Senate Foreign Relations Committee Hearing: Fiscal 2009 Foreign Affairs Budget
February 13, 2007
BIDEN:
The hearing will come to order.
It's a great pleasure to have Secretary Rice before us today to present the budget of the State Department and talk about that and other things with us.
And it's an honor to have you here, Madam Secretary.
And it's hard to believe that this is the last -- at least may be the last budget you'll be presenting, at least under President Bush, and who knows? Maybe we'll continue.
But we thank you for being here, Madam Secretary, and appreciate your cooperation.
Before we begin, I'd like to acknowledge what all of us are aware of, but it warrants being acknowledged, that our counterpart in the House, Tom Lantos, has passed away. We all had a relationship with Tom but, as we say, a point of personal privilege, my relationship with Tom goes back a long, long time.
Tom was actually my foreign policy adviser. Tom was working for the Bank of America and teaching at the University of San Francisco as an economics professor, and I met him out there on one occasion, and I talked him into coming back to work as my staffer. And I may be the only chairman who ever had a chairman work as his staffer.
But we became very close friends, our families. And his daughter Katrina worked for me as well, and his grandson Micah (ph) has a Ph.D. and handles Europe for me on the committee as we speak.
But Tom, as we all know, was the only survivor of the Holocaust to ever serve in the United States Congress. But in a sense, Tom was more American than a son of the American Revolution.
In my dealings with Tom, Tom epitomized every value that we herald as being an American value. I mean, he was the -- and above all, as the secretary knows, he was a consummate gentleman.
I used to kid him. I used to tell him that I believed that the Blarney Stone in Ireland was probably first found in Budapest, because I've never run across a more charming, more decent and a more brilliant man with all those qualities rolled into one.
And it's a big loss for the country, and I know he was a close friend of Barbara's as well, being a fellow Californian and coming from her neck of the state. So I just want to acknowledge how profoundly missed Tom will be.
I also would like to welcome the newest member of our committee, Senator Barrasso. Is he here? Oh, there he is. I'm looking the wrong way. I'm still used to looking to the right when I think Republican.
I apologize. And you were appointed last evening to take the place of Senator Sununu, who left the committee to take a seat on the Finance Committee.
And I welcome you, and I really look forward -- and I know you're going to have to leave because you're on the Energy Committee as well, and there's a major issue coming before that committee today. But we just want you to know how welcome you are and look forward to working with you on this committee.
Madam Secretary, today the committee meets to hear from you on the president's budget for foreign affairs for fiscal year 2009. The budget submitted to Congress last week seeks $39.5 billion in spending for foreign affairs, a substantial increase over the last year.
And I commend you. I commend you for persuading the president to continue to expand the foreign affairs budget.
I'm particularly pleased by the nearly $250 million for funding requested for the Civilian Stabilization Initiative, which was an initiative of my colleague and chairman Senator Lugar and I, but he was the main engine behind all of that.
And I think it is extremely important. This builds on legislation that we developed four years ago to establish a corps of active duty and reserve civilian personnel that we can send overseas on short notice to address post-conflict needs and humanitarian crises.
We still have unfinished business here in the Senate and the Congress. The latest version of our legislation has been stalled in the Senate for nearly a year. It is my hope we can unglue it and get it passed.
I'm also pleased that you are working to increase the number of foreign service personnel as well as diplomatic security agents. Secretary Powell began that expansion, but it has been offset by the demands of Iraq, and there continue to be reports of personnel shortages in many areas of the department.
The president's Emergency Action Program for HIV/AIDS has saved more than a million lives. It may be the greatest legacy this president leaves or any president could leave. It's saved more than a million lives.
And it also not only did the right thing, is doing the right thing, it puts America in the right light, once again, trumpeting our values and our humanity, not just our power.
This year's budget includes $6 billion for HIV/AIDS. I know that sounds like a lot of money, and it is a lot of money, but in reality the request only marginally increases the program over last year.
We're not doubling our investment, as the president said. We're just barely maintaining it. And I believe we can do even better than that, so this may be a case where Brer Rabbit is allowed to be thrown into the briars, because it's my intention to try to expand that number, and I believe others will join me in that regard.
So, Madam Secretary, I strongly support most of your budget efforts. What I don't support, and this is not your responsibility, is the practice of placing tens of billions of dollars for the wars in Iraq and Afghanistan into the category of so-called emergency spending, which the president again exempts from the normal budget rules.
I think it is wrong to force the taxpayers of tomorrow to pay for the wars of today.
Beyond the budget, this is an opportunity for you to talk about your policy priorities for the remaining months of the administration.
And let me briefly mention a few of mine and what I'm going to attempt to, with the help of Senator Lugar and others, have the committee focus on.
In Iraq, all of us welcome the recent decline in violence. Our military, as it always has, has done its job, and it's done its job remarkably well. And they've taken advantage of other critical developments, including the "Awakening" movement among Sunnis and the Sadr cease-fire among Shiites.
Unfortunately, political progress, which was the principal aim of the surge, has not followed. I still see no strategy for achieving what virtually everyone agrees is the key to success in Iraq -- a sustainable political settlement that convinces Iraqis they can pursue their interests peacefully, without bullets and bombs.
Without a political settlement, Madam Secretary, we could easily see a resurgence of violence, no matter how many troops we keep in Iraq. And we just can't keep this many troops in Iraq for a whole lot longer.
Every day we stay in these numbers is another day of terrible strain on our fighting forces and their families, on our military's readiness and ability to meet other threats to America's security, on our taxpayers and the government's capacity to meet challenges here at home, and on our standing in the world.
The president says our strategy is, quote, "to leave on success," end of quote. The question is does that mean that it is his intent to stay on failure? Because right now, in the absence of a political strategy in Iraq, that's what we're doing. We're treading water. That's better than drowning. But we can't keep doing it.
I am pleased that both you and Defense Secretary Gates have now clarified that the so-called framework for normalization of relations. That is the administration's plan to negotiate with the government of Iraq, and you've laid out clearly it does not include security commitments that would bind us to engage our military in Iraq's defense.
As I made clear to the president in a letter last December, any such commitment would require the consent of the Senate.
And I am also pleased the president himself has said on the record the United States seeks no permanent military bases in Iraq. We have passed such legislation, I believe, on five occasions in the Senate and once, finally, the entire Congress, signed by the president.
I have repeatedly put a prohibition against permanent bases in legislation because the misplaced belief in Iraq and in the wider Arab and Muslim world that we seek a permanent presence has been used as a recruiting tool for Al Qaida and it is an accelerant for anti- Americanism. And I'm glad the president has stated flatly that is not our intention.
What I hope to hear from you today, Madam Secretary, and in the weeks ahead, is just how we get to success. What is the political strategy in Iraq? What is the diplomatic strategy to help achieve it?
You know my views and my colleagues, unfortunately, know my views. I've been like a broken record, as they used to say. But unless and until we put all our energy into helping Iraqis build what is already in their constitution, a federal system that brings resources and responsibility down to the local and regional level, I don't believe we're going to reach that political solution.
Where are we on that? And if we continue to reject that plan, which Congress overwhelmingly endorsed, what's the alternative?
If we should have surged forces anywhere, I think most of the committee members would agree it was in Afghanistan. I know you're just back from there, and Senators Kerry and Hagel and I are about to go.
When we return, the committee will want to hear your ideas for how we can turn around the situation that seems to most of us, if not the administration, to be slipping from our grasp.
Violence is up. The Taliban is back. Drug production is at an all-time high. And people seem to be losing faith in the Karzai government's ability to deliver progress.
Afghanistan's fate, as you know better than anyone, is linked to Pakistan's future, and so is American security. We're going to see what next week what the elections bring in Pakistan, but we'll be anxious to hear from you after that.
But no matter what the result, we need to move in Pakistan from a Musharraf policy to a Pakistan policy, one that demonstrates to its moderate majority that we are with them for the long haul, with help to build schools, roads, clinics, and that we are going to demand accountability for the billions of dollars, the blank check that we keep writing for the Pakistan military.
And finally, in Darfur, the United Nations and the African Union jointly assumed control over the peacekeeping mission on December 31st, but fewer than 10,000 of the 26,000 authorized troops are on the ground.
One reason is Khartoum's obstructionism. But the other is the pathetic fact that the international community cannot muster 24 helicopters needed for this mission.
I would like to know exactly which leaders you and the president have personally contacted to get these helicopters and what can be done to deal with that.
There's a lot more to talk about -- Kosovo's imminent declaration of independence, your plans for the NATO summit, your efforts in the Middle East, the challenges posed by Iran, Syria and Lebanon.
And this committee's going to spend a lot of time in the months ahead on some long-term challenges that may seem less urgent but are no less important to America's future -- the emergence of China, India and Russia, the critical issues of energy security and climate change, which Chairman Lugar started in earnest the last two years, and the need for a more effective strategy to advance democracy and combat extremism that will help us -- that recaptures the totality of America's strength.
We won't have time today to cover even a small piece of this agenda, so I hope you'll come back a few times before the year is out, Madam Secretary.
And with that, let me turn to Senator Lugar for his opening comments.
LUGAR:
Mr. Chairman, thank you very much.
I note the presence of a quorum, and both parties have been consulted about legislation (inaudible) and 19 nominees that have the unanimous consent, whether it might be the pleasure of the chairman to proceed to that business.
BIDEN:
Well, I would ask the secretary if she minds us interrupting to ask -- well, with that, why don't we move into an executive session temporarily?
We have a quorum, 11 senators, so -- we had planned on doing this tomorrow, but we had to rearrange the schedule because of the memorial service for Chairman Lantos.
A revised agenda was circulated this morning, and I think we can move it by voice vote. I would entertain a motion to move the entire agenda.
LUGAR:
I so move.
BIDEN:
Second? All in favor, signify by saying "aye." Opposed, "no." The agenda is agreed to. All matters on the agenda -- legislation as well as nominees on the agenda -- are approved and will be sent to the floor.
Now we'll move back to regular session.
And the floor is yours.
LUGAR:
I thank the chairman, and I know the secretary thanks the chairman. Nineteen worthy Americans will be heading out to embassies that need to have our presence, and we appreciate very much this action.
And I join the chairman in thoughts about Tom Lantos. He was a very dear friend and a wonderful partner with this committee. We have appreciated that leadership very much throughout the years, as well as opportunities to be with him in Hungary during CODELs in the past in which he enriched our understanding.
Likewise, I want to welcome our new member, John Barrasso. He is going to be a very able and eager participant in our hearings, if he's back, I understand, after he does his work at Energy today.
I join you, Mr. Chairman, in welcoming the secretary. This hearing give the committee an opportunity to examine the State Department's budget and ask fundamental questions about the Bush administration's foreign policy.
It is especially important in a year of transition to examine the international projects that we have in motion and the overall strategies of our foreign policy institutions.
We should ask whether the State Department, the Bush administration and, indeed, the entire political establishment of our country, both Democrat and Republican, are adapting to the world as it is.
Have bureaucrats and budgetary inertia consigned us to spend most of our time preparing for yesterday's military and diplomatic threats? Or are we fixated on old processes and tactics that are being overwhelmed by global, economic, demographic and technological changes?
The understandable Bush administration response after September 11, 2001 was to shift assets toward combating terrorists. And defending this country from terrorist attacks remains a fundamental national security priority.
We are also engaged in vital diplomatic efforts related to problem countries, including Iraq, Iran, Afghanistan, North Korea. But the gravity of these situations should not keep us from responding to dynamic global changes.
In a recent piece from the Financial Times, the eminent columnist Martin Wolf wrote, and I quote, "Neoclassical economics analyzed economic growth in terms of capital, labor and technical progress. But I now think it is more enlightening to view the fundamental drivers as energy and ideas," end of quote.
If Wolf is correct, and I believe he is, our economy and our foreign policy are at risk of being overwhelmed by forces that are receiving far too little attention within our government.
Principal among these forces is the burgeoning demand for energy from China, India and elsewhere and the cosmic economic shifts that are being driven by these immense, rapidly industrializing societies.
The immediate effect is rising energy prices, but longer term effects include accelerating climate change and shortages of hydrocarbon supplies, both of which could become sources of serious conflict.
The most eye-opening statistics emanate from China. That country's rapid industrialization is obliterating old ways of thinking about the global economy.
Consider that the Chinese coal plants that came online in 2006 alone added a net 80 gigawatts of electricity generation to the Chinese system, an amount roughly equal to the entire electrical capacity of Great Britain.
Meanwhile, China last year used 32 percent of all the steel consumed in the world. The 7.2 million vehicles sold in China in 2006 were 4.5 times as many as were sold in China just nine years earlier.
And thanks both to foreign direct investment in China and its massive current surplus, China has nearly $1.5 trillion in official foreign currency reserves. That accounts for a quarter of all the reserves in the world.
The value of the dollar has fallen as our trade deficit has risen and our savings rate remains near zero. We are not just buying what they are making. America is, in effect, importing debt along with consumer satisfaction.
Such statistics raise many disconcerting questions about global stability, United States' influence in the world, and the maintenance of Americans' living standards.
I make these points today because there is a temptation in the last year of an administration for observers to dismiss not only the budgetary priorities of the outgoing president but also important foreign policy initiatives.
Lame duck administrations sometimes abet such attitudes by failing to quickly appoint nominees as numerous vacancies come open and by giving up on initiatives that require approval from Congress.
I would emphasize the United States cannot afford to take a year off, and I trust the administration believes that very stoutly.
The president should be reaching out to the Congress in an effort to construct a consensus on how we can respond not only to high- profile threats such as terrorism and climate change but also more nuanced problems such as U.S. energy vulnerability, the struggle to diversity Central Asian energy supplies, our weakened debt position, the shift of financial influence to Asia, the growth of sovereign wealth funds, and the coming expansion and demand for nuclear power, which will complicate our nonproliferation efforts.
These are economic and political problems that require the reorientation of the State Department.
For example, traditional ways of thinking about Russia have less salience when Russian foreign policy is now largely based on maximizing the political leverage and financial earnings of its energy supplies and dominating the transport of energy in Eurasia.
Secretary Rice, I congratulate you for moving toward a much- needed reinvigoration of U.S. international energy diplomacy.
I would highlight agreements with Brazil on biofuels and with India on civilian nuclear power as examples of how our strategic alliances can bring together our foreign policy, our energy security and climate change interests.
I hope that you will act quickly upon legislation establishing an international energy coordinator within your office. The legislation was passed unanimously by this committee and signed into law by President Bush in December of 2007.
Swift implementation of this legislation, with your clear support, would empower the international energy coordinator to galvanize diplomatic capacities currently stovepiped within the State Department and other executive agencies.
Last month, I traveled to Georgia, Kazakhstan, Turkmenistan, Azerbaijan and Ukraine to advocate for greater cooperation on energy security. The stakes there are high, as President Putin has repeatedly traveled to the region to solidify Russian domination of energy supplies.
Chairman Biden and I have joined in urging the administration to appoint a high-level special envoy for energy in that region. Indeed during my trip, leaders of those countries asked that the United States send such a representative to affirm U.S. interest in Central Asia and affirm U.S. security.
Madam Secretary, I'm hopeful you will share with us your strategy for the region and whether you intend to appoint such an envoy.
As we think about how to achieve our goals, we must also consider how to strengthen our diplomatic capabilities. The Bush administration deserves praise for its international affairs budgets which have attempted to reverse the downward spiral in U.S. foreign policy capabilities imposed during the '90s.
By 2001, embassy security upgrades were behind schedule. We lacked adequate numbers of diplomats with key language skills. Many important overseas posts were filled by junior foreign service officers. And our public diplomacy was completely inadequate for the mission in an era of global terrorism.
Our diplomatic capabilities have made progress under President Bush, but much work is left to be done. Congress, however, must begin to ask more fundamental questions about the national security budget as a whole.
Although our defense, foreign affairs, and homeland security, intelligence (inaudible) budgets are carefully examined from the incremental perspective of where they were the last year, it is not apparent that Congress is adequately evaluating whether the money flowing to these areas represents the proper mix for the 21st century security threats that we face.
Last year in my opening statement at our State Department budget hearing, I pointed out that the foreign affairs account was just one- fourteenth the size of the defense budget.
Defense agencies increasingly have been granted authority to fill gaps in foreign assistance and public information programs. But the military is ill-suited to run such programs.
A far more rational approach would be to give the State Department the resources it should have to achieve what clearly are civilian missions. This view was echoed by Defense Secretary Gates in a speech last month at CSIS.
He pointed out that the total foreign affairs budget request was roughly equivalent to what the Pentagon spends on health care alone.
He also noted that the planned 7,000 troop increase in the Army expected for 2008 is on a, quote, "equivalent to adding the entire U.S. foreign service to the Army in one year," end of quote.
We must adjust our civilian foreign policy capabilities to deal with a dynamic world where national security threats are increasingly based on non-military factors.
Though the State Department has numerous underfunded priorities, I would emphasize the urgency of establishing a rapidly deployable civilian corps that is trained to work with the military on stabilization and reconstruction missions to hostile environments.
I am very pleased that after several years of work by this committee and the State Department the Bush administration is requesting $248.6 million for the civilian stabilization initiative.
Creating and sustaining this civilian capacity is precisely the intent of the Lugar-Biden-Hagel legislation that passed the Senate in 2006 and passed this committee again last March.
In addition to meeting contingencies in Iraq and Afghanistan, we must be ready for the next post-conflict mission.
Madam Secretary, it is a pleasure always to have you with us. We look forward to your insight and many other matters that you wish to bring before us. Thank you.
BIDEN:
Mr. Chairman, thank you for an insightful statement. I appreciate it.
Madam Secretary, one housekeeping measure. We're told there's going to be a vote around 10:30, and what I'd like to suggest is you begin your statement, and I'll have you go through your statement, but it may be that one of us will leave -- I have read your statement in its entirety already, believe it or not -- and may leave to vote so we can come back without interruption and just keep this going.
But I apologize for the interruption which is likely to occur around 10:30.
The floor is yours, Madam Secretary, and again, welcome. Thank you for being here.
RICE:
Thank you very much, Chairman, and I would first like to thank the committee. This is, indeed, the last budget that I will present to you as secretary of state.
I want to thank you, Mr. Chairman. I want to thank the ranking, Mr. Lugar, and all the members of the committee for what I think we have achieved together over the last several years.
I'd also like to take just a moment to say how much Congressman Tom Lantos will be missed. He was, of course, a northern Californian, someone that I knew very well. I feel that I've lost an inspirational mentor and I've lost a good friend.
And when I testify today for House Foreign Affairs, it will be a sad moment to see him not sitting there. He was a true American hero and I think embodied the best of our country.
I want to thank you very much for what we have been able to do together. I have a full statement, Mr. Chairman, but I'll just have that entered into the record, and I'd like to, with your permission...
BIDEN:
Without objection, the entire statement will be placed in the record.
RICE:
Thank you.
I'd like to just mention a few highlights of what I think we've been able to do together and then to address three questions that came up in the remarks that you and Senator Lugar have made.
The first is I'd like to thank you very much for the support of this committee in significantly increasing foreign assistance during this administration.
Really, foreign assistance had been essentially flat-lined for almost two decades, and it was time for the United States to do more. We have been able, with your help, to double foreign assistance to Latin America, to triple it worldwide, and to quadruple it in Africa.
That includes, of course -- and it also has been helped by the development of the HIV/AIDS PEPFAR initiative which you mentioned, Senator Biden, as well as the development of innovative approaches in foreign assistance, like the Millennium Challenge Corporation. I think it's been a good story.
If I could say one thing from a point of privilege, I hope that it will continue into the future, because we've learned that as important as development assistance is, foreign assistance is, because of our moral obligation to help those who are less fortunate, it is also critical to our national security.
We have seen what happens when states are failed states, when they are unable to deliver for their people, and we have both an obligation and an interest in having well governed democratic states that can deliver for their people, that can fight poverty, that can defend their borders. And I think foreign assistance is our most valuable tool in doing so.
Secondly, I'd like to thank you very much for the support that you've given to the department as we've tried to transform the department into one that is capable of taking on the myriad challenges that we face.
We are sending diplomats, fine civilians, into places that diplomats didn't used to go. And I want to take a moment to thank the men and women of the foreign service, the civil service and especially our foreign service nationals for their willingness to serve in extremely difficult places and difficult circumstances.
We've tried to give them new tools. We've tried to develop new ways of doing this -- the Provincial Reconstruction Teams, for instance, in Iraq and Afghanistan that, in effect, marry us with our military counterparts, because really, while the military can buy time and space, it is really civilians who have to help these people and these governments build governance structures, non-governmental institutions, rule of law, justice and functioning economies.
And I think that the Provincial Reconstruction Teams will also live on as a way to think about post-conflict operations.
I'm especially pleased that we have made the budget request for the Civilian Response Corps. To be very frank, I think we tried in Afghanistan to deal with counterinsurgency and reconstruction through a kind of international effort. I'll be very frank. It was a kind of "adopt a ministry" by each country for capacity building.
It was very good to have so many countries involved. I've seen those efforts. But it also has led to some incoherence with which we are still dealing. And I will make a comment about that when I turn to Afghanistan.
And then in response in Iraq, we tried the single U.S. government department. The Department of Defense took responsibility but I think did not -- was not able to fully mobilize the range of capabilities that were needed.
There was no single U.S. government institution or agency that was capable of doing that. I think that under the State Department with a civilian response corps we would be better capable of getting the city planners and the justices and the lawyers and the health experts out into the field to help countries recover in post-conflict situations.
And it's not just the large ones like Iraq or Afghanistan, but Haiti or Liberia or the many places that have to develop.
And I thank you for the innovation of a civilian response corps, for the work that you and Senator Lugar and Senator Hagel have done, and I sincerely hope that we can get it stood up and really working. It is probably one of the most important things that we can do as the United States government.
I want to thank you also for the support of increases in public diplomacy. When I first testified before this committee for my confirmation hearing, I said that we would try and increase the resources to public diplomacy.
This is a long-term prospect. It's not something that is going to take hold overnight. But we've increased dramatically the number of exchanges. We have record numbers of foreign students studying in the United States now.
I think we've overcome some of the difficulties of the post-9/11 period when we really did have to think hard about who was coming into the country, but where we were in danger of sacrificing one of our best long-term tools in improving the understanding of the United States and respect for it. That is people who come here and study and go back to their countries to be leaders.
And I'm very grateful that we've been able to rebuild that function. There's much more work to do. And I'm sure that Jim Glassman, as he replaces Karen Hughes, will put energy into that.
I would also like to note that there's a request for a substantial increase in the number of foreign service officers and USAID officers -- roughly 1,100 in the foreign service and 300 in USAID.
We're just very small, and on many occasions I've been asked if the State Department could do things. It's been hard to do it. We have roughly 6,500 professionals worldwide. I believe there are twice as many lawyers in the Defense Department as foreign service officers.
And while Secretary Powell and the president started the process of rebuilding after the '90s with roughly 2,000 over four years, this is another important increment, and I will be counting on your support with the appropriators to make sure that we can this time fully fund the personnel request.
It will be important as a part of that also to do compensation reform so that our people do not lose locality pay when they serve abroad. It is principally our younger officers that suffer from that disparity, and we will press again for compensation reform.
I say all of this because it has been an extraordinary period for the United States in which we've been taking on challenges, difficult challenges, that I think perhaps none of us could have fully foreseen in 2001.
It has required us to make some difficult decisions. We have not always agreed about those decisions. But I think that we have always done it in the spirit of our great democracy, which is one that recognizes that people can disagree and still be patriots, that recognizes that we must always support our men and women in uniform as well as our civilians abroad.
We have much work to do in the remaining 11 months, and I want to assure you we will sprint to the finish. The United States of America cannot afford any less.
In that regard, let me just say briefly on Iraq and Afghanistan -- and then perhaps a comment on the energy issue -- it has been difficult in Iraq, but I do believe that not only are we starting to see security improvements, but we're starting to see the Iraqis rebuilding their country and developing a young political system to deal with their differences.
I would just note that reconciliation is taking place from the bottom up, of course, with provincial councils and local councils that are working with an awakening movement, not just in Anbar but efforts to spread it to the southern part of the country, with, frankly, Senator Biden, as we've talked, a pretty decentralized structure, which I think is probably best for a country as complex as Iraq.
The local citizens committees that are coming out to defend their territory are coming out not unlike a tradition that we've had in our own country for people to defend that which is nearest to them, which is their neighborhoods and their districts.
The political progress that we're seeing at those local levels -- and I will say I sat with the Kirkuk provincial council and watched Kurds and Arabs trying to overcome their differences through political dialogue.
But those local efforts are starting to have an effect on the national level. Frankly, I think we thought that it would be the national level downward. In some ways, it's been the local level upward that has put pressure on the Iraqi national leaders to be responsive.
And thus, they have passed in recent months a pension law, an investment law, a justice and accountability law -- in other words, a de-Baathification reform -- just today a provincial powers law setting a date for provincial elections to take place during the fall, a general amnesty which is very much welcome by the Sunni population, and a 2008 budget which has significant increases for provincial government, for Iraq's own security forces, and a capital budget that also has a significant provincial element.
So it is hard work. It is harder work, perhaps, than we thought when we began this enterprise. But they are going about the business of building a political structure. That is welcome among their neighbors.
We are seeing Arab states begin to engage with them. The Saudis have said that they will put a diplomatic mission there as well as others. The Russians have now forgiven on Paris Club terms some 90 percent of the Iraqi debt.
And we will have -- I've just accepted the invitation of the Kuwaiti government to hold the third Iraqi expanded neighbors conference toward the end of April. So I believe that we see progress on all fronts, although it is fragile and there is still much work to do.
If I may, just one word on Afghanistan. I was just there. I was in both Kabul and in Kandahar. It is quite clear that militarily there are battlefield successes against the Taliban that, quite frankly, doesn't do very well when it comes at the coalition forces or our forces in military-type formations and has therefore gone to hit- and-run tactics, to suicide bombings, to trying to terrorize the population.
And I had extensive discussions there about the importance of refocusing on population security and the importance of building police forces and local citizen forces that can, after an area has been cleared by coalition forces, hold the territory so that building can take place.
And I just want to say that there's been a lot of attention to NATO in the south, and can we get more NATO forces in to help the forces that are fighting there, the Canadians, the Danes, the British, the Dutch. And they deserve to have the help that they have asked for. And Bob Gates and others are working very hard on that.
But I also saw reconstruction efforts that, frankly, are not as coherent as they need to be.
And we are searching now for an envoy who can help to bring coherence to that international effort, because we now understand that in counterinsurgency you have to defeat the enemy, keep him from coming back, and then give the population reason to believe in a better future.
I believe that the Afghan project is making progress. The situation is better than some reports. It is not as good as it needs to be. And we are paying a lot of attention to improving the circumstances in Afghanistan.
Let me say just finally, Senator Lugar, on the energy piece -- and I'll be very brief -- I agree with you. It is a really important part of diplomacy. In fact, I think I would go so far as to say that some of the politics of energy is warping diplomacy in certain parts of the world.
And I do intend to appoint, and we are looking for, a special energy coordinator who could especially spend time on the Central Asian and Kaskad (ph) region. Thank you very much.
BIDEN:
Based on who's here, we can go with 10-minute rounds, but we'll start with 10-minute rounds and if it turns out that people show up, they'll just get less time. That's the price of coming late. So we'll begin with 10-minute rounds here.
Madam Secretary, there are reports of growing frustration in the ranks of the former Sunni insurgents, the so-called "Awakening," to whom we have been providing monthly payments of $300, which I agree with. It's not a criticism.
They want to be integrated into the Iraqi government and security forces, but the central government seems, even with the changes made as recently as yesterday, to be balking, particularly in mixed areas close to Baghdad.
The situation is said to be so bad that our military has started developing plans to create a Depression-era style civilian job corps so these folks are going to be gainfully employed.
What are the consequences of the Iraqi government's failure to hire these ex-insurgents or the concerned local citizens, as they're called, by our military? What are we going to do to increase this integration?
BIDEN:
And if they're not integrated, can we, by stepping in, stave off what is a growing discontent?
RICE:
The Iraqi government, I think it's fair to say, was initially quite skeptical of the local citizens committees, in part because they worried that they might be new militias, in a sense.
And what we have done is to work with the Maliki government. There is a committee that reviews now the local citizens committees and their integration into the security forces. Not all of them will be integrated into the security forces, and it is important that there be job opportunities for them.
There is work going on in that -- not just temporary jobs, but real jobs through -- for instance, we believe that if the Iraqi government fully executes its budget for housing, which -- its construction industry brings a lot of jobs -- that that might be a way to absorb some of these people.
I'm heartened by the budgets that are now coming out for provincial governments. You are starting to see more of an emphasis on budgetary resources from the center going to the provinces.
We have had, through the Provincial Reconstruction Teams, to intensify our efforts to make it possible for the provincial governments, then, to spend the resources that they're getting.
I've sat with the sheiks of the "Awakening" both in Iraq and when they were here. They want more project money to their province. In fact, there was an Anbar supplemental of about $70 million.
The Anbaris are politically powerful enough that several national politicians decided they should go and deliver it by hand, and there was a big ceremony for it.
Ultimately, I think you will see that the elections at the provincial level will be the real answer to this, because some of the provincial councils which are not so representative because of the way that the elections took place in 2005 I think will be renovated by new provincial powers -- by new elections.
And it's why the provincial powers law is so important. I might just say that they were engaged in debates about the provincial powers that we would recognize from our own history. What was the role of governors? Who could remove them? Did governors have the right to mobilize military forces?
These were really very crucial debates, and I think it's a good thing that they've gotten the law.
BIDEN:
Oh, I was there for that ceremony. I was there when the central government came out to meet with the sheiks and with Sattar -- not Sadr; Sattar -- who was the guy who organized -- the sheik who organized the other sheiks.
And I was there at that ceremony with Ambassador Crocker and the general. And it was an interesting phenomenon.
The fact was that I was told by two of the vice presidents who came from Baghdad, one Sunni and one Shia, that Maliki wouldn't sign the check until the very last minute. I assume it was because of some significant pressure from Ambassador Crocker. I don't know that.
And the point I'm making is this, that at least -- it may have changed in the last month or so, but there is an overwhelming distrust, as you know, as to whether or not these are merely stopgap measures.
And what I keep being told is that there is a need for there to be actual integration, not just in the regional government, in the regional elections that are coming up, but in the central government and in the security forces.
And I may be missing something, and I'm not being facetious -- I may be missing something here -- but I don't see any of that integration occurring, because that's where -- with the sheiks with whom I personally met, and there were, I think, six present -- they wanted to make sure that they were integrated into the security apparatus on a permanent basis.
And the bottom line was because they didn't want Shia patrolling their streets. They didn't want Kurds patrolling their streets. And they wanted to be able to patrol their own streets, being a representative of the central government but in their own areas.
RICE:
There is a program that is being worked with the Iraqi government. There is a committee that the prime minister himself appointed to do precisely that, to work these people into permanent structures of the state.
I think not everybody who's in a local citizens committee will be.
BIDEN:
No, no.
RICE:
But you're right, Senator. This will take some time. This was a very fortuitous development, "Awakening" and the local citizens committees. It was, frankly, not envisioned in the way that the security forces were planned.
And now working them into the structures is very important, but it is under way. And my only point is it's -- I think working them into the security structures is important, but also having "Awakening" feel that they are really a part of the political process...
BIDEN:
No, I understand both. And I agree. All I'm saying to you is I think we are -- we should be pushing, in my view, quite frankly, and according to the military with whom I speak, considerably harder.
And as you pointed out, real progress has come -- not the only progress, but real progress has come the more localized we've empowered people.
And I really would argue again for you all to take another look at what the Congress passed here about pushing forward on this whole federal system that their constitution envisions. But I'll come back to that.
In my remaining 2.5 minutes here, I'd like to ask you about the de-Baathification law. As you know, whether the recently passed de- Baathification law promotes healing or further division depends on how it's implemented.
If you listen to some of the voices of those such as Dr. Chalabi, who has been closely associated with de-Baathification, the law will actually lead to the expulsion of more individuals from key government jobs than inclusion.
What steps are we taking and how are we monitoring this to ensure that the de-Baathification law actually integrates more people rather than has this negative impact?
Because the devil really is in the details of how this is read and how it is being advertised, if you will, in Iraq by those individuals representing the sectarian interests in Iraq.
RICE:
We made the point precisely that you've made, that the issue here is going to be implementation. The law itself is not a perfect law. It is a compromise law. And obviously, with any law, it is subject to interpretation.
But when we've talked particularly with Tariq al-Hashimi, the vice president, he is now very focused on the question of implementation and also whether or not there need to be certain understandings about how it will be implemented.
And we have people in the embassy who are working on that. One of the things that has come about -- when I was out there a couple of times ago, Senator, I worked very hard with Prime Minister Maliki to restart something called the Three Plus One, which is -- they now call their executive council the presidency plus the prime minister.
And by meeting weekly and then having a little steering committee of their people to meet even more frequently, we've encouraged them to practically every day look at this and how it's going forward.
I think the principal concerns are about what may happen to certain people in the security forces and in the intelligence forces. It should be helped by the fact of the pension law and, frankly, also by the amnesty.
But we've been making exactly the point that the implementation and whether there need to be certain understandings about...
BIDEN:
Well, I think Hashimi's come a long way. I've spent a lot of time with him, and I think he's come a long way in terms of greater regional authority.
And I think there still is a significant deal to be made here tied to oil, but my time is up.
I yield to Senator Lugar.
LUGAR:
Thank you very much, Mr. Chairman.
Madam Secretary, yesterday Russian President Vladimir Putin, while President Yushchenko of Ukraine was sitting next to him, threatened to target Ukraine with nuclear weapons if Ukraine was to deepen their relationship with NATO.
Now, this comes on the heels of similar threats to Poland and the Czech Republic if those nations were to cooperate with us on missile defense.
Last year, the Russian government fomented unrest, stood idly by while government-sponsored groups physically threatened the Estonian ambassador and her embassy in Moscow, and is suspected of sponsoring a massive cyberattack on their Baltic neighbor, because the government in Tallinn moved a Soviet statute.
Last year Russia withdrew from a treaty restricting conventional weapons in Europe. And this week, a Russian bomber risked an international military incident when it flew over a U.S. aircraft carrier while another bomber simultaneously violated Japanese air space.
And President Putin announced that Russia is in the midst of a new arms race with the United States and our allies. Meanwhile, Gazprom, the Russian state energy company, threatened to cut off energy supplies to Ukraine, although the intervention yesterday by President Yushchenko and some agreement may have postponed that for the winter.
And Moscow continues to use energy as a weapon against its neighbors, to extort sales of vital infrastructure, with the goal of monopolizing energy development and transportation.
Other forms to bully Russia's neighbors have taken the form of a blockade of Georgia and daily threats to those capitals who are cooperating with the United States.
Given this record of behavior, why is NATO considering inviting President Putin to the summit conference in Bucharest in early April? It would seem that the alliance might very well be intimidated by that presence, given all the experiences of its members.
And I just simply want to ask you to discuss for a moment what you perceive in the event the agenda at NATO is new members -- three have been strongly suggested -- or two MAP programs -- namely, for Ukraine and Georgia -- and then, of course, discussion of Afghanistan or other issues in which we are, as an alliance, involved.
What is the effect of inviting President Putin to join the conversation?
RICE:
Thank you, Senator. First of all, let me just say that I said at Davos that the unhelpful and really -- I will use a different word -- reprehensible rhetoric that is coming out of Moscow is unacceptable, and it's not helpful to a relationship that actually, I think, has some positive aspects.
And we have cooperated on North Korean de-nuclearization, and Iran, and the Middle East and, of course, the cooperative threat reduction work and global nuclear terrorism -- a lot of things.
And yet, when it comes to issues that I would say come out of the structure of the post-Cold War order in Europe, we get this kind of rhetoric, and it's certainly not helpful.
As to the NATO agenda, it's the administration's strong belief that NATO will do what it must as an alliance, and Russia has no veto.
So in fact, we will look at what the status of various aspirants really is and whether they are ready for different stages of either NATO membership or the various relationships that NATO can offer and we'll make the decision on that basis. I think that's the only way that NATO can proceed.
We've also been very clear that we are absolutely devoted to the independence and sovereignty of Ukraine and of other states that were once a part of the Soviet Union.
The Soviet Union was a -- had all of these parts, but that is another -- that was another point in time. It is gone forever. And I hope that Russia understands that.
Now, as to how these discussions go, I've sat through at least the ministerials of the NATO-Russia Council, and very often, Senator, it goes the other way. It's an opportunity for Russia to see the unity of the alliance.
It's very often an opportunity for the Russians to sit and recognize that the Balkan states are part of NATO and therefore enjoy the protection of Article 5 and of the European and North Atlantic allies.
And so in that sense, these sessions tend not to be one in which the alliance is intimidated by Russia but, rather, where a very strong message of alliance unity can be communicated.
And I would hope that if we do go forward with a NATO-Russia Council in Bucharest that that would be what is being communicated, that it is a Russia-NATO conversation, but that NATO is a strong and unified alliance that is not going to see a return to the Cold War, and that means neither to Russia's ability to intimidate its neighbors nor to the times when we had an implacably hostile relationship with the Soviet Union.
LUGAR:
Well, I thank you for that response.
Can you give us an indication of how vigorous the administration will be in backing the three new membership applications that are imminent, as well as the MAP designation for Ukraine and Georgia?
RICE:
Well, on the three aspirants, we believe they're making very good progress. We will obviously reserve judgment until the time that we've had a chance with our allies to determine whether or not they've met the standard.
But should they meet the standard, it's our view that they ought to be invited for membership.
In terms of the membership action plans, of course, those also require an examination of where a state is, and I would give the same answer. We've always believed that states ought to meet these -- or receive these relationships as they become able and capable of carrying out the responsibilities that go with them.
LUGAR:
Well, we would certainly ask you, as April approaches, to inform the committee about the i
