[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]



 
         DEPARTMENT OF STATE FISCAL YEAR 2003 BUDGET PRIORITIES
=======================================================================

                                HEARING

                               before the

                        COMMITTEE ON THE BUDGET
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION
                               __________

             HEARING HELD IN WASHINGTON, DC, MARCH 7, 2002
                               __________

                           Serial No. 107-27
                               __________

           Printed for the use of the Committee on the Budget


  Available on the Internet: http://www.access.gpo.gov/congress/house/
                              house04.html





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                        COMMITTEE ON THE BUDGET

                       JIM NUSSLE, Iowa, Chairman
JOHN E. SUNUNU, New Hampshire        JOHN M. SPRATT, Jr., South 
  Vice Chairman                          Carolina,
PETER HOEKSTRA, Michigan               Ranking Minority Member
  Vice Chairman                      JIM McDERMOTT, Washington
CHARLES F. BASS, New Hampshire       BENNIE G. THOMPSON, Mississippi
GIL GUTKNECHT, Minnesota             KEN BENTSEN, Texas
VAN HILLEARY, Tennessee              JIM DAVIS, Florida
MAC THORNBERRY, Texas                EVA M. CLAYTON, North Carolina
JIM RYUN, Kansas                     DAVID E. PRICE, North Carolina
MAC COLLINS, Georgia                 GERALD D. KLECZKA, Wisconsin
ERNIE FLETCHER, Kentucky             BOB CLEMENT, Tennessee
GARY G. MILLER, California           JAMES P. MORAN, Virginia
PAT TOOMEY, Pennsylvania             DARLENE HOOLEY, Oregon
WES WATKINS, Oklahoma                TAMMY BALDWIN, Wisconsin
DOC HASTINGS, Washington             CAROLYN McCARTHY, New York
JOHN T. DOOLITTLE, California        DENNIS MOORE, Kansas
ROB PORTMAN, Ohio                    MICHAEL E. CAPUANO, Massachusetts
RAY LaHOOD, Illinois                 MICHAEL M. HONDA, California
KAY GRANGER, Texas                   JOSEPH M. HOEFFEL III, 
EDWARD SCHROCK, Virginia                 Pennsylvania
JOHN CULBERSON, Texas                RUSH D. HOLT, New Jersey
HENRY E. BROWN, Jr., South Carolina  JIM MATHESON, Utah
ANDER CRENSHAW, Florida
ADAM PUTNAM, Florida
MARK KIRK, Illinois

                           Professional Staff

                       Rich Meade, Chief of Staff
       Thomas S. Kahn, Minority Staff Director and Chief Counsel










                            C O N T E N T S

                                                                   Page
Hearing held in Washington, DC, March 7, 2002....................     1
Statement of Hon. Colin L. Powell, Secretary, U.S. Department of 
  State..........................................................     3
Prepared statements and additional submissions of:
    Hon. Adam Putnam, a Representative in Congress from the State 
      of Florida.................................................     2
    Mr. Powell:
        Prepared statement.......................................    11
        Response to Mr. Spratt's question regarding 
          nonproliferation.......................................    19
        Response to Mr. Sununu's question regarding the Real 
          Estate Advisory Board..................................    23
        Response to Mr. Brown's question regarding the Peace 
          Corps..................................................    37
        Response to Mr. Brown's question regarding multilateral 
          development banks......................................    38
        Response to Mr. Moran's question regarding the Islamic 
          Exchange Initiative....................................    41
        Response to Mrs. Clayton's question regarding USAID......    46
    Hon. John M. Spratt, Jr., a Representative in Congress from 
      the State of South Carolina................................    21









         DEPARTMENT OF STATE FISCAL YEAR 2003 BUDGET PRIORITIES

                              ----------                              


                        THURSDAY, MARCH 7, 2002

                          House of Representatives,
                                   Committee on the Budget,
                                                    Washington, DC.
    The committee met, pursuant to call, at 10 a.m. in room 
210, Cannon House Office Building, Hon. Jim Nussle (chairman of 
the committee) presiding.
    Members present: Representatives Nussle, Sununu, Hoekstra, 
Gutknecht, Thornberry, Fletcher, Watkins, Schrock, Brown, 
Putnam, Kirk, Spratt, McDermott, Clayton, Price, Clement, 
Moran, Hooley, McCarthy, Capuano, Honda, and Hoeffel.
    Chairman Nussle. Good morning. This is the full Budget 
Committee hearing; Department of State fiscal year 2003 budget. 
Today's hearing is intended to examine the President's 
international affairs budget request for the year 2003. We will 
look specifically at how the budget addresses the war against 
terrorism, the key initiative of the State Department which is 
the largest component of our international affairs function.
    As the war against terrorism obviously continues to unfold, 
the Department of State faces an increasing and very complex 
task. First, to maintain and expand support of the 
international coalition on the war against terrorism, and 
provide safe secure and functional facilities for employees at 
U.S. diplomatic missions worldwide. In response, the 
President's budget directs $5.5 billion toward specific 
diplomatic, security, and antiterrorist measures.
    Finally, we will explore and examine how the President's 
budget supports international assistance programs, including 
increased economic and security assistance for our coalition 
partners and frontline states on the war against terrorism, 
expanding the effort to stem the flow of cocaine, heroin and 
other drugs in Colombia and its Andean neighbors, and by 
providing the historically high level of funding to fight HIV 
and AIDS that is an obvious crisis throughout the world.
    We are very honored to have Secretary Colin Powell back 
before our committee today. Let me just say, both personally 
and professionally, thank God you are there. Over this last 
year we have seen the dream team, I think, at work in working 
on behalf of our Nation. I can't tell you how many of my 
constituents in Iowa have told me that they are particularly 
happy that you are in the position you are in, Don Rumsfeld is 
where he is, Vice President Cheney, and President Bush are 
there. It is kind of our four corners of support and expertise 
as we take on this very important challenge for the Nation.
    We know it is going to be a long, drawn-out situation and 
we know that this budget is the first of many that we will need 
to address what has become a permanent issue for our Nation. 
Not one that is temporary, not one that just fills the budget 
function for a year and then goes away, but this is a permanent 
responsibility for this country, for this Congress, for this 
government. We are honored to have you here to talk about that 
subject before us today.
    Before I turn to you, let me turn to Mr. Spratt for any 
comments he would like to make.
    Mr. Spratt. General Powell, let me echo the chairman's 
sentiments and say we are glad you are where you are, too, and 
we are glad you are here today because the support for function 
150 starts right here in this committee. It is not the most 
popular function in the budget by any means. We don't 
normally--in districts like mine--send out press releases 
bragging about this particular function of the budget, but it 
is critically important.
    I notice this year that you are adding another increment 
toward getting the amount for function 150, up to the level it 
needs to be to protect our interests abroad. I congratulate you 
in that endeavor and I tell you, you will have our support in 
achieving the goals that you have set for yourself.
    Chairman Nussle. General Powell, welcome, and we are 
pleased to accept your testimony. Your entire written testimony 
will be made part of the record. Without objection, members 
will have 7 legislative days to submit statements for the 
record at this point.
    [The information referred to follows:]

Prepared Statement of Hon. Adam H. Putnam, a Representative in Congress 
                       From the State of Florida

    Good morning. Thank you Mr. Chairman and Mr. Spratt for providing 
me with the opportunity to review the fiscal year 2003 budget for the 
State Department. Welcome Secretary Powell, thank you for taking the 
time to meet with us and for making yourself available to answer our 
questions. I would like to take this occasion to congratulate you 
Secretary Powell, as well as the entire State Department, on the fine 
job the Department has done during the first 6 months of our war on 
terrorism.
    Last month, you testified that the resources challenge for the 
Department of State had become a serious impediment to the conduct of 
U.S. foreign policy. You may also recall a statement you made last year 
on March 15, to the House International Relations Committee, which 
seems particularly prescient now: ``If we think it's important for our 
fighting men in the Pentagon to go into battle with the best weapons 
and equipment and tools we can give them, then we owe the same thing to 
the wonderful men and women of the Foreign Service, the Civil Service, 
and the Foreign Service nationals, who are in the front line of combat 
in this new world.'' The Congress responded with an increase of nearly 
6 percent in the overall State Department budget.
    This year there are added stresses and increased pressures from the 
war on terrorism generally and the war in Afghanistan. A number of 
longstanding foreign policy challenges remain--the escalation of the 
Palestinian-Israeli conflict, and its potential for destabilizing the 
entire Middle East region and the tensions between Pakistan and India 
for example. In addition, recent public opinion surveys of the Muslim 
world suggest growing anti-American sentiment in Islamic nations. This 
particularly concerns me in Southeastern Asian nations with significant 
Muslim populations, such as Indonesia, Malaysia and the Philippines, 
and suggests they may require greater assistance, and more intense 
engagement to encourage them in their efforts to combat terrorism.
    I agree with you Secretary Powell, that our diplomacy is an 
important weapon in the war on terrorism and that we must keep our 
diplomatic ``forces'' if you will, motivated, well equipped, well 
trained and prepared to do the job the Nation asks of them.
    The Bush administration's fiscal year 2002 State Department budget 
requested a total of $1.3 billion for embassy security and worldwide 
security upgrades. The House concurred; the Senate passed a total of 
$1.07 billion. The administration fiscal year 2002 State Department 
budget request emphasized three goals: improving information 
technology, embassy security and construction, and additional hiring of 
Foreign and Civil Service, as well as security personnel. Each of these 
priorities was intended to improve security at Department facilities 
around the world. The overall State Department budget request for 
fiscal year 2002 represented a 13-percent increase over the fiscal year 
2001 enacted level.
    It is imperative that we provide our diplomats, and their overseas 
staff, secure embassies in which to conduct our Nation's diplomacy as 
well as all the tools and information technology necessary to 
accomplish the mission at hand. The men and women of our foreign 
service have been the primary targets of a number of terrorist attacks 
and as such they may be said to go into harm's way every day, in much 
the same way as the men and women of our armed forces.
    President Bush sought a $23.85 billion in discretionary budget 
authority for U.S. foreign policy activities in fiscal year 2002; this 
represented a nominal increase of 5.3 percent over levels enacted for 
fiscal year 2001. Many people in the administration, including yourself 
I believe, characterized this proposal as a ``responsible increase.'' 
Is this ``responsible increase'' enough to protect our embassies 
against further terrorist attacks?
    Through out the 1980's American embassies and military barracks 
were repeatedly victims of such attack. For example, the U.S. embassy 
in Beirut, Lebanon in April 1983, the Marine barracks in Beirut in 
October 1983, and the embassy annex in Beirut in September 1984 were 
all terrorist targets and subsequently bombed. Unfortunately, the 
1980's were not the only decade to bear witness to the horrifying 
effectiveness of such attacks. On August 7, 1998, the U.S. embassies in 
Kenya and Tanzania were bombed. At least 252 people died (including 12 
U.S. citizens) and more than 5,000 were injured. It is important to 
note that U.S. officials have repeatedly said that there is convincing 
evidence Usama bin Laden was a major player in these bombings. In the 
wake of September 11, it comes as no surprise that U.S. installations 
abroad, such as our embassies, are once again targets of terrorist 
attack. We know, for example, that the embassies in Paris, Singapore, 
and Rome have been targeted or cased for such attacks.
    The terrorist attacks of the U.S. embassies in Africa in August 
1998 have served to reinforce the belief that it is impossible to 
achieve 100 percent security. It may be true that a 100 percent defense 
against a suicide bomber is impossible, but I commend both the U.S. 
State Department and the U.S. military for the efforts they have made 
to minimize the risks of terrorist attack through enhanced security 
measures. I hope, given the amplified awareness of potential 
vulnerabilities we now have, that needed security upgrades at any of 
our embassies will be brought to the attention of Congress immediately.
    The administration in its budget request for fiscal year 2003 has 
again redoubled its efforts to provide employees at U.S. diplomatic 
missions with safe, secure, and functional facilities. This budget 
increases funding for the State Department's diplomatic and consular 
programs by $310 million (not including the fiscal year 2002 emergency 
supplemental), or 8.4 percent, which includes an increase in spending 
for worldwide security upgrades of $65 million, or 13.3 percent. 
Nonsecurity related construction of overseas facilities, including 
embassies, is increased $35 million or 233.3 percent, and ongoing 
construction and maintenance by $57 million, or 12.8 percent.
    I recognize that Department of State and international assistance 
programs play a vital role in maintaining and expanding support of the 
international coalition against terrorism. The administration's fiscal 
year 2003 proposal for International Affairs [Function 150] calls for 
$25.4 billion in BA and $22.5 billion in outlays--a $1.4 billion or 
5.9-percent increase over the previous year's appropriated level.

    Chairman Nussle. Welcome, Mr. Secretary.

 STATEMENT OF HON. COLIN L. POWELL, SECRETARY, U.S. DEPARTMENT 
                            OF STATE

    Secretary Powell. Thank you very much, Mr. Chairman, for 
your kind welcome and Mr. Spratt for your kind comments as 
well. It is a pleasure once again to be before the committee, 
especially with this new set up--it is a very exciting 
arrangement here. I think I could run a war from this table. I 
look forward to watching--but it is a pleasure to be back 
before the committee, and I do thank you for your support.
    Mr. Chairman, as you noted, terrorism is very much on our 
mind, and as you also noted, it is going to be a long campaign. 
The President has said from the very beginning it isn't going 
to be over in a week or a month; it isn't going to be over with 
an exciting air strike or one battle. It is going to be a 
battle that will have many dimensions to it--legal, financial, 
military, political, diplomatic, economic--but it is a battle 
that we are in and will prevail in over the long term. We 
deeply appreciate the support we receive from members of this 
committee and from the Congress as a whole and, I believe even 
more importantly, from the American people, as well as from our 
coalition partners around the world who understand the 
necessity of being a part of this rather remarkable coalition 
that we have been able to put together over the last 6 months. 
I thank you for that support.
    Mr. Spratt, I too understand that the 150 account is not 
the one that you necessarily go home and speak about on the 
weekends. But, as you also noted, it is important. I think it 
is important, and part of my responsibility, and the 
responsibility of every member of this committee and all the 
Members of Congress, to make the case to the American people 
that if we are going to live in the kind of world we all want 
to live in, if we want to see our values adopted by more and 
more nations--not because they are American values but because 
they are universal values--it is important that we give our 
diplomatic efforts the support that they deserve through 
significant increases in the 150 account. That will be my case 
as I come before the Congress for as long as I am Secretary of 
State.
    As you noted, Mr. Chairman, I do have a prepared statement. 
Thank you for putting it into the record, without objection.
    I will begin by saying that, as many of you may recall from 
my first appearance last March, we talked about the State 
Department's budget not being at historical levels. Mr. Spratt 
voiced his concerns about the outyears. You may recall that I 
expressed my concern about the outyears at that time as well. 
Now we are involved in a war on terrorism, and that war has 
made President Bush's budget decisions even more difficult.
    In that regard I am pleased, as you noted Mr. Spratt, that 
the Department fared well in the President's request for fiscal 
year 2003. We are continuing the increase in dollars for the 
150 account for the State Department. The President's 
discretionary request for the Department of State and Related 
Agencies for fiscal year 2003 International Affairs is $8.1 
billion. These dollars will allow us to continue initiatives to 
recruit, hire, train and deploy the right work force. The 
budget request includes $100 million for the next step in the 
hiring process, the diplomatic readiness initiative we began 
last year. With these dollars, we will be able to bring on 399 
more foreign affairs professionals and other professionals, and 
will be on our way to repairing a large gap that was created in 
our personnel structure over the last 10 years, thus reducing 
the strain we put on our people. Over the last decade, we have 
had too few hires, an inability to train properly, and hundreds 
of unfilled positions.
    By 2004, if we are able to hire the final 399 personnel, we 
will have completed our multiyear effort with respect to 
overseas staffing to include establishing a training pool, the 
training pool I described to you last year, where we have some 
flexibility in the system so people can go to school and get 
the skills that they need without stealing them from positions 
that they are occupying or should be occupying. Next March, I 
will be back up here briefing you on the results of our 
domestic staffing review.
    In addition to bringing more people on board, we want to 
continue to upgrade and enhance our worldwide security 
readiness. That is reflected in this budget request. This is 
even more important in light of our success in disrupting and 
damaging the al Qaeda terrorist network.
    The budget request includes $553 million that builds on the 
funding provided from the emergency response fund for the 
increased hiring of security agents and for counterterrorism 
programs.
    We also want to continue to upgrade the security of our 
overseas facilities. The budget request includes more than $1.3 
billion to improve physical security, correct serious 
deficiencies that still exist, and provide for security-driven 
construction of new facilities at high-risk posts around the 
world.
    Mr. Chairman, we are right-sizing, we are shaping up and 
bringing smarter management practices to our overseas building 
programs, as I told you we would do last year. The first change 
we made was to put retired General Chuck Williams in charge and 
give him Assistant Secretary equivalent rank. His overseas 
buildings operation has developed the Department's first long-
range master plan which projects our major facility 
requirements through fiscal year 2007. His office is using best 
practices from industry, new industry templates and strong 
leadership to lower costs, increase quality, and decrease 
construction time. All of our construction programs underway 
now are coming in at lower costs than we indicated last year 
and with quicker completion time. As I told you last year, that 
would be our goal and it is a goal we are well on our way to 
achieving.
    General Williams is making all of our facilities overseas 
and stateside more secure. By the end of 2002, over two-thirds 
of our overseas posts should reach minimal security standards, 
meaning secured doors, windows and perimeters, making sure our 
people have safe places in which to work and in which to live. 
We are also making progress in efforts to provide new 
facilities that are fully secure with 13 major capital projects 
in design or construction, another 8 expected to begin this 
fiscal year, and 9 more in 2003.
    Mr. Chairman, we also want to continue our program to 
provide state-of-the-art information technology to our people 
everywhere. Because of your support last year, we are well on 
the way to doing this. We have an aggressive deployment 
schedule for our unclassified system which will provide desktop 
Internet access to over 30,000 State Department users worldwide 
in 2003, using 2002 funds. I was determined when I came in to 
make sure that all employees of the State Department were 
taking advantage of the information technology revolution that 
is going on around the world so that they can be in real time 
with respect to news, with respect to data, with respect to 
what is coming out of Washington. We have to catch up with that 
information and media news cycle that is now 24 hours a day, 
and we have to make sure that we have that same kind of agility 
and flexibility with all of our missions worldwide. This is 
done by giving them all desktop Internet access.
    We are also deploying our classified connectivity program 
over the next 2 years. We have included $177 million in the 
Capital Investment Fund for information technology 
requirements. Combined with the $86 million in estimated 
expedited passport fees, we will have a total of $263 million 
for our IT initiatives.
    We also want to continue to meet our contractual 
obligations to international organizations. This is even more 
important as we try to keep this coalition together and strong 
to pursue the war on terrorism to its end. The budget request 
includes $891 million to fund U.S. assessments to 43 
international organizations active membership, of which 
furthers United States economic, political, social and cultural 
interests.
    We want to continue to meet our obligations to 
international peacekeeping activities as well. The budget 
request includes $726 million to pay our projected United 
Nations peacekeeping assessments, all the more important as we 
seek to avoid increasing even further our UN arrearages. I 
hope, Mr. Chairman, that we can ask for your support and 
assistance in getting the cap on our assessments lifted so we 
don't continue to build up arrearages, moving it from 25 up to 
27 percent. These peacekeeping activities allow us to leverage 
our political, military, and financial assets through the 
authority of the United Nations Security Council and the 
participation of other countries in providing funds and 
peacekeepers for conflicts worldwide.
    Mr. Chairman, we also need to continue and also enhance an 
aggressive effort to eliminate support for terrorists, and thus 
deny them safe haven through our ongoing public diplomacy 
activities, our educational and cultural exchange programs, and 
through our international broadcasting efforts. We have all 
seen surveys and data recently that suggest that we are not 
really making our case very effectively in the Muslim world, 
and we have to simply do a better job of that.
    The budget request includes $287 million for public 
diplomacy, including information and cultural programs carried 
out by overseas missions and supported by public diplomacy 
personnel in our regional and functional bureaus. These 
resources help to educate the international public on the war 
against terrorism and America's commitment to peace and 
prosperity for all nations.
    The budget request also includes $247 million for 
educational and cultural exchange programs that help build 
mutual understanding and develop friendly relations between 
America and the peoples of the world. These activities help 
build trust, confidence, and international cooperation 
necessary to sustain and advance the full range of our 
interests: Fulbright scholarship programs, programs where we 
bring people from other nations early in their career, show 
them what America is about, let them study in our schools, let 
them participate in American life by being hosted by an 
American family. And when that person goes back to their land, 
they not only take back an education and experience, but they 
take back a better understanding of what America is all about. 
That pays dividends for decades and decades into the future.
    The budget request also includes almost $518 million for 
international broadcasting, of which $60 million is for the war 
on terrorism, to continue increased media coverage to 
Afghanistan and the surrounding countries and throughout the 
Middle East. These international broadcasts help inform local 
public opinion about the true nature of al Qaeda and the 
purposes of the war on terrorism, building support for the 
coalition's global campaign.
    On the subject of public diplomacy, let me expand my 
remarks just a little bit, Mr. Chairman. The terrorist attacks, 
as I said, underscore the urgency of implementing an effective 
diplomacy campaign. They are spreading distortion. They are 
spreading lies all over the world. In response, since September 
11, we have had over 2,000 media appearances by State 
Department officials. Our continuous presence in Arab and 
regional media by officials who have the language skills and 
media skills has been unprecedented. Our international 
information Web site on terror is now on line in seven 
languages. Internet search engines show that it is the hottest 
page on this topic.
    As an example of what else we are doing: when the President 
gave his State of the Union Address a few weeks ago, at the 
same time he was uttering his last word, that last word was 
being translated into one of seven languages and being 
broadcast around the world. Within 30 minutes after the end of 
his speech, we had downloaded it in every one of our missions 
and embassies around the world, in about five or six different 
languages, in order to get the word out as quickly as possible. 
Right content, right format, right audience, right away, 
describes our strategic aim in seeing that U.S. policies are 
explained and placed in the proper context in the minds of 
foreign audiences.
    Mr. Chairman, all of these State Department and Related 
Agencies programs and initiatives are critical to the conduct 
of American foreign policy. Some of you know my feelings about 
the importance to the success of any enterprise of having the 
right people in the right place. If I had to put one of these 
priorities at the pinnacle of our management efforts, it would 
be our hiring efforts. We must sustain the strong recruiting 
program we began last year. As the State Department's CEO, let 
me thank you for what you have done to help us begin this 
process of reinvigorating the Department of State with new 
blood and new people.
    Now, if I may, let me turn to my budget request for foreign 
operations. Over the past year, Mr. Chairman, I believe that 
the broader tapestry of our foreign policy has become clear: to 
encourage the spread of democracy and market economics, and to 
bring more nations to the understanding that the power of the 
individual is the power that counts. When evil appears to 
threaten this progress, America will confront that evil and 
defeat it, as we are doing in the war on terrorism.
    In weaving this tapestry, we have achieved several 
successes in addition to the successes of the war on terrorism 
and the regional developments that its skillful pursuit has 
made possible. We have improved our relations with Russia, set 
a new and smoother course with China, reinvigorated our Asian 
and Pacific alliances, and worked successfully with our 
European partners to ensure continued stability in the Balkans.
    Moreover, we reduced the level of concern in some places 
that thought we were pursuing a ``go-it-alone'' policy. 
Notwithstanding the fact that there have been some comments to 
that effect, I can assure you that the President understands 
the need for friends, the need for allies, and he has worked 
hard--meeting with foreign leaders, the work that I do at the 
State Department, as well as the trips he has taken.
    Just to touch on one of those trips, his trip a few weeks 
ago to visit Tokyo, to visit Seoul, South Korea, to visit 
Beijing, China: the President met with those leaders to consult 
with them, to hear their concerns, and to put into context our 
policies with their desires, their expectations, and their own 
policies. This is just one example of how this President is 
reaching out.
    Multilateralism is good. We understand that. But at the 
same time we also believe in principled foreign policy. When 
there is a matter of principle that we feel strongly about, 
something that serves our interest and we believe is the right 
way to go, then we will pursue that direction, we will pursue 
that policy, even if not all of our friends and allies agree 
with us on that policy. That is what leadership is about, to 
have a principled stand on the issues, and to try to bring our 
allies along. When we can't bring all of our allies along, we 
make the case to them and let them know that we took their 
advice into consideration, but that we still felt we had to 
move in a particular direction.
    We have also broadened our cooperation with central Asia 
and set a more effective policy in place for Africa based on 
good governance, reinvigoration of agriculture, and integration 
of Africa into the global world of trade and commerce.
    We are attacking HIV and AIDS in Africa and elsewhere with 
bilateral as well as international efforts. You will see in our 
request and in the focus that we give to the HIV/AIDS issue 
that we are determined to help with this pandemic that is 
perhaps the most significant crisis that exists on the face of 
the Earth today.
    Just by way of illustration to make the point, the 
President of Botswana was in to see us last week and we talked 
about HIV/AIDS: a country of 1.6 million people, an infection 
rate of 38.9 percent; 38.9 percent of the whole population is 
carrying the virus. The life expectancy in Botswana has already 
dropped from 69 years to 44 years. Fifteen percent of all 15-
year-olds are infected. These are horrible statistics, and 
Botswana does not stand alone. It is a problem throughout sub-
Sahara Africa. It is a problem in the Caribbean, and it is 
going to be a problem in other nations in the world. We are 
starting to awaken to the dimensions of this problem.
    I am pleased that the United States has been in the 
forefront of this awakening. We are putting together a variety 
of programs, bilateral programs with individual countries 
participating in the Global Health Trust Fund that we launched 
with Secretary General Kofi Annan last year, and there is much 
more that has to be done in order to bring this pandemic under 
control.
    We are also working, of course, within our own hemisphere, 
anxious to see the spread of free trade from the Arctic all the 
way down to Tierra del Fuego, and committing ourselves to 
democracy in this region.
    The Quebec Summit of last year reinforced the President's 
commitment to see democracy be firmly embedded throughout our 
hemisphere. Thirty-four of the 35 countries in our hemisphere 
are now solidly committed to democracy. Only Castro's Cuba 
remains on the outside.
    There are, of course, dark clouds that we are dealing with 
every day and tragic situations that we deal with every day in 
the Middle East especially, South America and South Asia, but 
we are working on all of these issues. There is effective 
policy in place, and good people are pushing that policy, all 
in response to the President's leadership.
    All of these efforts require resources, so let me turn to 
the specifics of our budget request for foreign operations. The 
President's fiscal year 2003 request for foreign operations is 
a little over $16.1 billion. These dollars will support the 
continuing war on terrorism and the counterdrug work we are 
doing in Colombia and the Andean region at large. These dollars 
will also support our efforts to combat HIV/AIDS and other 
infectious diseases.
    The one message that leaps out from the events of September 
11 and that we are implementing very quickly is that American 
leadership in all of these areas is important. In that regard, 
to fight terrorism as well as alleviate the conditions that 
fuel violent extremism, we are requesting an estimated $5 
billion in addition to the initiatives outlined previously 
under the budget for the State Department and Related Agencies.
    This funding includes $3.6 billion for economic and 
security assistance, as well as military equipment and training 
for the frontline states and other partners in the war on 
terrorism. That figure includes: $3.4 million from foreign 
operations accounts such as the Economic Support Fund, IMET, 
and Foreign Military Financing and Freedom Support Act funding; 
$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; ongoing programs to engage former 
weapons scientists in peaceful research and help prevent the 
spread of materials expertise required to produce such weapons; 
$69 million for counterterrorism engagement programs, training, 
and equipment to help other nations fight global terror, 
thereby strengthening our national security as well as their 
own; and $4 million for the Treasury Department's Office of 
Technical Assistance to provide training and other necessary 
expertise to foreign finance officers to halt terrorist 
financing.
    Mr. Chairman, in the 2003 budget request there is also 
approximately $140 million available for Afghanistan, including 
repatriation of refugees, food aid, demining and trading 
assistance. We will certainly have to add to that number in the 
course of our discussions in the rest of the year. I know that 
President Bush, the Congress, and the American people recognize 
that rebuilding that country will require a lot more than 
initially identified in that request.
    We are examining our overall international affairs 
requirements, including our operations account. In this effort 
we are working closely with OMB to deal with some valid 2002 
requirements that cannot wait until 2003. A supplemental 
request will be coming up in due course, and the State 
Department is working with OMB to make sure that we are dealt 
with appropriately in that supplemental request. We will be 
encouraging your support for it when it finally arrives for 
your consideration.
    Continuing with the 2003 budget initiatives, we are 
requesting $731 million for the multiyear counterdrug 
initiative in Colombia and other Andean countries. Assistance 
to Andean governments will support drug eradication, 
interdiction, economic development, and the development of 
government institutions. In addition, the Colombians will be 
able to stand up a second counterdrug brigade, assist efforts 
to destroy local coca crops and processing labs, and increases 
the effectiveness of our law enforcement activities in 
Colombia.
    This year we are adding a new element to our counterdrug 
efforts, and that is $98 million in FMF to help the Colombian 
Government protect the vital Cano Limon-Covenas oil pipeline 
from the same terrorist organizations involved in illicit drug 
trade, the FARC and the ELN. Their attacks on the pipeline shut 
it down for 240 days last year, costing Colombia revenue, 
causing serious environmental damage, and depriving us of a 
source of petroleum. This money will help train and equip the 
Colombian armed forces to protect the pipeline.
    I might mention that because of President Pastrana's 
decision to end the safe havens and go after the FARC, we do 
have a new situation. And for some of the assistance that the 
Colombian Government is requesting, which I believe we should 
provide, and the President believes we should provide, we might 
find it necessary to come up and seek additional authority, or 
relief from some of the constraints we are under by treating 
this specifically as a counterdrug effort to this point. We may 
have to come up and ask for changes in authority and new 
funding to deal with the new counterterrorist aspects of the 
fight that the Colombian people are waging against these 
terrorist organizations.
    In 2003, we are requesting $1.4 billion for USAID global 
health programs. Of this amount, we are requesting $540 million 
for bilateral HIV/AIDS prevention, care and treatment, and $100 
million for the Global Trust Fund to fight AIDS, tuberculosis 
and malaria. HHS is also asking for $100 million for the Global 
Trust Fund, which will mean $200 million on top of the $200 
million the President requested last year, and the additional 
$100 million that Congress added to that, making a total of 
$500 million over a 2-year period just for that one specific 
part of the HIV/AIDS battle.
    All of you 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 double 
the number of volunteers in the Corps over the next 5 years. 
Since that call to service by the President, the Peace Corps 
has received over 14,000 requests for applications, an increase 
of 57 percent over the same period last year. We have put $320 
million for the Peace Corps in the 2003 budget request, an 
increase of over $42 million from the fiscal year 2002 level. 
This increase will allow us to begin scaling up what the 
President has directed.
    The Peace Corps will open programs in eight countries, 
including the re-opening of currently suspended posts, and 
place over 1,200 additional volunteers worldwide. By the end of 
2003, we hope the Peace Corps will have more than 8,000 
volunteers on the ground and serving our interests.
    The 2003 request also includes an initiative to pay one-
third of the amount the United States owes the multilateral 
development banks for our scheduled annual commitments. With 
U.S. arrears now totaling $533 million, the request would 
provide $178 million to pay one-third of our total arrears 
during the fiscal year. The banks lend to and invest in 
developing economies, promoting economic growth and poverty 
reduction, and providing environmental benefits. We really need 
to support them.
    Mr. Chairman, you have heard from me as CEO of the State 
Department and principal foreign policy adviser to the 
President. I hold both of these responsibilities dear. Taking 
care of the great men and women who carry out America's foreign 
policy is as vital a mission in my view as helping to construct 
and shape that foreign policy. I need your help to do this, Mr. 
Chairman, and members of the committee.
    I think we have made a great deal of progress in our first 
year in office with revitalizing the State Department, fixing 
those management problems that have been identified previously 
by Members of Congress, and showing that we are aggressively 
planning to take our message to the world that the American 
value system is a value system that rests on democracy, the 
free enterprise system, and the individual rights of men and 
women. We think it is a system that works. We believe more and 
more countries are coming to the realization that it is a 
system that works, and we want to help these countries.
    We can help these countries if we find that our accounts 
are adequately funded, and we can carry forward the work of 
American foreign policy, as determined by the President in 
response to the mandate he has been provided by the American 
people.
    Mr. Chairman, I thank you, thank you from the bottom of my 
heart, for the support that the committee has provided to us in 
the past, and I hope we will continue to earn that support in 
the future. Thank you, Mr. Chairman.
    Chairman Nussle. Thank you, Mr. Secretary.
    [The prepared statement of Secretary Powell follows:]

Prepared Statement of Hon. Colin L. Powell, Secretary, U.S. Department 
                                of State

    Mr. Chairman, members of the committee, I am pleased to appear 
before you to testify in support of President Bush's budget request for 
fiscal year 2003.
    Let me say at the outset, Mr. Chairman, before I go into the 
specifics of the budget request, that President Bush has two overriding 
objectives that our foreign policy must serve before all else. These 
two objectives are to win the war on terrorism and to protect Americans 
at home and abroad. This administration will not be deterred from 
accomplishing these objectives. I have no doubt that this committee and 
the Congress feel the same way. As you will see when I address the 
details of the budget request, a significant part is related to 
accomplishing these two objectives.
    As many of you will recall, at my first budget testimony to this 
committee last March we talked about State Department's budget not 
being at historical levels, and Mr. Spratt voiced his concern about the 
out years. You may recall that I expressed my concern about the out 
years as well.
    Now, we are involved in a war on terrorism and that war has made 
President Bush's budget decisions even more difficult. So I was pleased 
that the Department fared well in the President's request for fiscal 
year 2003.
  the budget priorities for fiscal year 2003: department of state and 
                            related agencies
    The President's discretionary request for the Department of State 
and Related Agencies for fiscal year 2003 International Affairs is $8.1 
billion. These dollars will allow us to:
     Continue initiatives to recruit, hire, train, and deploy 
the right work force. The budget request includes $100 million for the 
next step in the hiring process we began last year. With these dollars, 
we will be able to bring on board 399 more foreign affairs 
professionals and be well on our way to repairing the large gap created 
in our personnel structure and, thus, the strain put on our people by 
almost a decade of too few hires, an inability to train properly, and 
hundreds of unfilled positions. By fiscal year 2004, we hope to have 
completed our multi-year effort with respect to overseas staffing, to 
include establishing the training pool I described to you last year 
that is so important if we are to allow our people to complete the 
training we feel is needed for them to do their jobs. Next March, I 
will be back up here briefing you on the results of our domestic 
staffing review.
     Continue to upgrade and enhance our worldwide security 
readiness; even more important in light of our success in disrupting 
and damaging the al Qaeda terrorist network. The budget request 
includes $553 million that builds on the funding provided from the 
Emergency Response Fund for the increased hiring of security agents and 
for counterterrorism programs.
     Continue to upgrade the security of our overseas 
facilities. The budget request includes over $1.3 billion to improve 
physical security, correct serious deficiencies that still exist, and 
provide for security-driven construction of new facilities at high-risk 
posts around the world. Mr. Chairman, we are right-sizing, shaping up 
and bringing smarter management practices to our overseas buildings 
program, as I told you we would do last year. The first change we made 
was to put retired General Chuck Williams in charge and give him 
assistant secretary equivalent rank. Now, his Overseas Building 
Operations (OBO) has developed the Department's first long-range plan, 
which projects our major facility requirements over a 5-year period.
    The OBO is using best practices from industry, new embassy 
templates, and strong leadership to lower costs, increase quality, and 
decrease construction time.
    As I told you last year, one of our goals is to reduce the average 
cost to build an embassy. I believe we are well on the way to doing 
that.
    General Williams is making all of our facilities, overseas and 
stateside, more secure. By the end of fiscal year 2002, over two-thirds 
of our overseas posts should reach minimal security standards, meaning 
secure doors, windows, and perimeters.
    We are also making progress in efforts to provide new facilities 
that are fully secure, with 13 major capital projects in design or 
construction, another eight expected to begin this fiscal year, and 
nine more in fiscal year 2003.
     Continue our program to provide state-of-the-art 
information technology to our people everywhere. Because of your 
support in fiscal year 2002, we are well on the way to doing this. We 
have an aggressive deployment schedule for our unclassified system 
which will provide desktop Internet access to over 30,000 State users 
worldwide in fiscal year 2003 using fiscal year 2002 funds. And we are 
deploying our classified connectivity program over the next 2 years. We 
have included $177 million in the Capital Investment Fund for 
Information Technology (IT) requirements. Combined with $86 million in 
estimated Expedited Passport Fees, a total of $263 million will be 
available for our information technology and communications systems 
initiatives. Our goal is to put the Internet fully in the service of 
diplomacy.
     Continue to meet our obligations to international 
organizations--also important as we pursue the war on terrorism to its 
end. The budget request includes $891.4 million to fund U.S. 
assessments to 43 international organizations, active membership of 
which furthers U.S. economic, political, security, social, and cultural 
interests.
     Continue to meet our obligations to international 
peacekeeping activities. The budget request includes $726 million to 
pay our projected United Nations peacekeeping assessments--all the more 
important as we seek to avoid increasing even further our UN 
arrearages. Mr. Chairman, I ask for your help in getting the cap lifted 
so that we can eventually eliminate all our arrearages. These 
peacekeeping activities allow us to leverage our political, military, 
and financial assets through the authority of the United Nations 
Security Council and the participation of other countries in providing 
funds and peacekeepers for conflicts worldwide.
     Continue and also enhance an aggressive effort to 
eliminate support for terrorists and thus deny them safe haven through 
our ongoing public diplomacy activities, our educational and cultural 
exchange programs, and international broadcasting. The budget request 
includes $287 million for public diplomacy, including information and 
cultural programs carried out by overseas missions and supported by 
public diplomacy personnel in our regional and functional bureaus. 
These resources help to educate the international public on the war 
against terrorism and America's commitment to peace and prosperity for 
all nations. The budget request also includes $247 million for 
educational and cultural exchange programs that build mutual 
understanding and develop friendly relations between America and the 
peoples of the world. These activities help build the trust, 
confidence, and international cooperation necessary to sustain and 
advance the full range of our interests. Such activities have gained a 
new sense of urgency and importance since the brutal attacks of 
September. We need to teach more about America to the world. We need to 
show people who we are and what we stand for, and these programs do 
just that. Moreover, the budget request includes almost $518 million 
for international broadcasting, of which $60 million is for the war on 
terrorism to continue increased media broadcasts to Afghanistan and the 
surrounding countries and throughout the Middle East. These 
international broadcasts help inform local public opinion about the 
true nature of al Qaeda and the purposes of the war on terrorism, 
building support for the coalition's global campaign.
    Mr. Chairman, on the subject of public diplomacy let me expand my 
remarks.
    The terrorist attacks of September 11 underscored the urgency of 
implementing an effective public diplomacy campaign. Those who abet 
terror by spreading distortion and hate and inciting others, take full 
advantage of the global news cycle. We must use the same cycle. Since 
September 11, there have been over 2,000 media appearances by State 
Department officials. Our continuous presence in Arabic and regional 
media by officials with language and media skills, has been 
unprecedented. Our international information Website on terror is now 
online in seven languages. Internet search engines show it is the 
hottest page on the topic. Our 25-page color publication, ``The Network 
of Terrorism,'' is now available in 30 languages with many different 
adaptations, including a full insert in the Arabic edition of Newsweek. 
``Right content, right format, right audience, right now,'' describes 
our strategic aim in seeing that U.S. policies are explained and placed 
in the proper context in the minds of foreign audiences.
    I also serve, ex officio, as a member of the Broadcasting Board of 
Governors, the agency that oversees the efforts of Voice of America and 
Radio Free Europe/Radio Liberty to broadcast our message into South 
Central Asia and the Middle East. With the support of the Congress, our 
broadcasting has increased dramatically since September 11. We have 
almost doubled the number of broadcast hours to areas that have been 
the breeding grounds of terrorists. The dollars we have requested for 
international broadcasting will help sustain these key efforts through 
the next fiscal year.
                              top priority
    Mr. Chairman, all of these State Department and Related Agencies 
programs and initiatives are critical to the conduct of America's 
foreign policy. Some of you know my feelings about the importance to 
the success of any enterprise of having the right people in the right 
places. If I had to put one of these priorities at the pinnacle of our 
efforts, it would be our hiring efforts.
    We must sustain the strong recruiting program we began last year. 
We want to get to a point where our people can undergo training without 
seriously jeopardizing their missions or offices; where our men and 
women don't have to fill two or three positions at once; and where 
people have a chance to breathe occasionally.
    Out on the front lines of diplomacy, we want a first-class offense 
for America. As a soldier, I can tell you that quality people with high 
morale, combined with superb training and adequate resources, are the 
key to a first-class offense.
    So as the State Department's CEO, let me thank you again for what 
you have done to help us create such a first-class offense--and I want 
to ask you to continue your excellent support so we can finish the job 
of bringing the Department of State and the conduct of America's 
foreign policy into the 21st century.
    Now, let me turn to the budget request for foreign operations.
        foreign policy: successes, challenges, and opportunities
    Over the past year, Mr. Chairman, I believe the broader tapestry of 
our foreign policy has become clear: to encourage the spread of 
democracy and market economies and to bring more nations to the 
understanding that the power of the individual is the power that 
counts. And when evil appears to threaten this progress, America will 
confront that evil and defeat it, as we are doing in the war on 
terrorism.
    In weaving this tapestry, we have achieved several successes in 
addition to the successes of the war on terrorism and the regional 
developments its skillful pursuit has made possible.
    We have improved our relations with Russia, set a new and smoother 
course with China, reinvigorated our Asia and Pacific alliances, and 
worked successfully with our European partners to ensure continued 
stability in the Balkans. Moreover, we reduced the level of concern in 
Europe over what some there thought was a U.S. go-it-alone policy, 
notwithstanding some recent comments from Europe with regard to 
President Bush's State of the Union Address.
    Further, we have broadened our cooperation with Central Asia, and 
set a more effective policy in place for Africa based on good 
governance, reinvigoration of agriculture, and integration into the 
globalized world of trade and commerce. Plus, we are attacking HIV/AIDS 
in Africa and elsewhere with bilateral as well as international 
efforts.
    Add to these successes our constructive focus on our own 
hemisphere, from Canada to the Caribbean, from Mexico to South America, 
and you have a solid record of achievement.
    There are some dark clouds, of course, in the Middle East, in South 
America, and in South Asia. But we are working these issues. There is 
effective policy in place and good people are pushing the policy.
    All of these efforts require resources. So let me turn to the 
specifics of our budget request for foreign operations.
     the budget priorities for fiscal year 2003: foreign operations
    The President's fiscal year 2003 request for Foreign Operations is 
a little over $16.1 billion. These dollars will support the continuing 
war on terrorism, the work we are doing in Colombia and the Andean 
region at large, our efforts to combat HIV/AIDS and other infectious 
diseases, essential development programs in Africa, the important work 
of the Peace Corps and the scaling up of that work, and our plan to 
clear arrearages at the Multilateral Development Banks, including the 
Global Environment Facility.
                            war on terrorism
    One message that leaps out from the events of September 11 and the 
days that have followed is very clear: American leadership in foreign 
affairs has never been more important. In that regard, to fight 
terrorism as well as alleviate the conditions that fuel violent 
extremism, we are requesting an estimated $5 billion. In addition to 
the initiatives outlined previously under the budget for the State 
Department and Related Agencies, this funding includes:
     Foreign assistance--$3.6 billion for economic and security 
assistance, military equipment, and training for front-line states and 
our other partners in the war on terrorism. This amount includes:
     $3.4 billion from Foreign Operations accounts such as the 
Economic Support Fund, International Military Education and Training, 
Foreign Military Financing, and Freedom Support Act.
     $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. Ongoing programs engage former weapons scientists 
in peaceful research and help prevent the spread of the materials 
expertise required to build such weapons.
     $69 million for counterterrorism engagement programs, 
training, and equipment to help other countries fight global terror, 
thereby strengthening our own national security.
     $4 million for the Treasury Department's Office of 
Technical Assistance to provide training and other necessary expertise 
to foreign finance offices to halt terrorist financing.
    Mr. Chairman, in the fiscal year 2003 budget request there is 
approximately $140 million available for Afghanistan, including 
repatriation of refugees, food aid, demining, and transition 
assistance. I know that President Bush, the Congress, and the American 
people recognize that rebuilding that war-torn country will require 
additional resources and that our support must be and will be a multi-
year effort. Moreover, we do not plan to support reconstruction alone 
and we will seek to ensure that other international donors continue to 
do their fair share. That said, to meet our own commitment to assist 
Afghanistan in its reconstruction efforts, we will need a supplemental 
appropriation this year.
    In that regard, Mr. Chairman, we are examining our overall 
international affairs requirements, including our operating accounts. 
We are working closely with OMB. We believe that there are valid fiscal 
year 2002 needs that cannot wait until fiscal year 2003. The 
administration will bring the specific details of this supplemental 
request to the Congress in the near future. We have not quite finished 
our review at this point, but it should not take much longer.
                     andean counterdrug initiative
    We are requesting $731 million in fiscal year 2003 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 counterdrug brigade. Assisting efforts to destroy local coca 
crops and processing labs there increases the effectiveness of U.S. law 
enforcement here.
    In addition to this counterdrug effort, Mr. Chairman, we are 
requesting $98 million in FMF to help the Colombian government protect 
the vital Cano Limon-Covenas oil pipeline from the same foreign 
terrorist organizations involved in illicit drugs--the FARC and the 
ELN. Their attacks on the pipeline shut it down 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 the Colombian armed forces to protect the pipeline.
                       global health and hiv/aids
    In fiscal year 2003, we are requesting $1.4 billion 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. All of this funding will increase the already significant U.S. 
contribution to combating the AIDS pandemic and make us the single 
largest bilateral donor to the effort. I should add that the overall 
U.S. Government request for international HIV/AIDS programs exceeds $1 
billion, including $200 million for the Global Fund.
                            the peace corps
    All of you 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 5 years. Since that call to service 
by the President, the Peace Corps has received over 14,000 requests for 
applications--an increase of 57 percent over the same time last year. 
We have put $320 million for the Peace Corps in the fiscal year 2003 
budget request. This is an increase of over $42 million over our fiscal 
year 2002 level. This increase will allow us to begin the scaling up 
that the President has directed. The Peace Corps will open programs in 
eight countries, including the restablishment of currently suspended 
posts, and place over 1,200 additional volunteers worldwide. By the end 
of fiscal year 2003 the Peace Corps will have more than 8,000 
volunteers on the ground.
                              mdb arrears
    The fiscal year 2003 request includes an initiative to pay one 
third of the amount the United States owes the Multilateral Development 
Banks (MDBs) 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. 
The banks lend to and invest in developing economies, promoting 
economic growth and poverty reduction and providing environmental 
benefits. We need to support them.
                               summing up
    Mr. Chairman, you have heard from me as CEO of the State Department 
and as principal foreign policy adviser to the President. I hold both 
responsibilities dear. Taking care of the great men and women who carry 
out America's foreign policy is as vital a mission in my view as 
helping to construct and shape that foreign policy.
    As I told this committee last year and as I have already reminded 
it again this year, the conduct of the Nation's foreign policy suffered 
significantly from a lack of resources over the past decade. I have set 
both my CEO hat and my foreign policy hat to correct that situation. 
But I cannot do it without your help and the help of your colleagues in 
the House and across the capitol in the Senate. I believe we have 
demonstrated in the past year that we are worth the money. I believe we 
have demonstrated that we can be wise stewards of the people's money 
and put it to good use in the pursuit of America's interests abroad. I 
also believe that we have demonstrated conclusively that we are 
essential to that process of pursuing the Nation's interests. With your 
able assistance, we will continue to do so in the months ahead.
    Thank you, and I will be pleased to address your questions.

    Chairman Nussle. Let me ask members to help me enforce the 
5 minute rule today. I know there are a number of members that 
have questions and certainly have a lot of interest in this 
subject, so please help me with that.
    Just for your information, Mr. Secretary, we are launching 
today on our Budget Committee Web site, a Webcasting so that 
some of your friends and colleagues around the world can listen 
to your testimony online today. So you were talking about how 
you tried to upgrade the State Department with regard to 
technology. That is in part why you see some of the changes 
from last year. So we are Webcasting as of today, so your 
hearing is going out across the Internet as we speak.
    Your presentation of the budget was very thorough, and 
rather than trying to get specific, let me be general. We have 
a number of Americans that since September have been asking 
many questions. I think one of the questions that they are 
asking--sometimes it is over coffee, maybe it is before you put 
your kids to bed, whatever it is, but the question that they 
are asking is: Is America safe? Let me ask you that question: 
Is America safe?
    Secretary Powell. We are at some risk from terrorist 
organizations, and we have to be sensitive to that risk. But at 
the same time, I think, overall, America is safe. I think 
Americans should go about their business. They should feel 
comfortable in their homes, feel comfortable in their 
communities, shopping malls, and theaters.
    I think we have learned a lot over the last 6 months about 
how to protect ourselves and how to do a better job of knowing 
who is coming into the United States. We are much more 
sensitive to threats that we receive and will be showing the 
American people more in the days ahead about how we respond and 
how we categorize these threats.
    I think that our law enforcement and intelligence agencies 
have been doing a great job. Our diplomatic forces and our 
military forces have been going after terrorist organizations. 
We have struck a real blow to al Qaeda, perhaps the most 
dangerous terrorist organization with respect to the United 
States. They are on the run. Our forces are chasing elements of 
al Qaeda in the hills of Afghanistan now, and we are also 
chasing their financial systems throughout the world. We are 
chasing them with our intelligence activities.
    Yes, there is a danger, but we must not be terrified by 
this danger. We should be cautious because of this danger. We 
should be careful about what we do. We should employ our 
security and law enforcement forces. But we need to get on with 
our life. We have to make sure our national life is not changed 
as a result of this. I encourage people to go out and enjoy 
themselves, travel, spend money, get this economy rolling 
again, show the rest of the world what we are made of. We are 
made of sterner stuff than people thought, and we can protect 
ourselves. We can protect our Nation and not change the quality 
of our life or the character of our life.
    Chairman Nussle. The President said--and I won't quote it 
exactly, I am sure--but he said, ``We will do whatever it 
takes.'' Are you satisfied that the budget you are presenting 
together with the President makes America safer as a result of 
the initiatives and the policies that you have advocated here 
today?
    Secretary Powell. There is no question it makes the Nation 
safer. I think the investment the President is making in our 
military forces, the investment he is making in homeland 
security efforts, the investments he is making in the State 
Department are sound. I'd like to say we are on the front line 
of this battle to take the message out and work with our 
coalition partners. I think it makes us safer.
    Would we like to have more in all the accounts? Certainly 
we would. But I think the President has made a judicious 
allocation to each of the claimants against the Federal budget 
in light of our economic situation and the fact that we are 
seeing a deficit this year, which hopefully we will rebound 
from quickly. I think he has made a judicious allocation, and 
he has done it in a way that will make us a safer nation.
    Chairman Nussle. You outlined for us today a number of 
accounts that, unfortunately, there are people in this country 
who once in awhile even attend our town meetings who seem to 
think with foreign aid--the question goes something like this: 
How come we spend this money overseas when we have issues and 
challenges right here in America? You outlined a number of 
them: economic support; support for Russia; counterterrorism; 
assistance in the drug war; and HIV and AIDS. Oftentimes this 
is categorized as foreign aid and going to foreign countries 
when we have challenges right here in America.
    Help me and help America answer that question. Why is it 
that it is important for America to invest in a number of these 
foreign challenges when we have challenges right here at home? 
How does that help America?
    Secretary Powell. We have to deal with our challenges at 
home, but we also have to deal with our challenges overseas. 
Increasingly our challenges overseas affect our challenges at 
home. We are not just an island, sitting isolated from the rest 
of the world by the Atlantic and Pacific Oceans. Just consider 
your comments a few moments ago. What we are doing here today 
is being seen around the world on your Web site and my Web 
site. We are interconnected with the whole world. We touch 
every country, and every country touches us. We cannot sit here 
behind the Atlantic and Pacific and be unconcerned about a 
pandemic such as HIV/AIDS, which is destroying millions of 
families in sub-Sahara Africa. These are people, God's people, 
and we have a responsibility to help them.
    I am going to find a better term than ``foreign aid,'' 
because it makes it look like we are giving something away. We 
are investing in our own future when we invest in nations that 
are trying to figure out how to become democracies, trying to 
figure out how market economics work. We need to help these 
nations, because sooner or later they will become trading 
partners with us, and they will be trading with us, not just 
receiving our aid.
    It is an investment more than it is giving away foreign 
aid. It is investment in the future of nations around the world 
that want to be partners with us, who want to be friends with 
us. But they have to be able to trade with us and have to be 
able to develop their economies in a way that will allow them 
to trade with us.
    It is in our interest to provide money to Russia and some 
of the other former republics of the Soviet Union to get rid of 
the horrible weapons that they used to have, that used to 
threaten us so seriously. That is in our interest.
    What we call ``foreign aid'' is really an investment in a 
better future for these nations, but also a better future for 
us. A nation that is out there believing that the United States 
is friendly toward them and is helping them start up this 
ladder of success, helping them deal with infectious diseases, 
showing them what market economics is all about, and making 
investments so they can create conditions that will draw 
private investment--this is a good investment for the American 
people.
    As you all know, Mr. Chairman, we are not spending that 
much on what is called foreign aid. People think it is 10, 20 
percent of our budget, but we all know here, it is less than 1 
percent of our budget. It is not breaking the bank, and we 
could do a lot more. I think it is a case we can take to the 
American people and we should take to the American people, and 
the American people should be proud that they are citizens of a 
country which feels this kind of obligation to the rest of the 
world.
    Chairman Nussle. Thank you. Mr. Spratt.
    Mr. Spratt. Thank you, Mr. Secretary, very much for your 
testimony. Let us look at the numbers again because I have a 
suspicion, looking at your budget request, that a supplemental 
will be following this. The reason for that is, last year, I 
believe, we gave you in the regular process, $24 billion. Then 
you got a supplemental of $1.6 billion, taking you up to $25.6 
billion.
    Your request for this year is, what, $25.4 billion? So it 
is actually below the level of the full amount of funding we 
provided for this fiscal year. If you keep reading in the 
budget, when you look under the major assistance accounts and 
look for Afghanistan in particular, it is to be determined 
economic support fund, IMET, military assistance, all of these 
accounts. One is led to believe by those two factors that there 
must be some kind of a supplemental probably coming on the 
heels of this. Is that far wrong?
    Secretary Powell. No. There will be a supplemental, as you 
correctly noted. We asked for $24 billion in fiscal year 2002, 
but with the supplemental we got $25.6 billion. So apples to 
apples and oranges to oranges, I think along with the $25.4 
billion we are requesting for fiscal year 2003, clearly we are 
working on a supplemental that will add to that number. I think 
when that supplemental comes up and we go through the entire 
process, it will still represent a significant real growth over 
last year's enacted level.
    Mr. Spratt. When would we expect that? The latter part of 
this year or----
    Secretary Powell. I think the administration is hard at 
work on it this year, and I expect the supplemental will be 
coming up this month.
    Mr. Spratt [continuing]. This month.
    Secretary Powell. The fiscal year 2002 supplemental.
    Mr. Spratt. Looking at some other of the accounts, too, 
when you consider the enormity of the problem, you wonder if 
there is adequate money there. For example, nonproliferation, 
antiterrorism, demining, and related programs, $372 million. 
That is not chump change, but that is a huge challenge. And I 
know DOD got some money and DOE gets the money in those 
accounts. Couldn't you use more of that?
    Secretary Powell. There isn't an account here that I 
couldn't use more in, Mr. Spratt. But going from $314 million--
I don't have the enacted number with the supplemental--but 
going from $314 million to $372 million is a significant 
increase. It is well over 10, close to--I am guessing--15 
percent.
    Mr. Spratt. What is State's peculiar or particular role 
with respect to nonproliferation of nuclear weapons and 
materials?
    Secretary Powell. There are two elements: nonproliferation 
and demining. We assist with UN demining efforts. For example, 
the largest employer in Afghanistan right now is the UN 
demining effort.
    Mr. Spratt. With respect to nuclear materials specifically, 
how would you differentiate your role from the Department of 
Energy or Department of Defense?
    Secretary Powell. All play a role, and I would rather give 
you a precise answer for the record as to where the lines are. 
Among other things, responsibilities include destruction of 
weapons and providing alternative sources of employment for 
scientists, but the responsibilities and funding are divided 
between the three departments. I don't have an overall number 
if one were to add up DOD, DOE, and State, but I can get that 
for you for the record.
    Mr. Spratt. If you would do that for the record.
    [The information referred to follows:]

       Mr. Powell's Response to Mr. Spratt's Question Regarding 
                            Nonproliferation

    U.S. threat reduction and nonproliferation assistance from Defense, 
Energy and State has been funded at about $1 billion in fiscal year 
2002. Concerning your question on State's nonproliferation programs, 
our programs are a critical element of this assistance and have been 
adequately funded for our immediate needs. The Department of State's 
nonproliferation programs focus primarily on four areas within the NADR 
realm:
    1. Export control and border security assistance with cooperating 
countries;
    2. redirection of former nuclear, chemical, biological and missile 
scientists to peaceful scientific and commercial endeavors;
    3. support for the International Atomic Energy Agency in its 
nuclear safeguards, nuclear safety and counterterrorism missions; and
    4. contingency quick-response funding through the Nonproliferation 
and Disarmament Fund to meet unanticipated needs or developing 
opportunities in order to achieve our nonproliferation objectives.
    State also provides assistance for nuclear reactor safety programs 
with DOE and necessary diplomatic support to DOE's mission of safely 
and securely disposing of dangerous nuclear materials in Russia and 
other former Soviet Eurasian republics.
    DOD'S Cooperative Threat Reduction (CTR) programs focus on 
dismantling former Soviet weapons of mass destruction (WMD), delivery 
systems, and associated infrastructure; consolidating and securing 
former Soviet WMD and related technology and materials; increasing 
transparency and encouraging higher standards of conduct; and 
supporting defense cooperation that helps prevent proliferation. They 
also address Biological Weapons Proliferation Prevention to safeguard 
and consolidate facilities and pathogen collections that pose a threat 
to the U.S. DOD CTR assistance projects and implementation efforts are 
coordinated with State to ensure consistency with U.S. foreign policy 
and national security interests.
    DOE's nuclear nonproliferation programs are built on four pillars: 
technology research and development (R&D); promotion of international 
nuclear safety; support for international nonproliferation regimes; and 
threat reduction efforts in Russia and elsewhere. Threat reduction 
activities concentrate on the protection, control, and accounting for 
disposal of fissile material in Russia and other former Soviet Eurasian 
republics, as well as long-term safe and secure disposal of materials 
that are excess to defense needs. They also are planned and carried out 
in close cooperation with State.
    State, DOD and DOE work closely to integrate their cooperative 
nonproliferation programs to ensure the highest value for the 
taxpayer's dollar. We have long had in place an effective framework for 
coordination among all concerned agencies at the deputy assistant 
secretary, assistant secretary and under secretary levels. 
Relationships are transparent and are well understood. The NSC oversees 
this overall process to ensure that guidelines and implementation are 
proceeding under the overall parameters of administration policy. For 
example, the NSC led a major administration review of all USG 
nonproliferation assistance programs for Russia that concluded in 
December 2001. As a result, we believe the management of our nuclear 
nonproliferation programs is sound.

    Mr. Spratt. Let me ask you about something that may seem 
parochial because it affects one of my constituents, which I 
mentioned to you earlier, but in truth it affects everybody in 
the State Department, particularly in today's world.
    There was a story on February 12 in the Washington Post 
Style section about a young man by the name of Frank Pressley. 
He is from Chester, SC. That is not his domicile now, but that 
is his home. He was one of the victims of the bombing in 
Nairobi who suffered some grievous, grievous injuries. And this 
lays out how the problem is only beginning with the bombing and 
the aftermath of it.
    Now, he has been working since 1999 to settle his workers 
comp claim for his gross disfigurement. There is a horrendous 
photograph of him on the front page. And, as I said, it is 
about a constituent, but it is about all your departments, and 
we all knew you as a general who took care of your troops 
first, and I am sure you bring that attitude to the State 
Department. Shouldn't he be entitled, and others like him be 
entitled to the same sort of benefits and assistance we are 
providing to the people in New York?
    Secretary Powell. Yes. The morning after that story came 
out, at my staff meeting that morning, I immediately asked what 
the situation was. He is one of ours. What I received back very 
shortly was that the State Department has done a great deal for 
him in terms of relocating him to Florida and helping him with 
his medical problems. I am pretty pleased with the efforts that 
the State Department made on his behalf, and he is deserving of 
everything and more.
    There is a problem with respect to the compensation issue 
that falls under the purview of the Department of Labor. So I 
immediately got in touch with Secretary Elaine Chao, wrote her 
a letter and asked her to look into whatever the bureaucratic 
problem is that has kept this from being settled. She wrote me 
back and just yesterday I got her return letter. She is looking 
into it on an aggressive basis to see how we can cut through, 
not red tape so much, but simply the wickets one has to go 
through to settle a claim like this. So Labor Secretary Chao is 
on top of the issue.
    Mr. Spratt. One final question. In the foreign aid ops 
appropriation bill last year, the committee and the Congress, 
in passing the conference report, requested the Department of 
State to come up with some method for compensating those who 
obtain judgments against foreign countries and against 
terrorist groups. In particular, for example, the hostages who 
were held in Tehran. There are others like them who sue. Assets 
are frozen and levied, and try to seize these assets, and these 
judgments are beginning to stack up. People are finding 
pathways in the judicial system to pursue those claims. Does 
the State Department have a ready solution for that?
    Secretary Powell. The Victims of Terrorism Fund is what it 
is called. We have completed our work on it, and it has been 
forwarded to OMB. I will try to get you an answer as quickly as 
I can, Mr. Spratt, as to when you can expect this.
    Mr. Spratt. Thank you very much, Mr. Secretary.
    Chairman Nussle. Let me announce to the members we have a 
series of two votes. We will recess after Mr. Sununu inquires, 
and we will come right back into the hearing right after the 
second vote.
    Mr. Spratt. I have an opening statement I would like to 
have made part of the record.
    Chairman Nussle. Without objection.
    [Prepared Statement of John M. Spratt follows:]

  Prepared Statement of Hon. John M. Spratt, Jr., a Representative in 
               Congress From the State of South Carolina

    Mr. Chairman, I join you in extending a warm welcome to our 
distinguished witness, Secretary Powell. Mr. Secretary, I want to begin 
by commending you for the outstanding work that you have done in the 
wake of the September 11 attacks.
    We all stand shoulder-to-shoulder in our battle against terrorism 
and our need to provide for the Nation's security. Needless to say, as 
we pursue these goals, our international affairs budget and the 
activities that it supports are a critical tool. The purpose of the 
hearing today is to discuss the President's budget request for the 
State Department and for International Affairs (Function 150), and to 
consider whether the request is adequate to the challenges that we now 
face.
    Regular appropriations for function 150 for fiscal year 2002 
totaled $24.0 billion, and the President's budget requests $25.4 
billion. At first glance, that's an increase of $1.4 billion, or 5.9 
percent. Of course that's a slight overstatement, because some of the 
increase is needed just to keep up with inflation. CBO tells us that in 
order to maintain constant purchasing power at the level provided in 
2002 regular appropriations, you need $24.6 billion, and this means 
that the President's request is an increase of $872 million, or 3.5 
percent, over that level.
    But these totals don't take into account the supplemental funding 
for function 150 that was provided in response to the September 11 
attacks, $1.6 billion in all. If this funding is included in the 2002 
totals, then the President's budget is proposing a level of funding 
that is slightly below the 2002 enacted level and $692 million below 
the amount needed, according to CBO, to maintain purchasing power at 
the 2002 level.
    Let's look at it another way. The administration's budget starts 
with the amount needed to match the purchasing power provided in last 
year's regular appropriations for function 150, and then adds $872 
million. But that's only about half the size of the $1.6 billion that 
we provided last year in emergency appropriations in response to the 
September 11 attacks.
    So, one of the areas we hope you can comment on today is whether 
this overall level of funding is sufficient to carry out our Nation's 
foreign policy objectives in this new post-September 11 environment. 
Does it really make sense for the administration's 2003 budget to 
provide fewer constant-dollar resources for function 150 than were 
provided for 2002? This choice seems especially curious to me in light 
of the budget's proposal for new tax cuts costing $800 billion over 10 
years.
    With respect to specific accounts within the budget, I would like 
to highlight a few that I think warrant some extended discussion. 
First, the President's budget does not include funding for Afghanistan 
for a number of major assistance programs: development assistance, 
Economic Support Fund, Foreign Military Financing, and International 
Military Education and Training. All of these areas are listed in the 
budget as ``to be determined.''
    The question naturally arises whether the administration will seek 
additional funding for Afghanistan through supplemental appropriations, 
an amended budget request, unspecified cuts to other countries and 
programs in the function 150 budget, or some combination of these 
methods. I know that you have commented on this in other hearings, but 
we welcome your most current views on this question, including but not 
limited to anything you can tell us about any function 150 component of 
the supplemental appropriation request that the administration is 
widely expected to send to the Congress in the near future.
    Second, the budget includes increases in the Economic Support Fund 
account and the Foreign Military Financing account for Pakistan, India, 
Jordan, as well as for some additional countries that will be important 
allies in the ongoing war on terrorism. However, given the 
administration's determination to pursue the war against terrorism in 
many areas of the globe, we would welcome your perspective as to 
whether the President's foreign assistance request provides adequate 
resources for so-called, ``front-line'' states, or whether you think 
that additional resources that are not reflected in this request are 
likely to be needed.
    Third, the budget provides $372 million for non-proliferation, 
anti-terrorism, demining, and Related Programs, which, among other 
things, provide anti-terrorism training to foreign governments and work 
to reduce the dangers posed by nuclear material. This amount is $51-
million more than the amount that CBO tells us is needed to maintain 
constant purchasing power at the 2002 level, if you exclude the $98 
million emergency supplemental appropriations provide after September 
11. If you include that $98 million, the request for fiscal year 2003 
is actually less than the total of what was provided in fiscal year 
2002. So, I have concerns about this account, and would welcome your 
comments about these programs and the adequacy of the administration's 
request here.
    Mr. Secretary, we all recognize that we need to provide every penny 
necessary to fight the war on terrorism. I am wondering whether the 
administration's budget really provides enough resources in fiscal year 
2003 and in subsequent years to meet our foreign policy needs in this 
world that has been so transformed by the September 11 attacks.
    We thank you for your leadership and look forward to your 
testimony.

    Chairman Nussle. Mr. Sununu.
    Mr. Sununu. Thank you, Mr. Chairman. Welcome, Mr. 
Secretary. Mr. Spratt mentioned in his opening remarks, and I 
am pleased to see you emphasizing the point, that whatever we 
spend at State, whatever we spend in foreign assistance, really 
does serve, if we spend the money effectively, to advance our 
national security interests. I think that is what we are trying 
to establish in a hearing like this, whether it is on the 
budget side or the appropriations side.
    What we want to do as legislators is make sure that the 
initiatives that we are undertaking really do advance those 
national security interests and that we are helping you to 
allocate the resources you have as effectively as possible.
    I would like to have you address questions about facilities 
a little bit more specifically. I traveled to central Asia at 
the beginning of January and had the occasion to visit, in 
addition to Afghanistan, Uzbekistan and Tajikistan, and visited 
with the embassy personnel in Uzbekistan. I wanted to talk a 
little bit about that embassy.
    Just as an example, as you are well aware, that is an 
embassy which is a former Soviet disco. The personnel have done 
an amazing job and a very important job in assessing 
information and working on diplomatic issues on central Asia 
that has directly affected our success and information 
gathering in Afghanistan. That is, rightly so, scheduled for a 
full reconstruction, a building of a new facility, and security 
for the personnel there is critical, not just because of the 
greater threat of terrorism today but because of the effect it 
has on the efficiency of their operations and the morale. You 
laid out a schedule, as it were, for major new projects, 13 
ongoing, 8 this year, and 9 in 2003. Are you comfortable with 
that pace of new project construction? Is it sustainable and is 
that something that we should look to accelerate?
    Secretary Powell. At the moment, I am comfortable with the 
pace. General Williams has just done one heck of a job on this, 
and he has traveled around to these places and taken a look. He 
is doing some excellent work with respect to standardizing 
design, power plants, and electrical systems and doors so that 
we do not reinvent the wheel every time we go to another place.
    The contract for Uzbekistan, the design and build 
contracts, will be out this fiscal year. That one is being 
taken care of. But I am satisfied with the pace, and I think 
that we can spend the money that has been given to us in a 
responsible way.
    Mr. Sununu. In his role overseeing the construction, what 
is General Williams' relationship to the Real Estate Advisory 
Board that has been looking at priorities and utilization of 
real estate in State around the world?
    Secretary Powell. I will have to get that for the record.
    [The information referred to follows:]

   Mr. Powell's Response to Mr. Sununu's Question Regarding the Real 
                         Estate Advisory Board

    The Real Property Advisory Board (RPAB) was established in April 
1997 by the Assistant Secretary for Administration in response to a 
directive contained in the Conference Report accompanying the 
Department's fiscal year 1997 Appropriations Bill. The RPAB consists of 
seven members, including three real estate professionals from other 
Federal agencies, and four high-ranking officials within the 
Department. General Williams is the Executive Secretary of the RPAB and 
Chairs the meetings, but he is not a voting member. One of the main 
purposes of the Board is to review information on properties proposed 
for disposition and make a recommendation to the Under Secretary for 
Management. The RPAB has met eight times since its establishment and 
has reviewed over 40 properties. In order to better convey the purpose 
of the RPAB, I have enclosed a copy of its charter.
      modification to charter of the real property advisory board
    WHEREAS, the Real Property Advisory Board was established pursuant 
to a charter (the ``Charter'') signed by the Assistant Secretary for 
Administration, who reports to the Under Secretary for Management, on 
April 17, 1997;
    WHEREAS, a copy of the Charter is attached hereto as Exhibit ``A'' 
and is incorporated herein by reference;
    WHEREAS, the former Office of Foreign Buildings Operations is now 
known as the Office of Overseas Building Operations (OBO); and
    WHEREAS, OBO now reports directly to the Under Secretary for 
Management and no longer reports to the Assistant Secretary for 
Administration.
    THEREFORE, it is necessary for the Under Secretary for Management 
to make the following modifications to the Charter to reflect this 
organizational change:
    1. All references to the ``Assistant Secretary for Administration 
``in- Articles II, III, VI, IX, X of the Charter shall be replaced with 
the ``Under Secretary for Management.''
    2. The reference to the ``Deputy Assistant Secretary of the Office 
of Foreign Buildings Operations'' in Article IV shall be replaced with 
the ``Director/COO of the Office of Overseas Building Operations.''
    This modification to the Charter is hereby approved this 4th day of 
September, 2001.
            Grant S. Green,
            Under Secretary for Management.
              charter of the real property advisory board
    I. AUTHORITY. The Real Property Advisory Board (``the Board '') is 
established pursuant to the direction of the committee of conference 
for the fiscal year 1997 Omnibus Consolidated Appropriations Act (House 
Conference Report No. 104-863, 104th Cong., 2d sess. (Sept. 28, 1996) 
under authority of the Foreign Service Buildings Act of 1926, as 
amended (22 U.S.C. 292-302).
    II. MEMBERSHIP. The Board shall consist of seven members appointed 
by the Assistant Secretary for Administration; it shall include three 
real estate professionals from outside the Department and four high-
ranking officials within the Department of State. A quorum will consist 
of four members, including at least one non-Department of State 
employee.
    III. FUNCTIONS. The Board shall (1) review information on 
Department of State properties proposed for sale by the Department, the 
Office of the Inspector General, the GAO or any other agency of the 
Federal Government; and (2) compile a list of properties recommended 
for sale to the Assistant Secretary for Administration.
    IV. OFFICERS. The Deputy Assistant Secretary of the Office of 
Foreign Buildings Operations shall serve as the Executive Secretary of 
the Board. The Board may, at its discretion, elect a chairman or other 
officers or otherwise make rules for the conduct of its business not 
inconsistent with the provisions of this Charter
    V. DUTIES OF THE EXECUTIVE SECRETARY. The Executive Secretary may 
call meetings of the Board, and shall do so not less frequently than 
once each fiscal year. The Executive Secretary shall provide all 
necessary administrative support and shall provide information on 
Department of State properties to be considered for inclusion on the 
list of properties recommended for sale. The Executive Secretary shall 
arrange for the preparation and distribution of Board minutes and 
reports.
    VI. REPORTS. The Board shall make a report in writing, within two 
weeks of meeting, indicating the issues considered and the Board's 
recommendation regarding properties to be disposed of. The report shall 
be transmitted by the Executive Secretary to the Assistant Secretary 
for Administration.
    VII. AVOIDANCE OF CONFLICT OF INTEREST. Board members will be privy 
to sensitive information in the course of performing their duties. 
Accordingly, members will not be eligible to bid or compete for 
contracts to perform work for the Department as such bids or proposals 
would be furthered by the knowledge obtained by virtue of service on 
the Board. This prohibition shall remain in effect for twelve months 
following completion of service on the Board.
    VIII. COMPILATION OF LIST OF PROPERTIES RECOMMENDED FOR SALE. The 
Board shall, as far as possible, proceed by consensus. If consensus 
cannot be reached, a property may be included on the list of properties 
recommended for sale if a majority of the quorum of Board members 
present recommend such inclusion. Members of the Board who dissent as 
to any property included on or excluded from the list may prepare a 
minority report for inclusion with the Board's recommendations to the 
Under Secretary for Management.
    IX. SUBMISSION OF THE LIST FOR APPROVAL. Not less frequently than 
once each fiscal year, the Board shall direct the Executive Secretary 
to submit a list of properties recommended for sale to the Assistant 
Secretary for Administration for approval. This list shall be annotated 
as the Board deems appropriate to describe the basis for each listing.
    X. AMENDMENTS TO CHARTER. Amendments to this Charter may be 
proposed by the Board upon majority vote. Any such proposed amendments 
shall be promptly forwarded by the Executive Secretary to the Assistant 
Secretary for Administration for consideration.
    This Charter is hereby approved this 17th day of April, 1997.
            Patrick F. Kennedy,
            Assistant Secretary for Administration.

    Secretary Powell. I am sure he is working closely with 
them, but I don't have a current state of play on it. Chuck is 
spending a lot of time reaching out to groups such as the Real 
Estate Advisory Board and Construction Associations and the 
like to make sure that he is getting the best advice from 
outside as possible.
    Mr. Sununu. In setting priorities for major maintenance 
projects or new construction projects, how do you weigh the 
needs of an existing facility--dilapidation, in need of 
repair--against risks and security issues? I hate to think that 
one has to come before the other, but those are tough choices.
    Secretary Powell. But they do. And the first thing you have 
to do is make sure they are secure. I would rather the 
utilities aren't working that well, if the choice is whether 
they are going to be insecure or whether the plumbing is 
working as well as we like. But obviously we want to do both.
    Mr. Sununu. Is State considering selling properties that 
are in need of repair--rather than try to maintain or rebuild--
so you can start from scratch?
    Secretary Powell. We are indeed. In fact, we have a couple 
we are going to make a few bucks on if everything goes well. I 
don't want to hang onto anything that we really don't need. And 
from my military experience, I also come into this job with 
some understanding of what it is like to try to keep 
maintaining very old properties that are just maintenance dogs, 
and we are better off getting a new piece of ground and a new 
building.
    Mr. Sununu. I know in my limited experience here that 
making those decisions about getting rid of a piece of property 
because it is in your interest or in our security interest is 
oftentimes tough. There are sometimes some historical or maybe 
even political objections to that. I would encourage you that 
if there is anything we can do to help you advance that cause 
of security in getting the most advanced buildings in place for 
people around the world, I and others are prepared to help you.
    Thank you, Mr. Secretary. Thank you, Mr. Chairman.
    Chairman Nussle. As I said, we need to go vote. Mr. 
Secretary, I am going to turn the Chair over to Mr. Fletcher 
from Kentucky, and we will continue the hearing. Evidently the 
second vote was not going to occur now, so let me turn over the 
Chair at this time.
    Mr. Fletcher [presiding]. Mr. Secretary, it is a pleasure 
to not only have you here before the committee but to get to 
Chair during your testimony. I read your autobiography and 
other things, and I do believe in a provident God that prepares 
men like you in times like these. So thank you for being before 
us.
    I have some concerns, and I know you have addressed them, 
as we all have concerns about what the average citizen in some 
of the Middle Eastern countries feel about Americans. If you 
look at the turmoil, the Palestinian versus Israeli problems 
that are occurring, and not only that, but in the other 
countries that we are looking at because of harboring 
terrorists--I looked at the broadcast budget of $60 million and 
some of your efforts with Voice of America that you mentioned 
in your testimony, and I wonder what your thoughts are of how 
can we turn that around. I remember reading ``The Ugly 
American,'' and the image that we had in our attempts to help 
other nations, so let me ask you if would just make some 
comments on what you see in the future and what we can do. Is 
this $60 million adequate?
    Secretary Powell. Sixty million is part of a half-billion 
dollar account for our broadcasting efforts. We are both 
respected and resented around the world, especially in the 
Muslim world. The Israeli-Palestinian issue is something of an 
overhang because we are seen as Israel's great supporter, and 
we are. I mean, we are a strategic partner of Israel and we'll 
always be there for Israel. To some extent, that affects 
attitudes in the region. I think we have to take it on 
directly, and get our people out, give our message to people.
    Let me give you an example. My staff, Ambassador Boucher, 
my Assistant Secretary for Public Affairs, said it was a good 
idea for me to go on MTV, and I questioned his judgment at the 
time, but nevertheless, I did it. The result was that I had 
exposure to 345 or 346 million households around the world in 
146 countries and 33 MTV channels, 6 of which were live 
interactive where I could actually see young people between the 
ages of 17 and 25 watching me as I answered questions while 
they called in.
    Now, it was supposed to be 60 minutes, but it went 90 
minutes. And after I was through, our ambassadors and consular 
offices stayed there with the young people at these locations 
and spent some more time.
    One of the first questions I got was, ``Why is America the 
Satan of the world?'' Well, I went right after it and said we 
are not the Satan, we are the protector. Let's look at what the 
American Armed Forces have done over the last 12 years. Have we 
invaded any Muslim country? No. Have we tried to subject any 
group of Muslim people? No. In fact, we went to the rescue of 
the Muslim people of Kuwait, went to the rescue of the Muslim 
people of Kosovo, and went to the rescue of the Muslim people 
of Afghanistan. Rather than being the Satan, we are the 
protector; and further, we have no territorial ambitions. We 
are not trying to impose our culture on anyone.
    If you look at America, you will find there are tens upon 
tens of thousands of Muslims who are at our embassies around 
the world and--guess what--are seeking visas to come to the 
United States. And if you look at the Muslim population in 
America, proud Muslim Americans, they make a contribution as 
valued members of our society.
    Did I change all of their minds? No. But they had to stop 
for a moment, scratch their heads. We have got to do more about 
it and think about it. We have got to do more of that, and it 
is sometimes difficult to face these kinds of audiences, but I 
am encouraging all of my colleagues in the State Department and 
others to take it on directly and to make our case in a more 
effective way without being defensive about what we do. What we 
do is very, very good and it has benefited the Muslims of the 
world. They should not be deceived by false leaders such as 
Osama bin Laden, who claims to be a Muslim but has violated 
every tenet of the Muslim religion. We can not just sit back 
and let him claim that he is faithful when he is anything but 
faithful.
    We have to do a better job through broadcasting, through 
the use of the Internet, and through mass audience 
participation to get our message out and to be proud rather 
than defensive about the message that we have to deliver.
    Mr. Fletcher. Thank you. I think that is one of the areas 
in our public relations and, quote, ``foreign aid'' or whatever 
over the years that we haven't put enough emphasis on. So I am 
glad to see in the President's budget, and certainly what you 
have done, that you continue to work on that very hard, because 
I think that is essential. No matter what you do, if people 
don't know about it, then I think it really loses the 
opportunity to have the impact it does.
    Let me yield to Mr. Hoekstra here for 5 minutes.
    Mr. Hoekstra. I thank the gentleman for yielding. Secretary 
Powell, it is good to see you. I am encouraged by the work that 
you are doing and I totally agree that you are at the right 
place at the right time. I am also tremendously pleased with 
the influence you have had on the Bush administration and the 
work that you have done on America's Promise.
    One of my other responsibilities is reauthorizing the 
Corporation for National Service. I look forward to working 
with the Bush administration on moving that project forward.
    An area that I have some concern is, you have requested 
about $731 million for the Andean counterdrug initiative. And 
you know that in the fiscal year 2000 budget, it states no 
funds may be available for a Peruvian air interdiction program.
    The President is going to Peru, I think perhaps the first 
American President to ever visit Peru, later on this month. Is 
it accurate that, at that time, the President will announce the 
U.S. will resume interdiction flights?
    Secretary Powell. I can't say that today, Mr. Hoekstra. We 
are anxious to resume, and we are completing the inquiries that 
we undertook as a result of the tragic accident last year. I 
don't know whether or not we will be in a position for it to be 
announced at that time, but I am pushing to complete the work 
so that we can resume that very useful program.
    Mr. Hoekstra. Will the Busby report be made available to 
Congress, the evaluation of the interdiction program?
    Secretary Powell. I don't know why not, unless one of my 
lawyers or assistants behind me is going to tell me why not.
    Mr. Hoekstra. Because I think it is embargoed at this 
point. I don't think it is available to Congress. Is that 
accurate?
    Secretary Powell. Correct, at this time. But the reason for 
the embargo, I presume, is because we are still going through 
the processing of the report and determining what actions we 
will take. But, in due course, it seems to be something we 
would want to share with the Congress. I don't think they are 
going to disagree with me.
    Mr. Hoekstra. No, not if they are smart.
    Alright. I am also assuming then that at this point in time 
you are not free, or you are not prepared to announce what 
steps might be changed in an air interdiction policy that will 
address the shortcoming that were exposed last year.
    Secretary Powell. No, I'm not, Mr. Hoekstra, but I can 
assure you we are pushing to reach that point as quickly as we 
can so we can announce the changes and get the program 
restarted.
    Mr. Hoekstra. Yes. I appreciate the cooperation and the 
support immediately after the tragedy from the State 
Department, from the CIA and a lot of the other agencies that 
were involved to address the concerns and the immediate needs 
of the family. I think that over the last number of months, 
that process hasn't gone as well as what we would have liked, 
and I hope that some of the outstanding issues get resolved as 
quickly as possible. I also hope that as we go forward, that 
the steps that we put in place provide some more protections 
than what we had before. I mean, the process before, as you are 
well familiar with, provides absolutely no due process for the 
people that might be suspected of drug trafficking, and we can 
see what the tragic results are where there is no due process.
    So I will be looking forward to seeing what the steps are 
and being briefed so that, if this is a valuable program, that 
we can all move forward with a high degree of confidence that 
it will be a safer and a secure program than what we had in the 
past.
    Secretary Powell. You and I have the same goal, Mr. 
Hoekstra, and you can be sure that I will be looking at the 
same thing.
    Mr. Hoekstra. Thank you very much.
    I yield back the balance of my time.
    Mr. Fletcher. Let me recognize Mr. McDermott next.
    Mr. McDermott. Thank you, Mr. Chairman.
    Mr. Secretary, you made some statements in your prepared 
remarks that I want to just try to clarify with you. I was just 
in Germany and heard Joschka Fischer talk to a group of us and 
heard businessmen all over Germany, leaders of their 
corporations there, and then went to London and heard members 
of the House of Lords talk about the future of what we are 
doing in the war on terrorism. I listened to my colleagues tell 
the Germans that we were there to consult, that if they didn't 
like what we said, well, we were going to go ahead and do it 
anyway. The Germans came back very strongly, as did the Brits, 
in terms of saying, you may have to go alone. And I heard the 
same from you that we will move even if we have to go alone, 
and as I think about it, you sort of are the key between 
whether or not we go after North Korea, Iraq and Iran. I would 
like to hear what your view is, how that is going to proceed. I 
mean, the President has said we have this axis of evil, which 
implies we have to get rid of it as we did the Axis in the 
Second World War. So I am interested to hear what you think 
your role in that is before we exercise the military option.
    Secretary Powell. The President and I and my other 
colleagues in the administration have been consulting very 
widely. Chancellor Schroeder, for example, my colleague, 
Joschka Fischer's boss, has been to see the President recently 
and had a good discussion. He listened to the Chancellor, heard 
his views, and expressed his views to the Chancellor. The 
President will be with Prime Minister Blair in a few weeks' 
time, and the President spends a lot of time talking to our 
friends in Europe.
    Mr. McDermott. Can I just clarify that? The British 
newspapers, when I was there, said that Blair was coming over 
here to finalize the plans for going into Iraq.
    Secretary Powell. British newspapers say many things in the 
course of the day. It certainly isn't my understanding of the 
purpose of their meeting. I am sure they will discuss many 
things, but there are no plans to finalize because the 
President has no plans on his desk. And I don't know of any 
plans that would be on his desk by the time Prime Minister 
Blair visits. I think that was an incorrect press account.
    The President clearly identified these three countries, 
Iran, Iraq and North Korea, as being despotic regimes that are 
developing weapons of mass destruction and the means to deliver 
them. They are state sponsors of terrorism, and for that reason 
they deserve to be so characterized. But he did not, the day 
after the State of the Union Address, announce a state of war 
against any one of these regimes. Quite the contrary, he 
indicated that he felt it important to make sure everybody 
understood the nature of these regimes, and why it was 
important for us to have a common front to deal with their bad 
policies.
    He then went to South Korea and said that he wished to 
engage with North Korea, and he supported the South Korean 
engagement policy. We have said to the North Koreans, let's 
talk any time, any place, and without any pre-set agenda; let's 
start to talk because you are in a broken economy, you have got 
a broken system. We are the ones who are feeding your people. 
You are not feeding your people, and yet you continue to 
develop these weapons and ship them to others. So let's have a 
dialogue. There is no declaration of war against North Korea.
    With respect to Iran, they are similarly trying to develop 
weapons of mass destruction, and, frankly, some of our friends 
are providing them the wherewithal. We are taking that up with 
Russia and others, for example. But the President is following 
very closely this debate that is taking place within Iran 
between the moderate elements that tend to support President 
Khatami and the radical elements which tend to support Mr. 
Khamenei. There is a debate going on inside of Iran, and the 
President stirred it up a bit by saying it's time for you all 
to make a choice. Which world do you want to be in? Do you want 
to be a part of the world of undeveloped nations that have 
spent their time and energy and resources developing weapons of 
mass destruction that bring you nothing but trouble, or do you 
want to start knocking off support of terrorism so you can 
become a part of the world that is moving forward to the 21st 
century where we will benefit your people?
    Iraq is a slightly different case in that we do have a UN 
position that says they should let inspectors back in to 
certify that they are not developing weapons of mass 
destruction. They say they are not. They say, trust us. No, we 
are not going to trust them. They agreed to have inspectors 
come and verify this. They agreed to this 10 years ago, and 
they are meeting with Secretary General Annan today and 
tomorrow to discuss this issue of letting the inspectors in.
    As a separate matter, the United States believes that Iraq 
would be better off with a different regime. We are examining 
options as to whether or not this can be accomplished through 
the use of opposition elements, and the President has other 
options available to him.
    And so, yes, at the end of the day the President always, 
always must retain the option of acting alone, but we 
understand----
    Mr. McDermott. Does that mean acting alone without the 
Congress?
    Secretary Powell. Acting alone as the United States of 
America.
    Mr. McDermott. And how would we be involved in that 
process----
    Secretary Powell. It depends on what it is the President 
decides to do, but I am sure whatever the President decides to 
do, it would be in consultation with the Congress and 
discussion with the Congress and consistent with the 
constitutional requirements. There is no war that is about to 
break out with any one of these three countries in the next----
    Mr. McDermott. I would just close by saying I hope it is 
not like the shadow government, where it was done kind of 
unilaterally and our own people don't know. I think that is 
what many of us are worried about is we will be caught with a 
budget request for something that is already a fait accompli.
    Secretary Powell. I have not been involved in the debate 
with this shadow government issue that arose in the press last 
week, but as Secretary of State, it just seemed to me to be 
something that was a normal course of business to have part of 
my staff somewhere outside of the Truman Building. I didn't 
view it as a shadow government. It was just the disbursement of 
the command and control elements of the State Department, and 
this wasn't any effort to bypass anything or not to inform--I 
would have told any Member of Congress if the issue had come 
up, but it was just prudence on the part of the government not 
to have people all in one place at a time of danger.
    Mr. Gutknecht [presiding]. The gentleman's time has 
expired, and as luck would have it, it is my turn to ask the 
next questions. And let me, first of all, sort of in response 
to this, I think I speak on behalf of the majority of the 
Members of Congress clearly and the vast majority of the 
American people when I say that I think the President's 
comments relative to the evil axis were refreshingly candid, 
and frankly I think it will go down in history along with 
President Reagan's words about the evil empire and his words 
about saying to Mr. Gorbachev, ``Tear down this wall.'' he 
didn't say, ``Gradually remove it.''
    I think words do have meaning, and I appreciate the fact 
that the President of the United States has had the courage to 
say what needs to be said not only to the people of the United 
States, but to the people of the world. So put me down in the 
category of strongly supporting the President's comments.
    Secretary Powell. Thank you, sir.
    Mr. Gutknecht. This, after all, though, is the Budget 
Committee, but as long as the issue of Germany has been raised, 
I have been very active in the congressional study group on 
Germany, and I have had several meetings recently. As a matter 
of fact, as recently as yesterday I had lunch with Wolfgang 
Gerhardt, and I don't know if you know Mr. Gerhardt, but I 
think you should get to know him. If the polls are correct, and 
of course we read polls up here on Capitol Hill, and they read 
polls in Germany, but right now if the election were held today 
in Germany, he would be your counterpart; he would replace 
Joschka Fischer.
    So I hope you will take some time to get to know some of 
these people, because I don't think it is fair to say that some 
of the people in Europe speak for all of the people in Europe, 
and I think there is strong support for what the United States 
is doing in terms of standing up. But I also think it is 
important that we not be hamstrung by a bureaucratic system in 
the European Union in terms of responding quickly and 
appropriately to the threats of terrorism.
    Let me come back though to the budget issues, because that 
is really what we are ultimately here for, and I guess I have 
more of a comment than a question, Mr. Secretary, and that is 
that you have already indicated once perhaps there will be two 
supplementals coming forward. I hope you understand that we are 
very supportive of what you are doing. I think you will find 
almost unanimity in support for your efforts, and I think there 
is a growing understanding that helping nations to help 
themselves is in our best interest in the long run.
    At the same time, we are charged with responsibility on 
this committee of doing our level best to balance the Federal 
budget. Recent reports suggest that we are going to be much 
closer than we may have thought a few months ago, but on the 
other hand, as you come forward with those requests, I just 
want you to know that we are going to give them serious 
consideration, but we are going to have to weigh them against 
all of the requests we have whether it be from the Pentagon or 
all the other agencies in Federal Government.
    It will be released later today that the Senate farm bill 
is being rescored, and the cost may well be $6.5 billion more 
than they had originally estimated. As a result, we are 
probably going to have to take another look at that.
    So essentially what I want you to know is we are going to 
give your request very, very serious consideration, but I hope 
you understand that we have to weigh those against the requests 
of all the other Departments.
    Secretary Powell. Of course. Thank you, Mr. Gutknecht. I do 
understand that.
    Mr. Gutknecht. Next on our list we have Mr. Price for 5 
minutes.
    Mr. Price. Thank you, Mr. Chairman.
    Mr. Secretary, let me add my welcome. Thank you for being 
here. I understand that you have already addressed the matter 
of embassy security in a previous exchange. We may want to 
follow up further on that for the record.
    Let me turn to a pressing policy issue, as others have. You 
may recall that here a year ago you and I had an exchange on 
the deteriorating situation in the Middle East and what our 
country could do to halt the spiral of violence and to move 
toward a just and lasting peace agreement. You indicated a 
desire to let the new Israeli Prime Minister get his government 
together and to formulate his negotiating position, but you 
also expressed a determination that the U.S. resume what you 
called, quote, ``the traditional leadership role it has played 
in Middle East peace.''
    Now, I realize that you had initiatives planned at the time 
of the 9/11 attacks, and of course we are all aware of the 
reports of death and violence that have made the prospects of 
peace seem more and more distant. The New York Times has 
described the ``stepwise regression'' that we seem to be 
involved in. We first have the Mitchell plan to get the parties 
back to the negotiations, and then the Tenet understanding to 
walk them back to the Mitchell plan, and then General Zinni's 
efforts, punctuated and delayed by outbreaks of violence, to 
get the protagonists back to Tenet. It seems like a pretty 
distant prospect right now, but it is one that we can't give up 
on, and the situation on the ground in recent days, I think, 
underscores that.
    So I have two questions for you. First, I am sure we would 
agree that the pursuit of Middle East peace is compelling in 
its own right. It also has an additional rationale post-9/11, 
in terms of our antiterrorism offensive, and what it will take 
to succeed. Can you comment on the priority Middle East peace 
assumes in light of our antiterrorism offensive and any ways 
you think the challenge has been altered?
    And secondly, observing the failure of both the Israelis 
and Palestinians to dampen the conflict and to regain momentum 
toward a long-term settlement, are you reconsidering in any way 
the conditions of engagement the administration has laid down? 
It is, of course, highly desirable that the violence recede 
before we resume our involvement or re-engage in a major way, 
but is that policy of watchful waiting working? Are there ways 
we can more proactively deter and discourage violence and the 
despair and anger that lead to violence and thus help create 
the conditions that we have said our constructive involvement 
requires?
    Secretary Powell. With respect to your first question, it 
takes on an even higher priority because of the war on 
terrorism. It really is sort of an overhang on our relations 
with other nations in the region, and so even more than before 
the Middle East situation, is a high priority for the 
administration.
    With respect to your second question, we have been doing 
everything we can, and you have outlined it very well. A new 
Israeli Government came in last year. Prime Minister Sharon 
committed to security, essentially to break from the situation 
that existed at the end of the previous administration. 
President Clinton tried to the best of his ability to reach an 
agreement. It didn't work; brought down the Barak government, 
and Prime Minister Sharon came in on the basis of Isrealis 
needing to be secure in their homes and communities before they 
could even think about moving forward in peace--not an 
unreasonable situation when you have an intifada raging 
throughout the region.
    We tried to help with first asking Senator Mitchell to stay 
on and complete his report. The Mitchell Report was accepted by 
both sides. Both sides said they would implement all their 
obligations under the Mitchell Report, but the violence 
continued. One of the first obligations was to stop the 
violence. Then we said, ``let's try to figure out a way to get 
the violence stopped so that we can get to Mitchell, because 
Mitchell gives us the political process.''
    We sent George Tenet over, and he did a great job putting 
together a work plan. Both sides agreed to the work plan. But 
the violence didn't end, and Prime Minister Sharon, in not an 
unreasonable position, said he cannot go forward with this kind 
of violence continuing.
    We continued to try to find ways to get the violence to 
end. I went over. We had both sides agree to work hard to get a 
7-day quiet period, but we couldn't get the 7-day quiet period.
    The President, in order to jumpstart it and to show our 
vision for the future, put a political dimension to it that the 
Palestinians could grasp. The President went to the United 
Nations in the fall and talked about a vision of a Palestinian 
state called Palestine. No President ever said that before, 
before an international body: Palestine. And then I gave a 
speech a week later which laid out obligations and what the 
American vision was.
    Then we sent General Zinni in. General Zinni was supposed 
to start security consultations at a high level between both 
sides. Both sides committed to that. They were going to do it, 
and instead what we got was more violence. General Zinni came 
out, and we sent him back. We thought we had some momentum 
then, and what happened? Suddenly the Karine A, a ship, shows 
up with 50 tons of munitions on it. At the same time we are 
being told by Chairman Arafat, ``No, we are going to do a 
cease-fire, we are not going to participate in these kinds of 
terrorist activities;'' and yet here comes a ship with 50 tons 
of munitions on it and new kinds of munitions that will 
escalate the situation, so that stopped us again. But we 
haven't given up.
    As I said to a committee yesterday, the violence is getting 
worse, both sides are escalating, and I don't see that the 
strategies being used by both sides necessarily will lead to a 
successful outcome. We are anxious to see if we can just jump 
to Tenet as quickly as possible so that both sides at a high 
level can begin working the difficult task of getting a cease-
fire into place so we can get started.
    If I thought there was some way to snap a finger or send in 
an emissary who would make all of this work--the kind of 
negotiations that were going on in previous administrations are 
not relevant right now because they are not discussing terms of 
an agreement. They are discussing terms of how to stop killing 
one another so that they can begin discussing terms of 
agreement and political discussions. But that's not the case.
    My friends from the European Union have been actively 
engaged in this with me, and we have had a common position, as 
have the Russians with us and Kofi Annan. The European Union 
has had a constant series of foreign ministers going in, trying 
to move this process along, and all of us--whether it is me, my 
European Union colleagues, Kofi Annan, or all the other 
interlocutors and intermediaries who are working this problem--
run into the same problem, the violence. I believe that 
Chairman Arafat has to do more than he is doing, and he can do 
more than he is doing to get the violence down.
    I have also suggested, as you know, that the Israeli side, 
faced with a legitimate problem of self-defense, has to defend 
their people. I think they have to be very careful with the 
means they use to defend their people because in recent months, 
it has just produced a series of escalations rather than 
bringing things under control. But we haven't given up. The 
President is deeply engaged. We have spoken about it again this 
morning, and he is deeply engaged in this issue as am I, sir.
    Mr. Price. Thank you.
    Mr. Sununu [presiding]. Thank you, Mr. Price.
    Mr. Thornberry.
    Mr. Thornberry. Thank you, Mr. Chairman. Mr. Secretary, I 
want to ask about a couple of areas of kind of broad reform to 
hopefully help improve the effectiveness of the money we are 
spending. I don't think my constituents are necessarily opposed 
to spending money on foreign aid, but they want to make sure it 
is spent well, and they get the sense that we keep doing the 
same thing year after year without a real impact in the 
countries that we are trying to help. Certainly the urgency of 
trying to help improve standard of living in developing 
countries is part of what we need to think about in preventing 
these places from being fertile grounds for terrorists.
    One writer I am particularly interested in is Hernando 
DeSoto from South America who argues that these people in 
developing countries have capital, they have things they have 
accumulated, but there is no private property legal system to 
help them protect it and that one of the things that the rest 
of the world needs to do is to figure out a way to help them 
protect things so they can build and save and start a business 
and help advance their standard of living.
    Is there anything like that on your radar screen, whether 
it is conditions on aid or maybe an additional effort that we 
can make to help countries develop the kind of legal 
underpinning that where people can rise up out of their 
poverty?
    Secretary Powell. It is very much on my radar screen, and 
the attitude I am communicating throughout all of the bureaus 
in the Department and with our ambassadors around the world is 
that if countries really want to enjoy our generosity in the 
future, and more than that, want to create conditions that will 
not just bring aid but bring trade, we have got to make the 
point to them that there has to be the rule of law that 
underpins that society. There has to be democracy. There has to 
be a way for the people to change who their leaders are. There 
has to be transparency in what the government is doing in the 
use of aid or trade money. There has to be a recourse to law 
not only for people who might invest in the country, but for 
people within the country who are trying to invest in their own 
country. If there isn't that recourse to law, you won't get 
that savings invested in your own country, or anyone else to 
come into your own country.
    Why should you when you can go two countries over and find 
it. ``Capital is a coward'' is our little catch phrase out 
there, and capital is not going, nor coming out from under a 
mattress, if it is not going to be protected and rewarded. 
Capitalism is a reward for the investment use of capital, and 
if it is to be rewarded and protected so that you can get your 
capital out with return whether you are a single homeowner in 
that country or an investor in that country, you must have that 
kind of a system--one that is noncorrupt, transparent, governed 
by rule of law, provides recourse in the courts, and is based 
on a democratic system that permits a change of government over 
time. That is our goal.
    Market economics, the sanctity of private property. We are 
carrying this message and there is no leader of an undeveloped 
country who comes and sits in my office with me who does not 
hear this little sermonette when they start asking me how they 
can get more aid.
    Mr. Thornberry. I think that's good and important, and the 
next step is how do we go beyond telling them what to do to 
having a carrot, and maybe a stick, to pushing them in that 
direction, and it is not easy----
    Secretary Powell. But you are right on, Mr. Thornberry. We 
really do have to incentivize it with the way in which we 
deliver our aid.
    Mr. Thornberry. Let me ask you about one other area, if I 
could. Last year, when you came before this committee, I asked 
about reforms at the Department. You have told us about the 
technology and the building security, the other things. Before 
9/11, a number of studies had suggested that the organization 
of the State Department was outdated, not just at headquarters 
but in the embassy, we needed a new look at the world around us 
and what kind of people we put in the embassies and the 
organization of things, how the State Department relates to 
other agencies, Treasury, et cetera.
    I haven't heard a lot about that since then. Some people 
suggest you need a QDR for the State Department, to kind of 
take a military term. Where is that broader reform effort in 
trying to update and modernize the State Department?
    Secretary Powell. With respect to a QDR kind of idea, I 
found all kinds of QDR studies waiting for me when I arrived at 
the Department. The Carlucci Report, overseas presence--a 
variety of reports. I didn't launch yet another study. We just 
started doing things. There are some positions I didn't think I 
needed filled anymore in the Department, and I just didn't fill 
them. I have tried hard to empower the Assistant Secretaries 
and Under Secretaries and to empower the ambassadors to 
decentralize authority within the Department so we can be more 
agile and more flexible. We made some organizational changes 
with respect to how we do building operations.
    We made some organizational changes in resource management. 
I now have a chief of resource allocations within the 
Department, instead of the bureaus arguing with each other over 
resources. We have done a better job of that. We are working on 
rightsizing and not--I don't like the term downsizing, because 
the answer might be upsizing, but rightsizing the embassies.
    We are looking at whether or not functions can be performed 
on a regional basis rather than an individual embassy basis. We 
are looking at presence posts of the kind that Ambassador 
Rohatyn started in France, and we are now looking at doing that 
in other places. Canada and Turkey come to mind. We have got 
all that underway.
    I have discovered, in the course of my career, that it is 
very often people that make the changes, not changes in 
organization. Sometimes a reorganization is something you do to 
somebody rather than for somebody, and so I have spent this 
first year trying to use the organization that I inherited with 
some modest changes in order to empower those people and get 
those people moving before I start throwing all the boxes up in 
the air.
    Mr. Sununu. Thank you, Mr. Thornberry.
    Mr. Clement.
    Mr. Clement. Thank you, Mr. Chairman. Secretary Powell, it 
is a great honor in having you, and I want you to know from the 
State of Tennessee, I compliment you a lot on your leadership, 
your courage, and your service as our Secretary of State. My 
first question concerns the fact that when the terrible tragedy 
occurred September 11, and we passed that resolution, my 
interpretation of that resolution is simply this: That if 
another, or I might say if another tragedy occurs in the world 
that it is separated, that the September 11 tragedy is related 
to September 11. That we shouldn't expand on that September 11 
and I know a lot of people at home and other places are very 
much thinking that we are going to get involved in another 
conflict, but it is nothing related to September 11 because 
September 11, we said in that resolution, go after the 
terrorists wherever they might be, but not to expand it any 
further than that. Do you differ with that interpretation?
    Secretary Powell. That was my understanding of that 
resolution, and I think if the President found it necessary to 
undertake other action against different persons, parties, or 
nations, he would consult appropriately with the Congress and 
would take those actions in a manner fully consistent with the 
Constitution.
    Mr. Clement. My next question has to do with our economic 
team versus our team to fight terrorism. I give high marks on 
combating terrorism, bolstering homeland security, but as you 
know, the Bush administration came before the Budget Committee 
last year and said that over the next 10 years, we are going to 
have a budget surplus of $5.7 trillion.
    Now, just a few weeks ago, they came before our Budget 
Committee and said no, it's not going to be $5.7 trillion, it's 
going to be $0.7 trillion over the next 10 years, which is a $5 
trillion turnaround. I know you are asking--you are requesting 
as well as others as well are asking for a rather substantial 
increase in your programs and all, and every penny may be 
justified, but what I want to happen is for our economic team 
that has the President's ear be as strong as the team combating 
terrorism. And I know your being Secretary of State, that may 
not necessarily be your problem, but do you read it that way or 
am I reading it incorrectly?
    Secretary Powell. I think we have a good economic team with 
Secretary Evans, Secretary O'Neill, Mr. Lindsey and others. The 
estimates were changed, of course, as the result of the events 
of 9/11, which affected our economy as well as the dip in our 
economic activity. I am not an economist, certainly, and as 
Secretary of State, I don't totally immerse myself in these 
details. But it seems that the statistics of the last quarter 
or so suggest that we may well be coming out of this now, and I 
expect those numbers will change again. I do understand the 
importance of your statement, that it is tough to find all of 
the funds asked of by the different departments, and that 
difficult trade-offs will have to be made. But I think the 
President has a good national security team and I am proud to 
be part of it. He has a good economic team as well.
    Mr. Clement. It just seems like we are spreading ourselves 
very thin. Not only here, but also abroad, and now we have got 
the conflict in Colombia that we have to deal with. I was down 
there last year and I know you have got the guerillas on one 
side, and you have got the drug lords on the other, and it 
appears like maybe the guerrillas are, in various ways, 
protecting the druglords. You also have a civil war ongoing, 
knowing that the guerrillas control approximately half the 
country, and yet the country of Colombia is the drug capital of 
the world.
    So you can't ignore that either because--I just want us to 
combat terrorism in the world like we have not combated drugs, 
because drugs have infested our society so deeply, and I think 
that is ingrained, as you know, in Afghanistan and other 
places, the drug trafficking with terrorism because that is 
where they have been able to get a lot of their money. Is this 
where you are going?
    Secretary Powell. Yes, sir. When President Pastrana decided 
to end the safe havens a few weeks back, I think he recognized 
these terrorist organizations, the FARC and the ELN, were not 
serious in their negotiating efforts, and so he now has a 
battle on his hands and we have to try to help him with that 
battle. It is not just against narco-traffickers, but 
counterterrorist activity as well, and they do blend one into 
the other as you noted, sir. We are reviewing our policies now 
with respect to support for Colombia, and the administration 
will be coming up with requests for changes to the current 
legislation, which compartments our efforts solely on the 
counternarcotics side.
    In the 2003 request, we are asking for $98 million to help 
with pipeline security, as I mentioned earlier, but there may 
be more things we want to do. Not to put U.S. troops into 
Colombia, but to give us the greater flexibility to assist the 
Colombians in fighting this challenge, which threatens their 
democracy, the democracy of a fellow democratic nation in our 
hemisphere.
    Mr. Clement. Thank you, Mr. Secretary.
    Mr. Sununu. Thank you.
    Mr. Brown.
    Mr. Brown. Thank you, Mr. Chairman. Mr. Secretary, I want 
to ask you three different questions about three different 
areas of your budget. The first one is the Peace Corps, and I 
know this was expanded on by the President in his State of the 
Union speech. I noticed on your budget request, you have got 42 
million additional dollars for 8,000 additional volunteers. Are 
they volunteers or are we actually paying those people to 
participate in the Peace Corps?
    Secretary Powell. I am not an expert in the Peace Corps, 
but I think they are paid a certain stipend. But they 
essentially volunteer for the Peace Corps and then they are 
provided with some stipend or means of compensation so that 
they can frankly afford it.
    Mr. Brown. I thought the idea was to certainly recruit some 
young people to come in and give them an idea about the world 
and sort of an early start in their career, but I also thought 
it was going to be targeted toward those people who sort of 
concluded their career that wanted to come back on a voluntary 
basis and just contribute some of their time to the better of 
the world peace.
    Secretary Powell. That is the philosophy of it. Nobody is 
coming into the Peace Corps to make a living at it, but what I 
have to do is provide for the record exactly, what we provide 
people so that they can at least keep body and soul together 
while they are volunteering, and that I don't know the answer 
to. I will find out for you.
    [The information referred to follows:]

Mr. Powell's Response to Mr. Brown's Question Regarding the Peace Corps

    Peace Corps volunteers are not paid a salary. Instead, they receive 
a stipend to cover basic necessities--food, housing, and local 
transportation--during their service overseas. While the amount of the 
stipend varies from country to country, it allows the volunteers to 
live at the same economic level as the people in the communities they 
serve. Also, volunteers at any given post are given the same amount of 
money regardless of age or experience since this is a stipend to cover 
only essential--living expenses, not a form of remuneration.
    The Peace Corps also pays for volunteers' transportation to and 
from the country of service and provides complete medical and dental 
care. Moreover, at the conclusion of their service, volunteers receive 
a ``readjustment allowance'' of $225 for each month of service. At the 
completion of a full term of service (3 months of training plus 2 years 
in service), the allowance amounts to $6,075.

    Mr. Brown. OK. The other thing is the MVB Bank, the arrears 
in the bank. Is this a bank, or is this just another way to 
issue grants? Does it operate like a bank or is somebody 
actually paying us back for these funds?
    Secretary Powell. These are multinational development banks 
that provide loans and an obligation is created when these 
loans are given, unless it turns out to be a grant that has 
been given. But yes, they are loans that are eventually 
recycled.
    Mr. Brown. So we have got a pretty good record of payment 
on them, you think?
    Secretary Powell. How good the record is--I would have to 
provide for the record.
    [The information referred to follows:]

 Mr. Powell's Response to Mr. Brown's Question Regarding Multilateral 
                           Development Banks

    Borrowing countries do have relatively good records in repaying 
loans from the multilateral development banks. For example, overdue 
payments to the International Bank for Reconstruction and Development 
(IBRD), which currently has more than $120 billion in loans 
outstanding, totaled $2.4 billion as of December 31, 2001--a rate of 20 
percent. Overdue payments to the International Development Association 
(IDA), which currently has over $109 billion in loans outstanding, 
totaled just $608 million, or 0.56 percent. In the case of the IDA, 
repayments on past loans currently finance over 40 percent of new IDA 
lending.
    I hope that this information is useful to you. Please do not 
hesitate to contact us if we can be of further assistance in this or 
any other matter.

    Mr. Brown. OK. The other thing is the Global Health 
Initiative that you have there for $1.4 billion. Apparently, 
about half of that is being focused on the AIDS crisis. Is that 
the way I understand it? Could you tell me a little bit about 
how that program works? Is it preventative or is it to address 
after the facts?
    Secretary Powell. There are several aspects to it. In some 
instances we have a bilateral program with a particular 
country. Let's just pull Uganda out of the air. We might 
support educational programs and other programs in Uganda, for 
example, to stop mother-to-child transmission with the 
administration of a very simple, inexpensive drug that keeps 
the infection from being passed from mother to child at a level 
of 85 percent. That might be a bilateral program we have with a 
particular country. Then we are also working with the UN in the 
Global Health Trust Fund, which will create a large amount of 
money to be available. So far it is up to $1.3 billion.
    A committee has been formed that will make grants out of 
that program to assist individual country or regional efforts 
at education, prevention, and treatment. On top of all of 
that--not only in my budget--but at NIH, at Health and Human 
Services, are billions of dollars more that are seeking a cure 
and funding research into the disease.
    Mr. Brown. Is there any indication that we are winning the 
battle or is it proliferating more?
    Secretary Powell. I think we have seen, in the United 
States, that there has been success in starting to bring down 
the mortality rates through education and through the treatment 
with antiretroviral drugs; overseas, the battle has just begun. 
But some countries--such as Uganda, for example--have made 
quite a dent in their problem, and it started to bring down the 
infection levels. Now, regrettably to some extent, the rate is 
brought down by the people who are dying, but the rate of new 
infection is also being brought under control through 
education, through the use of condoms, and through the breaking 
down of old taboos and conservative ideas that some of these 
tribal societies have been carrying. You also have some leaders 
in some of those countries who understand that they have to 
lead and who tell their people that this is destroying them as 
a nation, and they have to do everything: they have to treat, 
they have to educate, they have to not stigmatize people who 
are carrying the disease and not isolate them and throw them 
out of their families and communities. Leaders who are acting 
in that responsible a way are starting to bring the crisis 
under control in their countries.
    Mr. Sununu. Thank you, Mr. Brown.
    Mr. Moran.
    Mr. Moran. Thank you, Mr. Sununu. Mr. Secretary, I have a 
comment about State Department employee morale, and then a 
quick, specific question about the Islamic Student Exchange 
Initiative, and then a more general one about foreign aid. I do 
this because I used to staff too, when I want to give you some 
heads up about something I am going to ask about. First of all, 
in terms of personnel, I understand that the morale at the 
State Department is the highest it has been since the days of 
George Schultz, that you have really embraced the employees and 
made a tremendous difference in terms of their attitudes about 
what they have to do.
    In fact, I want to quote a statement that you made before 
the Senate Budget Committee last month. You said that ``the men 
and women of the State Department go into harms way every day 
just as much as any one of the men and women of our Armed 
Forces. They take risks, and sometimes they pay with their 
lives, pay with injuries, and we have to do a better job taking 
care of the people of that brave soldier of the State 
Department.''
    Only someone of your stature and military experience could 
have said something like that. But I know it meant a lot to 
people that don't have an opportunity to tell you that are 
working for you. I also appreciate all you have done in the 
area of information technology, but of course, all the 
information technology in the world isn't half as valuable as 
one wise person with experience and institutional memory and 
vision, and I understand you are going to lose a lot of those 
wise people, that over the next 5 years, as much as half of 
your personnel are eligible for retirement.
    You are asking for 400 more positions, 399. You got 360 
last year. But it is a problem and I hope we can get pay parity 
between the civilian and military sectors. I am sure you are 
not able to comment on that because you are a team player, but 
to the extent you can help us, again, your stature would make a 
great difference.
    I want to ask you specifically about the Islamic Student 
Exchange Initiative, because you have made some great points in 
your introductory comments. But the Islamic Exchange Initiative 
wasn't funded, and I know that the organization that runs these 
programs had pushed it. It seems like the kind of initiative 
that would make a lot of sense. Islamic students from the 
Middle East account for less than 5 percent of all the foreign 
students in the United States, and of course, this was going to 
send American students as well into Middle Eastern countries to 
teach and to study, so that I would hope that we could see our 
way fit to at least tacitly supporting that if there is an 
effort to do so.
    I will let you comment on that, but now I want to make a 
point about foreign aid. We saw a group called Global 
Leadership yesterday that made some good points and there was 
an excellent article, I think it was Sebastian Mallaby that 
wrote an article last week about all we have accomplished with 
foreign aid that most people don't know about. You know, the 
people that are living on a dollar a day has gone down by 200 
million, even though the population has increased by 1.6 
billion over the last 20 years. Adult literacy rate has been 
about halved in the last 3 decades.
    I could go down a long list of accomplishments, and yet I 
see an article today that the U.S. is fighting what appears to 
be the rest of the civilized world, specifically in the case of 
Jim Wolfenson in this article, but Europe supports him in 
putting more money, not just into the World Bank, but into 
foreign aid, and even though in dollar amounts we may be 
putting in the most, we are putting about one-seventh of 1 
percent into foreign aid.
    I know you know these numbers. We could be putting a lot 
more in, and we probably have the most vested interest in doing 
so. We are the most prosperous Nation. We are the most likely 
to be targeted. We are the ones they resent the most. To the 
extent we can reach out and help them improve their education, 
their health care, we also expand markets for our products and 
we can't possibly consume what we are capable of producing in 
this country. So I don't mean to be reiterating things that you 
are even more aware of, but I would like to get some comment 
from you on this issue of foreign aid, because we have had one 
spokesperson, our Treasury Secretary, opposing the investment 
of foreign aid, whereas I suspect there are a lot of other 
people in the administration that would be inclined to agree 
with the World Bank.
    Mr. Secretary.
    Secretary Powell. Thank you, Mr. Moran. First, let me thank 
you for your kind words about morale. Knowing how many of my 
employees reside in your district, this is a rare tribute. I am 
very grateful and thank you for your support of them over the 
years as well. The comparability issue is a difficult one, but 
we are looking at it and there are other compensation issues 
that we are also looking at with respect to the last three--and 
going overseas or staying home--which affect our retention 
rates, particularly of our most experienced people.
    Mr. Moran. It is a terribly disruptive life and they have 
got to be professionals, and we ask a lot from them and we 
don't pay them a whole lot that is competitive with the private 
sector.
    Secretary Powell. They truly are soldiers in a sense. You 
take a look at Pakistan. We sent Ambassador Wendy Chamberlain 
last summer with her two teen-age daughters, and suddenly she 
was in the middle of a crisis over there. Her daughters and all 
the other family members were sent home, and we have only now 
started to return those family members. And so you have a 
single mom with two teen-age daughters, and to do her job, she 
sent them home.
    As an aside, an ambassador in a nearby country said, 
``Well, Wendy, why don't you send your daughters to stay with 
me? They will be a little closer.'' Wendy's response was, ``No, 
if everybody else's kids are going home, my kids are going 
home. They are not going to be near.'' That is the kind of 
service and sacrifice I see every single day at one of our 
missions somewhere. There is no group of citizens serving as 
proudly and nobly, and with as much valor and courage, as our 
State Department people overseas. I am glad that this committee 
appreciates it, and I appreciate your support over the years.
    Mr. Moran. We too often take them for granted.
    Secretary Powell. With respect to the Islamic Student 
Exchange, overall our international visitors program has gone 
up slightly, but I need to look at this specific one and get 
you an answer for the record. With respect to more aid, the 
President understands the importance of the foreign aid, as do 
I.
    [The information referred to follows:]

  Mr. Powell's Response to Mr. Moran's Question Regarding the Islamic 
                          Exchange Initiative

    The Islamic Exchange Initiative is a proposal of the Alliance for 
International Educational and Cultural Exchange, an association of 
nonprofit educational and cultural exchange organizations in the United 
States. The Initiative would provide major new support for greatly 
enhanced exchange programs between the United States and the Islamic 
world. The Alliance has proposed an annual appropriation of $75 million 
to support the initiative.
    Soon after the events of September 11, the Department's Bureau of 
Educational and Cultural Affairs shifted significant resources from 
within its existing base to the support of programs in countries with 
large Islamic populations, consistent with the objectives of the 
Alliance proposal. The President's fiscal year 2003 budget request of 
$247 million is an increase of $8 million from this year, and would 
allow us to sustain this heightened level of activity. In addition, the 
administration included a request for an additional $10 million to 
increase exchange programs with Islamic countries in its recently 
submitted fiscal year 2002 supplemental request. If the Department 
receives these funds, they would go toward activities envisioned in the 
Alliance initiative.

    Secretary Powell. I am pleased that we have been able to--
in tight budget circumstances--achieve real growth my first 
year and hopefully this year. We are in constant discussions 
with my good friend, Jim Wolfenson, and there is a debate going 
on as to whether it should be more grant aid or more loans. 
That is a debate we should have, because I think there is a 
good argument to be made on both sides. But the President has 
encouraged me to speak up for what I want. He gives me the time 
to present my case to him and to the other administration 
officials and to OMB, and we will do it again in the 
supplemental request that is coming up. You can be sure that I 
will be back again in 2004 to make the case once again.
    Mr. Moran. Thank you for your leadership, Mr. Secretary.
    Mr. Sununu. Thank you, Mr. Moran.
    Mr. Watkins.
    Mr. Watkins. Thank you, Mr. Secretary. It is honor to have 
you here. I have reflected on your past, coming out of the 
projects and now serving our great Nation and the world with 
distinction. I always told my friend, Charlie Rangel, we have a 
lot in common, his being out of and also representing Harlem, 
and a lot of low income people. I come from a different 
background. I come from a real, economically depressed area 
that really hasn't recuperated from the Great Depression. We 
are kind of a developing nation, so to speak, and my friend--he 
is my friend from Tennessee--is going to have a chance to vote 
here in about 15 minutes on the fourth--not stimulus package--
job creation, economic growth package, and I know he is going 
to be there helping us bring forth that one with the--our 
economic opportunities, help us grow that a little bit.
    We also have a trade bill that will be really helpful, 
because we can't get a trade bill passed because for each $1 
billion of trade, it would create 20,000 new jobs. That is a 
good economic growth also.
    So I know he is going to be there helping us get that done 
in the future here. I just wanted to mention that----
    Secretary Powell. May I yield my time to Mr. Clement?
    Mr. Watkins [continuing]. I have got to hold an editorial 
just a little bit, so he has a little opportunity here coming 
up. But we have got to develop our economy. And that is the 
whole situation, in order for us to help others. I was kind of 
an absentee person, so to speak, in a lot of international--but 
in Oklahoma, I helped develop a school of international 
studies. It is Oklahoma State University, in helping to try to 
develop more understanding and all.
    We have got to engage countries around the world in 
education, help their culture and human rights and trade, and 
hopefully and prayerfully never have to engage in a mammoth 
war. I think we know we have got to do that by building 
relationships and friendships, and we have got to make that 
investment along the way. The thing I wanted to mention is, as 
my friend from Tennessee said, there are a lot of people--I was 
in Africa and they are living off a dollar a year, but we also 
know if we are able to help them increase their level of 
livelihood, it is going to build a greater relationship. I am 
very interested in knowing more, and I am wondering would you 
be willing to let me have an opportunity to have some of your 
economic development team come to the office so I can sit down.
    I think we have to attack it with a well-planned program 
for economic growth, and I would welcome the opportunity to 
visit with some of your team to just see what all we are doing, 
what can we do more, how can we make it happen because some of 
the same things that I have done in my public life--I am going 
to learn from it, but we have to apply it in other areas of the 
globe.
    Secretary Powell. Thank you, Mr. Watkins. I will have 
Assistant Secretary Kelly follow up and send some of our 
economic development people, as well as our USAID people, up to 
show you how we use these programs. We have the same goal. I 
want to see that African citizen, who is making $1 a day and 
trying to live on $1 a day and support a family, have an 
opportunity to work, perhaps, in a factory that is producing 
textiles that then come to the United States. We would purchase 
the products and they would be good value for citizens of 
Oklahoma, citizens of Tennessee or citizens of Harlem and the 
south Bronx, and this person is suddenly making $3 a day and 
has gotten out of that hole. Then with that $3 a day, we want 
to start him up the ladder to make $10 a day. Sooner or later, 
one of those dollars will start to come back to the United 
States to buy goods from us, and sooner or later we find that 
we have a trading partner, and that both sides are benefiting 
from it.
    That is why the President and this administration are so 
committed to free trade and opening barriers, so that people 
like this guy, trying to make it on a dollar a day, can start 
to walk up that staircase. We want to do anything we can to 
help him through: our economic development activities; our 
educational activities; our HIV/AIDS programs, giving them a 
healthier life and their children a healthier life; clean water 
which USAID does such a great job on, knocking off all of the 
diseases; and agricultural programs that show them how to grow 
more crops out of the same piece of land through genetically 
modified seeds or something of that nature.
    All of these ultimately translate into opportunity for a 
better life and trade with us, and they benefit us at the end 
of the day.
    Mr. Watkins. I look forward to meeting with your team on--
--
    Secretary Powell. Give my best to Sergeant Rangel if you 
see him before I do.
    Mr. Watkins. I will do that, sir, from buck private Wes 
Watkins.
    Mr. Sununu. Thank you, Mr. Watkins. In deference to the 
Secretary's scheduling commitments, we will conclude with Mrs. 
McCarthy and then Mrs. Clayton.
    Mrs. McCarthy. Thank you, and thank you Secretary Powell, 
for your devotion to our country. I am going to go back, and I 
know I missed part of the questions because I had to stand 
outside for a second. With Israel and the Palestinians and with 
our foreign aid: one of the things that I am certainly 
interested in, especially since we are going to be rebuilding 
Afghanistan and other areas of the world, when I was over in 
Israel and I spent some time over in Palestine knowing the 
amount of money that we have sent to the Palestinians for 
relocation, building, everything else like that, I didn't see 
much evidence of it. That concerns me because I feel very 
strongly, like you do, if we are spending money over there and 
we are going to spend more money for the future of these 
different nations, the accountability, that is a key word here, 
since I have been here anyhow, monies that we send out should 
be used for the projects and not diverted to other areas.
    I certainly think that the people of Israel, and certainly 
the people of my constituency, they want money to go to the 
Palestinians, they want money to go to those people that need 
it the most because I happen to believe, as you do, if we reach 
those people, hopefully they won't become terrorists or driven 
to the point of where they will do what they are doing today, 
whether it's in Israel, Palestinians, Afghanistan.
    Have we changed the way we give our money to forms of 
government to make sure that they are going for the humane 
areas and not being diverted unfortunately to other parts of 
buying the guns? I know we don't give any money anymore to the 
Palestinian Authority, but I think in the past, somehow that 
money was diverted.
    Secretary Powell. As I mentioned earlier, we work hard on 
convincing countries that if they want to receive our aid and 
if they want to encourage trade and investment, they have to 
put in place the rule of law, transparency, recourse to courts, 
and they must get rid of corruption altogether. There are still 
some countries, however, where the needs are so great. For 
example, food aid to North Korea: we still do that, but we try 
to bypass the government in cases like that and try to provide 
the service or the relief directly to the people through 
private or nongovernmental organizations until the governments 
have demonstrated that they are sufficiently responsible.
    That has been a problem with the Palestinian Authority over 
the years, and it is something we are going to have to deal 
with once we hopefully get through this period of crisis and 
start to move toward the Mitchell peace process and 
negotiations and plans. It is a similar problem that the 
European Union faces with respect to its investment in the West 
Bank and Gaza.
    Mrs. McCarthy. Thank you, and I will follow up with what 
you said right in the beginning. When I first ran for election, 
I think I said the first thing I said, the first thing I am 
going to do is cut foreign aid, and then I went to the Heritage 
Center and the Kennedy Center, and they educated me on the 
amounts of money.
    So I think we have to follow through on educating the 
American people on how important it is for this Nation, and we 
are not trying to take money away from the programs that we 
have domestically for us, but how actually it is beneficial for 
the whole world. So anything you can do, especially on 
convincing my constituents that I am voting the right way every 
time I increase foreign aid, that it is a good vote.
    Secretary Powell. I will do my best, Mrs. McCarthy, and 
thank you for your support.
    Mrs. McCarthy. Thank you.
    Mr. Sununu. Thank you, Mrs. McCarthy.
    Mrs. Clayton.
    Mrs. Clayton. Thank you, Mr. Chairman. Mr. Secretary, I 
also want to thank you for your leadership, and it is so nice 
to have a voice of reason in international relations and a 
voice of conscience. So I want to commend you for both of 
those. I haven't studied the budget as thoroughly as I should 
in international, but I know generally the exchange program, 
though you said it has slightly increased, overall it hasn't 
really increased, and the exchange program suffers the lack of 
appreciation like foreign aid suffers the lack of appreciation.
    It is, indeed, in a time of conflict, particularly the 
threat of terrorism from certain parts of the country, and the 
lack of appreciation of our values here in America by others. 
Part of this conflict is unfounded based on assumptions, and 
based on misinformation and to the extent that we don't make an 
effort to get the full story out, I think we are missing a 
unique opportunity by not getting foreign service and aid out; 
we miss a unique opportunity. Education exchange is far cheaper 
than bullets and guns, and foreign relation diplomacy not only 
is better than war, it is also cheaper if we are looking at the 
money. So from a budgetary standpoint, it just makes more sense 
to invest in those programs because they are so desperately 
needed, but they also can be so effective.
    I would like for you to comment on three areas and I would 
like to also ask questions. I wasn't here, but I would like to 
express appreciation. You mentioned Botswana, and I visited 
Botswana and know President Mogae who indeed has been a leader 
who has taken on this issue in a forthright manner. If you have 
met him, you know that it hasn't been a timid leadership. There 
was also a question about whether USAID could provide social 
services. They do need education and they are taking on the 
role of educating their nurses so that they can educate people 
in that area. So if you could please comment on this.
    The other concern is hunger in Africa. Hunger first. I had 
about six of the national nonprofit food aid programs from 
Catholic Charities, Care, Africare, OIC, to the World Food 
Program, and the other one I can't recall who came to my 
office. I am pretty well identified as the person who cares 
about nutrition and hunger. I am on the Agriculture Committee. 
In the budget, there may be more in the agriculture budget than 
your budget, but at any rate, P.L. 416 program has been 
eliminated.
    In your budget, I know that the P.L. 480 program that has 
an amount of $1.1 billion. But when you eliminate the P.L. 416 
program and have this total amount for aid--and if I am 
incorrect I would like to have it corrected. And the other 
thing that they were deeply concerned about is that the bill 
had eliminated the participation of faith-based communities as 
well as nonprofits, and they found that as being completely in 
paradox of what the administration initially said.
    Africare made the point that the monies that they got from 
selling commodities went back into the community to do just 
what you talked about, teaching them how to actually grow their 
crops themselves. So it is yielding funds.
    My final comment is that we always have to beg for Africa. 
I must tell you, Mr. Secretary, that it is puzzling at least, 
and offensive at best, to think that the struggles and 
deprivation of Africa, with so little money are acknowledged in 
terms of the needs of that. I don't know how we make that case 
to see that Africa has more of a development piece, not just in 
aid to Africa but in terms of a strategical plan for the 
development of Africa. And I certainly would like your 
engagement on that. There is a program that we are trying to 
conduct, farmer-to-farmer, that is there, the Farmer to Africa 
and the Caribbean Program and that will be in the farm bill. 
Hopefully, you can support those programs.
    Secretary Powell. Thank you very much, Mrs. Clayton, for 
your remarks. First, with respect to the international visitors 
program and programs like that, I could not agree with you 
more. It is such a worthwhile investment to bring young leaders 
starting out in their careers from foreign countries to the 
United States and help them get an education, expose them to 
our value system and let them know who we are really are. It is 
a marvelous investment with a great return on investment over 
the years.
    Chairman Karzai, the new head of the interim authority in 
Afghanistan, who is off to such a good start, participated in 
some of those programs many years ago. We didn't know where he 
would end up, but it turned out to be a wise investment because 
he is so understanding of who we are and he is carrying our 
value system to a nation that really has not seen this kind of 
value system spoken about previously.
    With respect to Botswana, I certainly share your view that 
President Mogae has done a great job of dealing with this 
crisis that he finds himself with. They are starting to turn it 
around, and we will try to support him in every way we can.
    With respect to 416(b), we increased Public Law 480 from 
$850 million up to $1.1 billion. There has been a discussion 
about 416(b) because in some instances there was a concern 
expressed as to whether that was always the best way to 
distribute food, since it is essentially giving food not to be 
eaten but to be used as barter for other purposes. There were 
concerns as to whether that was the best way to use that food 
aid. That is a discussion we are continuing to have within the 
administration. We are increasing food aid by $30 million 
dollars for Africa, from $130 million to $160 million and that 
is part of Public Law 480. And with respect to doing more for 
Africa, you have a strong supporter in that regard, Mrs. 
Clayton, and I thank you for your support. I will continue to 
do everything I can to make the case.
    Mrs. Clayton. Do you know about the Farmer to Africa and 
the Caribbean is so far down--can I bring it to your attention?
    Secretary Powell. No, but let me--we will certainly get you 
an answer for the record.
    [The information referred to follows:]

    Mr. Powell's Response to Mrs. Clayton's Question Regarding USAID

    As you know, development issues are front and center of our 
concerns at the State Department. We work closely both here in 
Washington and at our embassies and consulates abroad, with USAID, the 
host country government, and counterpart organizations on different 
projects meant to raise standards in our host countries abroad.
    USAID's Farmer-to-Farmer program, which was initiated after the 
passage of the 1985 Farm Bill, can be viewed as a success from several 
standpoints. First, USAID reports to us that the agricultural extension 
services that U.S. farmers and agri-business officials provide are 
effective and directly applicable by the farmers they visit in the 
developing countries. Second, according to USAID, the U.S. participants 
return home with a broader understanding of foreign countries, foreign 
aid, and development issues, which makes for a better informed 
citizenry.
    We understand that about 600 Farmer-to-Farmer volunteers will 
participate in activities in about 18 countries in Africa and the 
Caribbean during the next 2 years (fiscal years 2002 and 2003), which 
will triple the volunteer presence in those areas over previous years' 
levels. Almost one quarter of Farmer-to-Farmer participants work in 
Africa. The Farmer-to-Farmer program in Africa and in the Caribbean is 
being implemented through cooperative agreements with five 
nongovernmental organizations, including several historically black 
colleges and universities.
    While development issues such as those addressed by the Farmer-to-
Farmer program have long been part of the State Department's agenda, 
the events of September 11 make it even more clear that we must find 
ways to reduce poverty and improve education in much of the world, 
where misery, inequality, and lack of access to information has led to 
misunderstanding and hatred of the American people. We fully support 
this USAID program, and commend those who participate in it.

    Mr. Sununu [presiding]. Thank you, Mrs. Clayton. Finally, 
the final 5 minutes for Mr. Kirk.
    Mr. Kirk. Thank you, Mr. Chairman. Mr. Secretary, it is 
good to see you again. I have five thank-yous. First of all, 
thank you for your leadership. And secondly, thank you for 
continuing the food assistance program to North Korea. It is an 
underreported fact that we feed one out of three North Koreans 
even after the axis of evil speech. In a little reported 
action, but I think vital to what is coming, thank you for 
providing early warning radar assistance to Israel. The United 
States is moving to provide realtime missile data to Israel, 
and given what may or may not happen in the Middle East, 
avoiding 41 Scuds falling on Israel is an important goal of the 
United States. Thank you for Macedonia. Probably the first time 
I have ever seen a first time peace-keeping deployment actually 
stop a war. If we had that in Kosovo, and I want to be our ally 
in doing that. Thank you for--internally for what you have done 
on family planning, because I think for the long-term stability 
of many of these countries, what you have done is great.
    One short-term and one long-term question. Short-term, I am 
one of the few veterans of the no-fly zone in Iraq, but it does 
not extend over all of Kurdish territory. There are about half 
of Kurds not covered. They are all in PUK territory. The PUK is 
the organization most robustly against Saddam Hussein, but they 
are hanging out there. If things get robust there under current 
obligations of the United States, we would not be ordered to 
shoot down Iraqi aircraft if they were gassing Kurds south of 
the line. I would hope that you would take a look at that and I 
wonder if you give me your thought on current Kurdish relations 
and how you think things are going on in northern Iraq.
    Secretary Powell. With respect to your last point on 
protection of Kurds, I will certainly discuss it with my 
colleagues over at the Pentagon. I was the drawer of that line 
back in 1991.
    Thank you for your comments as well, your thanks on North 
Korea food. We always keep saving people from starvation 
separate from any political agenda that we are dealing with. 
And on Macedonia peace keeping, it was a good operation, not 
only as far as our forces working with the Europeans, but also 
for the diplomatic forces we sent in to produce a resolution to 
this crisis.
    With respect to--what was the last question, sir?
    Mr. Kirk. How are you feeling about the Kurdish opposition 
in northern Iraq?
    Secretary Powell. It is a very tricky situation, and we 
always have to keep in mind the equities of our Turkish 
friends, making sure that the Kurds are not at any risk from 
the Iraqi regime, while at the same time making sure we do not 
put in motion forces that would suggest the creation of an 
independent Kurdistan. We remain committed to one nation called 
Iraq, not breaking it up into three parts. Right now we are 
working closely with the various groups in that part of Iraq 
that is occupied by the Kurds, and I think we are doing a 
pretty good job of balancing all of the different equities. We 
stay in close touch with our Turkish colleagues as well.
    Mr. Kirk. I would hope at some point we might make a bold 
move and declare a liberated Iraq under the INC in northern 
Iraq. You could protect it and you have the capability to do 
that, and I think that would turn into a magnet for Iraqi's 
Baghdad. The long-term question is: we were pretty shocked by 
the Gallup Poll in the Arab world with regard to their opinion 
of Americans, and we have had enormous good work at the radios, 
not just VOA but VRL. And I am concerned that our linguistic 
capability in the United States is low. People have asked me 
how long will it take us to rebuild the human capability of the 
United States, and I say how long does it take to train an 
American to speak Urdu. I would hope in the coming budget you 
have that crown jewel with the Foreign Service Training 
Institute. In the coming budget we would see an enhancement 
there and we would also look to new technologies with the 
deployment of XM radio in the United States. We have the 
capability to beam directly into the AM radio of many countries 
the VRL content that we have.
    There are some international agreements which would prevent 
us that the United States would be greatly benefited because we 
are the only ones owning the satellites and could really go 
over the heads of many of these leaders and make it very 
convenient for people to tune into another view. And so I hope 
we will see the radios emphasized next time in the linguistic 
capability. You know many armies fail. They are national assets 
but we don't have enough of them.
    Secretary Powell. You are quite right, and Don Rumsfeld and 
I have spent a bit of time on this because not only do I have 
very, very outstanding programs through the FSI, but there is a 
program within the Pentagon that's run out of the National War 
College, which the Congress placed there some years ago. That 
has a source of money for additional language training through 
Department of Defense resources. We have been looking at how we 
could build up all of our programs to provide the kind of 
language training that is becoming so essential.
    Mr. Kirk. Thank you, Mr. Chairman.
    Chairman Nussle [presiding]. Thank you, Mr. Secretary, and 
we appreciate your time and wish you continued success during 
extraordinarily difficult and unprecedented times.
    The committee is adjourned.
    [Whereupon, at 12:10 p.m., the committee was adjourned.]

                                
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