[Senate Hearing 110-843]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-843
 
A RELIANCE ON SMART POWER--REFORMING THE FOREIGN ASSISTANCE BUREAUCRACY

=======================================================================



                                HEARING

                               before the

                  OVERSIGHT OF GOVERNMENT MANAGEMENT,
                     THE FEDERAL WORKFORCE, AND THE
                   DISTRICT OF COLUMBIA SUBCOMMITTEE

                                 of the

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 31, 2008

                               __________

       Available via http://www.gpoaccess.gov/congress/index.html

       Printed for the use of the Committee on Homeland Security
                        and Governmental Affairs



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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas              NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana          TOM COBURN, Oklahoma
BARACK OBAMA, Illinois               PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri           JOHN WARNER, Virginia
JON TESTER, Montana                  JOHN E. SUNUNU, New Hampshire

                  Michael L. Alexander, Staff Director
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                  Trina Driessnack Tyrer, Chief Clerk


  OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE, AND THE 
                   DISTRICT OF COLUMBIA SUBCOMMITTEE

                   DANIEL K. AKAKA, Hawaii, Chairman
CARL LEVIN, Michigan                 GEORGE V. VOINOVICH, Ohio
THOMAS R. CARPER, Delaware           TED STEVENS, Alaska
MARK L. PRYOR, Arkansas              TOM COBURN, Oklahoma
MARY L. LANDRIEU, Louisiana          JOHN WARNER, Virginia

                   Richard J. Kessler, Staff Director
             Joel C. Spangenberg, Professional Staff Member
             Jennifer A. Hemingway, Minority Staff Director
                     Jessica Nagasako, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Akaka................................................     1
    Senator Coburn...............................................     2
    Senator Voinovich............................................     3

                               WITNESSES
                        Thursday, July 31, 2008

Richard L. Greene, Deputy Director of U.S. Foreign Assistance, 
  U.S. Department of State.......................................     4
Leo Hindery, Jr., Former Vice Chairman, Commission on Helping to 
  Enhance the Livelihood of People Around the Globe (HELP).......    18
Gordon Adams, Distinguished Fellow, Henry L. Stimson Center......    20
Anne C. Richard, Vice President for Government Relations and 
  Advocacy, International Rescue Committee.......................    23
Samuel A. Worthington, President and CEO, InterAction............    26
Gerald F. Hyman, Senior Advisor and President of the Hills 
  Program on Governance, Center for Strategic and International 
  Studies........................................................    28

                     Alphabetical List of Witnesses

Adams, Gordon:
    Testimony....................................................    20
    Prepared statement...........................................    60
Greene, Richard L.:
    Testimony....................................................     4
    Prepared statement...........................................    43
Hindery, Leo Jr.:
    Testimony....................................................    18
    Prepared statement...........................................    54
Hyman, Gerald F.:
    Testimony....................................................    28
    Prepared statement...........................................    94
Richard, Anne C.:
    Testimony....................................................    23
    Prepared statement...........................................    75
Worthington, Samuel A.:
    Testimony....................................................    26
    Prepared statement...........................................    81

                                APPENDIX

Background.......................................................   103
Speech by Secretary of Defense Robert M. Gates, entitled ``U.S. 
  Global Leadership Campaign,'' July 15, 2008....................   112
Charts...........................................................   117
``Improving US National Security: Options for Strengthening US 
  Foreign Operations,'' working paper by Anne C. Richard and Paul 
  Clayman........................................................   120
``Proposed Major Components and Organization of a Cabinet-level 
  Department for Global and Human Development,'' Policy Paper 
  from InterAction, June 2008....................................   144
``Revamping U.S. Foreign Assistance,'' December 10, 2007, 
  submitted by The HELP Commission...............................   159
Questions and Responses for the Record from:
    Mr. Greene...................................................   181
    Mr. Hindery..................................................   221
    Mr. Adams....................................................   227
    Ms. Richard..................................................   231
    Mr. Worthington..............................................   237
    Mr. Hyman....................................................   248


A RELIANCE ON SMART POWER--REFORMING THE FOREIGN ASSISTANCE BUREAUCRACY

                              ----------                              


                        THURSDAY, JULY 31, 2007

                                 U.S. Senate,      
              Subcommittee on Oversight of Government      
                     Management, the Federal Workforce,    
                            and the District of Columbia,  
                      of the Committee on Homeland Security
                                        and Governmental Affairs,  
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:05 p.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Daniel K. 
Akaka, Chairman of the Subcommittee, presiding.
    Present: Senators Akaka, Voinovich, and Coburn.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. I call this hearing of the Subcommittee on 
Oversight of Government Management, the Federal Workforce, and 
the District of Columbia to order. I want to welcome our guests 
and our witnesses as well, and thank you for being here today.
    This is the fourth in a series of hearings exploring the 
effectiveness and efficiency of government management of our 
national security. The first hearing looked at reforms of the 
U.S. export control system. Subsequent hearings examined the 
management and staffing of the arms control, 
counterproliferation, and nonproliferation bureaucracy at the 
Department of State. Today we focus on our foreign assistance 
programs.
    Foreign assistance includes economic development, security, 
humanitarian, disaster response, health, and governance 
programs. We have helped other nations through our foreign 
assistance programs for over 60 years. During the late 1940s 
and early 1950s, countries in Western Europe benefited from the 
Marshall Plan as they rebuilt themselves after World War II. 
President John F. Kennedy signed the Foreign Assistance Act 
into law in 1961 in response to the American desire to help 
others.
    Foreign aid programs continue to be a vital part of our 
foreign policy strategy. The devastation of September 11, 2001 
was a demonstration that what happens in failed states can 
bring terrible tragedy to Americans. Al Qaeda was free to plot 
in one failed state--Afghanistan. Our national security depends 
on how well we help failed states recover.
    In the words of Secretary of Defense Robert Gates, 
``organization charts, institutions, statistics, structures, 
regulations, policies, committees, and all the rest--the 
bureaucracy, if you will--are the necessary pre-condition for 
effective government. But whether or not it really works 
depends upon the people and their relationships.'' Policy is 
not enough. Organizations and people do matter. Good policy 
depends on capable organizations.
    Without objection, I will introduce the entirety of 
Secretary Gates' speech into the record.\1\
---------------------------------------------------------------------------
    \1\ The speech by Secretary Gates, entitled ``U.S. Global 
Leadership Campaign,'' July 15, 2008, appears in the Appendix on page 
113.
---------------------------------------------------------------------------
    My primary goal in this hearing is to identify possible 
recommendations for improving the foreign assistance 
bureaucracy. The key components I ask our witnesses to address 
in their remarks are the human capital, management, 
coordination, and structural challenges that reduce the 
effectiveness and efficiency of U.S. foreign assistance.
    We need to ensure that we have an organization with the 
capacity to support the foreign assistance policies of this 
Administration and the next.
    In 2006, Secretary of State Condoleezza Rice announced a 
new direction for U.S. foreign assistance in order to align 
U.S. foreign assistance programs with the Administration's 
foreign policy goals. Secretary Rice announced the creation of 
a new Deputy Secretary level position, the Director of Foreign 
Assistance, who would also serve at the same time as USAID's 
Administrator, although this has not been established in 
statute.
    This new foreign assistance bureaucracy confronts a number 
of challenges. An overview of some of the core problems--and 
there are three charts\2\--can be seen in these charts: The 
steep decrease in USAID Foreign Service Officer staffing from 
1967 until today; the fragmentation of foreign assistance among 
many agencies and programs; and the amount of development 
assistance not under the direct control of the Director of 
Foreign Assistance.
---------------------------------------------------------------------------
    \2\ Charts referred to appear in the Appendix beginning on page 
117.
---------------------------------------------------------------------------
    The challenges are clear. We need to design a national 
strategy for foreign assistance with a clear mission and the 
means to accomplish it; streamline aid programs to ensure 
effectiveness and efficiency; simplify foreign assistance since 
there are too many programs, in too many departments, chasing 
too few dollars; reduce the role of the Department of Defense 
in foreign assistance as their involvement may come at a cost 
of supporting their own core mission; and finally, we need to 
improve USAID's human capital because its current staffing and 
training levels do not support its worldwide requirements 
adequately.
    Clarifying the key foreign assistance organizational and 
human capital issues will help the next Administration better 
focus its efforts and further strengthen U.S. national 
security. I look forward to hearing from our witnesses on these 
matters.
    May I now call on Senator Coburn for any statement he may 
have.

              OPENING STATEMENT OF SENATOR COBURN

    Senator Coburn. I will not make an opening statement. I 
have a history of being very interested in the subject on how 
we carry out our USAID projects as well as the people involved 
with it, and I look forward to hearing our witnesses testify, 
and I thank you for the hearing.
    Senator Akaka. Thank you. So glad you are here.
    Senator Voinovich.

             OPENING STATEMENT OF SENATOR VOINOVICH

    Senator Voinovich. Thank you, Senator Akaka. We appreciate 
your convening today's hearing to examine our foreign 
assistance structure.
    As a senior member of the Foreign Relations Committee, I 
have had the opportunity to meet regularly with international 
leaders to advance our public diplomacy. As the United States 
seeks to advance its interests and promote global stability, 
the delivery of foreign assistance in a timely and consistent 
manner is crucial to our efforts to support democracy abroad.
    Our current framework limits the return on our investment. 
Many would be surprised to learn that our foreign assistance 
structure spans 26 agencies and offices. The Department of 
State and the U.S. Agency for International Development control 
just over half of our development assistance and in 2008 will 
provide more than $24 billion to 155 countries. Without an 
orchestra leader to direct our development program and 
integrate existing agency silos, we limit our collective 
ability to strengthen the third pillar of our National Security 
Strategy.
    Now, critics have described our current aid structure as 
fractious, cumbersome, and rigid, a relic of the Cold War. 
While the creation of the F Bureau was well intended, most 
agree further reform is necessary. It seems to me that our 
development goals could be more easily accomplished if all 
partners involved sat down and crafted a comprehensive foreign 
assistance strategy.
    Compounding an inefficient structure is a lack of an 
adequate number of trained personnel to administer our foreign 
aid structure. The forthcoming report by the American Academy 
of Diplomacy, which I am proud to be part of, will show that 
the USAID currently has 2,200 personnel who administer more 
than $8 billion annually in development and other assistance 
following cumulative staff reductions of nearly 40 percent 
during the last two decades. While the average Federal 
contracting officer oversees an estimated $10 million in 
contracts, the average USAID contracting officer is responsible 
for approximately $57 million.
    Our foreign aid is intended to ensure stability and 
prosperity overseas. We also hope that our investment will help 
us to win the hearts and minds of those we are trying to help. 
In 2007, the program on internal policy attitudes reported that 
20 of the 26 countries, including many who receive millions of 
dollars of U.S. foreign assistance, felt the United States was 
having a negative influence on the world.
    Unfortunately, these numbers are the lowest ever recorded. 
While Secretary Rice is to be commended for her 
transformational diplomacy and initiative, it is clear that we 
have got to do more. Secretary Gates also encouraged us earlier 
this month to strengthen our civilian institutions of diplomacy 
and development.
    I hope today's hearing will result in a foreign assistance 
structure that is well managed, supported by highly skilled 
individuals committed to public service, and funded in a manner 
that allows us to use our foreign policy tools more effectively 
to meet the challenges of our rapidly changing world.
    Thank you, Mr. Chairman.
    Senator Akaka. Thank you very much, Senator Voinovich.
    I welcome our first witness to the Subcommittee today, 
Richard Greene, Deputy Director of U.S. Foreign Assistance, 
Department of State.
    It is the custom of this Subcommittee to swear in all 
witnesses, and I would ask you to please rise and raise your 
right hand. Do you solemnly swear that the testimony you are 
about to give this Subcommittee is the truth, the whole truth, 
and nothing but the truth, so help you, God?
    Mr. Greene. I do.
    Senator Akaka. Thank you very much. Let it be noted in the 
record that the witness responded in the affirmative.
    Before we start, I want you to know that your full 
statement will be made part of the record. I would also like to 
remind you to keep your remarks brief given the number of 
people testifying this afternoon.
    So, Mr. Greene, will you please proceed with your 
statement?

  TESTIMONY OF RICHARD L. GREENE,\1\ DEPUTY DIRECTOR OF U.S. 
          FOREIGN ASSISTANCE, U.S. DEPARTMENT OF STATE

    Mr. Greene. Thank you, Mr. Chairman, Senator Voinovich, and 
Senator Coburn.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Greene appears in the Appendix on 
page 43.
---------------------------------------------------------------------------
    First, I would like to point out the irony of talking about 
reforming the foreign assistance bureaucracy, and both the 
Chairman and the Ranking Member included quotes by Secretary 
Gates in their opening statements, and I have a quote by 
Secretary Gates in my opening statement. I think it is a sign 
of the times.
    The degree of turmoil and poverty in the world poses both 
challenges and opportunities for our foreign assistance 
programs. Our goal of improving lives around the world is 
consistent with our national security goal of making the world 
a more secure place. By addressing the long-term conditions 
that lead to despair and instability, development takes its 
place alongside diplomacy and defense as key components of our 
National Security Strategy. Today we must ensure that each of 
our major foreign policy tools works together to achieve 
results that promote our development, humanitarian, and 
national security goals all around the world.
    Under Secretary Rice's leadership, we have invested 
considerable effort to begin to improve the coherence and 
effectiveness of our foreign assistance architecture. Our 
overall approach has many features. These include adequate 
funding levels; the creation of a new structure to coordinate 
USG strategic and operational planning, integrated budget 
formulation and execution; a bigger and better trained and 
supported workforce--we are trying to turn that trend around; a 
focus on country needs in our planning and budgeting; better 
expanded civilian-military coordination and delivery; expanded 
public-private partnerships; and a new rapid response capacity 
through the Civilian Response Corps. These are all works in 
progress, and in my opening testimony, I would like to focus on 
just three components.
    First, regarding funding levels, there are numerous recent 
examples where we, the Administration, you, the Congress, as 
well as our stakeholders have worked closely together to 
provide the development funding commensurate with the 
challenges and opportunities that exist around the world. 
Consequently, the U.S. Government has nearly tripled Official 
Development Assistance since 2001. Of course, the signature 
program of that growth is PEPFAR, and yesterday the President 
signed into law a bill reauthorizing a second-year program with 
very strong support from the members of this panel that we are 
most appreciative of.
    We have also significantly increased our investments in 
other key development areas, such as health, education, 
economic growth, and governance. And I think both Congress and 
the Administration can take pride in the significant resources 
and the focus on results that we have provided to important 
programs that are transforming lives and making our world more 
secure.
    Second, we are reforming the foreign assistance planning 
and allocation process. As you pointed out, Mr. Chairman, 2 
years ago, Secretary Rice reviewed our current structure and 
frankly, she did not like what she saw. She saw fragmentation, 
duplication, no clear lines of authority, inadequate data 
transparency, and she had a hard time getting any answers to 
any basic management questions about what we are spending, 
where we are spending it, and what are the purposes.
    Consequently, Secretary Rice established the position of 
Director of U.S. Foreign Assistance, and you have talked about 
what that position is all about.
    To carry out its mission, the new organization has 
developed several new, and I think important, tools. These 
include a Foreign Assistance Framework as an organizational 
tool to describe a broad range of foreign assistance programs, 
a set of common definitions, standard indicators, and country-
level operational plans that describe how resources are being 
used and how results will be measured.
    The office is also focused on integrating State and USAID 
foreign assistance efforts and developing a country-specific 
focus, and for the first time, the Administration has submitted 
an official foreign assistance budget that fully integrates 
State and USAID requests for individual countries and program 
areas.
    We are also working to incorporate non-State and USAID 
foreign assistance programs, a subject of your chart on the far 
right. For example, we are piloting a strategic planning 
process where stakeholders from across the U.S. Government are 
working in Washington and in the field to develop U.S. 
Government-wide country-specific foreign assistance strategies.
    Finally, I want to mention operational support. Successful 
foreign assistance reform depends on our ability to rebuild 
USAID's core development capacity. My Secretary of Defense 
quote is where he said, I think about a month ago, ``It has 
become clear that America's civilian institutions of diplomacy 
and development have been chronically undermanned and 
underfunded for far too long--relative to what we traditionally 
spend on the military, and more importantly, relative to the 
responsibilities and challenges our Nation has around the 
world.'' Simply put, we need more better trained and supported 
people to work in new ways to support the achievement of U.S. 
Government development objectives. Staffing has not grown 
commensurate with the tremendous growth in programs and funding 
levels and challenges and degree of operational complexity. 
USAID's workforce and infrastructure must keep pace.
    Consequently, Administrator Henrietta Fore launched a 3-
year plan to double USAID's Foreign Service capacity and 
significantly ramp up systems and training resources. 
Administrator Fore calls this program the ``Development 
Leadership Initiative.''
    So where does this leave us? I think this is all clearly a 
work in progress. It is fair to say that the initial 
implementation of the reform effort had some serious problems, 
but I think it is also fair to say that we have seen 
significant improvements in many of the key areas of concern.
    I think we now have a greater development focus and sense 
of U.S. Government unity about how, why, and what we are trying 
to accomplish in our foreign policy and our foreign assistance 
goals. And while we are still in the formative days of our 
reform effort, we have made significant progress in bringing 
greater U.S. Government coherence to what we are trying to 
accomplish in foreign assistance. We have also taken the first 
steps to reinvigorate USAID's development corps. I think what 
is also important is to talk about what we need to do next. We 
collectively need to do more to realize our goal of 
significantly improving foreign assistance cohesiveness. We 
need greater funding flexibility. We need programs that are 
demand-driven and not ones that are dictated by the type of 
funding available.
    We need to do a better job of giving country experts the 
ability to shape and implement development strategies. We need 
to recruit and retain a robust workforce, with strong 
operational and technical skills. We need to further streamline 
our internal planning and allocation processes. We need to 
fully implement a whole government approach that achieves 
better coordination of U.S. Government foreign assistance 
programs. And to be successful, we need the active engagement 
of Congress, public and private partners, and the international 
community.
    So, in closing, I think the one word that captures where we 
are in our efforts to help achieve what we are talking about 
here is ``more.'' In the assistance world, there are more 
issues to consider; there is more complexity; there is more 
aggregate resources; there is more security concerns; there is 
more information about what works and what is important; there 
is more understanding of the impact of not coordinating 
defense, development, and diplomacy; there is more 
international focus on improving our collective foreign 
assistance performance. But most importantly, there is also 
more promise and more potential for achieving long-term 
sustainable development goals around the world. Progress can 
only be made if we have a sense of shared community goals and 
efforts. And I think there are clear signs that we are heading 
in that direction, and I salute the members of today's second 
panel for their leadership role on that front. Modernizing 
foreign assistance is necessary, it is urgent, and it is 
essential to the achievement of essential foreign policy and 
national security objectives.
    Thank you, Mr. Chairman.
    Senator Akaka. Thank you very much for your testimony, Mr. 
Greene. We will have 7 minutes of questions each here on the 
first round.
    Mr. Greene, you note that our foreign assistance was 
stovepiped into numerous accounts overseen by a multitude of 
offices, each with different standards of measurement and 
different ways of judging success or failure, and that this 
fragmentation made it difficult to plan coherently and could 
lead to conflicting or redundant efforts. I thank you for this 
honest assessment. You also state that in the year 2006, 
Secretary Rice launched an effort to improve the coherence and 
effectiveness of U.S. foreign assistance, and let me call your 
attention again to these charts that we have here on my right. 
It does not look like much progress has been made when you look 
at the charts.\1\
---------------------------------------------------------------------------
    \1\ The charts referred to appear in the Appendix beginning on page 
117.
---------------------------------------------------------------------------
    Can you tell us what new steps the Administration is 
planning to take to improve coherence and effectiveness?
    Mr. Greene. Thank you, Mr. Chairman. Let me be blunt. We 
have not done anything to simplify, collectively, the 
Administration and the Congress of the United States has not 
done anything to simplify the account structure that exists. 
And what the Secretary's initiative focused on was what we 
could do administratively to bring greater coherence.
    So what we are trying to do is to bring together State and 
USAID planning efforts. What we are trying to do is develop 
tools that describe in much greater detail what we do, and how 
we do it. What we are trying to do is to develop an attitude 
that gets around the stovepipes, that has State and USAID 
employees working together to plan, to develop, to formulate, 
to execute programs. And what we have also developed is a core 
set of improved tools in terms of developing foreign assistance 
policy that will be significant enhancements over what we have 
had. And you mentioned some transition and legacy issues that I 
think will be a great aid to whoever comes in and manages these 
programs in the next Administration.
    So our focus has been on what we can do without 
legislation, and what we can do without legislation is bringing 
out stronger State/USAID coherence.
    Senator Akaka. Mr. Greene, Mr. Worthington of InterAction 
argues that the F Bureau has been measuring performance of 
foreign assistance programs by outputs rather than impact or 
outcomes. Do you agree with him?
    Mr. Greene. Mr. Worthington is a fine and astute 
individual. I think it is a very--everything about foreign 
assistance is complex, and arguably, foreign assistance 
programs present the most complex public policy challenges 
there are. If you look at the number of programs, you look at 
the number of implementing partners, you look at the types of 
programs, you look at legislation, you look at countries, you 
look at security objectives, and if you laid all that out in a 
matrix, I would argue it would be probably the most complex 
matrix there is in any public policy arena. And I think it is a 
combination of factors.
    Of course, we look at outputs. We are output oriented. And, 
Senator Voinovich I think has worked hard in a lot of his other 
committees on this issue. One of the biggest challenges is to 
really usable performance measures that you would really use to 
manage programs by, that you would really use to make funding 
and allocation and staffing decisions, and we are working on 
that. It is a work in progress, and I would echo Mr. 
Worthington's point that it is very important to make continued 
progress on that.
    Senator Akaka. Mr. Greene, right now there are over 20 U.S. 
agencies and over 50 programs conducting foreign aid. In 
Afghanistan alone, there are eight different U.S. Government 
agencies and many private contractors. Using Afghanistan as an 
example, what is being done there to develop a coherent 
strategy?
    Mr. Greene. What we have in Afghanistan is, on the foreign 
assistance side, what we call our Country Operating Plan for 
Afghanistan that takes all of the foreign assistance resources 
available--to be clear here, I do not want to make this out to 
more than it is--for State and USAID, arrays it and allocates 
it by program area down to a pretty detailed level in terms of 
different types of programs, different types of delivery 
mechanisms, who the implementing partners are and what the 
expected results are. So we have a much greater degree of 
coherence in terms of allocating foreign assistance funds than 
I think we have had before.
    Now, in Afghanistan and in other post-conflict states, of 
course, there are huge overlaying security concerns, and there 
are huge overlaying political concerns that drive that 
relationship as well.
    Senator Akaka. Mr. Greene, do you believe it would make 
sense to consolidate most of our foreign aid programs under 
State?
    Mr. Greene. I do. Full stop.
    Senator Akaka. If over 40 percent of all foreign aid is 
controlled by agencies outside of the State Department, how 
does State ensure that other departments are not undermining 
its policies?
    Mr. Greene. It is a major challenge for us now, again, to 
be blunt. And the way we do it is we rely heavily on the 
leadership by our chiefs of mission in the field. We rely 
heavily on the leadership of our USAID mission directors who 
are assistance leaders in almost every mission where they are 
at around the world. And what we are trying to do is to develop 
U.S. Government-wide assistance strategies that incorporate the 
resources of agencies that are not under the authority of the 
Secretary of State.
    Now, we do not have the authority to make other agencies 
participate, and we are piloting it in 10 countries around the 
world. We will see how it works. We will see if we are able to 
achieve greater coherence without additional authorities. It 
basically will happen with the cooperation of others, 
recognizing what is at stake here, or it will not happen at 
all, sir.
    Senator Akaka. Senator Voinovich.
    Senator Voinovich. Thank you, Mr. Chairman.
    Mr. Greene, our dependence on continuing resolutions 
impacts the agencies charged with the delivering of foreign 
assistance, and recipient nations rely on long-term guaranteed 
funding to sustain economic growth. At my request, the 
Congressional Research Service prepared a soon-to-be-released 
report on the impacts of continuing resolutions on agency 
operations. We complain about what various departments and 
agencies are doing, but the fact of the matter is that we 
contribute to it with the continuing resolution, omnibus bills 
that we pass. But the report highlights a 138-day delay in 
increased funding for the President's Malaria Initiative for 
fiscal year 2007, and USAID noted, ``Because of a shorter time 
frame before the end of the fiscal year, planning and 
implementation were difficult and hurried in terms of the 
distribution of funds and in developing contracts for 
implementing various approaches in malaria control.''
    Could you just spend a little time telling us how the way 
we do things around here is impacting your ability to deliver 
what we want you to deliver? And, second of all, in your 
opinion, does it add to the cost because of the way we are 
operating in terms of our appropriations?
    Mr. Greene. I appreciate the question, Senator. It clearly 
adds to the cost of how we operate, and more importantly, adds 
to planning uncertainty about funding flows, about how to 
proceed.
    What is important is sustaining commitment, and you do not 
get results on the programs we are talking about here unless 
you are engaged in a sustained way over a number of years. You 
do not make development progress in a number of months. You 
make it with sustained focus and attention over a number of 
years. And if we go through this process each year where we are 
under long-term CRs, we get the appropriations late in the 
year, the implementing partners who we rely on, who do heroic 
work in the field and every place around the world, cannot 
plan, they cannot judge, they cannot hire people, they cannot 
put projects into place. There is a huge operating tax 
associated with that, and we are certainly worse off because of 
that, sir.
    Senator Voinovich. Also, it is my understanding that so 
often many of these projects that you undertake are earmarked. 
Would you like to comment on that?
    Mr. Greene. Sir, I think we are not at a good place in 
terms of implementing a balanced foreign assistance program in 
the United States, carefully balanced between congressional 
priorities, Administration priorities, and the needs and views 
of people on the ground that are actually implementing the 
programs. And in order to get that into better balance, my 
opinion is that we need a lot more flexibility in terms of 
funding categories, in terms of timing, in terms of the 
duration of projects as well. And I think because of what you 
are describing, sir, in many cases we end up with programs that 
do not adequately balance our key objectives and do not really 
reflect what the experts on the ground think are necessary to 
make development progress. Thank you.
    Senator Voinovich. In two area, we are responsible for 
making it more difficult for you to do the job we are asking 
you to do.
    Mr. Greene, the Commission on Smart Power that was headed 
up by Joe Nye and Dick Armitage describes how many of our 
traditional elements of soft power, such as public engagement 
and diplomacy, have been neglected and fallen into disrepair, 
and the report urges the State Department to give greater 
attention to an integrated foreign assistance program driven by 
strategic considerations.
    I would like to know how is the Department meeting this 
goal. And then the other question is, Does the Department's 
current framework support the goal? And I guess last, but not 
least, do you believe there would be a benefit to appointing 
additional senior officials to oversee this whole structure 
that we have or appoint someone that would be kind of the 
orchestra leader that would tie all of this together and make 
it happen and give them enough power so that they could get 
people to do what they are supposed to do? We keep running into 
situations where, even in the area of enforcement of our 
intellectual property, you have about a dozen agencies, and we 
have been trying to get them together. And the President was 
able to go along with an orchestra leader, and a guy named 
Christian Israel is putting it all together.
    But it seems that you have to have somebody that has the 
clout to try to make this happen, and I would like your 
response to that.
    Mr. Greene. The two whose responsibility it is to make it 
happen are Secretary Rice and USAID Administrator Henrietta 
Fore. Now, clearly neither of them have authorities over 
foreign assistance controlled by non-State/USAID agencies. That 
is a significant chunk, and it shows in your chart up there. I 
think the foreign assistance programs of the United States 
could be more effectively developed, implemented, and 
monitored, if more of the foreign assistance funding was under 
that leadership structure.
    Your second question, sir, was on integration. I think the 
effort that we have launched is a good first step. Again, this 
is a work in progress, but I think it is a good first step, 
sir.
    Senator Voinovich. In other words, you put a team together 
and this is the recommendation about how to get it done? Or are 
you just dealing with it because that is about the only way you 
can deal with it? Has this been taken up, for example, to talk 
to OMB about how that could be better?
    Mr. Greene. We made a conscious decision in terms of 
developing this reform effort that we could achieve the most 
progress the fastest if we did what we could do 
administratively as opposed to seeking new authorities. And so 
we did what we could do administratively, which is to basically 
try to get greater State/USAID coherence. And I think we have 
made pretty good progress on that. But as all of you point out, 
and as the chart points out, there is a whole other world out 
there of non-State, non-USAID foreign assistance, and that 
coordination and improved coherence relies on interagency 
cooperation.
    Senator Voinovich. Interpersonal skills between the people 
involved.
    Mr. Greene. Yes, sir. This is a very strong leadership-
dependent operation, sir.
    Senator Voinovich. Thank you.
    Senator Akaka. Thank you very much. Senator Coburn.
    Senator Coburn. Thank you, Mr. Chairman.
    I happen to think PEPFAR and Millennium Challenge 
Corporation grants, the work that is done there is probably by 
far some of the most effective work we do. And my observation 
from that is that because they have outcome requirements, they 
have metrics, they are measured. We know what we are trying to 
achieve. We know how to measure it, and therefore, we can 
assess it. And I am very glad to hear of some of the management 
changes.
    Does every program in American foreign assistance have an 
outcome goal?
    Mr. Greene. There are outcome goals, Senator, for every 
program. Now, I think it is also fair to say that in many cases 
they are not as effective, not as clear, not as easy to measure 
as PEPFAR and malaria when you are talking about capacity 
building in terms of a government ministry when you are talking 
about democracy programs, when you are talking about economic 
growth, and when you are talking about governance. The 
challenge of coming up with effective performance indicators is 
a bigger challenge, sir.
    Senator Coburn. It certainly is, but the management of all 
those programs is made much more simple if, in fact, you spend 
the time on the front end trying to get those performance 
indicators. And one of the things that I want to make sure we 
do--and I think it will help the State Department plus 
everybody else--is we ought to have a metric on what we are 
doing. And we just really do not in the State Department. In a 
large number of areas, not only do we not have clear outcome 
goals, we do not have metrics to measure whether or not we are 
achieving those goals.
    So one of the things that I am hopeful for is--it is really 
different in Afghanistan and Iraq. Those are combat areas. And 
the judgment that we should make on performance should be 
different in those areas than it is in others. But to 
highlight, the funds have been highly effective, whereas in 
many areas, USAID, because of the limitations we place on our 
USAID folks, they do not have the range of possibility that a 
local commander has in terms of spending money. I mean, we 
know--and part of that is security, and I grant that we have to 
discount a lot of that. But I think one of the important 
things--and I cannot stress to you enough, and I am going to be 
around here a little while longer--is we have got to have 
programs that are outcome driven not demand driven. And they 
have got to have metrics, and that is going to be one of the 
things. And I would have a little bit of disagreement with 
Senator Voinovich on CRs. A CR, you know what is coming. You 
just do not know what the increase is in what is coming because 
the CR is set at the level of the year before. So we do not 
know what the increases will be, but there should be no reason 
that a CR would slow us down for anything because the CR is a 
continuing appropriation based on the levels that we have been 
running.
    And so while we do handicap you--and I agree, we should be 
getting our work done on time--the handicap is on increases. It 
is not on the funds that are running because we are translating 
those through on a month-by-month basis at the same level at 
which they were before.
    If we had metrics, let's say we spent the extra time to 
really work to try to get an outcome, whether it be crop 
production or whatever it is, whether working with Agriculture 
or U.S. Fish and Wildlife or the Corps of Engineers, if we 
could spend the time up front on that, would it not make sense 
that we would probably be more effective if we had common 
outcome goals with all those other agencies where you do not 
have direct command and control over? And is there any way to 
set that up when we implement foreign policy before we invite 
the Corps of Engineers in, before we invite the U.S. Department 
of Agriculture in and saying here is our goal? Now, here is the 
goal, here is what we want to see, and how do we get there and 
how do we measure it? That is my first question.
    The second thing is could we not help you more effectively 
if we had more oversight hearings on what is happening so that 
we get a better understanding in Congress of the tools that we 
need to give you that you may not have, and also holding you 
accountable to meet those outcome measures?
    Mr. Greene. I appreciate your comments, Senator, and more 
importantly, many people that I work with are in total 
agreement with you on metrics. Metrics are a greatly 
underappreciated facet of any program management exercise, I 
think anywhere in the U.S. Government. We have started down the 
path of assigning metrics to various program areas and 
elements. Some of them work, some of them do not. And we take 
your call very seriously to pay more attention and invest more 
time to that up front.
    I think our efforts at getting to coherency and improving 
efficiency of our programs would be improved if we did what you 
are talking about in terms of having common metrics and common 
indicators for every foreign assistance program no matter where 
they were in the government.
    We are taking steps in that direction in terms of just 
initially trying to capture data and trying to describe what 
they do with our 10 pilot programs on overall country 
assistance strategies and there will be metrics components or 
performance components to that. And so I am in strong agreement 
with you, sir.
    Now, regarding oversight hearings, I have mixed emotions on 
more oversight hearings, but certainly more substantive 
discussions about what we do and how we do it and the 
challenges we face are welcomed. We would love to do that.
    Senator Coburn. Yes. We had all the hearings on a lot of 
the waste associated at USAID in Afghanistan, and some of it 
could not be helped. I understand that. But the fact is that 
even after the hearings, we went back and hired the same 
contractors who did not do a good job the first time. And 
sometimes that is the only contractor we had. But we ought to 
be about trying to change those things rather than to go in the 
manner that we have gone.
    You have a tough job, especially in the conflict areas, and 
it is hard to be too critical of you in that, especially when 
there is a security component to it. So I will save my 
criticisms for that. But I am going to be watching for outcomes 
in all these programs, and I am going to be looking for 
metrics. And I would just say one other thing. We cannot ask 
our State Department to have metrics and be accountable when we 
refuse as a Congress to hold the United Nations accountable 
with $5.4 billion of our money. This Senate passed 99-0 that 
the United Nations funding ought to be based on the fact that 
they are transparent and accountable to us with our money, and 
it was taken out in conference. We are going to get a vote on 
that every year I am here, and there is no way we can hold you 
accountable when we send money to another agency and turn a 
blind eye about how whether they are accountable or not.
    With that, I would yield back.
    Senator Akaka. Thank you very much, Senator Coburn.
    Mr. Greene, according to the charts again, as this middle 
chart shows, there has been a marked decrease in USAID Foreign 
Service officers from 1967 to 2008. In his testimony, Dr. Adams 
of the Henry L. Stimson Center states that USAID has hired more 
than 1,200 personal services contractors. He states that USAID 
has become largely a contract management agency with programs 
being implemented by a growing number of outside 
contractors.\1\
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    \1\ The chart referred to appears in the Appendix on page 119.
---------------------------------------------------------------------------
    Do you agree with this assessment?
    Mr. Greene. Mr. Chairman, I have a long tradition of never 
disagreeing with someone who is sitting right behind me. You 
just never know.
    Dr. Adams is an expert in this area. Dr. Adams has been 
very involved with these issues for a number of years, and I 
agree with his assessment.
    Now, I think what is important is to talk a little bit 
about what we are doing. One, we--meaning under Administrator 
Henrietta Fore's leadership--recognize that this is a serious 
problem and that we need to rebuild USAID's core capacity.
    Two, Administrator Henrietta Fore has launched the 
Development Leadership Initiative where her objective is to 
double the size of USAID's Foreign Service Corps over 3 years, 
and fiscal year 2009 is year one. The Congress has been very 
supportive of that objective and provided additional funding in 
the supplemental in the FY 2007 bridge supplemental. And the 
initial marks of our appropriation bills in the House and the 
Senate also provided additional funding. So I think we are, 
with your very strong support, taking a good step to try to 
reverse that trend, and it is a worrying trend.
    I also think there is no interest in going back to the 1967 
levels when the aforementioned Richard Armitage was in Vietnam. 
But we certainly need to significantly increase what we have 
now.
    Senator Akaka. Mr. Greene, I was recently informed by an 
organization called Inside NGOs that USAID's staff spends up to 
75 percent of their time on pre-award contract work, such as 
defining technical requirements, writing scopes of work, and 
evaluating proposals. Less than 25 percent is spent monitoring 
performance and administering the awards. Now, this suggests 
that accountability may be more of an afterthought rather than 
a management priority.
    Do you agree with Inside NGOs' characterization of the 
situation? If not, what percentage of time is spent on pre-
award work versus performance monitoring?
    [The information provided for the record follows:]

          INFORMATION PROVIDED FOR THE RECORD FROM MR. GREENE
    When looking at USAID staff across the board, warranted contracting 
and agreement officers and contract specialists make up less than 10 
percent of USAID's workforce. These professionals are far outnumbered 
by Cognizant Technical Officers (CTOs) and other Project Specialists 
who are nearly fully devoted to program implementation, monitoring and 
evaluation.
    If Inside NGO was referring only to USAID contracting and agreement 
officers and contract specialists, no analysis has been done regarding 
the percentage of time spent on pre-award actions and post-award 
performance monitoring and administration. It is our opinion, however, 
that the 75 to 25 percent ratio is fairly accurate with regard to 
contracting officers and specialists. Following award, the CTOs--also 
procurement professionals according to Office of Federal Procurement 
Policy's definition, but not warranted--act as the contracting and 
agreement officers' representative for the purposes of program 
implementation, performance monitoring and evaluation and spend a 
greater percentage of their time on administration and oversight. In 
addition, within the USAID Office of Acquisition and Assistance, there 
is an Evaluation Division and a Contract Audit and Support Division 
which carry out many contract administration duties such as financial 
reviews, claims, training, advisory reports, the suspension/disbarment 
of contractors, and contract performance reporting. Therefore, USAID is 
strongly committed to accountability as a priority.
    Ideally, the warranted contracting and agreement officers would 
play a larger role in post-award activities than they are currently 
able to. This remains a goal of USAID. Unfortunately, there is a 
chronic shortage of contracting and agreement officers across the 
Federal Government and this is true at USAID as well. For example, 
USAID currently has fewer staff in the 1102 (Contract Specialist) back-
stop than it did 10 years ago, yet obligations have tripled. Given more 
human and financial resources, USAID would be able to focus a greater 
percentage of contracting and agreement officers' time on post-award 
activities and provide for even greater accountability on the part of 
implementing partners, improved tracking of contract performance, 
improved transparency through better reporting data, and greater 
stewardship over resources. We hope to be able to sustain the 
significant recruitment effort we recently initiated to bring more 
Civil Service and Foreign Service procurement officers into USAID.

    Mr. Greene. Mr. Chairman, I do not know what the specific 
numbers are. If there are specific numbers, we will get back to 
you. Just my instinct is that in terms of order of magnitude, 
it is probably not that far off. And, again, more importantly, 
taking the tone of your remarks on every issue so far, it is 
what are we doing to reverse that? And our main tool to reverse 
that is to ramp up USAID hiring in both operational and 
technical issues. That is the only way we are going to be able 
to reverse what is a troubling trend, sir.
    Senator Akaka. Mr. Greene, Dr. Adams in his testimony 
argues that Foreign Service officers should be encouraged to 
hold a development or foreign assistance post in their careers. 
Do you agree with this and agree that this would be useful? And 
if so, is State doing anything to encourage this?
    Mr. Greene. I think it would be very useful, sir, and I 
think you are seeing a sea culture change in terms of the 
experiences that Foreign Service officers have at the State 
Department. You look at the number of people who have served in 
Iraq, who have served in Afghanistan, who have served in 
Bosnia, and the large number of our people who have been in 
post-conflict situations, and who have been part of managing, 
and directing assistance programs. And so the comfort level 
with assistance programs has increased. The linkage and knowing 
the relationship between assistance programs and achieving our 
overall goals has increased. And it is a trend that is going to 
keep on keeping on, as we say, and we will do everything 
possible to encourage it, sir.
    Senator Akaka. Mr. Greene, GAO reported that Human 
Resources Bureau officials did not attend meetings in which 
foreign assistance budget decisions were made that could 
potentially impact human capital requirements. Do you agree 
that this happened in the past? And what has changed since this 
report was issued in September 2007?
    Mr. Greene. Sir, there is a State Department equivalent of 
USAID's Development Leadership Initiative. At this point it 
does not have an eye-catching title like Development Leadership 
Initiative, but Secretary Rice and the leader of this effort, 
Under Secretary Kennedy, are also trying to significantly ramp 
up State's core technical operational staffing. And a part of 
this effort is to increase the number of people and increase 
the competency of State Department Foreign Service officers who 
have oversight, who manage, and who support foreign assistance 
programs.
    Senator Akaka. Mr. Greene, over the last few years, there 
has been a process underway to subordinate USAID to the State 
Department. Meanwhile, some of our allies abroad have been 
undertaking efforts to create separate agencies to direct their 
foreign assistance agenda. The United Kingdom's Department for 
International Development stands out as one example.
    In your opinion, is the British development department 
effective?
    Mr. Greene. I think our colleagues at the Department for 
International Development (DfID) are effective. I would also 
note that we just had a very long session with our colleagues 
at DfID who wanted to know what we do in the Foreign Assistance 
Bureau of the State Department and how we do it and what we are 
doing to try to gain greater coherence. And so they were 
looking to learn some of the tools from us to apply back to 
their own situation.
    Senator Akaka. Well, thank you very much for your 
responses.
    Senator Voinovich.
    Senator Voinovich. This is a difficult one to answer, and 
in my opening statement, I said that the program on 
international policy attitudes reported that 20 of the 26 
countries, including many who receive millions of dollars of 
foreign assistance, felt the United States was having a 
negative influence on the world. Real low numbers. Any 
explanation why you think that is the case? Has it got to do 
with the Iraq War or Abu Ghraib?
    Mr. Greene. I think there are some pretty well-documented, 
and discussed reasons why that could be true, sir. But I also 
think that there have been some recent polling information that 
shows that trend starting to turn around a little bit. And, 
again, I think what is important is what are we doing to try to 
turn around that trend. And, I think we are doing it, sir.
    Senator Voinovich. If there was one or two things that you 
would recommend to the next President that he do to kind of 
change this as rapidly as possible, what would you suggest?
    Mr. Greene. Sir, are you talking about overall attitudes or 
are you talking about----
    Senator Voinovich. Yes, overall attitudes. I mean, this is 
all a part of our public diplomacy. It is part of our national 
security. It should be.
    Mr. Greene. I think we do extraordinary work around the 
world. We do extraordinary work around the world that brings 
great daily benefit to millions of people around the world. We 
do it in conjunction with countries, with partners, with 
organizations. And I do not think we do the greatest job 
possible of talking about how we do it, why we do it, and the 
results we achieve. And I just think we need to significantly 
improve telling the story of what this country does and what 
this country helps accomplish around the world on a daily 
basis, sir.
    Senator Voinovich. Well, it is interesting. We are known 
for our great public relations, the fabulous firms that 
represent corporations and so forth that are in that business. 
You think that we need to figure out how to do this better, to 
communicate who we are and what we want to do and what we have 
done, and that we do care about other people?
    Mr. Greene. Yes, sir, and to do it in a sustained, engaged 
way using communication styles and techniques that are more in 
tune with the changing communication styles and techniques that 
are out there today. Frankly, I think we are just starting to 
wake up to that potential and that methodological change that 
is necessary.
    Senator Voinovich. Do you have any people in your shop that 
are working on that?
    Mr. Greene. Those are primarily in the Under Secretary for 
Public Diplomacy's shop, Mr. Glassman, and he is leading the 
charge on that, sir. What we constantly get----
    Senator Voinovich. How much coordination is there between 
you guys and Glassman's operation?
    Mr. Greene. What Glassman is always looking for two things: 
One are success stories, give us information, feed us all these 
success stories that your people say you are doing so that we 
can get them out to our communicators all over the world. Paint 
the picture, give us the information. So he is looking for 
success stories, and he is looking for resources to get the 
core capacity to deliver those success stories in an integrated 
way, looking for much more forward presence in terms of public 
diplomacy strategy as well, sir.
    Senator Voinovich. Shifting the questions to Senator 
Coburn, as a mayor and governor, I used to say, if you cannot 
measure it, do not do it. And one of the problems that we 
have--Senator Akaka and I have--we try to get strategic plans 
on how people are going to get off the high-risk list. You are 
setting up some kind of metrics. When you do this, do you ever 
sit down with the General Accounting Office to talk to them 
about it? Because so often what ends up happening is they come 
in and look over your shoulder, and then they come back with 
reports that program challenges remain. Is there any work that 
is being done in that area?
    Mr. Greene. Right now we are privileged to have a General 
Accounting group looking at many different aspects of our 
operation, and my understanding--I have not been in these 
conversations myself, but my understanding is that we have had 
discussions on performance measures and monitoring. I will find 
out exactly what----
    [The information provided for the record follows:]

          INFORMATION PROVIDED FOR THE RECORD FROM MR. GREENE
    We have discussions with the GAO on a range of foreign assistance 
related issues, including performance metrics. The current GAO study is 
however not specificallly focused on metrics.

    Senator Voinovich. It would really be good to do that 
because we have had situations, haven't we, Senator Akaka, 
where they come before us and claim they are not being measured 
the same way or that we do not agree with the definition and we 
are still trying to get some feedback on several of those 
areas.
    The last thing I would like to mention to you is that you 
have recently started this effort, and we are going to have a 
new Administration. I mentioned the American Academy of 
Diplomacy, you have the Commission on Smart Power, and I think 
there is one other group that is going to come back. There is a 
big coming together of thought on what we ought to do to go 
forward. And I would really appreciate it if, as these reports 
come out--in fact, I am going to have my staff look at them, 
and I am going to look at them, to see what the common threads 
are. And you have been there, and it would be interesting to 
know before you tip your hat what you think about those reports 
and whether you think that they are suggesting the right 
things. I would be very interested--and I am sure Senator Akaka 
would--in terms of your thoughts about that because we are 
going to have a new day in this area.
    And we had the Aspen Institute breakfast this morning. We 
had an adviser to the Secretary on terrorism, and his opinion 
was that there are a whole lot of things that we ought to be 
doing differently today. And then I think, Senator Akaka, you 
are on the Armed Services Committee. There is only so much 
money to go around. I think the State Department's budget 
proposal is $36 billion.
    Mr. Greene. Yes, sir. That includes assistance and 
operations.
    Senator Voinovich. Yes, $36 billion, and I think the 
defense budget is $683 billion, something like that. And I know 
this is probably not something good to suggest, but it seems to 
me that we should be allocating our dollars differently than we 
are today, that the enemy is different than it was before the 
Cold War. We have a group that is out that does not fly under 
any flag, and we need to be--as Joe Nye says, we need to have 
smart power and figure it out. And I am hoping that those of 
you that are close to this really get out and start beating the 
drum for the fact that we need to reallocate our resources and 
put them in the areas where we are going to get a much better 
return on our investment.
    Senator Akaka, one of the things that drives me crazy 
around here is that--they call it the ``military-industrial''--
Eisenhower talked about it, and it is also the congressional 
thing that we need to be concerned about. And we just seem to 
be going down one course, which is the past, and not looking to 
the future. And somehow we have to break that mind-set and 
start looking out differently than we are today, I think, if we 
are going to be successful, understanding that we have limited 
resources. And if we keep going the way we are, Senator Akaka, 
with the $10 trillion debt--we have some serious problems that 
need to be addressed, and I am hoping that we have a lot of new 
thinking. It is not to take anything away from what you are 
trying to do and the next Administration as to how we are going 
to handle this situation.
    If I do not get a chance, thank you for your service.
    Mr. Greene. Thank you, sir. Could I just respond to one of 
your points, if you do not mind, Senator Voinovich?
    I think there is an extraordinary level of compatibility 
and coherence between what we as an Administration are trying 
to do and what the reports that you cited, the HELP Commission 
also, have concluded. And so as much as the stars ever get 
lined up on this incredibly complex, important subject, I think 
they are about as lined up as they are ever going to be in 
terms of what outside groups are saying, what Members of 
Congress are saying, and what we, the Administration, are 
saying. And I think it provides a really good foundation to get 
to a much better place in terms of coherent foreign assistance 
programming, planning, and implementation, sir. And we greatly 
appreciate your comments.
    Senator Voinovich. Thank you.
    Senator Akaka. I want to thank Senator Voinovich. Mr. 
Greene, thank you so much for being here and for your 
testimony. I want to commend you for being as candid as you 
have been with your statements, and we look forward to 
continuing to work on this and to improve the system. So thank 
you very much.
    Mr. Greene. Thank you, sir.
    Senator Akaka. I want to welcome the second panel of 
witnesses. The second panel of witnesses includes Leo Hindery, 
Jr., Former Vice Chairman, Commission on Helping to Enhance the 
Livelihood of People Around the Globe (HELP); Dr. Gordon Adams, 
Distinguished Fellow, Henry L. Stimson Center; Anne C. Richard, 
Vice President for Government Relations and Advocacy, 
International Rescue Committee; Sam Worthington, President and 
CEO, InterAction; and Dr. Gerald Hyman, Senior Adviser and 
President of the Hills Program on Governance, Center for 
Strategic and International Studies.
    It is the custom of this Subcommittee to swear in all 
witnesses, and I would ask all of you to please rise and raise 
your right hand. Do you solemnly swear that the testimony you 
are about to give this Subcommittee is the truth, the whole 
truth, and nothing but the truth, so help you, God?
    Mr. Hindery. I do.
    Mr. Adams. I do.
    Ms. Richard. I do.
    Mr. Worthington. I do.
    Mr. Hyman. I do.
    Senator Akaka. Thank you very much. Let the record note 
that the witnesses responded in the affirmative.
    Mr. Hindery, please proceed with your statement.

    TESTIMONY OF LEO HINDERY, JR.,\1\ FORMER VICE CHAIRMAN, 
   COMMISSION ON HELPING TO ENHANCE THE LIVELIHOOD OF PEOPLE 
                    AROUND THE GLOBE (HELP)

    Mr. Hindery. Mr. Chairman and Mr. Ranking Member, I am Leo 
Hindery, and I was the Vice Chair of the HELP Commission, which 
was created by Congress in the year 2005 to reflect on how best 
to reform the tools of development assistance. And it is an 
honor for me to be here today to testify to your Subcommittee. 
I along with two other HELP Commission Members--Jeffrey Sachs 
and Gayle Smith--prepared a Minority Commission Report entitled 
``Revamping U.S. Foreign Assistance,'' and I ask that you place 
that entire Minority Report into the record.\2\
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    \1\ The prepared statement of Mr. Hindery appears in the Appendix 
on page 54.
    \2\ The Minority Commission Report entitled ``Revamping U.S. 
Foreign Assistance,'' appears in the Appendix on page 159.
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    In the few minutes I now have, I want to discuss in brief 
three of the five most significant conclusions which we drew up 
in our Minority Report, and I would ask, Mr. Chairman, that my 
fuller testimony also be placed into the record.
    Senator Akaka. Without objection.
    Mr. Hindery. Even though the principle has been part of 
U.S. foreign policy doctrine for 60 years, our first conclusion 
was that the United States must continue to promote development 
assistance as a core pillar of national security and American 
moral values since this principle is now no longer universally 
embraced. The 2006 National Security Strategy of the United 
States explained well the rationale and the imperative of 
development assistance when it said that, ``Development 
reinforces diplomacy and defense, reducing long-term threats to 
our national security by helping to build stable, prosperous, 
and peaceful societies.''
    Our second conclusion, and an extremely important one in 
light of the testimony a moment ago, was that the United States 
should immediately establish a new separate Cabinet-level 
``Department for International Sustainable Development.'' This 
new department would house USAID, PEPFAR, the President's 
Malaria Initiative, and Millennium Challenge Corporation, plus 
all new emerging initiatives such as in climate change. The 
case for a separate Department rests on five principles: The 
need, as I mentioned, to upgrade U.S. development assistance as 
a pillar of U.S. national security; the need to improve U.S. 
Government management and expertise in public health, climate 
change, agronomy, demography, environmental engineering, and 
economic development; the need to work effectively with similar 
Cabinet-level departments and ministries in partner donor 
countries; the need to de-politicize development assistance so 
that it can be directed at the long-term investments that are 
critical in the fight against poverty, hunger, disease, and 
deprivation; and the need for coherence, which is apparent 
today, of those U.S. policies which impact sustainable 
development.
    The shift, Mr. Chairman, as you commented, in the United 
Kingdom in 1997 from having a sub-Cabinet development agency to 
having a Cabinet-level department called DfID has dramatically 
increased the standing, reputation, and experience of the 
United Kingdom in the area of international development. 
Consequently, it was our conclusion that DfID is now, in fact, 
far ahead of USAID as a global thought-leader in development 
policy and thus, relatively more successful.
    Our third conclusion had to do with what works and with 
what does not work with ODA, which is particularly germane to 
this Subcommittee's strong interest in organizational process. 
The discussion on aid effectiveness is often clouded by 
confusions, by prejudices, and by simple misunderstandings. 
Many studies, Mr. Chairman, try to find correlations between 
overall aid and economic growth, and when they find little 
positive correlation, they declare aid to be a failure. Yet 
this low correlation does not prove that aid is failing, since 
much of the aid is directed to countries in violence, famine, 
or deep economic crisis. It is not a surprise, therefore, that 
aid is often correlated with economic failure, not because aid 
has caused the failure but, rather, because aid has responded 
to failure. We need, as you have commented, a much more 
sophisticated approach than standard simple correlations to 
judge the effectiveness of aid. And then we need to assess the 
objectives of specific aid programs and whether these 
objectives are fulfilled.
    Did the food aid stop starvation? Did immunizations save 
lives or eradicate disease? Did infrastructure spending on 
roads and ports help to generate new employment in new 
industries? Did aid for schooling raise enrollments, completion 
rates, and literacy? Did farm aid increase the productivity of 
farms?
    In short, I believe there are six keys to success in 
development. First, interventions should be based on powerful, 
low-cost technologies. Second, interventions should be 
relatively easy to deliver and based on expert systems and 
local ownership. Third, interventions should be applied at the 
scale needed to solve the underlying problems. Fourth, in a 
comment raised today, interventions should be reliably funded. 
Fifth, interventions should be multilateral and draw support 
from many governments and international agencies. Sixth, and 
extremely important, interventions, as Senator Voinovich has 
commented, should have specific objectives and strategies so 
that success rates can be assessed.
    Development assistance programs should have clear 
objectives, and they should not directly aim for excessively 
broad and overarching goals such as ``democracy'' or ``the end 
of terror,'' even though broad goals such as these can 
appropriately be among the direct and indirect motivations for 
the actual interventions. But only, as the Senator has 
commented, with specific objectives can there be measurements, 
auditing, evaluations, and re-assessments as needed.
    Thank you, Mr. Chairman and Mr. Ranking Member, for this 
opportunity, and I look forward to your questions.
    Senator Akaka. Thank you very much, Mr. Hindery. Dr. Adams, 
will you please proceed?

 TESTIMONY OF GORDON ADAMS,\1\ DISTINGUISHED FELLOW, HENRY L. 
                         STIMSON CENTER

    Mr. Adams. Thank you very much, Mr. Chairman. I am 
delighted to appear before this hearing this afternoon. I 
congratulate both of you for holding the hearing because, as 
has already been said today several times, this is a very 
propitious moment for thinking about how we strengthen, 
improve, restructure and make more effective the development 
assistance of the U.S. Government. So it is extremely timely.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Adams appears in the Appendix on 
page 60.
---------------------------------------------------------------------------
    I also wanted to thank you in particular, Senator 
Voinovich, for your service on the Advisory Panel for the study 
that the American Academy of Diplomacy is sponsoring, which we 
at the Stimson Center are writing. We appreciate your service 
there as well and look forward to giving you a useful and 
implementable result.
    I will briefly make a few points today, and thank you for 
putting my full statement in the record.
    Precepts first, I focus on our foreign policy toolkit, and 
our foreign policy toolkit is out of balance. We have relied on 
the military instrument of power and have neglected and 
understated our capabilities in diplomacy, development, and 
foreign assistance. And it is my judgment that the Congress and 
the next Administration are going to have to address that 
priority.
    I observe in my testimony that despite a growing State 
Department operational budget in recent years, we still have a 
Department that is inadequately staffed and funded to play a 
full part in our foreign and national security policy.
    And despite roughly doubling our foreign assistance over 
the past 8 years, our development and foreign assistance 
institutions still suffer from what I call a ``diaspora'' of 
organizations and capabilities. They need to better integrated 
and coordinated. They need more strategic direction. They need 
more funding and staff. And they need, in my judgment, a 
coordinated budget process to be effective.
    So I want to mention four things that I recommend in the 
testimony.
    First off, with respect to the State Department, we need to 
invest in additional staffing for the State Department and 
reshape the career expectations of people going into America's 
diplomacy. I think both of those are important. We will 
recommend in the report that Senator Voinovich is helping us 
with that there be a roughly 35-percent increase in the 
overseas Foreign Service staffing of the State Department over 
the next 5 years. But increasing the people is not in itself 
enough. We need to have also different people or to evolve the 
people we have. We have some fine diplomats, but the State 
Department today--and this is very much at the core of my 
testimony--is doing a great deal more than report, negotiate, 
and represent, which is the classical function of a State 
Department officer.
    Through the State Department and through USAID, we have a 
very strong and growing ``gray area'' of program activity at 
the State Department: HIV programs in PEPFAR, the EUR 
assistance programs in Eastern Europe and the former Soviet 
Union, counterterrorism programs, and peacekeeping operations. 
For all of these, we are getting a new generation and a new set 
of experiences for our State Department diplomats.
    We need to focus on that reality, in a very concentrated 
way, to recruit, to train through their careers, to assign 
across cones, to assign across departments, and to reward a 
much broader career path in the State Department than what 
traditionally has been the case.
    We also think that it is very important to expand and 
reward the work of the public diplomacy function at the State 
Department. Senator Voinovich referred to this in his early 
questions. We think that is a very important aspect, and we 
will be recommending in the Stimson Academy Report an increase 
in staffing and in programming for the public diplomacy 
functions at the State Department.
    I mention these issues because, in my judgment, they are 
all connected. We are talking about the civilian capability of 
the U.S. Government; our foreign assistance and diplomacy and 
public diplomacy are connected in our effort to be effective.
    Second, to come specifically to the area of foreign 
assistance, when I was the Associate Director at the Office of 
Management and Budget back in the early to mid-1990s, one of 
the things that struck me most strongly was that most of the 
accounts that are in what we call the Function 150, the 
international affairs budget, were integrated at my desk. I was 
an OMB official. It is not the place that these accounts, 
programs, or strategies ought to be integrated. Because the 
integration mechanisms at the State Department were not 
effective, they were integrated at my desk. This reflects the 
diaspora I mentioned earlier. And the diaspora has gotten worse 
in this Administration. Congress and the Administration have 
created programs that have the opportunity to be effective. I 
am talking about PEPFAR and about the Millennium Challenge 
Corporation, which make up the bulk of the growth in foreign 
assistance funding over the last 6 or 7 years.
    The consequence of the diaspora and your chart amply 
demonstrates it--is the weakening of our core foreign 
assistance institution: USAID. Here there is not only a need to 
rebuild the core, but to restructure that core so it can carry 
new responsibilities. It needs to reform to being a technical 
and field agency as opposed to a contracting agency, and 
forward to deal with the kinds of issues it now works on with 
the Department of Defense and the private sector. I want to 
note here that the flow of funding to the developing countries 
right now from the private sector overwhelms any bilateral 
official aid. The effective coordination with other donors 
requires an adequate staff in the field.
    So we have a very strong recommendation in the study about 
doubling the field presence of USAID and making sure that it is 
technical, programmatic, and on the ground, not just more 
contracting officers. We see USAID as the central player in our 
foreign assistance and development programs. I would urge 
appointing someone to the position that exists in statute but 
has not been filled, making the current Office of Director of 
Foreign Assistance an actual Deputy Secretary of State. A 
Deputy Secretary of State for Management and Resources position 
exists in law, in Title 22. And we recommend appointing that 
person and dual-hatting them as the Administrator of USAID. 
This will ensure a voice for foreign assistance at the 
intergovernmental level, and it will assure responsiveness to 
the Congress because it is a confirmed official responsible for 
development assistance.
    The third point is strategic planning. We have talked a 
little bit about that, and Mr. Greene talked about that a good 
deal, too. This comes to the core of the problem. There is a 
close tie between our foreign policy goals and our foreign 
assistance and development programs. Rather than separating 
them, I see over time the need for a very close tie if the 
United States is going to have a powerful and effective 
civilian foreign policy toolkit, and a more integrated 
strategic planning and budgeting capability that meets the 
needs of development as a central goal of U.S. international 
engagement.
    This to me is not a question of development versus foreign 
assistance. A very broad definition of development, one used by 
most of the development community today, incorporates programs 
that we call ``foreign assistance'' and programs that we call 
``development assistance.'' And it is not a question of ``short 
term'' versus ``long term.'' The short and the long are 
increasingly interlocked in our statecraft.
    There will always be some conflicts between short and long 
term perspectives. That is just in the nature of things. But 
both are important. It is important to recognize that reality--
--
    Senator Akaka. Dr. Adams, would you please summarize?
    Mr. Adams. Yes, I will. Thank you.
    The State Department does both long and short term work. 
USAID does both short and long term work. So we see Mr. 
Greene's office as flawed, flexible, fixable, and an important 
foundation for building this long-term, transparent capacity 
for budgeting.
    I will simply add one other point, and that is that in the 
testimony I talk a bit about this question of militarization, 
and both here and in the Stimson Center Report, we will try to 
be responsive to Secretary Gates' concern about militarization 
of foreign assistance to bring back into the State Department 
and the USAID world the authorities over many of those programs 
now being implemented by the Defense Department under its own 
authorities.
    Thank you very much, Mr. Chairman.
    Senator Akaka. Thank you very much, Dr. Adams. Ms. Richard, 
please proceed.

TESTIMONY OF ANNE C. RICHARD,\1\ VICE PRESIDENT FOR GOVERNMENT 
     RELATIONS AND ADVOCACY, INTERNATIONAL RESCUE COMMITTEE

    Ms. Richard. Thank you, Senators. Thank you for holding 
this hearing on Reforming the Foreign Assistance Bureaucracy. 
Your interest in this issue is very well timed. There is a 
consensus emerging that change is needed.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Richard appears in the Appendix 
on page 75.
---------------------------------------------------------------------------
    This afternoon, I would like to outline three major weak 
points in the foreign assistance bureaucracy--one, leadership; 
two, people; and three, coordination--and propose steps that 
could help address these weak points and strengthen the U.S. 
foreign aid program. My remarks are informed by my position as 
the Vice President of the International Rescue Committee, an 
internationally recognized relief and development agency, and 
also my past experience at the State Department. I was 
Madeleine Albright's adviser on budgets and planning.
    I should also mention that I am the co-author of a 
forthcoming paper from the Stanley Foundation and Center for 
New American Security that describes how the next 
Administration might improve U.S. foreign operations; and my 
co-author, Paul Clayman, was the counsel for Senator Lugar on 
the Senate Foreign Relations Committee. I request that my 
remarks and the forthcoming paper be put into the record.\2\
---------------------------------------------------------------------------
    \2\ The working paper from the Stanley Foundation and Center for 
New American Security entitled ``Improving US National Security: 
Options for Strengthening US Foreign Operations,'' appears in the 
Appendix on page 120.
---------------------------------------------------------------------------
    Senator Akaka. Without objection, it will be made part of 
the record.
    Ms. Richard. Thank you.
    Moving quickly to my first point, I think many of us here 
believe that stronger development management, policy, and 
leadership is needed from the U.S. Government. There is just a 
stronger need for leadership of development assistance. The 
Bush Administration has increased overall foreign aid but 
really opted out of using the U.S. Agency for International 
Development for major new initiatives and instead developed 
``work-arounds,'' such as creating the Millennium Challenge 
Corporation as a separate agency and also funneling HIV/USAIDS 
funding, the PEPFAR funds, through an office in the State 
Department. A logical move would be to fold these initiatives 
into USAID and thus, bring most of the major aid projects under 
one roof and ideally, reporting to one strong leader within the 
Administration.
    The Administrator of USAID is an important job that needs 
to be filled by someone who can speak with authority. This 
person has to go to conference tables at the White House and be 
included in the discussions as decisions are being made and not 
told what happened later on. In international meetings and 
summits, the USAID Administrator should be empowered to meet 
with development ministers from other governments as a peer. 
Put simply, the Administrator must be the point person for 
relief and development in the Administration.
    My written statement discusses militarization of foreign 
aid and concerns about reconstruction after conflicts. These 
are very hot topics right now, but they are parts of this 
overall foreign aid picture.
    All of these various trends seemed to have boiled down 
lately to a disagreement among experts about the best place to 
lead U.S. development aid efforts. Some would say leadership 
should be at the top of the State Department, as Mr. Greene 
did, or with a new Cabinet-level development department, as 
both InterAction and Mr. Hindery would maintain, or through a 
coordinator based in or around the White House.
    Paul Clayman and I developed what we call the ``hybrid 
model,'' which we think combines the best of all these ideas: A 
new directorate for foreign operations at the National Security 
Council with staff who are knowledgeable and able to obtain 
input from key actors and help resolve disputes as they arise; 
a State Department that can coordinate and influence the 
overall direction of the full range of aid programs--which, as 
we know, is more than just development aid--to address the 
President's foreign policy needs--and that could be built off 
of the current F process--and a strong development agency, 
which I would propose be a revamped and empowered USAID--that 
includes all or most major development programs.
    I would also propose that we continue the practice of 
having the leaders from different agencies involved in foreign 
aid meet to discuss the trends and the policies that the 
Administration has, and this could be modeled on the Millennium 
Challenge Corporation's board. Importantly, this hybrid model 
could be readily implemented within a short period of time by a 
new Administration.
    There is a need for more people in both the State 
Department and USAID to carry out the important work of these 
agencies. It will be important for the Department of State and 
USAID to explain the impact new personnel will have, how they 
will make a difference, and what tasks they will undertake. Not 
just more people are needed, but more training, too. The 
international affairs agencies need trained and skilled 
personnel to match modern demands. This includes the ability to 
speak hard languages, appreciation for the use of technology, 
and a good understanding of program management. In terms of 
skills, there is a clear need for personnel who can respond 
rapidly to crises and can play useful roles in post-conflict 
situations.
    Finally, both the State Department and USAID need 
contingency funds to head off and respond to crises. I know 
proposals for contingency funds almost never survive the budget 
process. I have firsthand experience in that. But I would 
propose modeling a disaster contingency fund on the highly 
successful Emergency Refugee and Migration Account that the 
State Department manages for refugee crises.
    My recommendation, therefore, is that this Subcommittee 
speaks out in support of greater investment in the 
international affairs budget and the personnel of these 
agencies, but that you also seek good answers to the questions 
of what the new hires will be doing and how the workforce will 
be used to tackle global threats and the full range of modern 
demands on Foreign Service officers.
    My third point is that the very complexity that Rich Greene 
talked about requires coordination. Many of those who criticize 
the current way the U.S. Government organizes foreign aid 
complain about the large number of agencies that run aid 
programs and the long list of budget accounts that fund aid. 
And so I think a fresh approach would probably consolidate this 
large number of government actors into a smaller number of 
decisionmakers that work more closely together. But there will 
always be multiple actors because of the complexity of U.S. 
interests overseas. A coherent strategy does not necessarily 
mean that U.S. national security priorities, goals, and 
objectives can be easily described or condensed into a simple 
catchphrase. U.S. national interests are broad and varied. The 
United States has relations with, and Americans have interests 
in--and I am sure nobody knows this better than U.S. Senators 
who hear from their constituents what their interests are--
nearly every country on the globe. U.S. Government engagement 
with the rest of the world should be expected to be multi-
faceted and complex.
    What is true is that the many U.S. foreign aid actors, 
organizations, and budget accounts make the entire enterprise 
harder to explain to senior officials, the media, the public, 
and to justify it to you, the Congress. Government leaders 
should do a better job communicating the importance of this 
work. There is a need to coordinate across various U.S. 
Government agencies in order to align U.S. foreign aid programs 
with foreign policy goals, avoid duplication, and ensure a 
smart approach. The paper Paul Clayman and I wrote on the 
hybrid model also proposes ways to do this.
    Before concluding, I just want to say, Senator Voinovich, 
your question earlier about the continuing resolution and 
really the reliance, too, on supplementals to fund emergency 
funding and crises in the world is having an impact on 
organizations like mine, the International Rescue Committee. 
What happens is there is a great deal of uncertainty at the 
start of the fiscal year, when managers, good managers, should 
be sitting down deciding how many people to hire, where they 
should be deployed, and how do you set about operating for the 
rest of the year. Without certainty, you cannot know that, and, 
in fact, when you are told that your funding has been cut but 
you might get more later in a supplemental, what ends up 
happening is you have to let people go. You have to give up the 
rent on your property. You have to not order the supplies or 
send people for training. And it is very hard to do that later 
in the fiscal year when half or three-quarters of the fiscal 
year has gone by.
    As bad as that is in terms of a management problem, it is 
really more troubling in life-and-death situations such as the 
situations some of my colleagues working in failed and fragile 
environments see. You cannot go back in time and deliver 
healthy babies after they have been born, you cannot go back 
and ``back-feed'' growing children, and you cannot stop the 
spread of deadly diseases as they are tearing through villages 
three-quarters of the way through the year. So I would be very 
happy to talk to you more about that. We have done a lot of 
thinking about that, both in my organization and within 
InterAction, our coalition of relief and development agencies.
    Let me stop there. Thank you for holding this hearing, and 
I look forward to your questions.
    Senator Akaka. Thank you very much, Ms. Richard.
    Mr. Worthington, please proceed with your statement.

   TESTIMONY OF SAMUEL A. WORTHINGTON,\1\ PRESIDENT AND CEO, 
                          INTERACTION

    Mr. Worthington. Thank you, Mr. Chairman. It is a pleasure 
to be here this afternoon. I am President and CEO of 
InterAction, which is the largest coalition of U.S.-based 
international development and relief organizations.\2\
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Worthington appears in the 
Appendix on page 81.
    \2\ The Policy Paper from InterAction, June 2008, entitled 
``Proposed Major Components and Organization of a Cabinet-level 
Department for Global and Human Development,'' appears in the Appendix 
on page 144.
---------------------------------------------------------------------------
    Foreign assistance plays a critical role in advancing U.S. 
national interests overseas, and it represents, as we know, our 
humanitarian values and puts the best face of America forward 
to the world in many ways. InterAction's 168 members receive $6 
billion a year from the American public directly, which is more 
than twice what they receive in partnership with the U.S. 
Government. We believe that the cornerstone of our foreign 
assistance portfolio is development assistance, which at the 
heart of it should be poverty alleviation. InterAction believes 
that the chief goal of U.S. development assistance should be to 
reduce poverty and help countries and people achieve their full 
potential, and that these reflect American humanitarianism and 
equal opportunity for all.
    The problem today is that we have too few development 
dollars spread over too many agencies, as we see in these 
charts,\3\ fragmented across 26 different departments, and our 
aid programs are often poorly coordinated, at best, and at 
worst, working at cross purposes.
---------------------------------------------------------------------------
    \3\ The charts referred to appear in the Appendix beginning on page 
117.
---------------------------------------------------------------------------
    It is for this reason that InterAction and its members 
believe that the United States should develop a National 
Development Strategy and that this National Development 
Strategy, among other things, should prescribe how foreign 
assistance programs will be coordinated and integrated with 
other foreign policy tools for working with low-income 
countries, assert that poverty reduction is a primary goal of 
foreign assistance, recognize the role of women in reducing 
poverty, describe how U.S. development programs relate to the 
Departments of State and Defense, and lay out how our 
assistance programs should coordinate with other bilateral and 
multilateral and other funding, including funding from the U.S. 
nonprofit community.
    This last point about coordination raises another important 
issue for us, which is the government's capacity to be a good 
partner in development. Right now USAID, which is our lead 
development agency, lacks the capacity to coordinate 
effectively with other bilateral and multilateral donors or of 
its own partners, including U.S. civil society. The latter 
problem is caused by the agency's human capital limitations, 
which we were talking about earlier today, as USAID just does 
not have the staff to effectively manage the grants and 
cooperative agreements that are used and comprise its primary 
funding relationship with the U.S. civil society and NGOs. This 
problem was exacerbated when the agency's Bureau for Policy and 
Program Coordination, which handled many functions related to 
donor coordination, was moved out of the agency into the Office 
of the Director of Foreign Assistance.
    I have made 11 key recommendations in my written testimony 
that I believe will improve the government's capacity to 
respond to this coordination, and I would like to share a few 
of them with you right now.
    First, I would urge Congress to work closely with Director 
of U.S. Foreign Assistance, Henrietta Fore, to implement her 
Development Leadership Initiative, which is, in essence, 
turning back some of the challenges that have plagued USAID for 
the last 15 years.
    Second, I urge Congress and the Administration to work 
together to replace USAID's operating expense (OE) account with 
a funding mechanism that allows Congress to maintain its 
oversight, but gives the agency the resources and flexibility 
it needs to be effective.
    Third, we need to prioritize monitoring and evaluation so 
that USAID can know what works and what does not.
    Fourth, to ensure that USAID staff know the difference 
between acquisition contracts and assistance cooperative 
agreements. The NGO community has always approached USAID a co-
equal partner rather than simply a contracting agency that pays 
for development programs.
    And, finally, we need to elevate development assistance 
within our government to its rightful place alongside defense 
and diplomacy, a principle that is well established as part of 
our government's National Security Strategy.
    It is InterAction's position that the best way to elevate 
development assistance is to create a Cabinet-level Department 
for Global and Human Development. A Cabinet-level department 
would streamline the various goals and objectives of U.S. 
foreign assistance as well as the current proliferation of 
assistance programs, including PEPFAR and the MCC, and creating 
a Cabinet-level department would protect development from 
militarization by the Department of Defense or subordinated to 
the tactical goals of the State Department.
    Those who suggest that USAID ought to be merged with the 
State Department underestimate the differences in the culture 
and the functions between the two agencies. The alignment of 
development and diplomacy is important. So is the alignment of 
defense and diplomacy. And yet no reasonable person would ever 
suggest merging the State Department into DOD. Soldiers enlist 
in our military to become warriors not aid workers. Similarly, 
State Department officials aspire to be diplomats not 
development specialists. Humanitarian development policy 
experts choose to work at USAID or the Cabinet-level department 
we propose because they believe they can make a difference in 
the lives of the world's poor, particularly as it relates to 
our national interests. InterAction has a paper that proposes 
how we might organize such a department, which I submit for the 
record along with my written testimony.
    Hundreds of CEOs and InterAction are not alone in seeking a 
Cabinet-level department. It is an idea that is gaining 
momentum here in Washington, also the position of the 
Modernizing Foreign Assistance Network, a bipartisan group of 
experts from think tanks, universities, and NGOs, of which I am 
a part.
    It is clear that the 21st Century presents us with foreign 
policy challenges that our current development infrastructure 
is ill-equipped to handle. We are also at a point in our 
history when respect for the United States abroad is at an all-
time low. At the same time, the next President will take over a 
country with a large constituency that supports international 
development, as well as a military that supports improvement in 
our non-military tools. It is vitally important that he works 
with Congress to reach a grand bargain that prioritizes these 
issues and gives the Executive Branch the flexibility it needs 
to respond to a rapidly changing world and ensures 
comprehensive legislative oversight.
    The United States must elevate development within our 
government and give it the space it needs to be effective vis-
a-vis defense and diplomacy, focus our foreign assistance and 
development programs on a streamlined set of objectives by 
creating a National Development Strategy, and improve the 
capacity of our government to partner effectively with U.S. 
NGOs, with other donors, and with aid recipients.
    Thank you, and I look forward to your questions.
    Senator Akaka. Thank you very much, Mr. Worthington. Mr. 
Hyman, would you please proceed with your statement?

 TESTIMONY OF GERALD F. HYMAN,\1\ SENIOR ADVISOR AND PRESIDENT 
 OF THE HILLS PROGRAM ON GOVERNANCE, CENTER FOR STRATEGIC AND 
                     INTERNATIONAL STUDIES

    Mr. Hyman. Thank you, Chairman Akaka and Ranking Member 
Voinovich, for holding this hearing and for giving me the 
opportunity to appear before you. I ask that my full written 
testimony be included in the record.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Hyman appears in the Appendix on 
page 94.
---------------------------------------------------------------------------
    Senator Akaka. Yes. Other materials that are being 
requested by our witnesses, without objection, will be included 
in the record.
    Mr. Hyman. Some of the points I wanted to make have already 
been made by others, so I will be briefer than I might 
otherwise have been. I am sure you will not object to that.
    The first and most important, of course, is that the 
organization of U.S. assistance is fractured, tangled, 
mismanaged, and mal-aligned. That is a point that everyone at 
this table--and, in fact, Mr. Greene pointed out himself when 
he said it was fragmented across multiple bureaus and offices 
within State and USAID. And your chart points that out even 
more forcefully. USAID was, and remains to some extent, the 
primary assistance vehicle, although it is deeply troubled, 
weak, and demoralized, and that needs to be turned around, in 
my opinion. So the first of these three points is the fractured 
nature of our assistance programs.
    Within the State Department, we have a number of programs 
that could easily have been managed by USAID and were pulled 
out for reasons of bureaucratic turf wars, personality, and a 
whole variety of other measures that had, I think, little to do 
with the substance of what was going on. That includes PEPFAR, 
it includes the Millennium Challenge Corporation, and it 
includes the Middle East Partnership Initiative.
    I was in the original group that worked on what became the 
Millennium Challenge Corporation, and initially that was--a 
separate corporation was only one of several options available 
for how to do a program like the MCC program. Pulling it out 
just was another example of picking away at what could have 
been or should have been and was a central development agency. 
That trend, it seems to me, needs to be reversed.
    The second major feature--and that is all within the 150 
Account, all underneath the Secretary of State, underneath the 
Agency for International Development. The second point is the 
point that is on your chart as well, and that is the other 
government departments that are doing assistance, with the 
possible exception, sir, of the Bureau for Indian Affairs. It 
is not obvious to me that there is any department in the U.S. 
Government that does not have a foreign assistance program of 
its own, and that creates a huge problem of fracturing, 
fragmenting, and so on, particularly when people from different 
agencies are engaged in similar or parallel programs in the 
same country at the same time and often giving contrary advice. 
So it seems to me that fracturing is the first issue that needs 
to be dealt with.
    Secretary Rice has tried to deal with that through the 150 
Account and the development of the so-called F process and the 
Director of Foreign Assistance. In my personal opinion, it is a 
defective attempt. But as Mr. Greene pointed out, they are 
working on some changes, which I hope will improve the 
situation dramatically.
    My second point: I agree with Mr. Adams--and I am afraid I 
disagree with some of my other colleagues on this panel--about 
the advisability of separating the assistance--a coordinated 
assistance effort into a different independent department 
separate from the Department of State, for a variety of 
reasons. First, the new National Security Strategy calls for 
development diplomacy and defense into the same--into a unified 
national security policy. I do not think that separating 
development out of that is going to increase the coherence of 
those three. It seems to me it is going to elevate the problems 
of integration to a higher level, which may require, as Ms. 
Richard suggested, a NSC arbiter. But it seems to me it is not 
a wise idea, again, to pull things apart and then move them to 
the top for integration into the National Security Council, 
which will wind up having to adjudicate a whole variety of turf 
and theoretical and implementation issues that it seems to me 
would be better handled within the Department.
    Second, there are other kinds of programs than the pure 
development account programs, and those are in the ESF 
accounts. We can talk about and I think it would be useful to 
talk about joining those two, but the fact is that we do a 
variety of ``development programs'' in countries for reasons 
other than pure development. Haiti, Sudan, the FATA regions of 
Pakistan, North Korea--the list goes on and on. These are 
programs that look like development programs done for very 
different reasons. We are not putting $750 million into the 
FATA because it is a great development partner. We are doing it 
for other reasons. And those, in my opinion, are perfectly 
reasonable to do, perfectly legitimate, and the programs may 
look like development programs--education, schools, roads, 
health--but they are done for very different reasons. And that 
is why you have, we have, separate accounts. It might be useful 
to come back and relook at those accounts, but those are 
programs that, again, require diplomacy and development to be 
linked together, in my personal view.
    If you pull them apart, either two-thirds of the 
``development budget'' would not be funded, or it would be 
funded at levels justifiable only on purely development 
grounds, or they would be managed by the Department of State 
while you had a separate development level agency doing the so-
called development program. I do not see that the first two are 
advisable, and the third is neither advisable nor realistic, it 
seems to me. So I would keep them within the confines of one 
agency.
    The third thing is strategy and tactics. I would be happy 
to talk about that in the question period, but the fact is that 
the F process that Mr. Greene talked about merges tax strategy 
and tactics, hyper-centralizes the decisions in Washington, 
does not adequately, in my opinion, look at the advantages of 
the field programs and field expertise. It oversimplifies the 
character of recipient countries. It undermines the value of 
our in-country expertise and has damaged the attempt to measure 
impact, as you discussed earlier.
    So I have nine recommendations. I think I am out of time. 
They are in my testimony, and I will just leave it at that. 
Thank you so much for the opportunity, and I look forward to 
your questions.
    Senator Akaka. Thank you. Thank you very much, Mr. Hyman.
    I would like to ask my first question of Mr. Hindery. I 
know you have limited time here. Mr. Hindery, in the four tasks 
you identified for starting up a new department for 
International Sustainable Development, you did not include the 
need to ensure that human capital needs, such as recruitment, 
retention, or training are addressed, even though you mention 
these needs as part of your case for starting a separate 
department.
    Do you believe that a new department would already have 
most of its human capital needs met?
    Mr. Hindery. Mr. Chairman, I think the question is a 
seminal one, and you have raised it in other contexts this 
afternoon. This is about quality of personnel. It is about 
quantity of personnel. But it is also about morale. And in our 
longer testimony, my colleagues and I on the HELP Commission 
concluded that all three of them can only be met well in a 
separate department.
    I take exception with some of the other panelists. I think 
it is the status that would come from a separate department 
that would address the morale question, and I think that as 
these three Secretaries sit as partners in this initiative of 
defense, diplomacy, and development, that all of the management 
concerns that you and Senator Voinovich have raised could be 
more easily addressed.
    I have had the privilege of being a chief executive of 
large organizations, and that is an unmanageable chart to your 
right, sir, absent consolidation and coordination and status--
and I really would emphasize, as somebody who has had the 
privilege of leading large numbers of people, that status is 
critical. Status is critical to attracting people. It is 
critical to retaining people. And absent it, I think foreign 
assistance will not be the success that you and Senator 
Voinovich might like to see.
    Senator Akaka. Mr. Hindery and Mr. Worthington, in your 
testimony, you make a case for a new separate Cabinet-level 
department focused on international development. Do you see any 
other practical alternatives to this such as improving the F 
Bureau or somehow keeping the foreign assistance 
responsibilities within the State Department?
    Mr. Hindery. Mr. Chairman, over the 3 years that the HELP 
Commission existed--and I was, as I mentioned, its Senate-
appointed vice chair--with a lot of exhaustive review, all of 
the Commissioners concluded that there were only three choices 
available to this Congress on this issue: A super State 
Department, that is, the collapse of this activity into the 
State Department; a much emboldened USAID; or the third 
alternative, which Mr. Worthington and I and Ms. Richard, I 
think, are in consensus on, which is the stand-alone 
department.
    We did not find a fourth, Mr. Chairman. I do not think 
there is one. And it was our conclusion that the negatives of a 
super State Department belie the principles of three D's as you 
would have just killed off one of the D's. And as for an 
emboldened USAID, it would not confront the three charts which 
you have presented to us today. Just emboldening USAID and 
managing it better would not fix its structure problem.
    I think as a final comment--and I would defer to Mr. 
Worthington, who is so able on this subject, and to Ms. 
Richard--there is such a good model in the DfID success that 
for you and the Ranking Member, you do not have to speculate 
that this works. It has been proven to work in the DfID model. 
And I think that would give great comfort, should give great 
comfort to the next Administration and to this Congress.
    Senator Akaka. Thank you. Mr. Worthington.
    Mr. Worthington. The F process was a beginning of an 
attempt to engage in coordination, and as such, it should be 
applauded as a first step. The challenge is for a community 
that engages directly with the U.S. Government in the field, 
that coordination did not go far enough and in many ways was 
too centralized in the way it related to the field. So one 
level, we applaud the coordination attempt, but it simply did 
not go far enough.
    The second is a recognition that any attempt to bring all 
these actors together will only work in terms of how it is 
reflected in an embassy overseas. You will always have an 
Ambassador as the primary representative of the United States 
overseas, but underneath that, right now you do not have a 
clear actor who is responsible for U.S. foreign assistance on 
the ground as it relates to different parts of the various 
programs you have over there. At times, you do not even know 
who is going to come and visit a country from different 
agencies.
    So our community--and this is a discussion among some 100 
different CEOs over a long period of time. It slowly emerged 
that we needed to have this broader degree of bringing together 
the different parts of U.S. foreign assistance to simply enable 
us to work with. Some members of our community are working with 
10, 15 different parts of the U.S. Government.
    Our challenge was that when we saw the F process come into 
being, the overall goals and direction of U.S. foreign 
assistance shifted significantly at the local level and in 
budgeting to reflect interests of the State Department and 
diplomatic interests, which are purely--very much valid for 
U.S. foreign assistance, but we saw that there was no longer 
the space for what we would view as development was actually 
narrowing at the time when resources are significantly 
increasing for development work within the Administration. And 
that led us to conclude that it was only establishing a more 
empowered USAID ultimately to a Cabinet-level department under 
a broad strategy would be the best outcome.
    Senator Akaka. Ms. Richard, would you care to comment on 
that question?
    Ms. Richard. Thank you, Mr. Chairman. Where I agree with 
Mr. Worthington and Mr. Hindery is on the importance of having 
a USAID that is functioning and that is strong. And I am really 
surprised that the current Administration, which talked a lot 
about taking a very businesslike approach to foreign aid, 
bypassed working to fix whatever is wrong with USAID and set up 
duplicative, new, and other organizations.
    I thought that if one wanted to be businesslike and be a 
good caretaker of the taxpayers' money, one would have looked 
at USAID, examined how it was operating, and come up with 
proposals to strengthen it. And so I would propose that the 
next Administration do that.
    Where I differ from them is that I do not think there is 
anything magic about elevating an organization to a Cabinet 
level. To me, that is no silver bullet. I think that what is 
really needed is that the organization operate very well and 
have the support of the President and of the Secretary of 
State, and that will enhance the status, and that will enhance 
the morale of the personnel in the organization.
    Senator Akaka. Thank you very much for that. I am going to 
ask Senator Voinovich for his questions.
    Senator Voinovich. One of the things that I was really 
happy about when Senator Akaka put this hearing together was 
that we are kind of at a junction or watershed period where we 
have a chance to really do something different. And I think one 
of the things that needs to be underscored is the landscape of 
the world has changed, and that is, we have a whole different 
variety of challenges that we must face. But the one thing I 
would like to ask, Mr. Adams, in the report coming out from the 
American Diplomacy, have all these people at the table had any 
input at all in the report?
    Mr. Adams. Yes, in a variety of ways, they have. Anne 
Richard is a member of the Advisory Group helping us with that 
study. That group has taken into consideration all three of the 
pieces of work: The Modernizing the Foreign Assistance Network 
in InterAction; the work Jerry Hyman did for the Carnegie 
Endowment; and the HELP Commission report as well. All of those 
pieces of work are taken into consideration in the work that we 
are doing.
    Senator Voinovich. It seems to me that we have a gigantic 
public-private partnership, and I think it is really important 
that you take into consideration the contribution that many of 
these organizations are making. I think you said, Mr. 
Worthington, they spend more money than we do combined. And so 
that is something that is very special, and we ought to be 
encouraging that, and there ought to be as much coordination 
going on as possible.
    I think the problems that are going to be confronting the 
next President are enormous in so many areas. I would urge all 
of you to really get together and get up early in the morning 
and go to bed late at night trying to come back with some kind 
of consensus, a recommendation to Congress and to the next 
President, about how this thing should happen. As I say, the 
stars are in line. Two years ago, I talked with General Jones 
about this, as well as the head of Africa--and they all--
everybody seems to understand we have got to do something 
different. But I think that if we get into the next year and we 
have got people going different directions, it will make it 
difficult for us to be successful.
    I am going to spend a lot of time trying to figure out this 
concept of a new department because I have experienced--and so 
has Senator Akaka--this whole new Department of Homeland 
Security. And it is a nightmare and probably should never have 
been put together the way it was. And I say shame on the 
Administration for not coming up here and wrestling with us to 
say, look, we have got the job to do and this is the way we 
think we need to do it, instead of letting us kind of impose 
it; and now that it is not working and things are not going the 
way they are supposed to, we just say, Well, that is your baby, 
you take care of it.
    I think that is really important to think about how does 
that get done. You have a lot of different groups out there, 
and how much more difficult or less difficult would it be than 
the Department of Homeland Security? We did the Defense 
Department. There was kind of a thread that ran through all of 
it, and it was a lot easier to do. You have different cultures, 
all kinds of things that need to be looked at.
    So I would really like you to give some more thought to how 
to handle that situation, and the other thing, of course, is 
the issue of the earmarks that are there. Again, that does not 
give you the flexibility that you need to look at the programs 
and how do they jibe together and how you can maximize the 
dollars that are available.
    Mr. Adams. Senator, since you asked my view on the 
department, let me be clear, I do not, in fact, favor creating 
a separate Department of Development. My views really join Anne 
Richard's and Jerry Hyman's. The reason I have that view is 
precisely because, as I said in my opening statement, the 
reality of our foreign affairs agencies and programs is that 
there is a substantial degree of integration, overlap, and even 
cooperation particularly between the State Department and USAID 
with respect to both program definition, program 
implementation, and the objectives served by the programs. This 
is what I called the ``gray area.'' It is really the connection 
between our foreign policy objectives, our national security 
objectives, and the important role that development has in 
those objectives.
    USAID does a number of things, not just development 
programs. It works closely with the Defense Department today in 
Afghanistan. In Iraq, as you know, it has transition 
initiatives programs, conflict management, military affairs 
programs and disaster assistance, all of which focus on the 
near term. And in the State Department, you have a European 
Assistance Program that is budgeted and planned by the EUR 
Bureau in the State Department and implemented in part at 
USAID. They have to work with each other hand in glove all the 
time.
    In other words, we have a rapidly changing culture--here I 
do disagree with Leo Hindery--in the State Department with 
respect to its attention to program definition and 
implementation and to long term objectives in the field. And we 
have a foreign assistance organization which can do both long 
term and short term at the same time.
    In my judgment, this is best served--and here I join Anne 
Richard and Jerry Hyman--by strengthening the capacity of USAID 
in relationship to the State Department. My recommendation is 
that a Deputy Secretary of State position for resources and 
management that exists in law be, in fact, the steering 
official for the foreign assistance programs of the United 
States, these programs give both accountability to Capitol Hill 
and a presence at the decision tables in the White House.
    That vision may not have quite all the details right, but 
it conforms to the reality of U.S. involvement overseas today. 
Trying to separate out one very specific thing narrowly defined 
as poverty reduction and development is not an accurate 
description of what we call ``development'' programs in the 
government and would artificially separate out these other 
policy-relevant programs. Then where is their home? What do 
they do?
    Senator Voinovich. Mr. Hindery wants to comment.
    Mr. Hindery. Senator, I think that your concern about the 
problems around the creation of the Department of Homeland 
Security are well stated. We looked at that, and we all have to 
remember that DHS was born out of the tragedy of September 11, 
2001, and many of its activities were new in their own right.
    Senator Voinovich. Pardon me. You said something about the 
DfID model?
    Mr. Hindery. The DfID model, which is the euphemism for the 
United Kingdom's stand-alone department. It is called the 
Department for International Development (DfID).
    Senator Voinovich. That was the other thing I was thinking 
about when you were talking. I wonder how other people handle 
it. So you are referring to the way they----
    Mr. Hindery. The United Kingdom, Senator, has a stand-alone 
department.
    I would go back to the comment about the Department of 
Homeland Security. We need to remember that much of its 
problems were because it was also trying to start new 
initiatives. U.S. foreign assistance already exists, and it has 
existed for 60 years. It is a noble part of what we do as a 
Nation.
    If you and your colleagues looked at it more as a 
reformation, a rehabilitation of what we are doing now and not 
the entirety of a new initiative, as DHS was, the Department of 
Homeland Security, while it is not an unformidable task, it may 
be more comforting to your and your colleagues as you try to 
draw the contrast.
    Senator Voinovich. Ms. Richard.
    Ms. Richard. The proposal that I put forward is less than 
ideal. It was put forward because it is a compromise between 
people who would like to see a Cabinet-level development agency 
and people who think that the State Department should do more, 
should be more in the leadership.
    So as a practitioner, Paul Clayman and I were looking for a 
way to bridge these two communities.
    Senator Voinovich. How long were you with Secretary 
Albright?
    Ms. Richard. I was at the State Department starting in May 
1990, working actually for Deputy Secretary Eagleburger, and I 
was there most of the 1990s. And for 2 years, I reported 
directly to Secretary Albright on these activities.
    Senator Voinovich. So you were there for a while.
    Ms. Richard. Most of the decade of the 1990s I was working 
on foreign aid and trying to figure out how to work across the 
agencies that were--and try to bring more coherence. And what 
is happening today is a much more serious effort than we were 
able to mount back then, although every Secretary of State has 
cared about this, and usually the longer they are in the job, 
the more they care about it because they realize that this is 
indeed the toolkit they have to make a difference in the world.
    So our proposal is a compromise. It is not ideal, but one 
of the benefits of it is it could be done relatively easily in 
the first 90 days of a new Administration.
    Now, could you do more and could you do something more 
towards an ideal? Yes, you could, but in order to do that, you 
would have to have the President personally interested, I 
think, with the White House behind it, and some sort of 
understanding at the outset with Congress that there would be 
joint work to produce something useful.
    We have seen how hard it is to get foreign assistance 
legislation passed in the Congress, and that is why I do not 
have a great deal of hope that a major restructuring could be 
carried out. But as you say, it is an interesting time. There 
is a lot more attention to this. You may have a better sense up 
here on the appetite for undertaking something large and 
sweeping.
    I do think there is a consensus that is changing----
    Senator Voinovich. I am taking too much time. I would like 
to interrupt you. The thing that is really important here is 
that you can have a new President, and new Presidents like to 
do new initiatives. And you are complaining about the 
Millennium challenge corporation and other things that should 
have been there, and they did not--they wanted to have 
something that they could point to. And I think that if there 
is not a lot of good work done before that and you can go to 
the next President and say, look, we worked this thing out, we 
do not think we need to have a new department, here is the way 
you can get it done and try and say that his initiative will be 
that he is going to bring these other things together in a 
special way. I think it is really important you do that because 
if it does not happen, the new guy is going to come in and say, 
hey, I am doing it this way, and off we go, and a year from now 
or 2 years from now, maybe we get something done. We do not 
have time for that.
    Ms. Richard. Well, where there is consensus is there is 
consensus change is needed; there is agreement the United 
States must be more effective on this. There is a general 
belief that foreign aid is indeed a useful tool to pursue U.S. 
national interests. There is a recognition that the United 
States needs a better balance between military and civilian 
tools. There is a desire to consolidate the large number of 
actors. There is an emphasis on the need for coordination, and 
there is a recognition that we need a longer-term strategic 
vision for U.S. programs. So I believe everyone here at this 
table would agree to that and that becomes then the nucleus for 
pulling people together around those concepts.
    In looking at what the candidates have said, they have not 
come up with well-developed proposals along these lines, but 
they are talking about change and trying to do more and 
investing in tools of reaching out to foreign countries and 
foreign publics. So in order for them to achieve what they 
would like to do in the concrete, specific proposals, they are 
going to have to have a better bureaucracy to support that.
    Finally, I would like to say that the International Rescue 
Committee benefits from private fundraising. We get grants from 
the U.S. Government to carry out programs in the U.S. national 
interest. We also, though, receive monies from the United 
Kingdom Government's Department for International Development. 
And what is interesting to me is that they are very good at 
funding some of the forgotten and neglected crises. They 
provide a lot of funding for us for the Democratic Republic of 
the Congo, which has really fallen off the screen here in the 
United States, even though there has been tremendous rates of 
mortality there. And they are also very good at looking how 
climate change has the potential to really hurt some of the 
world's more poor and vulnerable people.
    So I can only say very positive things about the U.K. 
example, and I think it is worth looking more at that example 
and talking more to them.
    Senator Voinovich. All right. Mr. Worthington.
    Mr. Worthington. I think we have to take into account a 
fundamentally changed external environment. I mentioned earlier 
that our community raises $6 billion from the American public. 
It makes us a donor of the size roughly of France. When you 
look around the world, many times in a given country, the 
United States is just one of many development actors in a 
country. Those actors are the NGO community, the private 
sector, other development actors and so forth.
    The challenge is, as the United States, we then have 
multiple actors of our own. So when it comes to leveraging 
things--leveraging private resources, leveraging resources from 
the NGO community--our government does not take advantage of it 
the way we could. We could be matching you 2:1 in terms of 
resources in many types of programs, and yet it is divided 
across many different actors.
    The DfID group is very good at leveraging how the U.K. fits 
in a given country compared to other development actors in a 
country, and the United States, by not having a development 
strategy of where is our specific value-added, where can we 
make a difference, we do not take as much advantage of that as 
could other actors.
    The other is InterAction did a study of many of our members 
in terms of the implementation of the F process in the field, 
and unfortunately, we got some relatively negative feedback, 
both in terms of morale--and this was feedback from partners of 
the U.S. Government as well as within USAID. In a sense, at a 
time when we need to be empowering development within the U.S. 
Government, we should not be taking steps that disempower it. 
We need to be able to elevate as much as we can.
    Now, whether that leads to a Cabinet level, I do not know, 
but there has been a lot of consensus, and it goes from the 
IRC's CEO, other actors within our broad community, to the 
Brookings Institution, the Center for Foreign Relations, other 
actors who have gotten together in this Modernizing Foreign 
Assistance. And whether you go all the way to the Cabinet 
agency one can debate, but the broad elements seem to run 
across many different groups, both from the Republican and 
Democrat, of the need, one, for fundamental reform; two, that 
there is a need to elevate in some way development to create a 
greater space for the voice, a capacity to better leverage U.S. 
interests in development overseas; and to do that under a 
strategy that is comprehensive and goes across multiple actors 
within the U.S. Government if it is not just one department.
    Senator Voinovich. Thank you.
    Senator Akaka. I thank Senator Voinovich for his questions. 
For the second round, I have just two questions, and I will 
also call on Senator Voinovich again. But this question is for 
the panel.
    Like the military, the Foreign Service prefers to recruit 
most of it officers at the entry level. Dr. Adams suggests 
recruiting FSOs at the mid-career levels may be preferable 
since many, especially those who have served in the military, 
NGOs, or the business world, may bring programmatic, technical, 
or other critical skills.
    Do you think that the Foreign Service culture, especially 
at USAID, could find a greater role for mid-career-level 
employees who desire to join the Foreign Service? Are there any 
obstacles that would prevent this from happening on a large 
scale?
    Mr. Adams. Maybe I should start since I made that point in 
my testimony.
    The answer is yes and yes. What is crucial here is that the 
Foreign Service is changing, and as everybody at the table has 
said, the world is changing. And so how we engage as a Nation 
in statecraft is, therefore, changing. And the old model and 
culture of ``report, represent, and negotiate'' does not work 
even for the Foreign Service officers at the State Department. 
And because of the damage amply demonstrated in your chart, the 
new culture of managing contracts does not work very well at 
USAID either.
    The reality is that for both of these organizations and 
more broadly, we need to recruit a new generation, people who 
are able to walk and chew gum at the same time. Who are 
prepared to be both managers and diplomats, both planners and 
implementers, and be engaged in the field. And if you put all 
of those pieces together, it means both organizations need, and 
I think our report is going to make this point very strongly--
to recruit, train, promote, incentivize, and cross-assign the 
personnel who promote our foreign policy interests.
    Can they do this at the mid-career level? Yes, they can. 
The Foreign Service Act that was passed in 1980 is both simple 
and explicit on this question. It is completely possible and 
within the range of the law to recruit people at the mid-career 
level and to recruit them very broadly with respect to 
specialization. And that is important. If you wait until junior 
officers come in with that skill set, it is going to be a very 
long time before they get to the level where they are defining 
and implementing programs, making a difference in the field. So 
you want to start fast, hit the ground running, and be bringing 
in people at the mid-career level.
    The obstacles are in the personnel rules in the two 
departments. But even USAID has moved beyond that. They are 
deliberately setting out explicitly, as part of the expansion 
you heard described earlier by Richard Greene, to recruit 
people at the mid-career level with the technical and field 
specializations that they need. So it is entirely possible. 
This is simply an act of will in the two departments to proceed 
down that road.
    Senator Akaka. Thank you. Ms. Richard.
    Ms. Richard. I agree with what Dr. Adams said. I also might 
point out that the staff of the State Department and USAID are 
made up of political appointees, Foreign Service officers, 
civil servants, Foreign Service nationals, some nationals of 
the countries in which embassies are located who are the 
locals. And the U.S. Agency for International Development, it 
has a Foreign Service, has civil servants, and, of course, 
there are consultants and occasionally people on loan, such as 
people from the Pentagon.
    What has happened is that when any kind of change is 
proposed, because of the environment in which everyone is 
working, there are always concerns that the change will be 
negative, that somebody is going to lose something. There are 
going to be less benefits or less pay or less opportunities. 
And this is not a good way to run organizations. There has to 
be more working together to build an esprit de corps and to 
take advantage of a very diverse workforce and really pull out 
people's best talents and have them move quickly into new areas 
to confront new challenges. And because, in part, I think the 
personnel always feel under threat that something is about to 
be lost, they are very defensive to any kind of reforms or 
changes. And I think that there has to be a better look at what 
is needed and modeling a staff that can then address what is 
needed.
    Thank you.
    Senator Akaka. Mr. Worthington.
    Mr. Worthington. The U.S. nonprofit community has over 
200,000 people working in development around the world, and we 
bring in experts from the United Nations, from the private 
sector, and other areas. The idea that you would bring in mid- 
to senior-level people in the U.S. Government makes a lot of 
sense. The challenge is: Are these jobs that people want to 
take? Are these jobs that are interesting?
    We are looking at the type of people that are coming in 
this new increase of Foreign Service officers. Now, many of 
them are coming from a background of a significant interest in 
transitional States and post-war conflict. So when we look at 
the world, it is not necessarily through development, but it is 
looking at the world through a lens of war.
    Our challenge is we need to bring in people who are also 
looking at the world through a lens of how do you improve the 
well-being of people and do so at the mid-career level and, in 
essence, be competitive with other types of jobs like our 
community where there is much more flexibility with private 
resources.
    Senator Akaka. Dr. Hyman.
    Mr. Hyman. Thank you, Senator. I was in USAID when we went 
back and forth between the very two things you are talking 
about. You can do it; definitely, you can do it. USAID did it. 
You get into this list of alphabetical acronyms. They were 
called NEPs, new entry professionals, to distinguish them from 
the earlier group, which were called IDIs, international 
development interns, or something like that.
    So what happened, of course, was that the people who came 
in at the bottom, so to speak, or earlier in their career got 
lower ranks. The people who were brought in later for so-called 
more professional got higher ranks. So the people that had been 
in the Foreign Service had served overseas for X numbers of 
years were suddenly confronted with Mary or John who comes in 
at a higher rank than they are in without having been in any of 
these countries.
    That can be overcome, but there are problems of managing 
personnel with bringing in people at higher levels. Definitely 
it can be managed. In my personal opinion, I think the best way 
to do this would be to have an agreement between the Congress 
and the Administration that we are going to go on a certain 
path and we are going to stay on it, we are not going to go 
back and forth.
    After the so-called NEP experience, now Administrator Fore 
is going back to the earlier model, bringing people in at a 
lower level. So the people coming in now are saying, ``Well, 
why don't I get a GS-3 rank? Why do I get a GS-6 rank? I am not 
any worse than so-and-so.''
    It seems to me that this going back and forth and back and 
forth is part of the morale problem in USAID and other 
agencies, and that really gets, Senator Voinovich, to your 
point earlier about initiatives.
    One of the recommendations I made here is that the Congress 
resist this continuous attempt to have new initiatives with the 
new mark of whoever has come in at the top. Whether it is the 
President, the Secretary of State, or the USAID Administrator, 
there is a flood of new initiatives in almost every 
Administration, and many of them do not live long through the 
Administration, let alone enduring through the next 
Administration.
    The Foreign Service and the civil service bounce back and 
forth between every new initiative, and it seems to me Congress 
could do a great service by avoiding or trying to resist or 
asking for resistance of constantly having new programs, new 
directions, new personnel systems, new program initiatives, 
etc.
    That said, going back to the point that was made earlier, 
one of the reasons that USAID and the U.S. Government, I think, 
are going to have a more complicated assistance structure than, 
let's say, the U.K. system, the U.K. system is devoted to 
poverty reduction. As Mr. Worthington said, he thinks that is 
the primary thing for our assistance program. If it is, you may 
very well be able to create a U.K.-type structure. But our 
structure has a multiplicity of purposes and a multiplicity of 
functions. If we do not want to do that, fine, then we should 
limit our assistance program to poverty reduction. That is not 
where it is now. It has now got anti-terrorism dimensions; it 
has state foreign policy dimensions. It has a whole variety of 
things that are all engaged in the way in which projects are 
put together. If you have that kind of complicated function, 
then you are going to get a complicated form as well. It is 
just like regular architecture. Organizational architecture, 
form ought to follow function. And we have a complicated series 
of functions and, therefore, need to look at what forms will 
best achieve those kind of functions. And I think that is where 
I think you were driving at, Senator Voinovich.
    Senator Akaka. Thank you very much, Mr. Hyman. As I said, I 
had two questions. Now, the last one, you heard Mr. Greene give 
his top three recommendations for improving the foreign 
assistance bureaucracy, and I am going to ask the panel to 
submit--each of you submit your three top recommendations in 
writing to the Subcommittee.
    Now I would like to ask Senator Voinovich for any questions 
or final remarks.
    Senator Voinovich. I just think this has been a great 
hearing, and I really appreciate all the work that you all have 
done, and your organizations. There is this tendency when you 
come in to try and do new things and build on--it is hard to 
say we want to have--I will just remember back when my 
predecessor was Governor Celeste, and he put a lot of money in 
``Ohio is the heart of it all.'' And my people came in and 
said, ``We have got to change this.'' I said, ``What do you 
mean we have to change it?'' ``Well, we have to have our own 
thing.'' And I said, ``This State spent probably millions of 
dollars in hustling this `Ohio is the heart of it all.' Why 
would we want to change that?''
    And then he put in place the Edison Centers. ``Well, we 
have got to have our own centers.'' I said, ``These things are 
working. Let's take what he has and let's build on it and make 
it better.''
    That is why I think it is real important that you guys keep 
doing what you are doing so that we get this information over 
to whoever the next President is and they do not come in and 
try and reinvent the wheel, and take the best of your thoughts 
and put it together and also do a good job of coming up to the 
Hill and lobbying and try to get some of our colleagues to 
understand that some of these earmarks and so on really are not 
helping the situation and we are not getting the best return on 
our investment because it does not allow us to put our dollars 
where they are needed most. For example, the international de-
mining group. And it is amazing to me how much money they are 
leveraging today. We put in, I think, $10 million, and they 
leverage another $10 million. And, frankly, they could even 
leverage more than that if we did the match. So there is this 
concept of how you can take your dollars and maximize them and 
get a bigger return on your investment is extremely important. 
That is why this public-private partnership I think is so 
important.
    The last thing I would say is that Senator Akaka and I have 
been trying for the last 10 years to deal with the issue of 
human capital, and we are talking about bringing people in from 
the middle level. Do you all believe that we have enough 
flexibilities to make that happen? Because I think the last 
time we looked, we only bring in about 13 percent of the people 
who work for the Federal Government that come in at a middle-
level area. One of the things that we did was leave. If you 
work for the Federal Government--maybe it is different in the 
State Department. You are here for a year, you get 2 weeks. You 
are here for 3 years, you get 3 weeks. And then you are here 
for 15 years, and you can get a month. And we have changed that 
situation. We have changed the paying off of loans--well, that 
does not so much deal with people coming in at mid-level. But 
do you think we have enough flexibilities there to go after 
some of these folks?
    Mr. Adams. My sense, Senator, is that you do. The issue 
that Jerry Hyman put his finger on is real; that is, you are 
dealing with an existing workforce and you have brought most of 
them in at a non-mid-career level and created an expectation 
about how they will move up through the career ranks. And, 
inevitably, the management challenge in doing what you are 
recommending--and I think it is highly desirable--is managing 
the career expectations of the people who are there.
    One of the keys to this is on the budgetary side, ensuring 
that we are expanding what we are expecting of the 
organizations. And expanding their funding. We are going to 
recommend in the Stimson Report, an expansion of the number of 
positions, which will require more funding. More positions and 
more funding will help alleviate some of the tension Jerry 
Hyman is talking about. But it definitely is an HR management 
issue to ensure that as you recompose the workforce and bring 
in the skill sets you need, you are not creating resentment and 
ill will in the existing architecture.
    It is a management challenge, but my sense is in law there 
is virtually no impediment. The challenge is going to be in 
managing the regulations and structures in the HR processes in 
the organizations.
    Senator Voinovich. You are going to have to bring in 
somebody who is really good in terms of HR or identify somebody 
already in the shop that can really understand that.
    Mr. Adams. There are two keys here. One is bringing in 
somebody with the level of expertise and knowledge and 
credibility to run the foreign assistance operation, someone 
who really knows what they are doing. It is not just another 
political appointee. Somebody with real skills and talents. In 
my judgment, 75 percent of this is an HR issue, and that means 
bringing in somebody who has the real skill to do this HR job.
    Senator Voinovich. Thanks very much.
    Senator Akaka. Thank you very much. I would like to thank 
all of our witnesses for being here today. There are many 
challenges that face our foreign assistance bureaucracy, not 
the least of which is, as we have been talking about, human 
capital. I believe that it is vitally important to establish a 
clear national strategy to not only guide our foreign aid 
efforts, but also to facilitate the effective management, 
coordination, and staffing so that our national interests can 
be attained.
    This Subcommittee will continue to focus on reforms of 
critical aspects of our national security. Our next hearing 
will explore the evolution of challenges to the public 
diplomacy bureaucracy.
    The hearing record will be open for 1 week for additional 
statements or questions from other Members of the Subcommittee. 
This hearing is adjourned.
    [Whereupon, at 4:29 p.m., the Subcommittee was adjourned.]


                            A P P E N D I X

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