[Budget of the United States Government]
[III. Creating a Better Government]
[3. International Affairs]
[From the U.S. Government Publishing Office, www.gpo.gov]


 
                        3.  INTERNATIONAL AFFAIRS

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                        Table 3-1.  Federal Resources in Support of International Affairs
                                            (In millions of dollars)
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                                                                               Estimate
               Function 150                   2000   -----------------------------------------------------------
                                             Actual     2001      2002      2003      2004      2005      2006
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Spending:
  Discretionary Budget Authority..........    23,459    22,651    23,867    24,388    24,918    25,468    26,031
  Mandatory Outlays:
    Existing law..........................    -4,069    -6,651    -3,543    -3,422    -3,438    -3,408    -3,361
Credit Activity:
  Direct loan disbursements...............     1,571     2,252     2,047       476       226       224       119
  Guaranteed loans........................    11,443    11,110    11,544    10,829    10,743    11,585    11,215
Tax Expenditures:
  Existing law............................    16,630    18,060    18,340    18,910    20,040    21,260    22,590
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  The Administration proposes $23.9 billion for International Affairs 
programs in 2002. By fully funding these programs, the United States can 
provide the global leadership needed to enhance national security, 
including the security of Americans overseas; promote free trade and 
open markets; counter the threat posed by the global trade in illegal 
drugs; provide humanitarian and development assistance to address the 
global spread of poverty and diseases; and provide the modern technology 
and working conditions that our diplomats need in their efforts to 
secure our national interests overseas.
  The performance goals that follow represent key U.S. foreign policy 
priorities based on the Administration's initial review of our 
international affairs programs and objectives. As the Administration 
continues to refine U.S. national security and foreign policy 
strategies, additional objectives and performance goals are likely to be 
identified. These goals should, therefore, be viewed as preliminary and 
not as an exhaustive list. International affairs agencies have 
additional performance goals that meet their legislative mandates in 
ways that contribute to U.S. national interests.

National Security

  Vigorous engagement and leadership in international affairs are 
essential to U.S. national security. Experienced and skilled 
professionals are required to protect America's security interests, 
along with an active diplomacy and sufficient resources to address 
challenges anywhere in the world. The Administration's efforts to reduce 
the threat of weapons of mass destruction will combine active diplomacy 
with critical, targeted assistance programs. The United States will 
continue its bilateral efforts to resolve destabilizing regional 
conflicts, including the use of economic and reconstruction assistance, 
which will be complemented by multilateral work through international 
financial institutions and the United Nations. These tools for 
leadership in international affairs require a sustained commitment of 
resources to achieve results.
  American resolve to advance national security and foreign policy 
interests throughout the world is unmatched. The advancement of those 
interests requires a day-to-day American presence in dangerous locations 
despite continued threats of terrorist violence. Effective performance 
of embassy security measures

[[Page 24]]

must be an integral component of efforts to meet our national security 
goals. The Administration has accepted the management challenge to 
achieve efficiently and effectively global embassy security upgrades and 
maintain a high level of readiness at U.S. overseas posts. The budget 
proposes $1.3 billion for enhanced security measures, including $665 
million for new, secure facility construction, which includes funding 
for U.S. Agency for International Development (USAID) facilities, $211 
million for additional security upgrades to existing facilities, and 
$428 million for security readiness.
  In addition to enhanced security, the Administration intends to review 
America's official presence overseas. According to one study, the 
distribution of U.S. Government staff overseas is based more on 
historical legacy and bureaucratic inertia than by a clear commitment to 
advance American policy goals. In some embassies, up to 30 U.S. agencies 
may be represented. Frequently, agencies do not know the true costs of 
having their staff in foreign countries. This situation clearly does not 
reflect the desired goal of a well managed, rational, and cost effective 
American presence overseas.
  United Nations peacekeeping efforts can benefit U.S. national 
security. Working with the UN allows the United States to address policy 
objectives and share the cost among all nations, while reducing the 
possible requirement to deploy U.S. troops abroad. The United States 
must continue to address the need for UN management reforms. The United 
States must ensure that UN peacekeeping mission goals are defined and 
achievable, that vital national interests are identified, and that there 
is not only a planned exit strategy, but also a ``success'' strategy to 
UN peacekeeping operations.
  The Department of State will meet the following goals in 2002:
  Continue to make full use of active and defensive measures to 
          prevent and deter terrorist attacks and the loss of human 
          life. The resources requested will support maintenance of 
          counter-surveillance programs, integration of threat 
          intelligence into an active security posture, inspection of 
          all vehicles entering U.S. diplomatic compounds, and 24-hour 
          guard coverage and electronic monitoring of embassy 
          facilities.
  Improve the security posture of all agencies overseas, make 
          more reliable the Department's ability to project resource 
          needs in the future, and examine the current financing 
          structure for overseas facilities to determine if it provides 
          a sound basis for long-term capital needs.
  Set standards to measure the effectiveness of UN peacekeeping 
          activities and bilateral U.S. assistance programs designed to 
          build regional and national peacekeeping and peace enforcement 
          capacities worldwide. Make decisions concerning continued 
          support for and funding of these activities based on whether 
          these standards are being met.
  Achieve demonstrable reductions in the flow of the material, 
          equipment, and technology needed to acquire, produce, or 
          deploy weapons of mass destruction, by helping officials in 
          exporting countries and key transshipment points to improve 
          their systems of export controls.

State Department Management and Operations

  The budget provides funding to modernize and improve State Department 
management, which is expected to enable the Department to achieve its 
strategic and performance goals. The Department will identify 
appropriate quantitative indicators to measure the success of management 
reforms and ensure that budgetary resources are directly linked to 
management performance.
  As with any institution, excessive layers of bureaucracy and 
duplicative bureaus impede effective management. In the case of the 
State Department, they can hinder the prompt and effective execution of 
foreign policy. To reduce the number of middle management positions that 
complicate lines of authority and hinder the development and 
presentation of coherent foreign policy, the Department of State will 
empower line officers. The budget also provides the necessary resources 
to improve needed work force planning and to strengthen the Department's 
human

[[Page 25]]

resource management to enable the Department to effectively recruit, 
assess, and retain the highest possible caliber work force.
  The budget includes $210 million for information technology 
investments that will improve interaction and information sharing among 
agencies in the foreign affairs community and modernize secure 
communications capabilities. The budget also provides the necessary 
funding to ensure that diplomatic and consular facilities are planned 
and constructed effectively, efficiently, and on budget.
  In the context of the biennial authorization process, the Department 
will propose legislative changes needed to implement management reforms. 
In addition, the Department will improve its financial management 
practices to identify savings and performance enhancements accruing from 
the United States Information Agency (USIA)/Arms Control Disarmament 
Agency (ACDA) merger. This merger brought 4,000 staff under the direct 
control of the Secretary of State.
  The Department will meet the following performance goals in 2002:
  Identify and eliminate bureaucratic layers that hinder 
          effective foreign policy.
  Undertake and implement a comprehensive review of the 
          Department's organization to realize efficiency gains by 
          eliminating duplication in bureau functions.
  Review current administrative practices in overseas facilities 
          and undertake reforms, including increased use of Foreign 
          Service Nationals, to reduce substantially the cost of 
          administrative support.
  Design and implement a long-term investment strategy in new 
          technology that enables employees to communicate more 
          effectively and that realizes increased cost savings and 
          efficiencies.
  Complete and implement a comprehensive examination of current 
          and future work force needs. The Department will demonstrate 
          with measurable criteria how additional personnel contribute 
          to fulfillment of specific program goals.
  Create and implement policies to ensure that the Department 
          recruits, hires, and retains Foreign and Civil Service 
          officers with the proper skills needed to fulfill the 
          Department's strategic and performance goals. The Department 
          will develop and apply performance criteria to measure the 
          effectiveness of its recruitment, examination, and retention 
          strategies.
  Identify, review, and implement, as necessary, overseas 
          facility planning, construction, and management processes to 
          ensure effective and on-budget service delivery.
  Describe savings and performance enhancements deriving from 
          the USIA/ACDA merger and take steps to ensure that this merger 
          achieves scale and other benefits as originally anticipated.
  Make substantial progress toward financial systems compliance 
          with the Federal Financial Management Improvement Act.
  Present an authorization proposal that includes a blueprint 
          for substantial management reforms.

Free Markets

  As the President said in his Address to the Joint Session of Congress: 
``The cause of freedom rests on more than our ability to defend 
ourselves and our allies. Freedom is exported every day, as we ship 
goods and products that improve the lives of millions of people. Free 
trade brings greater political and personal freedom.''
  International affairs programs work to increase our economic freedom 
and prosperity in several ways. First, the United States Trade 
Representative (USTR), supported by the Departments of State and 
Commerce, and other agencies, works to reduce barriers to trade by 
negotiating new trade liberalizing agreements and by enforcing existing 
agreements. To reach this objective, the President has called on 
Congress to quickly give him, as each of the previous five Presidents 
has had, the ability to negotiate far reaching trade agreements with 
presidential trade promotion authority. This authority will enable the 
Administration to proceed aggressively with its negotiating agenda, 
which includes the World Trade Organization's (WTO) built-in agenda on 
agriculture and services, the

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Free Trade Area of the Americas (FTAA), and bilateral free trade 
agreements.
  Second, the Export-Import Bank provides export financing to correct 
market distortions that can put U.S. exports at a competitive 
disadvantage. The Overseas Private Investment Corporation (OPIC) 
provides investment insurance and financing for projects involving U.S. 
business. The President has pledged to reduce unnecessary corporate 
assistance and to support an active, but limited, Government. To this 
end, the Export-Import Bank must sharpen programs by focusing on support 
that would not otherwise be available in the private market or which 
redresses officially supported foreign competition. Similarly, OPIC's 
activities should focus more closely on companies and countries that 
cannot access private financing or insurance. These efforts should 
enhance the value added of Export-Import Bank's programs and make OPIC's 
programs complementary, not competitive, with the private market.
  At the moment, these agencies have similar client bases and sometimes 
overlapping product lines. For example, both the Export-Import Bank and 
OPIC offer political risk insurance. The Administration intends to 
review how these agencies, along with the U.S. Trade and Development 
Agency, can serve American clients more effectively.
  The trade agencies will meet the following performance goals in 2002:
  USTR will work with Congress to obtain trade promotion 
          authority and use this to provide impetus for a new 
          negotiating round in the WTO, progress in the FTAA, and 
          negotiation of other free trade agreements, including with 
          Chile and Singapore.
  USTR, working with the Treasury Department and Congress, will 
          seek extension of the Generalized System of Preferences and 
          extension and enhancement of the Andean Trade Preference Act, 
          as included in the President's revenue proposals.
  The Export-Import Bank will expand its direct support to small 
          business above 2001 levels, as well as improve its internal 
          processes and outreach through use of proven technologies.
  OPIC will strive to support a stable level of private U.S. 
          investment in 2002 that promotes American development goals, 
          while continuing to expand its lending to U.S. small business 
          above 2001 levels.

Andean Initiative

  Andean countries are the source of virtually all of the cocaine in the 
United States and an increasing share of the heroin--Colombia is the 
primary regional source of both. This drug trade contributes to 
political, economic, and social instability.
  The budget includes $731 million for U.S. funding for the Andean 
regional initiative, which will support drug eradication, interdiction, 
alternative development in Colombia, Peru, Bolivia, Ecuador, and other 
countries in the region. (Additional funding from economic assistance 
accounts will augment these reforms directed toward democratic 
strengthening and economic growth.) This initiative will build upon the 
resources provided in the 2000 Emergency Supplemental Appropriations Act 
for Plan Colombia and ongoing regional counterdrug funding for the State 
Department's Bureau of International Narcotics and Law Enforcement 
Affairs. About 50 percent of this combined new funding will go to Peru, 
Bolivia, Ecuador and neighboring countries to maintain and continue 
their success in eradicating illegal drug crops and to prevent spillover 
of violence and the drug trade from Colombia. Additionally, about 50 
percent of these 2002 funds will support alternative development, human 
rights, displaced persons, judicial reform and democratic institution 
building programs.
  The State Department, working with other U.S. agencies, will meet the 
following performance goals:
  Reduce Colombian coca production by 30 percent from calendar 
          year 2000 levels by the end of calendar year 2002.
  Eliminate all illicit coca production in Bolivia by the end of 
          calendar year 2002.
  Negotiate revised coca and poppy control goals with the new 
          Government of Peru after it assumes power in July 2001.

[[Page 27]]

  Establish meaningful, aggressive, achievable, and quantifiable 
          goals for counterdrug efforts in other countries in the region 
          by August 15, 2001, to be used in carrying out programs in 
          2002.

International Development/Humanitarian Response

  The United States has a long and proud history of providing assistance 
to poor countries, both to alleviate the human suffering brought on by 
poverty and man-made and natural disasters. U.S. assistance must also 
help to improve opportunities for freedom and prosperity. The United 
States will work with other countries to help meet the needs of the poor 
and vulnerable around the globe. The budget for USAID provides an 
increase in funding to fight the spread of HIV/AIDS and other infectious 
diseases. This will continue recent efforts by the United States to 
combat the global spread of this disease and maintain the pressure on 
other donors, multilateral organizations, and non-governmental 
organizations to make greater efforts to address a plague that threatens 
to undermine the economies and national security of affected countries, 
especially those in sub-Saharan Africa where prevalence rates often 
exceed 20 percent of the adult population. The budget also increases 
investment in such key social sectors as basic education.
  In addition, the United States will continue to leverage international 
donor resources to promote global economic growth and reduce poverty by 
seeking funding for our commitments to the Multilateral Development 
Banks and to the Heavily Indebted Poor Country (HIPC) multilateral debt 
reduction initiative. These multilateral programs assist countries to 
reach their potential for sustainable growth through adoption of policy 
reforms that promote market-oriented economies, fight corruption, and 
improve transparency and accountability. The United States will continue 
to make resources available to carry out agreements under the Tropical 
Forest Conservation Act, which allows for restructuring debt to generate 
funds for conservation projects.
  One aspect of debt forgiveness, however, is the coordination of that 
forgiveness with new lending. Four U.S. Government agencies currently 
have direct loan and guarantee programs that are subject to debt 
forgiveness initiatives. In some cases, agencies have offered new 
credits to a country, only to have the country qualify for debt 
reduction a short time later. The Administration intends to reconcile 
the goals of debt forgiveness and credit management in a rational 
manner.
  Relevant agencies will meet the following performance goals for 2002:
  USAID will increase funding to support prevention and care 
          programs that combat the HIV/AIDS pandemic.
  USAID will increase support for economic growth, leveraging 
          private sector resources to foster agricultural development, 
          improve the business and trade climate, expand access to basic 
          education and increase the efficient use of energy in 
          developing countries.
  USAID will expand conflict prevention and development relief 
          efforts, facilitating increased support from non-governmental 
          organizations, other private sector entities and other donors 
          to respond to crises, and recovery and support prevention 
          including support for democracy.
  The United States will support the HIPC initiative to reduce 
          the debt burden of the poorest countries to more sustainable 
          levels in return for adopting appropriate policies to reduce 
          poverty and enhance economic growth. As part of this 
          initiative, the Department of Treasury will fund the 
          forgiveness of debt owed to the United States by an expected 
          33 qualifying countries and will provide contributions to the 
          HIPC Trust Fund in order to finance debt reduction by 
          multilateral institutions. The budget requests $224 million, 
          which along with $16 million from existing balances of 
          previously appropriated funds, will fully meet the U.S. 
          commitment for contributions to the HIPC Trust Fund.
  Under the Tropical Forest Conservation Act (TFCA), the 
          Department of the Treasury has restructured some of 
          Bangladesh's debt in order to generate funds for conservation 
          programs. Treasury expects to continue making progress on this 
          initiative by completing agreements with two or

[[Page 28]]

          three additional countries in 2001 with a budget cost of 
          approximately $13 million. In 2002, Treasury will make more 
          funds available for further programming under TFCA, as well as 
          up to $13 million that may be transferred from USAID.
  The State Department, through the help and advice it provides 
          countries to clear land mines and other unexploded ordnance, 
          will expand by 3,500 square kilometers over 2001 the amount of 
          land available for local agricultural and other economic 
          activity. These efforts, funded primarily by $40 million from 
          the Nonproliferation, Anti-terrorism, Demining, and Related 
          Programs account, will speed economic and social recovery and 
          will reduce the casualties suffered by innocent civilians, 
          including children.
  State, in cooperation with USAID and other relevant agencies, 
          should make and implement recommendations based on the 2000 
          review of humanitarian assistance programs to improve the 
          administration and delivery of relief.
  The Peace Corps expects to have more than 7,000 volunteers to 
          address a variety of problems in the areas of agriculture, 
          environment, small business, and health, including a multi-
          faceted initiative to fight the HIV/AIDS pandemic.

International Broadcasting

  International broadcasting directly impacts the global free flow of 
information by providing accurate coverage of world and local events to 
foreign audiences with limited access to unbiased news reports. To meet 
the President's Government-wide performance goals for 2002, the 
Broadcasting Board of Governors will:
  Reduce the number of upper- and middle-level managers in each 
          of the four broadcasting entities.
  Link budget and management decisions more closely to 
          performance by revamping the strategic planning and 
          performance management system that incorporates Government 
          Performance and Results Act (GPRA) planning, the annual 
          language service review process, and the program reviews of 
          individual language services. By early 2002, the Broadcasting 
          Board of Governors will produce an over arching strategic plan 
          containing specific criteria for measuring the need for and 
          effectiveness of individual language services and programs and 
          explaining how they relate to one another and to overall GPRA 
          planning. This strategy will reduce duplication among the 
          various broadcast entities, eliminate ineffective or low-
          priority language services and programming, and direct 
          resources to highest-priority, most effective languages and 
          programming.
  By the middle of 2002, finalize and implement a uniform, 
          agency-wide strategy for capital planning, using private 
          contractors whenever possible, that will improve the operating 
          efficiency and reach of its broadcast network by taking 
          advantage of emerging technologies. Such a strategy will 
          address the latest broadcast technologies to combat jamming 
          and other transmission difficulties while ensuring that 
          worldwide audiences receive broadcasts via the media they are 
          most likely to use.
  Actively solicit the participation of private-sector firms in 
          competitive bidding for contracts.