I have some final thoughts, which I hope to expand upon during the question and answer period. Despite a clear mandate from Congress, the administration has cut funds for basic education which, frankly, Mr. Secretary, simply confounds me. The administration has also signaled its intention to expand the reach of the Mexico City policy to HIV/AIDS funding and possibly to assistance disbursed through the State Department, a move which could severely damage foreign aid programs.

There is nothing in the requests which would help countries on the cusp of qualifying for MCA funds to solve the health and education sector problems that have caused them to miss the mark.

And finally, Mr. Secretary, as we plunge into the Iraq conflict, we take on the huge task of reconstruction, which will cost in the tens of billions of dollars, with no prospect for any significant help from our allies. I sincerely hope the institutional commitment exists to take on this effort ourselves, as it appears we have to do.

Thank you again, Mr. Secretary. I look forward to a productive exchange of views.

CHAIRMAN KOLBE: Thank you, Ms. Lowey. Chairman Young?

CHAIRMAN YOUNG: Mr. Chairman, I don't have an opening statement, but I would like to open two subjects, if this is an appropriate time.

CHAIRMAN KOLBE: Certainly. Do you want to do it -- would you like me to call on you first after the Secretary's opening statement?

CHAIRMAN YOUNG: I think that would be appropriate.

CHAIRMAN KOLBE: Mr. Secretary.

SECRETARY POWELL: Thank you very much. Thank you very much, Mr. Chairman, and Congresswoman Lowey, for your opening remarks. And thank you for your compliments with respect to how we have been trying to run the Department and the level of cooperation we have achieved between the Department and the Congress. We do work hard at this.

Assistant Secretary Kelly, all of my budget people, and especially my deputy, Rich Armitage, view this as one of our principal responsibilities, to be good stewards of the taxpayers' money. And you are also stewards of the taxpayers' money, and we owe you our best answers and all the information you need to do your job so that you can support us in doing our job. And I view that as something we have done successfully over the last two years, to include opening up the new office that we have up here on Capitol Hill to serve you better with respect to your needs from the State Department. I thank you for your support.

Mr. Chairman, I do have a prepared statement for the record, which I would like to submit.

CHAIRMAN KOLBE: The entire statement will be put in the record.

SECRETARY POWELL: And I would like to shorten that statement and then after going through my shortened statement, I will deal with the specific questions that have been raised by you, sir, and by Ms. Lowey.

Mr. Chairman, members of the subcommittee, I'm pleased to appear before you to testify in support of the President's international affairs budget for fiscal year 2004. Funding in the request for 2004 for the Department of State, USAID and other foreign affairs agencies is $28.5 billion. I have given you a great deal of detail on this request in my formal written statement, and let me just highlight a few of those items.

Mr. Chairman, the President's budget will allow the United States to target security and economic assistance to sustain key countries supporting us in the war on terrorism, and helping us to stem the proliferation of weapons of mass destruction. It will allow us to launch the Millennium Challenge Account, a new partnership generating support to countries that rule justly, invest in their people, and encourage economic freedom. It will allow us to strengthen the United States in global commitment to fighting HIV/AIDS and alleviating humanitarian hardships, allow us to combat illegal drugs in the Andean region of South America, as well as bolster democracy in one of that region's most important countries, Colombia, and finally, allow us to reinforce America's world class diplomatic force, focusing on the people, places, and tools needed to promote our foreign policies around the world.

I'm particularly proud of that last goal, ladies and gentlemen, because for the past two years, I have concentrated in each of my jobs -- primary foreign policy advisor to the President and chief executive and chief operating officer of the State Department, and under that CEO hat, we are asking for $8.5 billion, and let me just touch on that request for a moment or two, because I think it really is vitally important to the success of our efforts.

First, we have been reinforcing our diplomatic troops for the last two years and will continue to do so in 2004. We'll hire 399 more professionals to help the President carry out the nation's foreign policy. This hiring will bring us to 1,100-plus new foreign and civil service officers that we set out to hire three years ago to bring the Department's personnel back in line with its diplomatic workload.

I cannot tell you what a joy it is, Mr. Chairman, to go to one of our swearing-in ceremonies now, because you have approved these numbers over the last two years, and see 100 or 150 brand new FSOs or civil servants.

And either Rich Armitage or I swear in every single class, and to see the look in their eyes as they, with pride, they take their oath of office to the Foreign or Civil Service and go forth to places around the world to serve this nation, and not just as cookie pushers, as some might say, but they're going out in the front lines of American diplomacy, out on the offense, putting their lives in danger, just as surely as the young men and women in uniform put their lives in danger. We should be very proud of these youngsters.

Completion of the hiring program we put in place will also give us the flexibility to train and educate all of our officers as they should be trained and educated. I'm proud of what we've been able to do, and I thank you for that.

I also promised the Congress that I would bring state-of-the-art communications and management capability to the Department, because if we can't communicate rapidly, if we can't run our business rapidly in this globalizing world, then we won't be able to conduct foreign policy in an effective way, and we're approaching our goal in that regard, as well, in both unclassified and classified communications capability.

I'm going to make sure that every single man and woman in the Department of State anywhere in the world has access to the Internet, access to instantaneous communications, and the $157 million budget request will put us there.

Finally, with respect to my CEO role, I just wanted to sweep the slate clean and completely revamp the way we construct our embassies and other overseas buildings, as well as the way we secure them in order to secure the men and women who occupy those buildings.

This last task is a long-term, almost never-ending one, particularly in this time of heightened terrorist activities, but we are well on our way to implementing both the construction and the security tasks in a better way, in a less expensive way, and in a much more efficient way.

I need your continued support for the $1.5 billion for Embassy security construction and the $646 million in DNCP funding for worldwide security upgrades.

Now, Mr. Chairman, let me turn to that part of the budget request for which this subcommittee has primary oversight responsibility.

The 2004 budget proposes several initiatives to advance US national security interests and preserve American leadership. The 2004 foreign operations budget that funds programs for the Department of State, USAID, and other foreign affairs agencies is $18.8 billion.

Our number one priority is to fight and win the global war on terrorism. The budget furthers this goal by providing economic military and democracy assistance to key foreign partners and allies, including $4.7 billion that have joined us -- for countries that have joined us in the war on terrorism.

Of this amount, the President's budget provides $657 million for Afghanistan, $460 million for Jordan, $395 million for Pakistan, $255 million for Turkey, $136 million for Indonesia, and $87 million for the Philippines.

In Afghanistan, the funding will be used to fulfill our commitment to rebuild Afghanistan's road network. In addition, it will help establish security through a national military and national police force, and our assistance will establish broad-based and accountable governance through democratic institutions in an active civil society.

Moreover, these funds will ensure a peace dividend for the Afghan people through economic reconstruction and provide humanitarian assistance to sustain returning refugees and displaced persons.

People often talk about how things are going in Afghanistan. Is it going well, is it not going well, or what? But when you look at what we've accomplished in less than a year-and-a-half, it's quite remarkable.

We've put in place a new government that is representative of its people. We've put in place a system where people are selecting their own leaders. Women are returning to the business place, the workplace, the educational system. It is a tremendous success story. The economy is slowly starting to get started again. Nations around the world are assisting us in this effort. And one of the key indicators or whether or not the glass is half full or the glass is half empty -- 2 million Afghans have returned home. In the last year-and-a-half, 2 million souls have crossed the borders from Pakistan back to Afghanistan and Iran, back to Afghanistan, because they see hope, they see a future, they see what the United States, with its Coalition partners, have done with the new Afghan Authority, to make a promising future, build a promising future for the people of Afghanistan, and no critic can take away from the simple fact that 2 million people have voted with their feet to return to this country that they had fled from over the last 15 or 20 years.

I also want to emphasize our efforts to decrease the threats posed by terrorist groups, rogue states and other nonstate actors with regards to weapons of mass destruction and related technology. To achieve this goal, we must strengthen partnerships with countries that share our views in dealing with the threat of terrorism and resolve regional conflicts. The 2004 budget request supports the Nonproliferation and Disarmament Fund, increases funding for overseas export controls and border security, and supports additional funding for science centers and biochem redirection programs.

Funding increases requested for these programs will help us prevent weapons of mass destruction from falling into the hands of terrorist groups or various other states, by preventing their movement across borders and by destroying or safeguarding known quantities of weapons or source material.

The budget also promotes international peace and prosperity by launching the most innovative approach to U.S. foreign assistance in more than 40 years. The new Millennium Challenge Account, which has already been mentioned, an independent government corporation funded at $1.3 billion will redefine development aid. And I will talk more about that in a moment or two.

The budget also provides more than $1.3 billion to combat the global HIV/AIDS epidemic. The President's total budget for HIV/AIDS is over $2 billion, which includes the first year's funding for the new emergency plan for HIV/AIDS relief announced by the President in his State of the Union address. And these funds will target four of the hardest hit countries in Africa and the Caribbean.

The budget also includes half a billion dollars for Colombia. This funding will support Colombian President Uribe's unified campaign against terrorists and the drug trade that fuels this terrorist activity. The aim is to secure democracy, extend security and restore economic prosperity to Colombia and prevent the narco-terrorists from spreading instability in the broader Andean region. To accomplish this goal requires more than simply funding for Colombia. Therefore, our total Andean counter-drug initiative is $731 million for Colombia and for other nations in the region. And critical components of this effort will include resumption of the air bridge denial program, stepped up eradication and alternative development efforts, and technical assistance to strengthen Colombia's police and judicial institutions.

Mr. Chairman, to advance America's interests around the world, we need the dollars in the President's budget for 2004. We need the dollars under both of my hats, foreign policy principal advisor to the President, and CEO, COO of the Department of State.

Mr. Chairman, before turning myself over to your questioning, let me touch on a few of the points that have been raised in the course of the opening remarks. With respect to the concerns that you raised, Mr. Chairman, about some of the new initiatives, let me say that, first, with respect to the contingency fund, the complex contingency fund, the fund that's currently being set up to allow us to respond to those crises that come along in the course of a year, these funds at $100 million, these problems that come along in the course of a year where we need funds on an immediate basis. Someone will come in to me and say, Mr. Secretary, something just happened in a particular country, a crisis has broken out somewhere, there is an immediate need for funding. And rather than going around constantly robbing Peter to pay Paul, or looking for pigeonholes of money that might be available, this will give the President and will give the Secretary of State enormous flexibility to respond without disrupting other efforts and programs.

Who is responsible for it? The State Department. Who will answer your questions? The State Department. Obviously, how the money is placed is a question for the administration to work out with the Congress. But who will answer to you as to how it has been used, whether it has been used in accordance with the intent and the will of the Congress, it will be the Secretary of State and the State Department.

With respect to the famine fund, it will be administered by USAID under the foreign policy direction of the State Department and the Secretary of State. And who is answerable to the Committee on the use of these funds? It will be USAID and the State Department.

With respect to the Emergency Plan for AIDS Relief, there will be various federal agencies under the direction of a new AIDS coordinator who will work directly for the Secretary of State. So on this initiative as well, it is the State Department and the Secretary of State who will hire this individual, supervise this individual. Obviously, there will be other departments of government and there will be obvious interests from the White House. But I can assure you, there is always that interest in every account that I have, as there should be. I am not a free agent running fully through the woods. My responsibility is to make sure that I am following the President's priorities. And I would expect that the White House would work closely with the State Department and I would work closely with them, as we use these monies.

But who is answerable to Committee and who you should come to if floggings are appropriate is the Secretary of State and the Department of State. And I will carry out those responsibilities in the manner I try to carry out all the responsibilities that I have.

With respect to the general question of are we undercutting USAID when we create new programs such as the Millennium Challenge Account or the Emergency Fund for HIV/AIDS, I don't think we are. I think what we are trying to do is find new and innovative ways to deliver services. And I have the greatest respect for USAID and I work very closely with its distinguished administrator, Andrew Natsios, and all the other terrific people who are in AID. Andrew is in my staff meeting every single morning. I am with AID every single morning at 8: 30 a.m. And we are doing everything we can, building on Andrews initiatives, to make AID more responsive, to do a better job of using the resources that have been made available to them, to fight as best we can to get them increases in their budget. And, less the new initiatives, HIV/AIDS and the Millennium Challenge Account, we have been able to provide some additional increase for AID programs this year. Not as much as I would like, but it is an increase.

Because what AID does is extremely valuable and it is in no way, at least in my mind, in conflict or is competing with the Millennium Challenge Account or with the emergency fund for HIV/AIDS. It's just that we're looking for new ways of delivering assistance.

So to dismiss it as sort of a corporate approach and therefore it is somehow fatally flawed because it is a corporate approach, I don't think is quite the right characterization of the Millennium Challenge Account. The President wanted it to be a separate, independent corporation because he wanted it to be seen as something new and different, something that would focus on those nations, those developing nations that have made a firm commitment to democracy, to transparency, to the rule of law, to economic freedom, to empowering men and women, and are prepared now to make investments in the infrastructure that then can make these countries more competitive in a globalizing world. That's the purpose of the Millennium Challenge Account, and it will help other AID programs that might be underway in those countries, as well; but we wanted to show a different face to the manner in which we provide support to countries.

Similarly, and as you know, Mrs. Lowey and others, the independent corporation is under a board of directors consisting of the Secretary of State, the Director of OMB, and the Secretary of the Treasury, and it is the Secretary of State who will be the chairman of that board and will be providing direct oversight and supervision to the independent corporation, but as an independent corporation, it is also directly answerable to the Congress as well as answerable in reporting to the President through the board, which I chair.

A lot of this will come up in questioning, so I won't belabor it, but one final point, if I may, Mr. Chairman. It was already made reference to -- constant public declarations dissing our allies and the United Nations.

The President took this problem to the United Nations and he sought a solution from the United Nations. He did that last September, in a very powerful speech, and that powerful speech resulted seven weeks later in a powerful resolution that was endorsed by every single member of the Security Council at that time, 15 to zero, Resolution 1441.

Now, there has been enormous debate since then, because some of the members of the Security Council who signed on at that time didn't understand that the United States of America was deadly serious. We were going to disarm Saddam Hussein, peacefully or, if not peacefully, through the use of force of arms, and in the months that have passed, we have seen four more months of continued violation, continued ignoring of the past obligations and current obligations that Saddam Hussein has.

Some members of the Security Council would like to say, "Just keep inspections going, just wait and see what he will do, put the burden on the inspectors."

The burden is not on the inspectors. The burden is on Saddam Hussein, and what 1441 required was for him to comply and cooperate fully. He's not complied. He's not cooperated fully, and we believe the case is clear. There are some members of the Council who will veto any resolution that comes along that might require that Saddam Hussein comply or face the use of force, and so we have found that there is a great deal of, now, disagreement over this issue, and I'm not unmindful of the public disagreement that exists in Europe and elsewhere.

But there is also a great deal of support. The United States is not isolated politically on this issue and nobody is supporting us. I can point to the strong efforts of Prime Minister Blair of the United Kingdom. I can point to the speech that Prime Minister Howard of Australia gave yesterday to the people of Australia. I just left a meeting in the Oval Office with the Prime Minister of Ireland, a small country that stood up strongly on the Security Council last fall and voted with us and continues to support us. Even though they have difficulties at home, they know what has to be done to disarm this nation. I can point to Bulgaria, Italy, Spain, the Vilnius 10, the Group of 8, Japan.

The United States is not in this alone. If one thing is clear, the whole world recognizes that Saddam Hussein must be disarmed. The debate we're having, the disagreement we're having is how best to accomplish that.

We have tried to accomplish it peacefully for 12 long years. Saddam Hussein is the one who is guilty. Saddam Hussein is the one who is not responding. It is he who is not complying. The only reason he's doing anything now is a result of the threat of force.

Remember, when the President gave his speech on the 12th of September, within three days, suddenly, Saddam Hussein was starting to say, "Let the inspectors in, but not really." Everything he has done since the President's speech has been an effort to try to keep away the day of reckoning.

Well, the day of reckoning is fast approaching. We still hope for a peaceful solution. We hope a peaceful, diplomatic way can be found. But the one thing that we have made clear to the world since the very beginning of this crisis is that the United States is committed to the disarmament of the Iraqi regime. We hope it will be done peacefully. If it is not done peacefully, the United States is prepared to lead the coalition of the willing that will do it.

And when it is done, there will be bills, as mentioned here this morning. There will be a need for reconstruction, but in that effort, the Iraqi people will be better off. The United States has a track record of, over the past 60 years, of leaving places a lot better than we found them.

Mr. Chairman, in the interest of time, I'll stop there, because I think we'll repeat a lot of this in the questioning. [End]

Released on March 13, 2003

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