MCC CEO Expresses Serious Concern Regarding the Funding Level in the FY 2008 Senate Appropriations State-Foreign Operations Bill

Washington, D.C.—The Senate last night passed the Fiscal Year 2008 State-Foreign Operations Appropriations bill providing only $1.2 billion for the Millennium Challenge Corporation, an innovative foreign aid program that targets grant assistance to countries that reinforces good governance, promotes economic freedom, and investments in people.

“I am concerned by the Senate bill’s allocation of $1.2 billion for the MCC. The Senate mark is $600 million less than the House level of $1.8 billion and a substantial cut from current levels as well as less than half the President’s request of $3 billion,” said Ambassador John Danilovich, MCC’s CEO. “Congress established MCC to represent an innovative, common sense approach to development assistance focused on providing incentives for countries to implement the reforms necessary for aid dollars to be used effectively.”

“MCC is fulfilling Congress’ mandate to reduce poverty and provide incentives for countries to enact major political and economic reforms. Countries are responding to this incentive, but the Senate’s allocation undermines the MCC model and conveys a detrimental message to countries seeking a partnership with the United States,” Danilovich stated. “Moreover, the Senate approved amount will deny MCA Compacts to countries that have already developed results-oriented proposals which will lift millions of people out of poverty and it will dampen efforts of other countries making the difficult reforms in order to be accepted into the program. Cuts in MCC funding undermines US support to poor countries making the most determined efforts to improve the quality of life for their people.”

Since its inception in 2004, MCC has signed poverty reduction grants with 14 countries totaling over $4.5 billion. Most recently, MCC signed a five-year, $697.5 million grant with Morocco that aims to reduce poverty by creating jobs and improving the productivity of Moroccan workers. MCC assistance is also being used to help countries improve access to potable water, mitigate the devastating effects of poor maternal health, HIV/AIDS, tuberculosis and other diseases, build schools, and improve roads and agricultural productivity.

Ambassador Danilovich added, “Providing MCC adequate funding promotes the interest of the United States and the American people by rewarding countries that have a demonstrated commitment to good governance. MCC’s work directly promotes security and stability around the world by creating opportunities for the world’s developing countries to participate in the global economy.”

The FY 2008 State-Foreign Operations bill will now go to a conference of the House and Senate appropriators.

“We hope to work with appropriators in conference to continue our results-focused approach to development assistance,” Danilovich said. “We believe that MCC programs epitomize the best aspirations of Congress and the American people to ensure that our generosity is matched by tangible results in our partner countries.”

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Millennium Challenge Corporation (MCC), a United States government corporation designed to work with some of the poorest countries in the world, is based on the principle that aid is most effective when it reinforces good governance, economic freedom, and investments in people that promote economic growth and elimination of extreme poverty.