Statement on President Bush's Budget Request for FY 2003

SECRETARY POWELL: Thank you very much, Mr. Chairman. And I do have a prepared statement, and I thank you for putting it in the record for the benefit of the members, and for the staff.

Let me begin, Mr. Chairman and Mrs. Lowey, by thanking both of you and all the members of the committee for the solid support that you have provided to me and to the State Department over the past year as we sought to reinvigorate the Department, as we sought to rearrange our priorities, and as we sought to get the real increases that I believe are necessary to conduct foreign policy in the 21st century.

You gave us more than we asked for last year, and we're deeply appreciative of that. As you know, we have come in for more real growth this year. I wish it had been a lot more real growth. But the nation is facing many challenges, and these challenges were increased in scale as a result of the events of 11 September, requiring significant increases for homeland defense and for the Defense Department, which is really also part of our Foreign Operations, the security shield for the world, really, and for the United States. And the President had to make some very tough choices with respect to resourcing, and it was quite appropriate that Defense and Homeland Security got significant increases. I'm pleased that the State Department also was able to achieve some level of real growth in the President's budget, at the expense of a number of domestic agencies, and of course while facing a deficit that we had not expected a year or so ago.

So I am pleased with what the President has been able to allocate to the Department, and my task today is to present it to you, ask for your support, and answer whatever questions you may have.

Before going into my opening statement and abbreviated version of what I have submitted for the record, I might touch on a few points that have been mentioned. With respect to the United Nations Population Fund, you're quite right, Mrs. Lowey; I know the arrangement that was made last year in considerable detail. We have had intense discussions about this in the administration, and I hope that a decision will be forthcoming from the White House in the very near future. But I cannot tell you what day of the week.

But we are looking for a way that will square the circle and be faithful to the commitment that was made to the Congress, by each body with each other, and Republicans and Democrats together. And the White House was aware of it, the Administration was aware of this arrangement; even though not a party to the arrangement, we certainly were witting in what was going on. And the President feels strongly about finding a solution that is faithful to the arrangement that had been made up here on the Hill.

With respect to some of the decreases you mentioned, Mrs. Lowey, on newly independent states in Southeast Asia, we have to find some way to reallocate money. And since a number of these countries have been given that start on the road to progress in the early '90s, we thought it was prudent -- and through the late '90s -- we thought it was prudent to make some adjustments in their accounts that I think, upon examination, will be seen to be prudent.

With respect, Mr. Chairman, to your question about an amendment as opposed to a supplemental, I understand your point. We will take it back to the Department and to the Administration. I just might point out that there are some needs that we have in 2002 that I think will be requiring supplemental action, and we would not be able to wait for a budget amendment: operating security and major facility costs in Kabul, and the frontline states; public diplomacy efforts that we're trying to put in place and accelerate -- we became very much aware of the need for a more aggressive public diplomacy effort in the Administration -- some other activities having to do with police and security requirements in Afghanistan and the frontline states; military assistance in Afghanistan and the frontline states.

Many of the things you touched on, Mr. Chairman, are pressing, and for that reason, as we consider how to move forward, we have to keep open the option of a supplemental and a budget amendment, because I think there are some things that will need supplemental funding. And I take your point very much to heart and will discuss it with my colleagues back in the Department, as well as within the Administration.

With respect to HIV/AIDS funding, this has been quite a success, that the world has come together and contributed well over a billion dollars, up toward $1.7 billion, to the new Global Trust Fund. And so far, our contribution has been $300 million, $200 million from the Administration, and then Congress then generously added another $100 million. And for 2003, we're adding another $200 million to bring it to $500 million, $100 million out of State Department, and another $100 million from the Department of Health and Human Services.

Quite correctly, as was pointed out, some of the money that we are using for that plus-up came out of some of our child survival accounts, and we are now working with Tommy Thompson at HHS to see if he can help us replenish those accounts. Because it is a limited amount of money we have, and there are pressing needs that we are trying to fill.

But I am anxious to see that we do not take money away from the neediest of our fellow citizens around the world, children. And right now that is a problem that I have to do more work on within the Department, and working with the Department of Health and Human Services.

I think most of the other issues that were touched on, Mr. Chairman and members of the Committee, so far, I'll cover in my opening statement, and are also in my prepared statement.

You may recall, Mr. Chairman, that in your opening statement last year you reminded me that this committee provides two-thirds of the funds that the State Department needs and uses. And I told you that your words would be emblazoned on my forehead, I would never forget that statement, and they are emblazoned there. But you may also remember that I told you that I believe that I am more than just a foreign policy advisor to the President; I am the Chief Executive Officer and Chief Operating Officer of the State Department, and I have those responsibilities, as well as being foreign policy advisor.

And wearing that hat, my CEO hat, I want to tell you that we have made some solid advances over the past year, advances in hiring and bringing state-of-the-art information technology to the Department, and in streamlining our overseas building process, and in making our buildings more secure for our people. Morale is high at the State Department. My folks are proud of what they are doing; they are proud of being in the front line of offense for the national security interest of America and of our friends and allies.

And I want to thank you, Mr. Chairman, and all the members of this Subcommittee in your capacity as members of the Subcommittee, but also as members of the full body for the support that you have provided. And I want to ask for your full support in full committee, and on the floor when it gets there, for our $8.1 billion request for State Department and related agencies for 2003. I want to keep the momentum moving.

But of course I need your support so very, very much for the $16.1 billion request for foreign operations. These dollars will support the continuing war on terrorism and the work we are doing in Colombia and the Andean region at large, and our effort to combat HIV/AIDS and other infectious diseases around the world.

In addition, these funds will support essential development programs in Africa, the important work of the Peace Corps, and the scaling up of that work, the work of the Peace Corps; and our plan to clear arrearages at the multi-development banks, including the Global Environment Facility. We are requesting an estimated $5 billion to fight terrorism, as well as alleviate the conditions that fuel violent terrorism. This funding includes $3.6 billion for economic and security assistance, military equipment, and training for frontline states and our other partners in the war on terrorism.

It also includes $3.4 billion from foreign operations accounts, such as the Economic Support Fund, International Military Education and Training, Foreign Military Financing, and Freedom to Support Act Activities; $88 million for programs in Russia and other states of the former Soviet Union to reduce the availability to terrorists of weapons of mass destruction that are available in Russia and other former republics of the Soviet Union.

There's a request for $69 million for counter-terrorism engagement programs, training, equipment to help other countries fight global terror, thereby strengthening our national security; $4 million for the Treasury Department's Office of Technical Assistance to provide training and necessary expertise to foreign finance offices to halt terrorist financing.

And Mr. Chairman, in the FY 2003 budget request, there is, as you noted, approximately $140 million available for Afghanistan, including repatriation of refugees, food aid, demining, and transition assistance. It doesn't leap out to you as a single item, and there may be a need -- there will be a need -- for additional funding as we go forward, through supplemental or amendment action, in order to match what we did last year and perhaps even do more. As you know, we committed $297 million, but a lot more is going to be required. What we have identified already in 2003 is $140 million.

I know that President Bush, the Congress, and the American people recognize fully that rebuilding that war-torn country will require additional resources, and that our support must be and will be a multi-year effort. And your own trip to the region, Mr. Chairman, I'm sure reinforced your view of that same proposition.

We may need additional funding for the war on terrorism, either in the form, as I mentioned earlier, of an '02 supplemental or an '03 budget amendment. Moreover, to meet our commitment to assist Afghanistan in its reconstruction efforts, we will definitely need additional funding for FY '03.

Moving on in our budget request for Foreign Operations, we are requesting $731 million for the multi-year counter-drug initiative in Colombia and other Andean countries that are the source of the cocaine sold on America's streets. ACI assistance to Andean governments will support drug eradication, interdiction, economic development and development of government institutions. In addition, the Colombians will be able to stand up a second counter-drug brigade. Assisting efforts to destroy local coca crops and processing labs there, doing it there, increases the effectiveness of U.S. law enforcement here.

In addition to this counter-drug effort, we are requesting $98 million in FMF to help the Colombian government protect the vital CLC oil pipeline from the same terrorist organizations that are involved in illicit drugs, the FARC and the ELM. Their attacks on the pipeline shut it down for 240 days in 2001, costing Colombia revenue, causing serious environmental damage, and depriving us of a source of petroleum. This money will help train and equip two brigades of the Colombian Armed Forces to protect the pipeline.

We are also requesting $1.4 billion in 2003 for USAID global health programs. Of this amount, we are requesting $540 million for bilateral HIV/AIDS prevention care and treatment activities, and $100 million for the Global Fund to fight AIDS, tuberculosis, and malaria, as I mentioned earlier. All of this funding will increase the already significant contribution to combating the AIDS pandemic that we have made, and make us the single largest bilateral donor to that effort.

I should add that the overall U.S. government request for international HIV/AIDS programs exceeds $1 billion, including the $200 million for the Global Fund. You made reference to the Fund earlier, Mr. Chairman; I am pleased that it is now in the process of being staffed. Procedures are being put in place; there is a structure, and requests for proposals are being issued. And hopefully disbursal from the funds will begin in the not-too-distant future.

I think that fund has come together quickly, in a very prudent manner. It will be well-managed, and soon people will begin to see benefits arriving in their countries, in their villages, in their towns.

Mr. Chairman, we all heard the President's remarks in his State of the Union address with respect to the USA Freedom Corps, and his objective to renew the promise of the Peace Corps, and to double the number of volunteers in the Corps in the next five years. We have put $320 million for the Peace Corps in the 2003 budget request, an increase of over $42 million from our Fiscal Year 2002 level.

I take seriously the concern you raised about the security for additional Peace Corps volunteers, and I will make sure that as we expand the program, this is uppermost in our mind. But my understanding of the program and the plans that exist for the program, it is a scaling up that is achievable with these added resources.

The Peace Corps will open programs in eight countries, including the re-establishment of currently suspended posts, and place over 1,200 additional volunteers worldwide. By the end of 2003, the Peace Corps will have 8,000 volunteers on the ground.

The 2003 request also includes an initiative to pay one-third of the amount the United States owes to multilateral development banks for our scheduled annual commitments. With U.S. arrears currently now totaling $533 million, the request would provide $178 million to pay one-third of our total arrears during the fiscal year. These banks lend to and invest in developing economies, promoting economic growth and poverty reduction, and providing environmental benefits. We need to support them. All of these programs, Mr. Chairman and members of the committee, are integral to the conduct of our foreign policy.

Since that heart-rending day in September, when the terrorists struck in New York and Virginia and Pennsylvania, we have seen -- as you have noted, Mr. Chairman -- why the conduct of our foreign policy is so important. We have had great success over the past five months in the war on terrorism, especially in Afghanistan. And behind the courageous men and women of the armed forces has been the quiet, steady course of diplomacy, assisting our military's efforts to unseat the Taliban government and defeat the al-Qaida terrorists in Afghanistan.

We have reshaped the whole region, a new US-Pakistan relationship. And I just left, as you noted, a lunch with President Musharraf. And you can see here a courageous leader who has put his country on a path 180 degrees in a different direction than it was headed on the 11th of September. We have been able to set up a new Interim Authority in Kabul, and I think we should be very proud of the role that the United States and United States diplomats played in supporting the Bonn conference which resulted in the creating of an Interim Authority, and the superb work our diplomats are doing there.

The Taliban gone or on the run, terrorists dead or in jail or also on the run. We are also forming new and important relations in Central Asia with Uzbekistan, Kazakhstan, Tajikistan, Turkmenistan. They all want to have a better relationship with the United States. What is so very, very interesting is that we have been able to achieve this without causing a problem with Russia. Russia, a year or so ago, would have been terribly distressed to see the kinds of things we are doing in that part of the world now. But I like to tell the story of my friend, Foreign Minister Igor Ivanov, who I have come to know very, very well over the last year, just as President Bush has come to know President Putin. And a year ago when we first met and started measuring each other and getting to know one another, he would complain: we don't like you all in Central Asia. That's really our part of the world. Why don't you go somewhere else?

But last week he was asked at a television interview, "Foreign Minister Ivanov," -- this is in Russia -- "aren't you worried about the Americans having a presence in that part of the world? They are the enemy." And his answer was, "Wrong. The enemy is fundamentalism. The enemy is terrorism. The enemy is drugs. The enemy is smuggling. Now we are aligned, we are allied, with the Americans in meeting this common threat."

That is a sea change in the relationship, and it really reflects many changes in the relationship between us and Russia, and us and so many other nations that have been brought about in the first year of the Bush Administration, and accelerated especially after the events of the 11th of September. In Russia, a solid commitment was made by President Putin to move his country forward with us, in step with us, on the campaign against terrorism. Mr. Putin was the first foreign leader to call President Bush after what happened on that terrible morning, and ever since they have been a strong supporter of everything we have been doing. Because of the fact that Russia wants to come west, not go east, and because we are working together to their south, they are on a path of being integrated into Western economic structure. And I hope at the NATO ministerial meeting in May we will be able to conclude a NATO-Russia agreement for Russia to work with "NATO at 20", as we call it. And that will be a historic move and will make things much easier as we move to the Prague summit in the fall when we will, no doubt, invite a number of nations to join NATO to add to the size of the alliance.

I think the same thing can be said with respect to our relationship with China. It is improving. Many people worried last April when we had the incident with the reconnaissance plane and the Chinese fighter, and our plane was forced down and the Chinese pilot was lost. This was going to throw the whole relationship into the refrigerator for who knows how long. Well, it turned out it wasn't for very long. With some very, I think, effective diplomacy on the part of your State Department and with open lines of communications with the Chinese leadership, we had our young men and women home soon, and our plane a little while after that. And we quickly got back on track with the Chinese. I visited China last summer. The President went there in the fall as part of the APEC summit and struck up a personal relationship with President Jiang Zemin, and he is going back next week. And so rather than the relationship going into a deep freeze, it is moving forward on the basis of common interest.

But both with Russia and China, even though things are going in the right direction and we have common interests, we do not hold back our criticism when it comes to human rights, when it comes to proliferation activities, when it comes to religious freedom, when it comes to things that go against the universal values that the President spoke about in his State of the Union Address. With these two great countries, we are moving forward, I think, on a solid path of cooperation and, where necessary, honest, open debate about the things that we are in disagreement over.

I am also pleased that the President has been able to structure an agenda for our own hemisphere that is a positive one, based on free trade. The Free Trade Area of the Americas that we launched at the Quebec Summit of the Americas last year. Bilateral trade agreements throughout the region. That's why we want the Andean Trade Preference Act extended again, because trade is the engine that will pull people out of poverty by reducing barriers to their goods and allowing us to import our goods, make our market successful, and at the same time, make it easier for us to invest in their countries.

So I think things are going in a positive direction there. People often say that we are unilateralist compared to our European friends, when in reality, President Bush has reached out in the most effective way with our European allies. We are working closely with the European Union, with NATO, and we have a steady stream of visitors coming to see the President and coming to see your Secretary of State. And we are as multilateral as a man can stand. Trust me. I spent my whole life in this multilateral world.

But when we have a matter of principle that we feel strongly about, we feel strongly about it, and we act on that principle, whether others are with us or not. And more often they are. And when they are not, then we stand on principle and we do what we think is right, because it's in our best interest, but more importantly, because it's the right thing to do. And that's, I think, a hallmark of this Administration.

I could not leave this brief tour of the horizon without touching on Africa. Africa is a major priority for this Administration. President Bush is totally committed to the African Growth and Opportunity Act. He wants to see it expanded. We had the first forum to implement that act last fall; we'll do it again this year. President Bush responded immediately when I called him one morning. Or after calling Secretary Thompson, I went into the Oval Office one morning and said to the President that Tommy Thompson and I wanted to co-chair a task force on HIV/AIDS because of the nature of this crisis, and especially the way it affects sub-Saharan Africa. Before the last sentence was out of my mouth, he said do it; I want to do this. And he has given it full support. We wish we could give it even more money than we have, but I think we have made a very responsible contribution, and we are the leader of the world with respect to our assault against HIV/AIDS and other infectious diseases.

There are very dark spots remaining on this landscape. The Middle East is an area that consumes a great deal of my time. Our strategy is simple: the Mitchell peace plan is there as a way to get to negotiations that will lead to a solution where these two peoples can live side by side in their individual states, Israel a Jewish state, secure behind its borders; Palestine a land for the Palestinian people, secure and free behind their borders; both sides trading with each other and friendship and partnership, not hatred. That remains our vision. To get to that vision, we need a cease-fire. So we continue to apply pressure to Mr. Arafat and encourage restraint on the part of Mr. Sharon until we can get the violence down and get the discussions started again.

The President talked about other dark spots in his State of the Union Address when he talked about an "axis of evil." He wasn't talking about people who are evil. He was talking about regimes who are evil or do evil things. And I think he spoke with clear-headedness and with a realistic point of view. It doesn't mean anybody is declaring war on these states tomorrow, but we call them the way they are. Korea, a state, North Korea, a state that we provide a great deal of its food and we have an agreement to help them get power that they need. We are also anxious to engage with them, as the President has said and I have said repeatedly, any time, any place, without any preconditions. All they have to do is say so. And it is a despotic regime and we should not shrink from calling it what it is. But at the same time, we are absolutely aligned with our South Korean friends in encouraging engagement so that these two states can ultimately become a joined people again, as the Korean people were joined for much of their long history.

We also have a problem with nations such as Iran, which is trying to find its own way. In some ways, Iran has been very helpful to our efforts. It was very helpful at the Bonn conference and the Tokyo conference with respect to Afghanistan. But at the same time, we have to be troubled by a regime that is pursuing weapons of mass destruction and nuclear capability and that is supporting terrorism. And for us to say, well, they've done these good things and let's ignore all the unpleasant things they are doing I think would be hypocritical of us and not consistent.

We are also concerned about some of the actions they are now taking in Afghanistan with respect to perhaps introducing weapons or doing other things that might not be stabilizing in the western part of Afghanistan. And so the President called it the way it is.

With respect to Iraq, we have long had a policy of regime change, believing that the Iraqi people deserve better leadership than they have had for the last 30 years. And we also work within the UN framework to keep the sanctions in place. When I became Secretary of State on the 20th of January of last year, the sanctions were collapsing. All of Permanent Members of the Security Council were moving in different directions. We arrested that. The sanctions are in place. The Security Council has come together. And I believe by the end of May we will have moved to smart sanctions so the Iraqis can no longer claim that we are somehow affecting the well-being of their citizens. It was a false claim all along, and this will show the falsity of it for the whole world to see.

And so there are these dark spots that we worry about, but we worry about them from a position of strength. We have allies around the world who have joined with us in this campaign against terrorism, this campaign for freedom, whether it's in Asia -- and I've just touched on a couple. I could also mention the strong support we receive from Japan and Australia and so many other nations there. We should be proud that we have such friends and partners. We should be very proud of the coalition that President Bush has been able to put together over the last five months, a coalition that, in my humble judgment, will be for more than just terrorism. It will go beyond terrorism. It will find ways to work together to combat HIV/AIDS, to provide more development assistance to countries in need, to open the doors to free trade. It's a coalition that we should not just say, fine, we've dealt with terrorism, let's break it up and move on. No, let's continue to pursue these universal values that we all believe in. It's a coalition that I think can keep going because it has a common purpose, and it's a noble purpose.