[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
              ASSESSING U.S. FOREIGN POLICY PRIORITIES AND
                  NEEDS AMIDST ECONOMIC CHALLENGES IN
                            THE MIDDLE EAST

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


                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                     THE MIDDLE EAST AND SOUTH ASIA

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 10, 2011

                               __________

                           Serial No. 112-34

                               __________

        Printed for the use of the Committee on Foreign Affairs


 Available via the World Wide Web: http://www.foreignaffairs.house.gov/

                                 ______




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                      COMMITTEE ON FOREIGN AFFAIRS

                 ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey     HOWARD L. BERMAN, California
DAN BURTON, Indiana                  GARY L. ACKERMAN, New York
ELTON GALLEGLY, California           ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
DONALD A. MANZULLO, Illinois         DONALD M. PAYNE, New Jersey
EDWARD R. ROYCE, California          BRAD SHERMAN, California
STEVE CHABOT, Ohio                   ELIOT L. ENGEL, New York
RON PAUL, Texas                      GREGORY W. MEEKS, New York
MIKE PENCE, Indiana                  RUSS CARNAHAN, Missouri
JOE WILSON, South Carolina           ALBIO SIRES, New Jersey
CONNIE MACK, Florida                 GERALD E. CONNOLLY, Virginia
JEFF FORTENBERRY, Nebraska           THEODORE E. DEUTCH, Florida
MICHAEL T. McCAUL, Texas             DENNIS CARDOZA, California
TED POE, Texas                       BEN CHANDLER, Kentucky
GUS M. BILIRAKIS, Florida            BRIAN HIGGINS, New York
JEAN SCHMIDT, Ohio                   ALLYSON SCHWARTZ, Pennsylvania
BILL JOHNSON, Ohio                   CHRISTOPHER S. MURPHY, Connecticut
DAVID RIVERA, Florida                FREDERICA WILSON, Florida
MIKE KELLY, Pennsylvania             KAREN BASS, California
TIM GRIFFIN, Arkansas                WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
VACANT
                   Yleem D.S. Poblete, Staff Director
             Richard J. Kessler, Democratic Staff Director
                                 ------                                

             Subcommittee on the Middle East and South Asia

                      STEVE CHABOT, Ohio, Chairman
MIKE PENCE, Indiana                  GARY L. ACKERMAN, New York
JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
JEFF FORTENBERRY, Nebraska           THEODORE E. DEUTCH, Florida
ANN MARIE BUERKLE, New York          DENNIS CARDOZA, California
RENEE ELLMERS, North Carolina        BEN CHANDLER, Kentucky
DANA ROHRABACHER, California         BRIAN HIGGINS, New York
DONALD A. MANZULLO, Illinois         ALLYSON SCHWARTZ, Pennsylvania
CONNIE MACK, Florida                 CHRISTOPHER S. MURPHY, Connecticut
MICHAEL T. McCAUL, Texas             WILLIAM KEATING, Massachusetts
GUS M. BILIRAKIS, Florida
TOM MARINO, Pennsylvania
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

The Honorable Jeffrey D. Feltman, Assistant Secretary of State 
  for Near Eastern affairs, U.S. Department of State.............     8
Mr. George A. Laudato, Administrator's Special Assistant for the 
  Middle East, U.S. Agency for International Development.........    16

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Steve Chabot, a Representative in Congress from the 
  State of Ohio, and chairman, Subcommittee on the Middle East 
  and South Asia: Prepared statement.............................     4
The Honorable Jeffrey D. Feltman: Prepared statement.............    10
Mr. George A. Laudato: Prepared statement........................    18

                                APPENDIX

Hearing notice...................................................    48
Hearing minutes..................................................    49


  ASSESSING U.S. FOREIGN POLICY PRIORITIES AND NEEDS AMIDST ECONOMIC 
                     CHALLENGES IN THE MIDDLE EAST

                              ----------                              


                        THURSDAY, MARCH 10, 2011

              House of Representatives,    
                Subcommittee on the Middle East    
                                        and South Asia,    
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2 o'clock 
p.m., in room 2172, Rayburn House Office Building, Hon. Steve 
Chabot (chairman of the subcommittee) presiding.
    Mr. Chabot. The committee will come to order.
    Good afternoon. I want to welcome all my colleagues, new 
and old, to the first hearing of the Subcommittee on the Middle 
East and South Asia.
    I guess I am both a new and old member of the subcommittee, 
having served for a number of years under Chairmen Gilman and 
Ros-Lehtinen and Ackerman. And after a temporary interruption 
in service--I like to call it my 2-year involuntary 
sabbatical--I am back.
    And I want to acknowledge my friend from New York, the 
distinguished ranking member, Mr. Ackerman. I have enjoyed 
working with him over the years and look forward to working 
closely with him in the next couple of years and hopefully 
longer.
    I also want to acknowledge the vice chairman of the 
subcommittee, my friend from Indiana, Mr. Pence. I look forward 
to working with him, as well.
    And, finally, I would like to welcome our freshman members, 
who will hopefully be here soon: Mr. Marino, Ms. Buerkle, Ms. 
Ellmers, and Mr. Keating. I hope that they enjoy serving on the 
subcommittee.
    And I would expect that this subcommittee will continue to 
work in a bipartisan manner as often as possible. We will 
certainly disagree on issues from time to time, but we will 
also find many areas, I am certain, where we can work together. 
I can assure you that I will try to operate the subcommittee in 
a collegial manner. And I know Mr. Ackerman, Chairman Ackerman 
at the time, did that at the time over the years.
    And this hearing was called with the intention of following 
up on Secretary of State Clinton's testimony that the full 
committee heard last week, but with an exclusive focus on the 
Middle East. This will give members the opportunity to ask more 
specific questions, both about the Fiscal Year 2012 proposed 
budget as well as broader U.S. strategy throughout the region.
    The regional shifts happening right now in the Middle East 
place the United States and our allies at a precipice in 
history. The entire strategic framework that the United States 
regional posture has been based on for decades is rapidly 
transforming. The precise new composition of the region remains 
uncertain. At a minimum, it will be shifting from autocracies 
of varying degrees to political diversity.
    At this critical juncture, the administration must seize 
the initiative to cement new partnerships and secure enduring 
U.S. strategic interests, such as countering terrorism, 
securing energy supplies for global markets, countering 
proliferation, moving forward on the Israeli-Palestinian peace 
process, and guarding against the threats posed by Iran and 
Syria. These objectives can only be achieved by helping to 
establish the foundations and principles for a new strategic 
order in the region.
    For decades, the United States has been criticized 
throughout the Middle East for what was perceived to be an 
unprincipled foreign policy. Today, we have the opportunity to 
prove wrong those who hold this belief. But that can only be 
achieved with action. We must not miss this opportunity.
    It is safe to say that there are many learning 
opportunities to be had. It is particularly thought-provoking 
to consider the reforms President Obama called for in his Cairo 
speech. Many of the measures laid out in the speech resonated 
with citizens throughout the region.
    Unfortunately, many of those measures were never 
implemented. What, if over the past few years, we had more 
effectively lobbied our allies in the region, many of whom are 
large aid recipients, to implement political reforms? Could we 
have had liberalization without the violence and bloodshed that 
we see now?
    No one can know the answers to those questions for sure, 
but they highlight one undeniable truth: Money is no substitute 
for effective diplomacy.
    I think we can look at the Middle East today with cautious 
optimism. We can certainly be inspired by the brave actions 
taken by pro-democracy activists who seek merely to have the 
same fundamental human rights that are the birthright of every 
individual on Earth. We know now that the claims of many in the 
past that the Middle East is somehow not ready for democracy 
are fundamentally false. We are reminded that the rights to 
life, liberty, and the pursuit of happiness do not stop at the 
water's edge.
    With this in mind, I think we can look to the future with 
hope--hope that we see emerge in this region true 
representative government, a government that embodies key 
principles of a democratic society, such as the right to vote 
and the right to free expression, and that these principles are 
applied fairly across ethnic and religious lines.
    At the same time, we have to be concerned that the efforts 
of so many may be hijacked by extremists who seek to use the 
institutions of democracy to rise to power, only to abolish 
that very system. Although it is the right of the people of the 
Middle East ultimately to self-determine their own fate, we 
should be ready to assist them in their effort.
    As I mentioned earlier, although the circumstances in the 
region are changing, our core interests are not. And our 
mission is, without a doubt, daunting. The budget that this 
Congress is considering is the means of meeting these 
challenges.
    To that end, we will hear today from Ambassador Feltman and 
Mr. Laudato on what those plans are and how the budget 
allocations they have requested will enable them to achieve 
them. I want to thank them both for taking the time to meet 
with us today.
    And I would now recognize the ranking member, Mr. Ackerman, 
for his opening statement. The gentleman is recognized.
    [The prepared statement of Mr. Chabot follows:]
    
    
    
    
    Mr. Ackerman. Thank you very much, Mr. Chairman.
    Let me first congratulate you on this, your first day and 
first hearing----
    Mr. Chabot. Thank you.
    Mr. Ackerman [continuing]. Of this subcommittee in this 
Congress, and tell you that we look forward to working with you 
in a nonpartisan fashion in the interest of our country. We see 
many issues eye-to-eye, and you and I have gotten along 
famously in previous Congresses. And I look forward to that 
continuing, despite the fact that you are in the chair.
    Mr. Chabot. Thank you.
    Mr. Ackerman. Mr. Chairman, although there is a lot of 
ground to cover in this hearing, focusing on the Middle East as 
a whole, I would like to focus chiefly on Egypt. First of all, 
I think what happens in Egypt is absolutely critical and may 
determine the future of the entire region; and, second, 
because, to my deep regret, the Obama administration now 
appears to be on the verge of a colossal and inexcusable 
failure to seize this critical moment.
    So, you have a close friend. She has been very reliable and 
helpful to you, and she is very important in the neighborhood. 
After a 30-year marriage, she finally throws her good-for-
nothing husband out of the house. As you well know, he 
continuously beat her, abused their children, and frittered 
away their scarce resources.
    Now, imagine, a few days after pushing the old man out, 
your helpful and reliable friend calls you and asks you for 
help. And in response to your good, reliable, and helpful 
friend, you jam your hands into your pockets, pull out a stick 
of gum and a used ChapStick and 150 bucks, and say, ``Don't 
spend it all at once.''
    And as you walk away, you add, ``Do you remember the three 
grand you guys borrowed so you could feed your kids? Well, make 
sure you get me about 300 bucks back this year. I am having a 
tough time, too.''
    I think we would consider someone who responded that way to 
be a rather sorry excuse for a human being, much less a friend. 
But this is almost exactly what the Obama administration is 
doing. And it is worse than a sin; it is a mistake. We will not 
get another chance to help Egypt in this critical and formative 
moment in its history.
    And let's be clear about the scale: If things go bad in 
Egypt, the consequences for the Middle East and for the United 
States will make the Islamic revolution in Iran look like an 
episode of Sesame Street.
    What has to be borne in mind is that this revolution in 
Egypt is shaped like a hurricane, and right now we are in the 
eye of the storm. Things seem kind of quiet. In reality, the 
back end of the storm is coming. And in a few short months, 
when expectations come crashing into reality, the great mass of 
Egyptians are going to discover that they are still 
impoverished with yet-unfulfilled dreams, and they are going to 
take to the streets again.
    And this time they won't just be asking for democracy and 
their God-given rights. The vanguard of this second revolution 
won't be bright-eyed, secular, Twittering youngsters. It will 
be the Muslim Brotherhood, who are shrewdly hanging back right 
now and waiting for Egypt's neo-nascent democratic experiment 
to arrive stillborn.
    But instead of moving aggressively to lift a $3 billion 
burden off of Egypt's back, a debt that will cost them roughly 
$315 million this year and for many years to come, the 
administration has proposed reprogramming $150 billion so that 
USAID aid could support, quote, deg. ``nongovernment 
organizations supporting the Egyptian-led economic and citizen-
led transition effort''--in other words, exactly the same kind 
of inconsequential programs that USAID has been doing for the 
past several decades. It is a big box with the same old mush 
and a great big ``new and improved'' sticker slapped on it, the 
same great mush, now even more feckless.
    USAID has proposed spending 75 million bucks on three new 
economic growth programs that will include, 
quote, deg. ``secular-based dialogues for local businesses to 
encourage local, regional, national, and international trade 
expansion; and improving the skills and access to finance of 
entrepreneurs, enterprises, and businessowners.'' This 
bureaucratic mumbo-jumbo sounds to me like a bunch of seminars 
in a Holiday Inn. It is the commercial, ``I am not really a 
global power, but I did stay last night at a Holiday Inn.''
    Egypt has 80 million people and a $500 billion economy. 
USAID is proposing a bottle of aspirin for a man who needs a 
heart transplant. Debt relief, by comparison, is big, is fast, 
is meaningful, and it leverages America's standing as a global 
leader and a diplomatic powerhouse. American support for debt 
relief could help encourage European support for debt relief, 
something the Egyptians are already seeking, to the tune from 
the Europeans of some $9 billion. The Egyptian Government's 
total foreign debt is roughly $30 billion.
    Instead of us playing small ball at the Holiday Inn, 
leading a global effort to eliminate the debt accrued by 
Mubarak's Egypt would show real commitment and real friendship. 
Debt relief could help leverage Egyptian reform efforts and be 
done before the back of the hurricane hits, without the 
bureaucratic delay and parasitic contractors that so regularly 
plague even USAID's debt efforts. Debt relief requires no new 
outlays from the U.S. Treasury. And, best of all, debt relief 
empowers Egyptians to chart a new course for their country on 
their own terms, which was the point of their revolution in the 
first place.
    I am told that both Treasury Secretary Geithner and Under 
Secretary of State Burns have been talking down American debt 
relief for Egypt. I have a lot of respect for each of these 
men, but if, in fact, they are pushing debt relief off the 
table, I think they are making an incredibly shortsighted and 
potentially catastrophic error.
    And, finally, a quick word each about Lebanon and Syria. I 
have said before that our assistance to Lebanon needs to be put 
on hold until the new government takes shape and demonstrates 
that it intends to pursue the interests of Lebanon--not Iran, 
not Syria, and not Hezbollah. The burden rests with the next 
Lebanese Government. If terrorists put you in power, you have 
to show, not simply declare, that you are independent from 
them.
    And regarding Syria, I have one simple question: Is our 
policy ``passive consistency'' or ``consistent passivity''? Or 
don't we have any Syria policy at all? I am glad Ambassador 
Ford is in Damascus. I just wish he was doing more than 
conveying the usual feckless message to the Syrians and 
reporting their contempt back to Washington.
    I thank you, Mr. Chairman, and I look forward to hearing 
from our two very distinguished witnesses.
    Mr. Chabot. Thank you very much, Mr. Ackerman.
    Any other folks want to say anything particularly pressing?
    Okay. We will go ahead and introduce our panel here, our 
very distinguished panel here this afternoon.
    We will start with Ambassador Jeffrey Feltman. Ambassador 
Feltman was sworn in as Assistant Secretary of State for Near 
Eastern affairs on August 18, 2009. He is a career member of 
the Foreign Service since 1986. Ambassador Feltman served as 
Principal Deputy Assistant Secretary in the Bureau of Near 
Eastern Affairs from February 2008 to his present assignment, 
serving concurrently as Acting Assistant Secretary of State for 
the Bureau since December 2008.
    From July 2004 to January 2008, Ambassador Feltman served 
as U.S. Ambassador to the Republic of Lebanon. Prior to his 
assignment in Lebanon, he headed the Coalition Provisional 
Authority's office in the Irbil province of Iraq, serving 
simultaneously as deputy regional coordinator for the CPA's 
northern area.
    And it goes on and on. It is a very long and distinguished 
bio. But rather than continue with that, I am going to go over 
to Mr. Laudato's here quickly, and then we will hear your 
testimony.
    George Laudato leads the Middle Eastern Bureau as the 
Administrator's Special Assistant for the Middle East at the 
U.S. Agency for International Development (USAID). He has more 
than 45 years of experience in international program 
development and management in the private and public sectors in 
Asia and the Middle East, Latin America, and Central Europe.
    And this one goes on and on, as well. But rather than take 
the time to do that, since we really want to get to your 
testimony here this afternoon, we will go right to the 
testimony now. And members then can follow up with questions.
    We will begin with you, Ambassador Feltman.
    And each of you has 5 minutes, by the way.

   STATEMENT OF THE HONORABLE JEFFREY D. FELTMAN, ASSISTANT 
SECRETARY OF STATE FOR NEAR EASTERN AFFAIRS, U.S. DEPARTMENT OF 
                             STATE

    Ambassador Feltman. Mr. Chairman, Ranking Member Ackerman, 
distinguished members of the committee, thank you very much for 
inviting me and for inviting George Laudato to testify before 
you in your first hearing in the new session. So thank you very 
much.
    We look forward to testifying regarding our Nation's 
foreign policy priorities in the Middle East at this critical 
time, as both you and the ranking member mentioned.
    Transitions in Egypt and Tunisia, the tragic violence 
unfolding in Libya, and unrest in Yemen and elsewhere are 
indicative of larger forces at work across the region, 
including unprecedented mass movements calling for democratic 
change.
    Notably, the genesis of these momentous events has not been 
anti-American or anti-Israeli or anti-Western. Rather, they are 
inspired by domestic grievances and legitimate aspirations for 
certain rights and opportunities that we, as Americans, have 
long recognized as universal.
    The outcomes of the political changes under way in the 
region are still taking shape. While these changes are 
different in each country of the region, they are playing out 
against a backdrop of shared challenges. Daunting demographic, 
political, economic, and environmental challenges compound each 
other.
    And we know a strong and strategic response will be 
required from the United States if we are to adequately protect 
our interests, promote our values, and advance our security in 
this crucial region.
    We have much at stake. Successful democratic reforms in the 
Middle East would lay the groundwork for a more sustainable 
regional foundation. Peaceful changes that answer people's 
legitimate aspirations and respect their rights would give the 
lie to al Qaeda and all of those who claim that violence and 
extremism are the only means for achieving results.
    We are seeking to act as partners, to governments as well 
as peoples and civil society, to help counter acute threats, to 
resolve conflicts, and to build the stronger democratic 
foundation that will enable our friends to meet the challenges 
and seize the opportunities they face.
    This is the road to long-term stability and broad-based 
economic opportunity--ingredients that are essential to make 
the region more secure and more friendly to American interests. 
And it is the work that the State Department, USAID, and our 
interagency colleagues are engaging in every day, working to 
help shape events and address contingencies that could have a 
critical impact on our national security.
    It is worth noting that the price tag of these diplomatic 
and development efforts is far smaller than if we were forced 
to defend our interests through military force.
    We stand for a set of core principles. We strongly condemn 
any violence directed against peaceful citizens. Governments 
must respond to their people peacefully through engagement and 
meaningful reforms. And we stand for the rights of all men and 
women, regardless of age or minority status.
    As you well know, the United States has other important 
core interests in this region in addition to promoting 
democracy and human rights: Halting Iran's illicit nuclear 
activities; ensuring lasting security for Israel; achieving a 
comprehensive peace between Israel and its neighbors based on a 
two-state solution; supporting a sovereign, stable, and self-
reliant Iraq; countering terrorist groups; and maintaining open 
energy, trade, and communications flows. These all have 
significant effects on our interests today and into the future.
    U.S. foreign assistance is applied toward advancing our 
national interest, to strengthening our friends and allies, and 
to helping to build the capacity and will to tackle shared 
problems. Approximately 85 percent of our fiscal 2012 foreign 
assistance request consists of bilateral assistance to critical 
partners in Israel, Egypt, and Jordan, as well as to the 
Palestinians.
    The more than $3 billion provided to Israel is the largest 
sum and, in tandem with our policy of guaranteeing Israel's 
qualitative military edge, ensures that Israel is able to meet 
any combination of threats it might face.
    Our assistance to Egypt was invaluable in maintaining our 
relationship with Egypt's military and civil society during the 
recent events there. And these relationships will remain 
critical in helping Egypt remain on a positive trajectory as 
Egyptians seek to consolidate their historic gains and 
implement essential democratic reforms.
    In this tight fiscal environment, we are mindful we need to 
make sure that every foreign assistance dollar is well-spent in 
service of our national interest.
    I look toward to discussing with you some of the specific 
issues that I address more fully in my written testimony, and I 
look forward to your questions.
    [The prepared statement of Ambassador Feltman follows:]
    
    
    
    
    
    
    
    
    
    
    
    
    Mr. Chabot. Thank you very much, Ambassador.
    Mr. Laudato, you are recognized for 5 minutes.

  STATEMENT OF MR. GEORGE A. LAUDATO, ADMINISTRATOR'S SPECIAL 
 ASSISTANT FOR THE MIDDLE EAST, U.S. AGENCY FOR INTERNATIONAL 
                          DEVELOPMENT

    Mr. Laudato. Thank you, Chairman Chabot, Ranking Member 
Ackerman, distinguished members of the committee. It is a 
pleasure to be here today to testify alongside my colleague, 
Ambassador Feltman, on assessing U.S. foreign policy priorities 
and needs in the Middle East.
    I appreciate the opportunity to address the critical points 
you raised in your request for this hearing, notably how our 
budget request advances U.S. interests in the region. USAID 
will focus on ways to help the people of the Middle East move 
toward democracy and improve their economic circumstance. We 
are doing so with regard to immediate needs and to long-term 
development challenges.
    As you know, Mr. Chairman, USAID operates in seven 
countries and two regional programs in the Middle East and 
North Africa. These programs are tailored to the needs of each 
country, yet they share a common structure: Promoting economic 
growth and good governance while strengthening education and 
health care.
    The Middle East is beset by complex problems, many of which 
have fed the current situation: A youth bulge, a rapidly 
growing population, unemployment, rising food and oil prices, 
and violent extremism. These factors contribute to the historic 
events of recent months, with people loudly demanding basic 
rights that have long been absent.
    The current Fiscal Year 2010 USAID budget provides $1.7 
billion in assistance across the Middle East and North Africa, 
including Iraq. USAID's Fiscal Year 2012 request for the Middle 
East is nearly $1.6 billion. While this budget reflects 
conditions from an earlier time, we are confident that we can 
adopt ongoing programs to meet the extraordinary opportunity 
that the transition represents.
    Given this historic situation, we plan to draw upon the 
skills and resources across the U.S. Government. We will 
respond to the immediate needs of the people of the Middle 
East, and we will keep our sights on what is needed to sustain 
progress in the long term.
    Right now we are dealing with the immediate transition 
situation. In the aftermath of the protests in Tunisia, USAID 
mobilized immediate humanitarian assistance to meet the urgent 
needs of those most impacted by the violence and dislocation. 
U.S. humanitarian assistance teams are currently on the Libyan 
borders in both Egypt and Tunisia addressing urgent needs and 
assessing future requirements.
    With regard to the economic conditions in the region, we 
are continuing to plan for the long term. At this remarkable 
moment in history, USAID recognizes that economic issues have 
an impact on future regional stability, and our Fiscal Year 
2012 budget request reflects this.
    For instance, in Yemen, which suffers from soaring 
unemployment and a population of disenchanted youth, as part of 
the $68.5 million request we are expanding vocational education 
for these youth, establishing apprenticeship programs, and 
helping provide business development services to the small- and 
medium-scale industrial sector.
    Egypt has received significant economic assistance since 
1975, which helped it to grow from a low-income country to one 
of the most improved and diversified economies in the Middle 
East. USAID's assistance directly and fundamentally contributed 
to improving the quality of life for Egyptian citizens.
    As a first step to ensure that Egypt's gains continue, it 
is vital that the economy remain stable. USAID is planning to 
use reprogrammed funds to launch a $150 million package to 
assist with immediate transition needs in economic growth and 
good governance. These reprogrammed funds will complement the 
$250 million in the Fiscal Year 2010 request level, which 
focuses on longer-term goals by adopting ongoing programs to 
respond to new opportunities.
    Moving toward democracy: We recognize the impact of the 
protests on political reform and citizens' participation. As 
democratic forces of change are sweeping the region, we are now 
entering a new phase. USAID's programs will remain flexible 
enough to adopt to the rapid changes in the region. The 
opportunity for political reform is unprecedented, and we are 
ready to support this historic shift.
    Mr. Chairman, with all of these changes, it is appropriate 
to ask, where do we go from here? We are reviewing country 
programs to identify opportunities to support transportational 
change----
    Mr. Chabot. If the gentleman could wrap up. You are over 
the time now.
    Mr. Laudato. Sure.
    In conclusion, Mr. Chairman, let me just say that I 
appreciate the opportunity to share what USAID is doing to 
advance prosperity, democracy, and security in the Middle East. 
And I am eager to hear your advice and counsel and welcome any 
questions you may have.
    Thank you.
    [The prepared statement of Mr. Laudato follows:]
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mr. Chabot. Thank you very much. I am sorry to interrupt 
you, but I am trying to follow the chairwoman's lead, in which 
she is being very strict about that, both with people 
testifying as well as members here, to keep us all on track.
    So I will recognize myself for 5 minutes, and I will keep 
within the 5 minutes.
    Ambassador Feltman, I want to ask you about the status of 
our policy toward the Israeli-Palestinian conflict. From where 
I sit, it appears that the administration has mishandled this 
issue from day one.
    The initial call for a full settlement freeze, something we 
could have anticipated would have failed, hurt our relations 
with both Israelis and Palestinians concurrently. Israelis, 
both government officials and the broader population, lost 
trust in us; and Palestinians viewed this as evidence that we 
can't deliver.
    This administration prides itself on the use of effective 
diplomacy, and yet it appears that this is exactly what was 
missing.
    The recent episode at the U.N. Only further illustrates 
this end. After vetoing, rightfully, a Security Council 
resolution targeting Israel, Ambassador Rice's vote explanation 
effectively undid any positive impact his veto could have had. 
Instead of being a steadfast defender of Israel, we appeared to 
be a reluctant acquaintance. The decision to issue such a 
statement is, at best, diplomatic malpractice and, at worst, 
abandoning our friend and ally to fend off the wolves alone.
    Moreover, I believe that, had we made clear to the 
Palestinians from the start that there was no way this 
resolution or anything like it would pass, they might not have 
proposed it. Weeks of hemming and hawing about a negotiated 
resolution, however, left the issue ineffectively addressed. 
Either we were diplomaticallyineffective or we have lost so 
much of our influence that nothing we said mattered.
    Both of these episodes and the negative repercussions that 
accompanied them could have been avoided, had our diplomacy 
been less inept from the start.
    This brings us to today. Months of attempts to coax the 
Palestinians back to the negotiating table have failed. And the 
absence of effective U.S. Leadership has left a void, which is 
quickly being filled by the threat of Palestinian 
unilateralism.
    As all this is happening, it is unclear what our policy is 
or even who is in charge of implementing it. George Mitchell, 
the special envoy for Middle East peace, has virtually 
disappeared.
    So my question is, what is our policy, and who is in charge 
of it? Additionally, what did the administration hope to 
achieve with Ambassador Rice's vote explanation?
    Ambassador Feltman. Mr. Chairman, thanks.
    I think there are four main pillars to our policy toward 
the Israeli-Palestinian conflict.
    The first is an absolute commitment to Israel's security. 
And the more than $3 billion that will go toward FMF for 
Israel, we hope, in the Fiscal Year 2012 budget is part of that 
commitment. Congress' appropriation of $205 million for Iron 
Dome, a short-range rocket defense system from this fiscal 
year, Fiscal Year 2011, are examples of the absolute commitment 
to Israel's security that this administration, like other 
administrations, like this Congress, have followed for years. 
That is the first pillar.
    The second pillar is, you are right, political 
negotiations. We need to get negotiations started, without 
conditions, with momentum behind them, to get to a two-state 
solution. We are not there yet. This is hard. We need to get 
there.
    The third part is the Palestinian institution-building, 
which is part of the whole two-state solution objective. The 
Palestinians need to be able to have a responsible state, not a 
failed state, a state that has law and order for its own 
citizens. The institution-building that we are doing with the 
Palestinian Authority, with the generous support of this 
Congress, is also in partnership with Israel.
    The fourth part is a comprehensive peace, so that we are 
talking about Israel living at peace with all of its neighbors. 
That includes the Syria track and the Lebanon track.
    Those are the four main pillars of working toward a 
comprehensive peace in the Middle East and protection of 
Israel's security. And, you know, this policy is led from the 
President on down.
    Mr. Chabot. Okay. Thank you.
    In keeping with what I just said, I wouldn't have time to 
ask my second question here, so I am going to yield to the 
gentleman. And if members have, in a second round, questions, 
we may well go to a second round, if folks want to stick 
around.
    The gentleman is recognized for 5 minutes.
    Mr. Ackerman. Thank you, Mr. Chairman.
    A lot of people, not just Americans and Israelis, are very 
concerned about whether or not Egypt is going to continue to 
adhere to its international obligations. It has, up to this 
point, served as a bulwark against radicalism and has done a 
lot of very, very important things.
    The army, which, under almost everybody's scenario, will 
continue to somehow play a very important role in Egypt, is 
being looked at very carefully.
    And the question is, do we expect or have a concern that 
Egypt will turn to a more populist direction and a less 
cooperative one on these and other important issues as they 
examine foreign policy? And are we going to have a foreign 
policy there that looks more like Turkey's Erdogan than Egypt's 
Mubarak?
    Ambassador Feltman. Congressman Ackerman, I mean, the short 
answer is that none of us know for sure, you know, how the 
events in Egypt are going do develop. But what we can say is 
that we saw certain aspects of what I will call the ``spirit of 
Tahrir Square'' that are encouraging. We saw Muslims and 
Christians protecting each other in prayer. We saw people 
asking for a say in how they are governed. We saw people asking 
for an end to corruption.
    The sorts of things that people were asking for in Tahrir 
Square are things that could inherently make Egypt a more 
stable partner going forward, where the leadership is ruling by 
consent, not ruling by----
    Mr. Ackerman. Yeah. We are greatly--we are more than 
encouraged--we are thrilled to have seen that, and it is very, 
very encouraging. But, in the move to a democracy, all voices 
somehow get heard. And there will be competitive voices in the 
streets as frustration sets in, because--I won't beat you over 
the head with the point--a lousy $75 million or $150 million is 
not going to pull them out of the doldrums that they have been 
experiencing. I made that point.
    But there will be the Muslim Brotherhood that is going to 
be out there with an ``I told you so'' any minute now, playing 
on the frustrations of people who would like to see, as 
everybody else, instant gratification for their very good 
motives and expectations.
    What is going to happen then, and what are we doing about 
it?
    Ambassador Feltman. Well, first of all, the $150 million 
that you referred to, Mr. Chairman, is a quick response using 
existing resources----
    Mr. Ackerman. I understand. I am more interested in the 
second half of my question.
    Ambassador Feltman [continuing]. But it is not the only 
thing that we are looking at. We are looking at what would 
truly help the transition, what would truly help the economic 
dislocations that, as you say, are severe.
    Mr. Ackerman. Three billion in debt forgiveness. But work 
on the other half of the question.
    Ambassador Feltman. What we are doing is, we are 
maintaining our partnerships with the military, with the 
Egyptian institutions. Those partnerships proved quite valuable 
over the past few weeks; they will prove valuable going 
forward.
    The statements that the military has made about 
understanding Egypt's international obligations, upholding 
Egypt's international obligations, are encouraging. We think 
that there is a basic understanding of the importance to Egypt 
of its international obligations, including the peace treaty 
with Israel.
    We are building stronger relations with civil society so 
that they have a better understanding of us. You know, part of 
the $150 million was a tool to open the door to engagement with 
a broader part of Egyptian society. We are sharing our 
experiences with the Egyptians about what it means to have 
elections that aren't just one-time elections, that are truly 
democratic elections that lead to greater accountability and 
responsibility.
    This is going to be a continuing story. There is not one, 
sort of, instant way to address your question. Ultimately, the 
Egyptians themselves are going to be determining what is best 
for Egypt----
    Mr. Ackerman. I got a quick question that I want to get in 
on Lebanon. The Secretary, when she was here, said that it was 
important that we continue our aid to the military because of 
their great importance in protecting the border and their 
relations with their neighbors.
    She noticed that the new government hasn't been formed yet 
and said that, quote, deg. ``Once it does, we will 
review its composition, its policies, its behavior, the extent 
of Hezbollah's political influence,'' et cetera. That takes a 
long time.
    Is there a chance that the new government is going to be 
able to pursue their own foreign policy?
    Ambassador Feltman. All I would say, Mr. Chairman, is 
actions speak louder than words. I don't know what they are 
going to say, but it is what they do that is going to matter.
    Mr. Chabot. I thank the gentleman for his time.
    I will now recognize the gentleman from California, Mr. 
Rohrabacher, who is the chairman of the Subcommittee on 
Oversight and Investigations of the Foreign Affairs Committee.
    Mr. Rohrabacher. Thank you very much, Mr. Chairman.
    We are supposed to be learning things here at these 
hearings, so maybe you could educate us. If the debt of a 
country is forgiven, who is left holding the bag?
    Ambassador Feltman. I believe that Congress has certain 
rules for what the administration would have to do, including a 
formula for making the budget whole for that debt, based on the 
risk factors----
    Mr. Rohrabacher. The money that has actually been 
transferred, does that come from the Federal Treasury? Does it 
come from banks to which we give guarantees? So if the debt is 
forgiven from a bank, is this not, then, a gift to large 
bankers somewhere?
    Ambassador Feltman. Congressman, in general, if you talk 
about a country--I am not a financial expert, so forgive me if 
I am not getting this exactly right. But, in general, when you 
talk about a country's debt rescheduling----
    Mr. Rohrabacher. Yes.
    Ambassador Feltman [continuing]. One talks about official 
debt in one category, government-to-government debt in one 
category, and commercial debt in another category.
    Mr. Rohrabacher. Now, the government-to-government debt, 
does that come from our Treasury, or does it go through private 
banks?
    Ambassador Feltman. I believe it comes from our Treasury.
    Mr. Rohrabacher. All right. I think we both need to bone up 
on that issue, right? We need to figure out what the real 
details are.
    And, Mr. Chairman, I am going to be studying exactly how 
that debt works. I think we should know that.
    Has the National Endowment for Democracy been mobilized and 
have they sent more people over to Egypt and to these other 
countries that are now going through this turmoil?
    Ambassador Feltman. Particularly the groups that receive 
funding from AID, from MEPI, as well as from NED, like IRI and 
NDI, are active in these countries. They are active across the 
region----
    Mr. Rohrabacher. Have they been beefed up? I know they are 
very active.
    Ambassador Feltman. Yes. Yes.
    Mr. Rohrabacher. Okay. Let me just note that that is what 
they are supposed to do, that is what we expect them to do. We 
don't want to send in troops, but we would love to send in 
people to help them organize democracy, so that elements don't 
think they have to fight, but they can rely on ballots rather 
than the bullets.
    Have there been sizable street demonstrations in Iran 
during this time period, over these last 3 months?
    Ambassador Feltman. It is a good question, Congressman, 
because these events really show the hypocrisy of the Iranian 
regime, that Iran is trying to celebrate what happens in Egypt 
while shooting and repressing its own people. There have been 
demonstrations in Iran. They have been put down violently.
    Mr. Rohrabacher. All right. And that is very important for 
us to note here, that--and anything that we do that would in 
any way encourage the Iranian regime would also be contrary to 
what we are supposedly standing for in the rest of this area, 
volatile area.
    I would suggest that we take note of the people here who 
are drawing our attention to the plight of the people of Camp 
Ashraf. And let us just note that, if for any reason the 
thousands of people in that camp, who are all opposition--they 
are opponents of the mullah regime in Iran, who were actively 
engaged in fighting the mullah regime--that that would be a 
huge disservice to those of us who are trying to say that we 
are behind the cause of democracy in Iran.
    You don't have to answer that, but let's just note that 
there will be a number of Congressmen who will be, in the next 
few months, visiting Camp Ashraf to make sure that we 
underscore that point.
    The people who are fighting the mullah regime are our 
friends. The people who are struggling for democracy throughout 
the Middle East, whatever streets they are on right now, if 
they really want democratic government, they are our friends. 
And we should be backing them up in Iran, and we should be 
backing them up elsewhere, whether it is with the National 
Endowment for Democracy or perhaps--and one last issue. We have 
40 seconds left.
    The dictatorship in Libya over the years--which we know 
now, Qadhafi, himself, ordered the downing of an American 
airliner, responsible for the deaths of hundreds of Americans. 
His regime is using weapons, meant to fight military 
operations, against his own people.
    Do we plan in any way to help balance that off so that this 
type of dictator can't use those kinds of weapons to secure his 
reign in that country?
    Ambassador Feltman. Do I have permission to----
    Mr. Chabot. If you can answer the question in 20 seconds or 
so, we will give you that leeway.
    Ambassador Feltman. Congressman, we are working with--we 
are looking at this question with the U.N., with NATO, with the 
Arab League, with the African Union, with the Gulf Cooperative 
Council, so that there is an international approach to ending 
the bloodshed and the violence that Qadhafi is inflicting on 
his own people, so that it is not unilateral, that there is a 
general international/regional approach.
    Mr. Rohrabacher. Well, if we stand there when people are 
being slaughtered right in front of us, that is a message, too. 
It is a message to every dictator in the world that they can 
slaughter their own people, and while we can talk about it, we 
won't do anything about it.
    Mr. Chabot. The gentleman's time has expired.
    Mr. Rohrabacher. Thank you very much.
    Mr. Chabot. I thank the gentleman.
    I would like to recognize the ranking member of the full 
Foreign Affairs Committee, Mr. Berman from California. If he 
would like to ask questions, we would certainly welcome that at 
this time. Or he could wait, whatever is his preference.
    Mr. Berman. I am not going to be able to wait. I really 
appreciate this. I apologize to my colleagues who have been 
here. And I will avoid comments and just ask you very quickly a 
couple of questions.
    One, is the administration going to change the restrictions 
that USAID follows on providing democracy and governance 
support to NGOs in Egypt who are not registered under the 
Egyptian NGO law? That is question one.
    You know what I am referring to here, right? I thought so.
    Secondly, Bahrain. I am curious, is there a Sunni component 
to the Bahraini opposition, or is it strictly a Sunni-Shia 
conflict?
    And, third, if you could just tell us a little bit about 
who makes up the Libyan National Council. What do we know about 
them, the anti-Qadhafi forces based in Benghazi? Who are their 
leaders?
    Thank you.
    Thank you, Mr. Chairman.
    Mr. Laudato. Thank you, Congressman Berman.
    Yes, we have changed our policy on NGOs. And we have 
recently requested proposals from NGOs, and we will review all 
of them equally. And registered, nonregistered, U.S., Egyptian, 
there will be no difference.
    Ambassador Feltman. Mr. Chairman, on Bahrain, I was there 
three times over the past couple of weeks. I go back again out 
there this weekend.
    While there are some Sunnis who are down in the roundabout, 
there are certainly some Sunni grievances about house and 
government services, feeling like second-class citizens. In 
large measure, it is a concessional battle between Sunni and 
Shia, but not exclusively so.
    And where the potential is to resolve this is a shared 
sense on both sides of Bahrain's citizenry about the need for 
better government services, about the need for some real 
political reform. It is not easy, but the Crown Prince's call 
for a national dialogue to lead to real political reform is, in 
our view, an opportunity. And we would hope that people from 
across Bahrain's political spectrum would seize this 
opportunity, exercise leadership, enter into a dialogue that 
then has to show results.
    On Libya, you are asking a question that we are asking 
ourselves all the time. Ambassador Gene Cretz, our Ambassador 
to Libya, has, in fact, traveled to the region and traveled to 
Europe to meet with representatives of the provisional council. 
He has been in contact with people from the provisional council 
by phone.
    It is made up of some people who were formerly part of 
Qadhafi's regime. It is made up of people who have long opposed 
Qadhafi's regime. It is made up of a number of people. The 
question is, how deep is their political representation in the 
east?
    But I will tell you, we are, at this point, in contact with 
them, talking to them, as well as talking to people in the 
diplomatic corps who have left the Qadhafi regime in favor of 
claiming to represent the council.
    Mr. Chabot. The gentleman's time--does he yield back?
    Mr. Berman. Yes.
    Mr. Chabot. The gentleman's time has expired. Okay, thank 
you.
    Mr. McCaul of Texas is recognized next for 5 minutes.
    Mr. McCaul. Thank you, Mr. Chairman.
    I want to follow up the question from my colleague and 
friend from California. I asked Secretary Clinton the other 
day--you know, we are very vocal, very supportive of the 
resistance movement in Egypt and in Libya.
    But when you look at Iran--and what is happening there 
right now, I think, is very important. The former Iranian 
President lost his position just recently as head of the state 
clerical body, on Tuesday, after hardliners criticized him for 
trying to reach out to the reformers in opposition.
    Then recently, Reuters came out with a report, and also the 
Washington Institute for Near East Policy, that the IAEA report 
refers to ``new information recently received, as well as 
concerns about the possible existence in Iran of activities 
related to the development of a nuclear payload for a 
missile.'' And, you know, our sanctions, our diplomacy, in my 
judgment, are becoming a bit of a failed policy. And, at some 
point, they are going to achieve that nuclear state.
    Now, I guess that is a two-part question. But, you know, it 
seems to me, we have a great opportunity here, a golden 
opportunity, to be standing up behind this Green Movement, the 
resistance in Iran, to finally do away with the ayatollah and 
the mullahs, who have been oppressing their people for so long. 
And yet, when it comes to this administration's policy, we are 
really not seeing anything.
    Can you tell me what we are doing to support--we are 
supporting in Egypt and Libya. What are we doing in Iran to 
support the resistance?
    Ambassador Feltman. Congressman, we support the right of 
peaceful assembly, wherever it is, including in Iran. What is 
happening in Iran is appalling. As I said, it shows the 
hypocrisy, it shows the outrageous behavior of this regime, the 
way that you have peaceful demonstrators being fired on by 
their own Government. And we have spoken out forcefully and 
strongly against that.
    Where I think you are going with your question is, how can 
we best support the Green Movement, beyond simply highlighting 
what is happening to them, highlighting the hypocrisy of the 
Iranian Government, the brutality of the Iranian Government? 
And there, it is more difficult. Because the Green Movement is 
proud of being an Iranian movement. They have said that they do 
not want any outside financial or technical support. They don't 
want to be tainted, in the views of some, by looking to be 
agents of foreign government.
    So what we are trying to do is use some appropriations from 
this Congress to help create political space for them to 
operate via the Internet, to try to help provide some civil 
society training where people's voices can get heard, provide 
them information that they would not otherwise get available, 
provide broadcasting into Iran that gives them other sources of 
news and information that is less tainted. We are trying to 
help create the political space for them to operate.
    But that is not the same as saying that we can go out and, 
say, give a bag of money to the Green Movement because, 
frankly, they don't want it. They prefer to work in their own 
way, as Iranians, inside of Iran. So we are doing what we can 
on that.
    I agree with you very much that we have to be concerned 
about Iran's pursuit of illicit nuclear activities. I would 
argue that the sanctions that are in place internationally, and 
particularly some of the national measures the countries have 
taken in response to the six Security Council resolutions, four 
of which have sanctions, have been significant. When you have 
countries like, you know, Australia, Japan, Norway, 
Switzerland, the European Union imposing national sanctions, 
this starts to have an impact.
    We have to watch the clock. Is the Iranian clock ticking 
faster than our sanctions clock? And----
    Mr. McCaul. Can I just say one more thing? Because I 
think--and I admire the Secretary. She is a brilliant person. 
But this President, in appearances--and I could be wrong about 
this, but the appearance is, because he thinks he can win in 
diplomacy with President Ahmadinejad, which I think is a naive 
foreign policy, that, because of that, he is very timid and 
almost afraid to come out very vocally and strongly in support 
of any opposition movement. And that is the appearance that I 
think a lot of us in the Congress see.
    What are your thoughts?
    Ambassador Feltman. Well, I don't think that is the 
position. I think the position is to stand strongly on the side 
of the universal rights that the Iranian protestors have.
    Mr. McCaul. Well, why doesn't the President--I would love 
to see him come out--I have not seen him come out--and state 
that very clearly on television. I have seen him on TV a lot. I 
have never seen him come out and say, ``I strongly support the 
resistance movement in Iran.'' Because it is imperative for our 
national security, as well, for this regime, the ayatollah and 
the mullahs, to go.
    Mr. Chabot. The gentleman's time has expired.
    The gentleman from New York, Mr. Higgins, is recognized.
    Mr. Higgins. Thank you, Mr. Chairman.
    Ambassador Feltman, you outlined in your opening statement 
the unique characteristics of what is going on in the Middle 
East and North Africa. It is clearly not anti-American; it is 
not anti-Western. The President isn't being burned in effigy. 
They are not burning the American flag.
    And, you know, the two most powerful forces in these 
movements throughout that region seems to be technology and 
youth. These places are relatively very, very young. They are 
Web-enabled. They are very sophisticated in their use of this. 
It provides both organizational advantages but also 
aspirational advantages as well. For the first time, a lot of 
these people are seeing what is going on in the rest of the 
world, and they want to be treated like citizens, not subjects. 
So these are extraordinary times, perhaps unprecedented.
    My sense is, you know, what is the model that we look to? 
You know, do we want a place like Egypt? We want Egypt, I 
suppose, to become what it wants to become. But, ultimately, we 
have a strategic interest in that area, and there are several 
models to follow.
    Egypt could follow, I guess, an Iranian model, which would 
not be viewed favorably by us. But it could also follow Turkey, 
which has demonstrated, I think, an extraordinarily unique, 
pluralistic, strong economy. Twenty years ago, the exports in 
Turkey were, like, $3 billion. Today, they are, like, $140 
billion. They are importing raw material and exporting finished 
product.
    So I would like to get your thoughts, both of you 
gentlemen, on, you know, what it is we would like to see emerge 
in the Middle East and North Africa as these new governments 
begin to take shape.
    Ambassador Feltman. We have done a lot of thinking about 
the models, Congressman. And you can go beyond the ones that 
you mentioned. You can talk about the Philippines, Indonesia, 
Eastern Europe at the end of the 1980s. There are a lot of 
models. Ultimately, you have put your finger right on it, which 
is that, in Egypt, there will be a made-in-Egypt solution to 
Egypt. And we will try to work with the Egyptians to help shape 
that solution in a way that meets their aspirations.
    I think you also put your finger on something that is 
essential. I mentioned that each situation is unique according 
to the circumstances of each country, but there is something 
shared. And that is, people are looking at how they are 
governed in a different way. The relationship between the 
governor and the governed is now far different in the Middle 
East than it has been in a very long time, if ever. And that is 
going to change going forward.
    So I would hope, again, that that spirit of Tahrir Square, 
the sorts of things that the Egyptians were asking for, things 
that we would see as universal rights or natural rights we take 
for granted, are what is going to govern a democratic Egypt 
going forward. Anyone that is going to win the presidency or 
Parliament in Egypt now is going to know that those people in 
the square could go there again. They are going to have to meet 
some of the aspirations of the people.
    And I will let George make some comments before I use up 
all the time.
    Mr. Laudato. I will just add that, as Congressman Ackerman 
has noted earlier, there could be a huge popular, populist 
reaction to what needs to be done in all of these economies as 
they move forward.
    I guess, in the face of that, we would like to see these 
economies move as private-sector economies and growths come 
from the private sector, so that we really do see the job 
creation that robust private-sector growth will entail. I mean, 
Turkey is a good model for this.
    And, actually, if we look back at Egypt over the longer 
term, Egypt actually has produced has significant numbers of 
jobs. It hasn't kept up with the population growth rate, but it 
has created jobs probably faster than almost anybody else in 
the Middle East. That growth is based on private-sector-led 
economic growth, and we would like to continue to support that.
    Mr. Higgins. And then, finally, on Iran, which poses all 
kinds of challenges for us, but I think what we have learned 
with Egypt and the other countries in the Middle East and North 
Africa is that there is often a very, very different view of us 
from the regime to the people themselves.
    And Iran is a country of some 70 million people. Two-thirds 
of the population is under the age of 32. And they are very 
pro-Western. And I think that the basis for the Green 
Revolution in Iran is, again, what young Iranians see going on 
in places like America and in the West.
    So I don't think we can paint that country with too broad a 
brush, and I don't think that that serves our geopolitical 
interests.
    Mr. Chabot. I thank the gentleman. The gentleman's time has 
expired.
    The gentleman from Florida, Mr. Bilirakis, is recognized 
for 5 minutes.
    Mr. Bilirakis. Thank you, sir. Appreciate it very much.
    Gentlemen, thank you for your testimony here today, and 
thank you for your public service. It is very timely, of 
course, the hearing, because of events that are going on in the 
Middle East and here at home.
    Yesterday, I was stunned to see a news report that 
unveiled, as far as I am concerned, the gross mismanagement of 
U.S. taxpayer dollars. The story's focus was the government's 
deficit-reduction report which revealed that hundreds of 
millions of taxpayer dollars are being funneled through the 
State Department in an effort to, quote, deg. ``fight 
Islamic extremism and build relationships with the Muslim world 
by enhancing mosques oversees in places like Egypt and the 
Turkish-occupied territory of Northern Cyprus,'' which is 
particularly offensive to me since the Turkish Army has been on 
a 36-year crusade to destroy and desecrate the religious 
heritage of Cyprus.
    American taxpayers are providing dollars to put computers 
in mosques and giving imams Internet service--that is what has 
been reported, anyway--to run jihadist Web sites that seek to 
radicalize not only their local populations but also American 
Muslims.
    Furthermore, we know that from past testimony before this 
committee from the Broadcasting Board of Governors that there 
is a real problem perpetrated by the Arab networks that are 
funded by the State Department. Some of these networks, such as 
al-Hurra TV, broadcast anti-propaganda to the Middle East. In 
other words, Americans are paying for broadcasts that actually 
fan the flames of hate and terrorism.
    So my question is, to what extent are taxpayers' dollars 
being sent overseas to support extremists and terrorist 
behavior? And that is for the panel.
    Thank you.
    Ambassador Feltman. Congressman, we will have to look into 
the specific examples raised in the report, because, certainly, 
that is contrary to the entire intention of everything that we 
are doing overseas. And I don't know the specific examples. You 
know, we will have to look into specific examples.
    But what I will tell you is how seriously we take our 
responsibility to combat terrorism and extremism and to use the 
money that is allocated to State Department programs wisely and 
to guard against benefiting extremism and terrorism.
    You know, I have worked--I was Ambassador in Lebanon. And I 
will tell you, the vetting process that we had for every dollar 
in Lebanon, to make sure it did not end up in the hands of 
Hezbollah or benefit Hezbollah in some way, was extreme. And I 
know that it is the same throughout the region that falls in 
the bureau that I have the honor to lead, that we are fighting 
against extremism.
    We are looking to provide tools for moderate voices. We 
want the moderate voices to be able to be heard, to have access 
to modern media, to be able to have access to information. So 
any examples that you have that are contrary to that are simply 
wrong. We will have to look into that.
    Mr. Bilirakis. Yes, please get back to me as soon as 
possible on that. I would appreciate that. I would like the 
details.
    Thank you.
    Mr. Chabot. Does the gentleman yield his time back?
    Mr. Bilirakis. I yield back my time. Thank you, Mr. 
Chairman. I appreciate it.
    Mr. Chabot. I thank the gentleman very much.
    I think the gentlelady from Pennsylvania, Ms. Schwartz, is 
next. And she is recognized for 5 minutes.
    Ms. Schwartz. Thank you, Mr. Chairman. I appreciate that.
    And I appreciate your being here.
    And I wanted to follow--a little different, but follow up 
on what my colleague, Mr. Higgins, was talking about. He 
presented, I think, a real hopefulness, if not uncertainty, but 
a real hopefulness about what is going in North Africa and the 
Middle East, I mean, Tunisia, Egypt. I hear it in your voice, 
as well. As, I would say, I think it should be. I think we are 
appropriately anxious about where we are going here and how it 
is going to go. But there is just a sense of hope and optimism 
coming from the ground. And you are pointing out that it is not 
anti-U.S., it is not anti-Israel, it is not anti-West. It is a 
hopefulness, both economically and politically.
    So I wondered if you could tell us a bit more about what is 
obviously a more troubling situation in Libya. And there has 
been a conversation in some of the press about the use of some 
military action. Obviously, I think there has been real--I am 
not going to ask you about that; I am going to set that aside--
no-fly zones, something like that, that would require us to 
really choose a military option, whether that is for 
humanitarian reasons or not. But that puts us down a whole 
different road.
    So my question for you is, how much can you tell us about 
what the elements that you are using, all the capacity that we 
have within State to reach out and really try and resolve this 
situation and reduce the violence? Not just the humanitarian 
action, although that would be interesting for you to talk 
about, but I am really talking about diplomatic, economic, both 
unilateral and multilateral, efforts that are being made to 
resolve this situation in a nonviolent way.
    How much can you tell us about that? I assume some of it is 
being done quietly. But if you could share with us what is 
happening, it would give us some sense of resolution and hope 
for that also being resolved in a way that gives Libyans a 
chance for self-expression and rule of law and, of course, 
right now also make sure that additional harm does not come to 
hundreds or potentially thousands of our fellow citizens around 
the world.
    Ambassador Feltman. Congresswoman Schwartz, thank you.
    I mean, it is appalling to watch what is happening in 
Libya. It truly is. And, as the President and the Secretary 
have said, Qadhafi has lost the legitimacy to rule when he 
turns his forces against his own people.
    One thing to watch is how much Qadhafi and his circle have 
talked about us. There is a lot of focus on the United States. 
And that reinforces one of the principles that we are going 
forth in trying to address the problems that you raised, which 
is to work with the region, to work with the international 
community.
    This is not about the United States versus Libya. This is 
about the world being appalled by what Qadhafi is doing to his 
own people. And so we have been working to build a coalition. 
At the U.N., it resulted in a Security Council resolution. In 
Geneva, it resulted in Libya being tossed out of the Human 
Rights Council. The Arab League suspended Libya's membership.
    We are in touch with the African Union, the GCC--the Gulf 
Cooperation Council--the Arab League, the U.N., the EU, a 
number of people bilaterally, a number of countries 
bilaterally, about how to isolate Qadhafi and his circle, how 
to hold him and his circle accountable, how to protect the 
citizenry as best we can, how to provide humanitarian 
assistance, how to reach out to Libyans across the political 
spectrum, which is why we have had such an outreach to the 
people associated with the provisional council.
    Humanitarian assistance is both about how you get things 
into Benghazi, assess the needs, get things in, as well as how 
do you address the problem of the displaced. More than 100,000 
people have crossed the border into Tunisia.
    But the main thing is, we are doing this in an 
international and regional context. This is not something that 
is the responsibility of the United States alone, nor should it 
be, to solve. We are working on it with partners.
    Ms. Schwartz. Uh-huh. All right. Well, I appreciate that.
    I was involved a bit in a situation--and I will try to ask 
this really quickly--where the Department was very helpful. And 
it was the Office of the Coordinator for Reconstruction and 
Stabilization. They were very helpful with Georgia, when Russia 
invaded Georgia. And just wanted to know that they have also 
been involved? They were very helpful in that situation, and I 
assume you are using every tool in the toolbox. This would be 
one that was really helpful, both in reaching out and in terms 
of information, but also in stabilizing and humanitarian 
efforts.
    Ambassador Feltman. Yeah, I was Ambassador to Lebanon in 
2006 with the war, and they were also--that same office was 
very helpful to me, as Ambassador, in how we responded to the 
needs after the end of that war. And so we are looking across 
the State Department at how best to use all the resources we 
have.
    Ms. Schwartz. All right. Well, thank you.
    Mr. Chabot. Does the gentlelady yield back?
    Ms. Schwartz. Yes, Mr. Chairman.
    Mr. Chabot. Okay. I thank the gentlelady.
    The gentleman from Pennsylvania, Mr. Marino, is recognized 
for 5 minutes.
    Mr. Marino. Thank you, Mr. Chairman.
    Good afternoon, gentlemen. It is a pleasure to be here with 
you. Thank you for your service.
    Mr. Ambassador, I know how serious you are about your 
responsibilities, both of you. And I understand the awesome 
responsibility you have at State. But could you answer this 
question for me in outline form, because it is a very detailed 
question, but very short.
    We have a situation where we are over $14 trillion in debt. 
And when I go back to my constituents, they are used to 
reading, you know, one-liners in the newspaper, hearing one-
liners on television about how much money we send overseas--
billions of dollars overseas. Some of it, I may agree with it; 
some of it, I don't. And we are even sending money to countries 
that just hate us.
    Can you give me a rundown of how you account for that 
money? Now, you said you have meticulously--I don't think you 
used the word ``meticulously,'' but you supervise it well. 
Could you give me an outline of how you do that and how you are 
certain that money is used for what it was intended? And how do 
you come to the conclusion on how it is intended?
    Ambassador Feltman. First of all, just talking about the 
budget for the bureau that I oversee, for the foreign 
assistance part, we are asking for, for 2012, $6.84 billion for 
the core and enduring activities that we would like to see 
across the Near East region.
    Of that, 85 percent is part of the comprehensive peace, 
securing Israel and the region--85 percent. That is assistance 
to Egypt, Israel, Jordan, West Bank, and Gaza. So that is the 
bulk of it right there, of the $6.84 billion that we are asking 
for, is part of the, sort of, core of the comprehensive peace 
we would like to see.
    Now----
    Mr. Marino. Could I interrupt for just a minute?
    Ambassador Feltman. Yeah.
    Mr. Marino. Eighty-five percent of it. Now, how do you 
follow that? Or do we not follow it, the expenditure of that 85 
percent?
    Ambassador Feltman. It depends on the parts we are talking 
about. For example, all military assistance that would go 
toward training of units or individuals, that has to be 
accounted for in terms of Leahy Amendment. You know, are units 
or individuals involved in human rights violations?
    In terms of military equipment that goes out through sales 
or through assistance, that has to go through end-use 
monitoring. Each program has a discrete way of monitoring to 
make sure that it goes for the intended recipient, that it goes 
for the intended use.
    And, of course, we also have various checks that come in, 
the inspector generals, what have you, that will check us to 
make sure that we are checking things appropriately.
    So we are very aware of the need to account for what the 
taxpayers are giving us for what we see as our core and 
enduring activities in our region.
    Mr. Marino. Could we get down in the weeds just briefly on 
the accounting? Let's take the number of $10 billion. We send 
$10 billion to a country. And out of that $10 billion, $3 
billion or $4 billion are accounted for humanitarian needs and 
some of it for military needs.
    How far down in the weeds do you get, other than someone 
saying, ``Well, we used $3 billion for humanitarian needs and 
$2 billion for military equipment''?
    Ambassador Feltman. It would have to be a lot deeper than 
that, Congressman. It has to be a lot deeper than that, because 
there are anti-terrorism controls we have to put on. You can't 
simply provide a bunch of assistance and not see where it goes.
    For the most part, we are not giving cash anyway. For the 
most part, we are providing contracts. We are providing some 
grants; we are providing some equipment. But we are not turning 
over, you know, money that is fungible. We are funding 
activities that we argue would be in the interest of the U.S. 
People, the U.S. National security interests.
    I mean, George, do you want to give an example of an 
accounting on an AID part?
    Mr. Laudato. Sure.
    We do fairly detailed accounting, both in terms of how the 
money is spent but also what we get for the money that we are 
spending. So if we are looking at--if we provide X million 
dollars to build a water system in the West Bank, we contract 
for that. We monitor the contract to make sure that we are 
getting what we are paying for. And then we monitor the impact 
of that water system, that it has on the community once it is 
completed.
    And if you look at a program like Egypt, which we have 
provided more than almost $30 billion since 1975, there are 
pages of accomplishments that have been achieved: The Cairo 
water system, the----
    Mr. Marino. All right. My time has expired. Thank you.
    Mr. Chabot. Yeah. The gentleman's time has expired.
    The gentleman from Florida, Mr. Deutch, is recognized for 5 
minutes.
    Mr. Deutch. Thank you, Mr. Chairman.
    Secretary Feltman, in light of the speech that Robert 
Einhorn gave yesterday, suggesting that Iran is moving toward 
the threshold of making nuclear weapons and we have no choice 
but to increase the costs on Iran by tightening implementation 
of existing penalties and existing sanctions, can you give us 
an update, where we stand on the current sanctions 
investigations with respect to those companies doing business 
in Iran and when we might see the next round of determinations?
    Ambassador Feltman. Congressman, I know the investigations 
are ongoing in the State Department's Bureau of Economic 
Affairs. But what is, I think, as important to keep in mind is 
the number of companies who have pulled out or curtailed 
operations, ceased operations in Iran, companies like Shell, 
Statoil, ENI. These sorts of companies have ceased operations 
because of the Comprehensive Iran Sanctions and Divestment Act.
    So it is not simply the investigations which are ongoing. 
It is not simply the fact that Secretary Clinton was the first 
Secretary of State to actually sanction a company under the 
Iran Sanctions Act and then CISADA, the subsequent act. It is 
that we are using this effectively to be able to dissuade 
companies from going in, from increasing investments, and also 
to convince them, in some cases, to pull out.
    Mr. Deutch. Secretary Feltman, if you can get back to us 
after you learn when we can expect the next determinations.
    And then, finally, I just have one further question, 
Secretary Feltman. Last week, a report surfaced that one of my 
constituents, Robert Levinson, missing from Iran since 2007, 
might still be alive.
    Can you give us any update on the progress of the case? And 
can you speak specifically to whether the Iranians have been 
cooperating in any way, either directly with us or with any of 
our allies?
    Ambassador Feltman. Well, we would welcome Iranian 
cooperation in finding out the whereabouts of Mr. Levinson. As 
you know, it has been 4 years since he has seen his family. He 
has had a grandchild who has been born since he has seen him. 
It has been too long since Bob Levinson has been away from his 
family, and we want to see him reunited.
    I can't say much about the investigation. It is an ongoing 
investigation, and information is protected. But I will say 
that we would welcome any information that Iran has that would 
help us locate the whereabouts of Mr. Levinson and return him 
to his family.
    Mr. Deutch. Thanks, Secretary Feltman.
    I yield back.
    Mr. Chabot. I thank the gentleman for yielding back.
    The distinguished gentleman from Kentucky, Mr. Chandler, is 
recognized for 5 minutes.
    Mr. Chandler. Thank you, Mr. Chairman. Appreciate that.
    Mr. Chabot. Not that everyone else on this committee isn't 
distinguished, but Kentucky being right next to Ohio----
    Mr. Chandler. Very much appreciate you especially giving me 
that appellation. Thank you.
    Ambassador, first of all, I notice on your resume that you 
speak Hungarian. Is that true?
    Ambassador Feltman. It was true. I don't know if it is 
still true. It has been a long time since I practiced.
    Mr. Chandler. Well, I must tell you, I am very impressed 
with anyone who can speak Hungarian who is not a native 
Hungarian speaker. And I assume you are not, so 
congratulations.
    Ambassador Feltman. I had the good fortune to be posted in 
Budapest from the late 1980s to the early 1990s. That was an 
historic period in Hungary. I was thrilled; I dived into the 
language. But I am very thrilled to be now looking at another 
historic period, which is the transformation of the Middle 
East.
    Mr. Chandler. That is right. Well, not an easy thing, no 
matter how long you are in the country.
    In any event, two questions. And I will try to be quick so 
you can answer.
    First of all, Tunisia. Obviously, a critical time in the 
history of Tunisia. Yet our Government is proposing to cut aid 
to Tunisia pretty dramatically at a very, very critical 
juncture.
    Could you please address that, tell me why we are doing 
that? And isn't that a little bit of a dangerous thing for our 
Government to do at this particular point in time, particularly 
given that Tunisia is one of the more Western-leaning Arab 
countries and has been a very friendly country to us?
    Second question, Syria. If you could address, to the extent 
that you can--you know, there are two schools of thoughts about 
Syria and the intentions of the Assad regime. You spent some 
time in Lebanon, so you are probably very familiar with the 
Government of Syria.
    There is one school of thought that holds that Assad may 
actually want to try to get a peace arrangement, some kind of 
peace deal. And, of course, if that were true, it would be good 
for everybody in the region and, I think, would be a major 
breakthrough.
    On the other hand, I think the greater school of thought is 
that the Assad regime views peace as inimical to their 
interests of regime maintenance, given that they are an Alawite 
minority in charge of that government there, that they actually 
need to have a conflict with the United States and, in 
particular, Israel, in order to maintain their regime.
    What is your viewpoint on that particular subject?
    Thank you. And I will listen to your answer.
    Ambassador Feltman. On Tunisia, of course, the budget was 
prepared last April. You know, the budget documents were 
prepared at a much different time in Tunisia's history. At that 
time, Tunisia was cutting off security cooperation with us. 
They were no longer working hand-in-hand with us on a lot of 
issues that were of interest to us. It explains why you see the 
numbers you do in the budget.
    However, you may have heard the Secretary mention today to 
the appropriators that she is going to Tunisia next week. And 
we will be sending you some information shortly that I think 
will answer some of your questions about Tunisia.
    Because, you know, we agree 100 percent that we need to be 
responsive to the transition in Tunisia. Tunisia was a leader 
in the region in changing how the governed look at their 
governors, and they can be a leader in the region in this 
transition.
    I served in Tunisia. I very much understand the 
opportunities that are there. But we will be sending you 
something to the Congress on this very issue shortly.
    On Syria, you mentioned that I am probably familiar with 
the Government of Syria. I think they are familiar with me, 
too, from my time when I served as Ambassador in Lebanon. I was 
seen as kind of anti-Syrian, I think, from their perspective, 
when I wanted to be seen as pro-American. That is what guides 
me when I am serving overseas.
    President Assad has said repeatedly that he wants to see a 
comprehensive peace in the Middle East. He has entered into 
negotiations with the Israelis directly, indirectly before, 
most recently through, you know, Turkish mediation.
    But it is like what I said with the Lebanese earlier: 
Actions speak louder than words. To have a comprehensive peace 
in the Middle East, which is good for our interests, it helps 
protect Israel, Syria has to be part of the game, Syria has to 
be there. And we want to see whether or not Syria is sincere in 
its words on wanting peace. And that remains to be tested.
    But I will say that----
    Mr. Chandler. About the regime maintenance issue and the 
minority being in charge, how much weight do you give that?
    Ambassador Feltman. Syria is a multiethnic society, as you 
point out. And Syria has so far not encountered the sort of 
concessional problems that you see in Iraq and in Lebanon. And 
so there is an argument that what you say is why that is, how 
they have been able to avoid those problems.
    But, again, Iran has said Israel must be wiped off the face 
of the earth, essentially. Syria has said we want peace with 
Israel. We would like to pursue that and see if we can get to 
that peace.
    Mr. Chabot. The gentleman's time has expired.
    Without objection, our Foreign Affairs Committee colleague, 
Mr. Poe, is welcome to participate in today's hearing since 
most of the subcommittee members have already asked their 
questions.
    We will get to Mr. Connolly in just a moment. We have had 
two Democrats in a row, so, if you don't mind, we will go to 
Mr. Poe now, if Mr. Poe would have some questions.
    Mr. Poe. Thank you, Mr. Chairman. And thank you for not 
calling me ``distinguished.'' I have been called a lot of 
things in my life, but ``distinguished'' is not one of them.
    Mr. Feltman, I want to follow up on some questions. You and 
I talked on November the 18th--I was sitting on that side; 
things have changed; I am over here now--about, specifically, 
Camp Ashraf. We discussed the issues and the problems and the 
people that are there. And I want to go back to our 
conversation. I have your testimony before me.
    And I ask unanimous consent, Mr. Chairman, to submit it for 
the record.
    Mr. Chabot. Without objection.
    Mr. Poe. Thank you.
    We specifically discussed the issue of the loudspeakers 
around Camp Ashraf that are bringing in propaganda from Iraq, 
other individuals, saying all kinds of horrible things to the 
residents of Iraq. And our discussion was, what are we going to 
do about it.
    And so, here we are 4 months later, and I am asking you, 
what has happened to that situation and that intolerable noise 
and propaganda that is being brought into Camp Ashraf?
    Ambassador Feltman. Congressman, this is a really tough 
question. It is a really tough issue. Iraq----
    Mr. Poe. But what are we doing?
    Ambassador Feltman [continuing]. Is sovereign on Iraqi 
territory. The Iraqis are now sovereign. There are provocations 
that go back and forth. The Camp Ashraf----
    Mr. Poe. Excuse me, Mr. Ambassador. I only have 5 minutes. 
I just want you to tell me what we are doing and what has 
happened in the last 4 months regarding those loudspeakers.
    Ambassador Feltman. Okay. We are working with the 
Government of Iraq, we are working with UNAMI, and we are 
working with Camp Ashraf to stop the provocations that go back 
and forth.
    There are provocations that go in both directions: From the 
Camp Ashraf residents to the Iraqis, who are now sovereign in 
their own country; and from the Iraqis to Camp Ashraf. There 
are provocations on both sides. These are dangerous 
provocations. You don't know where this is going to lead. We 
want to see these provocations end.
    Mr. Poe. But what has happened? Let's just talk about one 
side at a time. What about the speakers on the outside blaring 
in? Has anything been----
    Ambassador Feltman. A lot of those are parents of Camp 
Ashraf residents from Iran, saying, ``Please come back.'' You 
know, a lot of these is Iraqi propaganda; a lot of it is simply 
parents looking for their kids. We don't want to see 
provocations from either side on Camp Ashraf.
    Mr. Poe. I want to show you a poster--and I will furnish 
you a copy that is smaller, so you don't have to carry this 
around with you--recently taken from Camp Ashraf to the 
outside. And when you and I talked in November, there were 110 
loudspeakers--here is a pole with a bunch of speakers on it--
all blaring to the inside of Camp Ashraf. And now today, 4 
months later, there are 212 of these loudspeakers. So it seems 
to me, if I do the math right, it has increased by 100 
loudspeakers blaring into the residents of Camp Ashraf.
    The residents of Camp Ashraf tell us that these are all 
propaganda, saying awful things about the women in Camp Ashraf, 
inciting, I think, violence to occur. People live in fear. And 
it is constant. And, you know, I don't know anybody, any 
American that would like to have outside their house a speaker 
going 24 hours a day saying anything, even if it is playing 
Willie Nelson music. Nobody wants to have that. But this is 
propaganda. And it concerns me because it concerns residents in 
Camp Ashraf, many of whom are Iranian Americans now, who have 
come to this country.
    What are we doing besides talking? It just seems to me, 
when all is said and done, more is said than done. So what 
specifically is being done, if anything, by our Government to 
take the speakers down?
    Ambassador Feltman. Iraqis are sovereign in Iraq. What we 
have to do is work with the Iraqis, work with the United 
Nations, to reduce the provocations, reduce the danger.
    But this is Iraqi territory. It is not U.S. Government 
territory, Congressman. And what we have to do is use our 
diplomacy, use our U.N. Partners, talk to other members of the 
international community, but we are not in control of----
    Mr. Poe. Reclaiming my time, Mr. Ambassador. So far, 
nothing we have done has helped to bring these speakers down--
all the talk, all the encouragement. And it seems to me, if we 
have this conversation again in 4 months, there probably are 
going to be a whole lot more speakers.
    And I sincerely just hope that the United States is able to 
use its prestige to encourage Iraq to let these people live in 
peace instead of breaking the peace with--one way is the 
propaganda that is coming through these loudspeakers. That is 
my goal, and I hope the State Department figures out a way to 
make it happen.
    And I yield back my time.
    Mr. Chabot. Thank you. The gentleman's time has expired.
    The gentleman from the great State of Virginia is 
recognized, Mr. Connolly, for 5 minutes.
    Mr. Connolly. Thank you, Mr. Chairman. And congratulations 
on your reelection and selection as chairman of our 
subcommittee.
    Mr. Chabot. Thank you.
    Mr. Connolly. And I am reminded of the fact, listening to 
our colleague understandably concerned about the use of 
loudspeakers, that when the United States, through the 
Government of General Noriega in Panama, the American military 
used exactly this technique in front of the Vatican Embassy in 
Panama City. So I am sure we have some experience in that 
regard and understand how irritating it can be when used as a 
tool for propaganda.
    Let me ask--and now the vote has been called. But the title 
of this hearing is, ``Assessing U.S. Foreign Policy Priorities 
and Needs Amidst Economic Challenges in the Middle East.''
    How important, at this time in history, given the upheaval 
in the Maghreb and Egypt and perhaps other places, as well, how 
important is our foreign assistance program as a tool or a 
policy priority as we face those challenges?
    Ambassador Feltman. I would say it is essential to us being 
able to realize our goals.
    Mr. Connolly. Essential.
    Ambassador Feltman. Essential. It is part of our overall 
development, diplomacy, and defense approach to the region. We 
need to have all three.
    And if you look at, say, the military assistance to the 
Egyptian Army, the Egyptian Army, by and large, has reacted to 
the events in Egypt in a very professional manner. I think that 
we can take some credit for that, for the years of training and 
work that we have had with the Egyptian Army.
    If you look at Iraq, going forward in Iraq, the diplomacy 
and development side of our work in Iraq will help make Iraq 
that sovereign, stable, self-reliant partner that is in our 
interests----
    Mr. Connolly. So, Mr. Ambassador, what you are saying is, 
if you look back over the years of investment since the Camp 
David Peace Accords were signed, with respect to Egypt, for 
example, it paid off in this transition; in terms of helping 
build a force that respected demonstrators and their human 
rights, and is a force for stability in this transition. And, 
moving forward, we need to be making like investments in the 
region that will pay off sometime down the road. Is that your 
argument?
    Ambassador Feltman. Yes, that is my argument, Congressman. 
And that is the logic behind what I said for my region is a 
$6.84 billion request for the core and enduring activities we 
have for the region. It is to advance U.S. Interests, U.S. 
National security and diplomatic interests, in this region 
during a changing time.
    Mr. Connolly. Ambassador, I am struck by the fact that, 
just a few weeks ago, here in the House of Representatives, the 
United States Congress, sadly, from my point of view, 
significantly slashed the 150 Function of the budget. We cut 
funding for precisely what you just said we should be doing 
more of, not less of.
    Has the State Department even assessed yet what the 
potential ramifications in this region might be in terms of 
curtailing our diplomatic efforts and our foreign assistance 
efforts?
    Ambassador Feltman. I mean, yes, we have. And cutting $2 
billion out, which is what this would be, would be cutting out 
a lot of the democracy programs that we need most right now.
    We also need, frankly, since you raised the question, we 
need a 2011 budget. Particularly when I look at how are we 
going to do the civilian transition in Iraq, we need to know 
what our money is, we need to know what our budget is.
    So we not only hope that we will be able to get fully 
funded for 2012, we also hope we are going to get a 2011 
budget.
    Mr. Connolly. Mr. Laudato, I see you shaking your head.
    Mr. Laudato. No, I couldn't agree more.
    Mr. Connolly. No, I saw you shaking your head in agreement.
    Mr. Laudato. Oh, absolutely. Absolutely.
    I have dealt with, for example, Egypt since 1976. I was in 
Egypt when President Sadat came back from Jerusalem. And I saw 
the impact that our foreign assistance has had on cementing the 
solidarity in the region on our foreign policy. And as we cut 
it, we cut the capacity to involve ourselves with these 
governments for the purposes that we deem are in our own 
interest and in the interests of our friends and allies. And so 
I think it is critical.
    Mr. Connolly. Mr. Chairman, in the 16 seconds I have left, 
let me just say, I would hope that, upon reflection, Members of 
Congress here in the House would reconsider the cuts that we 
made to the continuing resolution in the 150 Function, 
especially in light of the profound changes going on in this 
region.
    And, with that, I yield back.
    Mr. Chabot. Thank you. The gentleman yields back.
    And some real quick comments here.
    First, without objection, the witnesses' full prepared 
statements will be made part of the record. And members may 
have 5 calendar days to insert statements and questions for the 
record, subject to the length limitations in the rules.
    Secondly, I need to correct myself. My crack staff has 
drawn to my attention the fact that I inaccurately recognized 
the gentleman by saying ``the great State of Virginia,'' when, 
in fact, it is a commonwealth. But it is certainly still great. 
Having been a graduate of the College of William and Mary, I 
should know that.
    We, the ranking member and myself, have a couple of quick 
questions that your response you can give back to us in 
writing. I will go through them very quickly. The reason we are 
doing this quickly is because we have votes on the floor, and 
we have to be over there and vote within 10 minutes. So we are 
going to do very quickly.
    As Egypt works steadily toward political reform, many 
people are calling attention to the economic situation on the 
ground, which is dire by any measure. Some of these measures 
are not just simple aid programs, many of which have been shown 
to be quite ineffective over time.
    The question comes down to a free-trade agreement between 
the United States and Egypt. Arguably, doing such would be good 
for Egypt and good for the United States. I would love to have 
the administration's view on that.
    The other question, Ambassador Feltman: I had the privilege 
of asking Secretary of State Clinton about our Iran policy when 
she testified before the full committee last week. I 
specifically asked Secretary Clinton about our policy toward an 
indigenous Iranian enrichment capability. And I would like to 
ask you the same question today. Of course, you can respond in 
writing.
    At the recent meeting in Istanbul, the Iranians once again 
asserted their right to enrich on their own soil. A recent 
bipartisan Senate letter reflects the overwhelming concern in 
Congress about Iranian domestic enrichment. Last week, however, 
I was surprised to hear Secretary Clinton say that, if Iran 
were to live up to its international obligations, it would be 
allowed to enrich within its borders.
    I would like to be clear: Is this indeed the policy of the 
United States? Would we actually allow this regime in Tehran, a 
regime that openly calls for wiping Israel off the map, to 
enrich on its own soil? I would add that our record of 
detecting covert nuclear programs is not stellar.
    Additionally, recent reports suggest that Iran may be 
allowed to continue enriching in the interim during 
negotiations. The rumored Einhorn plan, for example, would 
supposedly allow Iran to maintain and operate 4,000 centrifuges 
on its territory. Is this an actual proposed interim measure?
    And I will now yield to the gentleman from New York, the 
ranking member.
    Mr. Ackerman. I thank the chairman.
    I actually think that I have what I think is an answer to a 
question that was raised by a colleague, rather than a question 
myself.
    Mr. Chabot. Okay.
    Mr. Ackerman. The gentleman from California wanted to know 
who was going to be left holding the bag if we did debt 
forgiveness toward Egypt, whether it would be the big banks or 
us. The answer to the question, no matter who you ask it of, is 
us. It is not the banks. This was not money that the banks gave 
that we gave a guarantee. It wasn't actually even money we gave 
to Egypt. What we did provide was food credit, in the tune of 
$3 billion, to feed the Egyptian people, who were adhering to 
policies that we greatly supported and wanted to be helpful and 
useful to them, as they were being very helpful to us. And the 
$3 billion in food credits was spent here in the United States. 
So all of that money benefited our farmers and our people here, 
as well as helping to feed the people over there.
    The question isn't who is going to be left holding the bag, 
but whose bag you would prefer holding. If we have debt 
forgiveness, I am sure that there would be a great deal of 
gratitude on behalf of an emerging, hopefully, emerging 
democracy in Egypt. If we don't have debt forgiveness, we are 
competing with the Muslim Brotherhood. If they win the battle 
of the street in the time to come and are going to be in charge 
of a new Egypt, God forbid, I am sure they are not going to be 
paying back that $3 billion any time soon and will not be 
grateful to us.
    So it is a contest between whose side are we on in the 
fight for these emerging democracies. And we are, indeed, the 
same people who are left holding the bag in all of the efforts. 
My friend advocated and supported, whether we helped the people 
in Iran, the cost of that, we will be holding the bag, and I 
don't think that is a bad thing. And if we help the people in 
Libya, enforcing a no-fly zone, the cost of that, we will be 
holding the bag. And he advocates, and I don't necessarily 
disagree at the moment. And when we helped liberate Iraq, which 
he supported and I supported.
    This is a big responsibility, being the superpower in the 
world. And if we want to see good things, we have to be willing 
to pony up, step up to the bar. Otherwise, the bad guys are 
going to take over all over the world.
    And as far as the speakers, we are talking about Iran. And 
the chairman and I have worked out an agreement that we heard a 
rumor that there are ``speakers of mass destruction,'' and we 
are going to go in and see if we can eradicate that.
    Mr. Chabot. The gentleman yields back. I thank the 
gentleman.
    And we thank the witnesses for their very good testimony 
here this afternoon.
    The committee is adjourned.
    [Whereupon, at 3:40 p.m., the subcommittee was adjourned.]
                                     

                                     

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