[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]






   STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR 
                                  2019

_______________________________________________________________________

                                 HEARINGS

                                 BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED FIFTEENTH CONGRESS

                              SECOND SESSION

                            ______________

                SUBCOMMITTEE ON STATE, FOREIGN OPERATIONS,
                          AND RELATED PROGRAMS

                    HAROLD ROGERS, Kentucky, Chairman

  KAY GRANGER, Texas              NITA M. LOWEY, New York
  MARIO DIAZ-BALART, Florida      BARBARA LEE, California
  CHARLES W. DENT, Pennsylvania   C. A. DUTCH RUPPERSBERGER, Maryland
  THOMAS J. ROONEY, Florida       GRACE MENG, New York
  JEFF FORTENBERRY, Nebraska      DAVID E. PRICE, North Carolina
  CHRIS STEWART, Utah 
  
  

  NOTE: Under committee rules, Mr. Frelinghuysen, as chairman of the 
full committee, and Mrs. Lowey, as ranking minority member of the full 
committee, are authorized to sit as members of all subcommittees.

                Craig Higgins, Susan Adams, Winnie Chang,
           David Bortnick, Dean Koulouris, and Clelia Alvarado
                            Subcommittee Staff

                               ____________
 
                                  PART 3

                                                                   Page
                                                                   
  Department of State and Foreign Assistance........................  1
                             
  Department of the Treasury International Programs ................  3 
                                                                      
  United States Agency for International Development ............... 43
                                                                    
  Written Testimony from Outside Witnesses ........................ 181

                                                             

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                                  

                        _______________

    Printed for the use of the Committee on Appropriations
    
          
          
          
          


 
   STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR 
                                  2019
_______________________________________________________________________

                                 HEARINGS

                                 BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED FIFTEENTH CONGRESS

                              SECOND SESSION

                               _________

                SUBCOMMITTEE ON STATE, FOREIGN OPERATIONS,
                          AND RELATED PROGRAMS

                    HAROLD ROGERS, Kentucky, Chairman

  KAY GRANGER, Texas                NITA M. LOWEY, New York
  MARIO DIAZ-BALART, Florida        BARBARA LEE, California
  CHARLES W. DENT, Pennsylvania     C. A. DUTCH RUPPERSBERGER, Maryland
  THOMAS J. ROONEY, Florida         GRACE MENG, New York
  JEFF FORTENBERRY, Nebraska        DAVID E. PRICE, North Carolina
  CHRIS STEWART, Utah

 

  NOTE: Under committee rules, Mr. Frelinghuysen, as chairman of the 
full committee, and Mrs. Lowey, as ranking minority member of the full 
committee, are authorized to sit as members of all subcommittees.

                Craig Higgins, Susan Adams, Winnie Chang,
           David Bortnick, Dean Koulouris, and Clelia Alvarado
                            Subcommittee Staff

                                __________

                                  PART 3

                                                                   Page
                                                                   
  Department of State and Foreign Assistance........................  1
                                                                      
  Department of the Treasury International Programs ..................3

                                                                      
  United States Agency for International Development ............... 43

                                                               
  Written Testimony from Outside Witnesses ......................... 181
...............................
                                                                   

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                                 

                                ______

          Printed for the use of the Committee on Appropriations

                             ______________

                    U.S. GOVERNMENT PUBLISHING OFFICE                  

33-569                       WASHINGTON : 2018



                      COMMITTEE ON APPROPRIATIONS

                                ----------                              
             RODNEY P. FRELINGHUYSEN, New Jersey, Chairman


  HAROLD ROGERS, Kentucky \1\           NITA M. LOWEY, New York
  ROBERT B. ADERHOLT, Alabama           MARCY KAPTUR, Ohio
  KAY GRANGER, Texas                    PETER J. VISCLOSKY, Indiana
  MICHAEL K. SIMPSON, Idaho             JOSE E. SERRANO, New York
  JOHN ABNEY CULBERSON, Texas           ROSA L. DeLAURO, Connecticut
  JOHN R. CARTER, Texas                 DAVID E. PRICE, North Carolina
  KEN CALVERT, California               LUCILLE ROYBAL-ALLARD, California
  TOM COLE, Oklahoma                    SANFORD D. BISHOP, Jr., Georgia
  MARIO DIAZ-BALART, Florida            BARBARA LEE, California
  CHARLES W. DENT, Pennsylvania         BETTY McCOLLUM, Minnesota
  TOM GRAVES, Georgia                   TIM RYAN, Ohio
  KEVIN YODER, Kansas                   C. A. DUTCH RUPPERSBERGER, Maryland
  STEVE WOMACK, Arkansas                DEBBIE WASSERMAN SCHULTZ, Florida
  JEFF FORTENBERRY, Nebraska            HENRY CUELLAR, Texas
  THOMAS J. ROONEY, Florida             CHELLIE PINGREE, Maine
  CHARLES J. FLEISCHMANN, Tennessee     MIKE QUIGLEY, Illinois
  JAIME HERRERA BEUTLER, Washington     DEREK KILMER, Washington
  DAVID P. JOYCE, Ohio                  MATT CARTWRIGHT, Pennsylvania
  DAVID G. VALADAO, California          GRACE MENG, New York
  ANDY HARRIS, Maryland                 MARK POCAN, Wisconsin
  MARTHA ROBY, Alabama                  KATHERINE M. CLARK, Massachusetts
  MARK E. AMODEI, Nevada                PETE AGUILAR, California
  CHRIS STEWART, Utah
  DAVID YOUNG, Iowa
  EVAN H. JENKINS, West Virginia
  STEVEN M. PALAZZO, Mississippi
  DAN NEWHOUSE, Washington
  JOHN R. MOOLENAAR, Michigan
  SCOTT TAYLOR, Virginia
  ----------
  \1\}Chairman Emeritus     
  
  
   

                   Nancy Fox, Clerk and Staff Director

                                   (ii)
                                   
                                   


STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR 2019

                              ----------                              


               DEPARTMENT OF STATE AND FOREIGN ASSISTANCE

    Clerk's note.--Due to the Secretary of State's busy 
schedule, the Committee on Appropriations was unable to find a 
mutually agreeable date for the Secretary to appear before the 
subcommittee concerning the President's budget request for 
fiscal year 2019.



STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR 2019

                              ----------                             


                                         Wednesday, April 11, 2018.

           DEPARTMENT OF THE TREASURY INTERNATIONAL PROGRAMS

                                WITNESS

HON. STEVEN MNUCHIN, SECRETARY, DEPARTMENT OF THE TREASURY

                  Opening Statement of Chairman Rogers

    Mr. Rogers. The Committee will be in order, and to all a 
good morning and welcome. The State, Foreign Operations 
Subcommittee is now in session.
    It is a pleasure to welcome our witness, the secretary of 
the Treasury, Steven Mnuchin, as we consider the department's 
budget request for international programs and its policy 
implications for foreign affairs and national security.
    We are glad that the ranking member and my dear friend Mrs. 
Lowey is able to be with us today. She was instrumental as we 
shepherded the omnibus across the finish line last month, to 
questionable happiness, and will be bringing new bills for the 
House to consider shortly.
    We also want to welcome all subcommittee members back. A 
sparse number this morning. I expect we will see more as time 
goes on.
    Mr. Secretary, we appreciate your service to your country, 
and are interested to hear from you on how your budget request 
comports with the national security strategy, supports the 
Department of State and USAID's joint strategic plan, and 
decreases reliance on foreign aid.
    The department's budget requests $1.4 billion for 
international programs. Within that amount, over $1 billion is 
for contributions to the World Bank. In terms of dollars 
requested and the number of multilateral institutions to be 
supported, this request is conspicuously smaller than in the 
past. I have long encouraged agencies to be as efficient as 
possible with taxpayer dollars, in part by taking a hard look 
at whether a different approach could yield better outcomes at 
less cost. But if the administration is deliberately reducing 
its engagement with multilateral banks as a matter of policy, 
then it is incumbent upon the department to inform Congress of 
the decision and the justification for it.
    At the World Economic Forum in Davos, you supported the 
President's America First agenda and, as with other cabinet 
members, clarified that America First does not mean America 
alone. Similarly, we would not expect Treasury alone to make 
decisions about foreign assistance and policy.
    On the one hand, I was pleased to see Treasury with the 
Departments of State and Justice issue a trifecta of sanctions 
against North Korea, Russia, and Iran. On the other hand, I am 
concerned that the administration is proposing to eliminate all 
of Treasury's multilateral funding for food security and to cut 
in half USAID's bilateral funding for such assistance.
    In your testimony today, I would appreciate answers about 
food security assistance: How did Treasury and USAID reach this 
decision? Did the agencies debate the effectiveness of 
bilateral versus multilateral assistance? What are the expected 
consequences of significantly reduced food security assistance 
on global economic and political stability?
    Mr. Secretary, this subcommittee has the responsibility to 
scrutinize not only the numbers in the budget, but also the 
policies behind them. Therefore, you should expect that we 
would question the department's budget and policies, and we 
would expect timely and substantive responses.
    We thank you, Mr. Secretary, for meeting with us. Your 
time, attention and service are greatly appreciated.
    Let me recognize now the ranking member of our subcommittee 
and the full committee, Mrs. Lowey, for any remarks she would 
care to make.
    [The information follows:]
    
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               Opening Statement of Ranking Member Lowey

    Mrs. Lowey. First of all, Mr. Chairman, I want to say, 
before the hearing begins, what a pleasure it was to work with 
you on the last bill and we were so proud of it.
    And that is why today, Secretary Mnuchin, I have real 
concerns with the fiscal year 2019 budget request. The 
Administration has ignored congressional support for robust 
international engagement and has once again proposed a 
crippling 30 percent cut to our diplomatic and development 
efforts.
    I want to make it clear, Mr. Secretary, these cuts, in a 
bipartisan way, were rejected and we turned out a really 
excellent bipartisan budget in the last cycle. If enacted, this 
budget would substantially harm critical U.S. interests, put 
our embassies and diplomats at risk, and stymie our efforts to 
counter violent extremism and fight terrorism.
    The Treasury Department's international program is 
essential to achieving U.S. strategic objectives overseas. The 
proposed cuts to important international partners would 
recklessly undermine U.S. global leadership and inhibit our 
ability to steer the international development agenda.
    Some of the worst parts of this request would slash our 
contributions to the Global Environmental Facility by more than 
half; and eliminate resources to multilateral funds, 
specifically targeting food security, even as numerous 
countries face famines.
    Congress should, yet again, reject these cuts and boost 
investments in international financial institutions. These 
entities are critical in the fight against global poverty by 
helping low-income countries strengthen their economies. When 
properly managed, these institutions leverage U.S. dollars to 
develop sustainable programs and enable countries to become 
self-reliant.
    Should the United States step back from our leadership at 
international financial institutions, there are many other 
countries that would gladly fill the space. But these countries 
will almost certainly not represent American values or our 
interests. A diminished U.S. role at these entities would hurt 
low-income countries in the world and damage U.S. economic and 
national security.
    The Treasury Department is also charged with leading U.S. 
efforts to combat terrorist financing networks and enforce 
sanctions against rogue nations. I am very concerned that 
President Trump's impulsive actions in the international realm 
and his troubling tendency to act favorably towards 
authoritarian leaders are impacting policy decisions at your 
department.
    For example, despite signing the Countering America's 
Adversaries Through Sanctions Act into law in August 2017, the 
Administration failed to apply these sanctions against Russia 
until mid-March 2018. And while these sanctions were a step in 
the right direction, both sides of the aisle agree that more 
must be done to punish Russia for election meddling; 
government-sponsored hacking operations targeting U.S. 
companies in the water, aviation, construction, manufacturing, 
and nuclear sectors; and the use of a chemical weapon on the 
soil of our closest ally.
    Additionally, the Administration has lifted sanctions 
against countries such as Sudan and been unwilling to impose 
sanctions on countries such as the Philippines. This lack of 
accountability feeds a global perception that the United States 
condones corruption and human rights violations. This is not in 
our interest, nor is it representative of our moral obligation 
as a champion of human rights.
    As Secretary of the Treasury, I hope you know that global 
challenges do not have military solutions alone, and that 
``soft'' power is fundamental to national security. As 
Secretary of Defense Mattis said, ``America has two fundamental 
powers: the power of intimidation and the power of inspiration. 
Soft power is largely found in the power of inspiration.''
    This Administration undercuts our ability to inspire 
through irresponsible behaviors and a woefully insufficient 
budget request. These actions pose grave threats to U.S. 
security and global leadership.
    So again I welcome you, Mr. Secretary. I look forward to 
discussing this with you further during questions.
    Thank you, Mr. Chairman.
    [The information follows:]
    
    
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    Mr. Rogers. Thank you, ma'am.
    Mr. Secretary, you are recognized for as long as you care 
to speak.
    Secretary Mnuchin. Thank you.

                 Opening Statement of Secretary Mnuchin

    Chairman Rogers, Ranking Member Lowey, and members of the 
subcommittee, it is good to be here with you today to discuss 
the President's budget.
    In fiscal year 2019, the Treasury Department requests $1.4 
billion for international programs. This reflects the 
administration's priority of preserving investments in 
multilateral development institutions and remaining a key donor 
to those institutions.
    Constructive use of concessional funds is an important 
component of our agenda to promote better economic policies and 
foster growth. Our participation will contribute to a more 
democratic, prosperous and secure global economy.
    Our budget envisions United States contribution levels that 
are more appropriate relative to those of our partner 
countries. We seek to balance priorities and direct government 
resources to programs that support the national interest and 
national security.
    Treasury also encourages international financial 
institutions to operate more efficiently and has been a driver 
of shareholder support for reforms to the multilateral 
development banks. These reforms are aimed at improving 
governance, maximizing development impact, and ensuring 
financial discipline.
    Treasury continues to seek reforms at several of these 
institutions to improve monitoring, evaluation, independent 
compliance operations, and the efficient deployment of capital, 
particularly to countries that need it most.
    I would also like to highlight Treasury's request for $30 
million for the Office of Technical Assistance (OTA). This 
helps to reduce countries' dependence on financial aid, by 
helping them to mobilize domestic resources more effectively 
and supporting private sector economic growth.
    In addition, Treasury plays an important role in combating 
terrorist financing, among other financial crimes. And OTA's 
provision of technical assistance is key to enforcing relevant 
laws.
    Ultimately, the United States expects a strong return on 
this investment, not only because it will help other countries 
to stand on their own, but also because it will lead to more 
secure and stable markets around the world.
    The policies in the President's budget demonstrate this 
administration's commitment to promoting economic growth, 
putting our country on a sound fiscal path on the long-term, 
and prioritizing our national security.
    Thank you very much, and I would be happy to answer any 
questions.
    [The information follows:]
    
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    Mr. Rogers. Thank you, Mr. Secretary. And thank you for 
being here this morning.
    Congress gave the department clear marching orders in the 
form of the North Korea Sanctions and Policy Enhancement Act 
and Countering America's Adversaries Through Sanctions Act. I 
am heartened to see the department making use of these new 
powers by issuing sanctions against North Korean shipping 
companies, Russian oligarchs, and Iranian individuals who stole 
intellectual property for the benefit of the Islamic 
Revolutionary Guard Corps.
    Mr. Secretary, the cooperation from other countries, 
especially China and Japan, is required to isolate the 
economies of North Korea, Iran, and Russia. You recently 
returned from the G-20 meeting and will be attending the World 
Bank-IMF meetings later this month. Have you and will you raise 
the importance of confronting the illicit financing and cyber 
activities of North Korea, Iran, and Russia with your 
counterparts at these meetings? And how would you characterize 
their support for such measures?
    Secretary Mnuchin. Mr. Chairman, thank you very much.
    I think, as you know, the Treasury Department has been very 
aggressive in using its sanctions authorities over the last 
year.
    Starting specifically with North Korea, our part has been 
part of the maximum pressure campaign which we believe is 
working quite significantly and is a major contributor to 
having North Korea now being willing to sit down with the 
President and discuss getting rid of nuclear weapons.
    We have worked very closely with our allies, and 
particularly Japan and South Korea--I participated in many 
trilats with the President--as well as China. I have had very 
many active discussions with my counterparts. President Trump 
has spoken many times to President Xi and they have been an 
important contributor in passing resolutions at the U.N. and 
working with us, as well.
    On Iran, I think you know we have been very aggressive on 
sanctions on Iran. We think Iran's behavior is completely 
unacceptable. The President is also reviewing the JCPOA and 
actions on the JCPOA.
    Finally, I would just comment on Russia. Again, we took the 
CAATSA legislation very seriously. We had done many sanctions 
on Russia before CAATSA under our different authorities. I 
think as you know, we have to be very careful when we issue 
sanctions. These are very, very powerful tools and we need to 
do them carefully and thoughtfully.
    We just released recently sanctions on the Russian 
oligarchs and Russian political figures. I think they have been 
quite impactful. You have seen an impact on the market. We have 
also sanctioned a significant number of companies associated 
with those oligarchs, and we will continue to use these 
sanction authorities.
    Thank you.
    Mr. Rogers. Are there further sanctions that are in your 
holster in regard to North Korea? Are there more sections that 
could be placed upon them than are now?
    Secretary Mnuchin. I want to be careful about talking about 
future activities, since we try not to highlight any future 
activity in advance.
    But I can assure you that we will continue with the maximum 
pressure campaign. We have people working at Treasury and the 
intelligence community around the clock on future sanctions for 
all of our different programs, and will continue to use these 
enforcements powerfully.
    Mr. Rogers. Well, I hope that there are further sanctions 
that could be laid on North Korea so that the pressures that 
are now being applied to set up a meeting between the two 
leaders is not the end. We need to keep up the pressure to 
denuclearize--not just to meet but to actually do the 
denuclearization that we are all after.
    So I would hope that you have in reserve some extra special 
punch to get us past the summit to actual results.
    Secretary Mnuchin. Well, again, I want be careful and not 
commenting on our reserve tank which we are careful to guard.
    But I can assure you, the President has instructed me to 
continue our maximum pressure campaign.
    Mr. Rogers. Thank you.
    Mrs. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman. The Administration has 
said it will not sign a new sanctions waiver for Iran by May 
12th unless changes are made to the Joint Comprehensive Plan of 
Action, JCPOA.
    Now, I voted against the JCPOA, but abruptly leaving the 
deal risks our credibility and could isolate us. I believe we 
should stay in the JCPOA to ensure aggressive and vigorous 
enforcement of the deal, and should also implement additional, 
non-nuclear sanctions that address Iran's ballistic missile 
program and other destabilizing activities.
    I would like clarity on the President's plan. What metrics 
is your department using to evaluate whether the suspension of 
specific Iran sanctions pursuant to the JCPOA are or are not 
vital to the national security interests of the U.S.?
    Secretary Mnuchin. Mrs. Lowey, first of all, I appreciate 
your comments on this, and I respect your vote and appreciated 
your vote against the JCPOA.
    I can assure you, we are not doing anything abruptly. This 
is something we have been looking at for the last year. I have 
personally had many conversations at the National Security 
Council and with the President on this strategy. I obviously 
cannot go through all those issues in this format, but I can 
assure you we are not doing anything abruptly.
    I can also assure you that the President is very concerned 
about Iran's continuing behavior on both missiles and 
terrorism, as well as he is very concerned about the term of 
the JCPOA.
    So this is something we have been carefully reviewing. I 
have had many discussions with my counterparts in Europe. There 
are active discussions going on with our counterparts in 
Europe. The secretary of state has also been very involved in 
these discussions.
    I am not going to comment on specifically what the 
President's plans are going forward, but it has been very 
clear. He wants to have a better deal, and he is very concerned 
about Iran's behavior, and any ability we have to put on 
sanctions outside the JCPOA, we will continue to do as we have 
done, over the last year.
    Mrs. Lowey. Sanctions outside of JCPOA dealing with 
ballistic missiles, et cetera, certainly, in my judgment, 
should be imposed, and I would be interested to hear the 
direction in which you are going.
    But if we re-impose nuclear sanctions, what areas of Iran's 
economy will we target to force Iran, once and for all, to 
cease nuclear development? Will the world community join us in 
this effort? And what is the Administration's plan to monitor 
and evaluate Iran's activities to ensure it is not restarting 
its nuclear program?
    Secretary Mnuchin. Well, first of all, I would just comment 
that, again, these sanctions programs are very effective. There 
is no question in my mind that the sanctions on Iran is what 
led Iran to come to the table.
    There is no question that--we fundamentally believe--this 
administration believes that we should have had a better deal 
before we let the sanctions go.
    Again, I want to be careful in what I say in this format. 
We are evaluating, and we have evaluated, those issues that you 
have discussed, but I think to the extent that the President 
decides not to sign the waiver and we do re-impose those 
sanctions, not only will there be primary sanctions, but there 
will be secondary sanctions, and I believe that they will 
continue to have a very strong impact on the economy in Iran.
    Mrs. Lowey. Now, what you didn't mention--and, again, I 
want to say I did not support the JCPOA because I felt it could 
be more extensive and more inclusive.
    However, you are saying if the President decides to move 
forward on additional nuclear sanctions, what about the other 
partners in the JCPOA? You didn't refer to that.
    Secretary Mnuchin. Again, I want to comment on, I 
appreciate your vote. It is actually--it is not the President 
deciding on additional sanctions. If the President does not 
sign the waiver--so, Congress requires a waiver to be signed by 
the President--if the President does not sign that waiver, we 
are required to re-impose the sanctions. So the issue will be 
whether the President wants to sign the waiver or not.
    Again, as it relates to, I am not comfortable in this 
setting talking about what our allies will do or will not do. 
Again, I can assure you, there have been extensive 
conversations, both at my level and at other levels in the 
government on a coordinated basis with our allies, and they 
understand how we feel.
    Mrs. Lowey. I will conclude, Mr. Chairman, but I think we 
need additional clarity on the President's plan, because this 
is a very critical step. And most of us, whether we voted for 
JCPOA or against JCPOA, certainly Mr. Royce and Mr. Engel have 
had important legislation on the authorizing side regarding 
other actions that we think should be taken, but that is 
separate from the JCPOA.
    I would certainly appreciate additional information, and 
perhaps this is not the format for you to discuss it with us. I 
think my time is up, Mr. Chairman, so I will save the next 
question.
    Mr. Rogers. Mr. Dent.
    Mr. Dent. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary, for being here this morning. I certainly appreciate 
the work that you are doing and the administration are doing on 
the issue of sanctions with respect to North Korea, Russia and 
Iran. It is very necessary, and much appreciated.
    But I would like to focus on the Export-Import Bank (EXIM) 
and trade, generally. As you may be aware, it seems that we are 
now at the beginning stages of what some are calling a trade 
war.
    I am very alarmed by the way the administration is 
proceeding on the issue of trade, launching against friend and 
foe alike on aluminum steel tariffs. And then only to pivot to 
the real issue, the big issue, which, of course, is the course 
of technology transfers and intellectual property theft by the 
Chinese, as well as excess capacity in metals. But in the 
process we seem to have offended our friends and allies.
    I wanted to say this, though, on EXIM. This bank does not 
fully function. Do you, as secretary, want the Export-Import 
Bank, and does this administration, want it to fully function?
    Secretary Mnuchin. Yes.
    Mr. Dent. OK. There is legislation pending, and we put in 
the appropriations bill, State, Foreign Operations, the last 
few years, Lindsey Graham and I, that would allow the bank to 
function without a full quorum, so that they can make loans for 
over $10 million knowing that there are hundreds of deals out 
there that are not being done for export.
    We can't send any--all kinds of--Mack Trucks in my district 
can't sell trucks to Cameroon. We can't sell locomotives to 
Africa from GE out of Pennsylvania and Texas. I have got a long 
list. It is not happening. We need your leadership, and the 
President's leadership, to say you want this to happen, because 
the nominations are going nowhere in the Senate.
    Do you have any comment on that issue?
    Secretary Mnuchin. Well, again, the President is very 
interested in reopening the Export-Import Bank. As you said, it 
is effectively closed because of the lack of quorum. Our first 
choice is to get people confirmed and have it fully 
functioning. But to the extent we cannot do that, we are happy 
to work with you and look at the legislation.
    Mr. Dent. Because it is getting very late, you are going to 
lose capacity over at the bank. You know, we have been having 
this battle now for years and the President states that he 
wants to see the trade deficit shrink. Well, here is a way we 
can do it and make some money for the Treasury in the process.
    And it just seems like--I just feel like there hasn't been 
enough leadership coming out of the executive branch saying 
they want this to happen. In fact, I think there are people in 
the executive branch who don't want it to function. And I think 
that is, kind of, a mixed message that I am getting. I am 
pleased that you are on board, but I get the sense there are 
those in the administration who are not.
    Secretary Mnuchin. Well, I cannot comment on everybody in 
the administration, but I can comment, the President does want 
it to function.
    Mr. Dent. I realize you are not the trade ambassador, USTR. 
So I will be a little respectful, but you are Treasury 
secretary and, obviously, we have a complex relationship with 
the Chinese. And I would like to get your take on the second- 
and the third-degree implications of this tit for tat with 
China on trade and tariffs and how it might affect their 
purchase of our debt or Treasuries.
    I would like to get your take on this and, how do you think 
we can move this back from the edge and get this thing focused 
on the issues that our allies care about, along with us, on 
intellectual property theft?
    Of course, the technology transfers and this could mushroom 
into something far bigger that is going to have enormous 
implications to our farmers and many, many others if we don't 
get this into a better place.
    Secretary Mnuchin. Well, I think, as you know, and I just 
want to put this in perspective. The President's economic plan 
has always had three parts to it. This was broadcast going back 
to the campaign: tax relief, regulatory relief and trade.
    We very much appreciate and we are beginning to see the 
impact of the tax bill that was passed last year. We are really 
just beginning to see the important economic aspects of that. I 
think we have made a lot of progress on regulatory relief that 
is also having a positive impact on the economy and we are now 
dealing with the trade issues.
    These trade issues, we have been discussing them for the 
last year. The economic team meets weekly and has reviewed all 
these issues. The President has been actively involved. I speak 
to the President almost daily on these issues.
    I think, as it relates to China, we should refer to this as 
a trade dispute, because that is what it is. Going back to the 
Mar-a-Lago Summit which was a little over a year ago, President 
Trump and President Xi dealt with this issue and agreed that we 
would work on reducing the trade deficit, together. We have 
been in active discussions over the last year on that. And the 
301 is meant to protect our companies, our workers and our 
technology.
    Mr. Dent. Thank you. Let's just give trade peace a chance 
because there is a lot of concern out there that we are not 
moving in the right direction. I agree with you on deregulation 
and tax. We have done good work. I agree. I think on trade, we 
are not in a very good place right now and that needs to 
improve.
    Secretary Mnuchin. Well, I would just, finally, comment. 
President Trump did appreciate President Xi's speech and some 
of the things he acknowledged. I think you saw that in the 
tweet yesterday. So we look forward to continuing to work with 
China on our mutual interest on this issue.
    Mr. Dent. Thank you.
    Mr. Rogers. Mr. Ruppersberger.
    Mr. Ruppersberger. First thing, I am very concerned about 
the decreasing budget as far--in the developing world. We see 
budget proposals that pull back from our investments in the 
multilateral development banks (MDBs). And if we continue to 
pull back, China will continue to step right in and fill the 
void.
    China has been increasing its investments in infrastructure 
all over the globe. Their Belt and Road Initiative, which is 
being funded, partly, through their development bank, will 
connect China to the Middle East and Africa, creating new 
markets and building China's influence. I believe this effort 
will significantly impact our influence in these regions.
    Now, my question, how does this budget reflect our efforts 
to counter China's growing influence? Do you believe that the 
United States can maintain its influence around the world when 
we pull back in this area? What would you say to concerns that 
an increase in China influence would be a threat to the United 
States national security?
    When the U.S. does not meet its international commitments, 
we are at risk of losing influence and that is a major, major 
issue and the power to direct policy in our favor. So, if you 
could answer that, I would appreciate it.
    Secretary Mnuchin. Thank you. I would say we are concerned 
about China's growing lending on the One Belt, One Road around 
the world and the influence and the concern that it causes. I 
think, also, we are concerned in certain areas where countries 
cannot, necessarily, afford the loans.
    I would comment that, as it relates to the multilateral 
development banks, I very much support these, the major 
institutions. We have asked for the same amount of money in the 
past, the World Bank, through both the IDA facility and IBRD, 
we very much support.
    We are looking for more efficiency at these institutions. 
As a matter of fact, I have a meeting with the head of the 
World Bank later today. I look forward to the meetings next 
week, here. But we, very much, support these development banks 
and on the margin, we are just looking for more efficiency in 
them.
    Mr. Ruppersberger. Now, as far as the JCPOA is concerned, 
when we passed that, I was the ranking member of the 
Intelligence Committee, so, in that regard, knew a lot more 
than most of the people who were voting on it. In the end, I 
think it was the right thing to do.
    And the reason is because if, in fact, we would not have 
moved forward with that, the Middle East and the world would 
have been a lot more dangerous because Saudi Arabia, Turkey, 
other countries would have gained nuclear weapons. And they 
could purchase it. And that would be very, very dangerous.
    Also, what is happened now, the checks and balances and the 
inspections have worked, at this time. I agree, Iran is one of 
the most dangerous countries in the world. We have to deal with 
that. But as it relates to the nuclear issue and what is, a lot 
of times, people mistake what happens with the JCPOA is what 
else--everything else, that Iran is doing.
    What it really has done has, at least is slowed down 
nuclear weapons in the Middle East. So, when you are 
negotiating and whatever you are doing, don't open a can of 
worms if we are the only country that pulls back.
    And I would hope we would look at what it is, not because 
the President said this in a campaign speech throughout his 
entire campaign. But really, what is working, how it is working 
and to make sure that we come together with our adversaries who 
sign that and our allies, also. If you can comment on my 
comment, I know where you are, I know where the President is, 
but I think this is a very, very serious issue at this point.
    Secretary Mnuchin. Well, I want to be careful of what I 
comment. I would be more than happy to come meet with you and 
talk----
    Mr. Ruppersberger. I would like to do that.
    Secretary Mnuchin. In a classified setting on these issues. 
They are complicated issues that I am just not comfortable, 
obviously, going into the details. As I have said before, I 
fundamentally believe and the President believes that, although 
there were certain benefits of the deal, OK, that we should 
have had a better deal.
    We have significant concerns about the deal. We have 
obviously done a lot of work and a lot of discussions at the 
National Security Council on this. We have reviewed obviously a 
lot of classified information. We have discussed a lot with our 
counterparts.
    Again, I do not want to comment what the President may or 
may not do on signing the waiver the next time. But we have 
been very clear with our allies what our objective is here and 
that is protecting the United States, protecting the rest of 
the world against the malign behavior coming from Iran. You see 
that today in Syria.
    Mr. Ruppersberger. These are probably some of the most 
dangerous times we have; the Russia-China threat, the Iran 
threat, the North Korea threat, ISIS threat. And it is 
important that we maintain as much stability as we can. So I 
would like to meet with you on this issue. I guess you are hard 
to get a hold of. Will you commit to that meeting?
    Secretary Mnuchin. I will. I am not hard to get a hold of.
    Mr. Ruppersberger. OK. Well then we will see. We will test 
it.
    Secretary Mnuchin. That is fine. I am actually pretty easy 
to get a hold of.
    Mr. Ruppersberger. I yield back.
    Mr. Rogers. Mr. Fortenberry.
    Mr. Fortenberry. Thank you, Mr. Chairman.
    Mr. Secretary, welcome. We have a formulaic problem in 
Washington, and it is this: Good intentions plus more money 
means good outcomes. That is not necessarily true, especially 
when you are dealing with the multilateral institutions that 
sometimes can become bloated and elitist and are not tethered 
to holistic, integrated metrics that are constantly presented.
    I am amazed that during budget season how some institutions 
who really never show up start coming around when budgets are 
threatened. You mentioned that sanctions are a very powerful 
tool. So are budgets. They tend to focus the mind.
    Now in this regard, though, I want you to help--I want to 
try to get you to reconcile some comments you made last year at 
this hearing with some of the cuts that you have proposed. For 
instance, you mentioned that the Global Environmental Facility, 
the GEF, was one of the most important, most effective programs 
in the field serving U.S. interest, you got the proposed 50 
percent reduction.
    The Feed the Future program widely supported bipartisan 
initiative in Congress to rethink how we protect our most 
vulnerable leverage aid capacity with other nations and build 
out the infrastructure that attacks systemic poverty and helps 
those who are most vulnerable. The multilateral development 
banks that are proposed for significant cuts are an integral 
part of Feed the Future.
    So in one sense, again, budget reductions or proposed 
budget reductions can help focus the mind of institutions that 
may not be as efficient as you just said. Yet at the same time 
I need to better understand your strategy in this regard. The 
comment that you did give, the contribution levels, that are 
more appropriately relative to our partner countries and we 
seek to balance private priorities, is vague.
    So can you help me understand the strategy that you are 
implementing here with these proposed reductions, particularly 
in light of what I think is a generous comment to your earlier 
that sometimes wielding budgets can actually help focus upon 
and bring about reform? But it has to be tethered to a 
strategy.
    Secretary Mnuchin. Well, I agree with that completely. The 
budget process is very important to making sure we align this 
strategy. Quite frankly, I think, we appreciate what you 
approved last year and we look forward to working with you this 
year.
    Specifically as it relates to the Global Environmental 
Facility, there are a lot of different facilities that focus on 
environmental issues. This is just one of them.
    As it relates to this facility, again, the reason why we 
are comfortable cutting the facility--we are asking for a cut 
in half--is because this facility has defined obligations. A 
significant amount of them have already been impacted and this 
is what we think it is needed to meet our commitments of what 
this facility is supposed to do.
    As I think your--your other question was around--the 
International Fund For Agricultural Development, where we do 
not have a request this year, again--there are other areas in 
the government. We very much support food security and food 
safety and everything else. There are other areas of the 
government specifically and USAID, which are much more 
efficient. Again, these facilities are some of our smaller 
facilities, but we look forward to working with you on them.
    Mr. Fortenberry. In regards to that comment, I understand 
David Malpass has now been confirmed as your undersecretary, so 
we would appreciate a very rapid opportunity to integrate with 
him and his strategy in this regard.
    Again, because some of our programs designed to build out 
the sustainable economic infrastructure to attack systemic 
poverty, which Feed the Future is fundamental to, are tied 
inextricably to some of the multilateral development banks.
    So if that is just being pushed to--that intention is being 
pushed more to USAID, then we have to--because you don't feel 
like it is properly embedded in your department any longer, we 
have to understand the fullness of the implications of this. So 
it is not a cut, per se, but it is a change in strategy.
    But I think the broader piecing together of that strategy 
has to have a fuller conversation, or else we are going to 
undermine the intent of Congress. Had some very important--a 
new architecture for the 21st century that is emerging in terms 
of both food aid and economic regeneration possibility for the 
world's poorest. So what I don't want to end up is with--a 
budget cut or not, is the budget cut tied to the broader 
strategy of meeting the mission goals?
    Secretary Mnuchin. Good. Well, next week we have the World 
Bank and IMF meetings, but I will ask David Malpass to come and 
see you the following week and coordinate with you and your 
staff and he can come discuss the strategy with you----
    Mr. Fortenberry. Thank you very much.
    Mr. Rogers. Thank you. Mr. Secretary--Ms. Meng.
    Ms. Meng. Thank you, Mr. Chairman. Welcome back, Mr. 
Secretary.
    I wanted ask a question about cryptocurrencies, which we 
know can be used to finance crimes and evade sanctions. What is 
Treasury doing to address this new threat? And how can we here 
in Congress work with you to prevent use of this?
    Secretary Mnuchin. Thank you. I appreciate that question 
because I am very focused on cryptocurrencies. The social media 
following will now go up dramatically when we talk about this, 
so this is a very popular subject.
    I have been very active over the last year on this issue, 
both working at the G7 as well as working with the regulators 
here. From Treasury's standpoint, we have two major concerns. 
One is we want to make sure that cryptocurrencies cannot be 
used for illicit activities.
    So on that front, in the United States, we have very strong 
rules and regulations from FinCEN, that if you are a 
cryptocurrency dealer, if you are a wallet, you are subject to 
the same bank secrecy laws, the same anti-money laundering laws 
as a bank. So at the G7, we are working very carefully, and at 
the G20, of making sure that those same rules and regulations 
and through the FATF are enforced throughout the world. That is 
our number-one priority.
    Our number-two priority is, they are also used for 
speculation and we want to make sure that to the extent that 
consumers are speculating that they understand these issues 
carefully, and we have worked very closely with the regulators, 
with the SEC, with the CFTC, and launching futures as well as 
with the OCC and the Fed on these issues.
    So, again, this has been a major focus of ours. We are very 
pleased with the work we have done. We are not against 
cryptocurrencies; we just want to make sure that the 
enforcement is done properly.
    Ms. Meng. Thank you. In your testimony, you note that 
Treasury plays a role--an important role in combating terrorist 
financing. What steps is Treasury currently taking to stop the 
flow of resources to Hezbollah? What is being done to stop 
specifically Iranian--our resources from going to Hezbollah?
    Secretary Mnuchin. That is a big focus of ours. We have 
enacted a very large number of specific sanctions dealing with 
this. We have launched the Terrorist Financing Targeting Center 
in the Middle East with our Middle East partners that are 
working on--we did joint sanctions. We will be doing more joint 
sanctions.
    We are working on--very closely with our Middle East 
partners, combating terrorist financing, enacting terrorist 
financing laws through these countries. This is a major, major 
focus of ours, and again goes to the issues with the whole Iran 
strategy.
    Ms. Meng. Do you think that the administration should 
consider designating Hezbollah as a transnational criminal 
organization?
    Secretary Mnuchin. It is something that we are reviewing. I 
am not going to comment on it at this moment, but it is 
something we are reviewing.
    Ms. Meng. And lastly, last year, Treasury listed Iran's 
IRGC, Islamic Revolutionary Guard Corps, as a supporter of 
terrorism after Congress passed the Countering America's 
Adversaries Through Sanctions Act. Unfortunately, there are 
public reports of hundreds of IRGC-owned or-controlled entities 
that have not yet been named or sanctioned by Treasury.
    Do you intend to take additional actions to designate IRGC 
individually-owned companies, front entities, and individuals 
affiliated with the guard?
    Secretary Mnuchin. Well, first of all, as I said, there is 
an enormous team at Treasury and on an interagency basis doing 
this, so I can assure you that any company that we have 
intelligence on that we can connect either has been designated 
or is in the process and will be. So it is a complicated issue.
    Many times they hide this. We need to have a basis of doing 
it. But yes, that is a major focus of ours that we continue to 
work on.
    Ms. Meng. Thank you. I yield back.
    Mr. Rogers. Thank you, ma'am. Mr. Secretary, let me say 
from the outset that foreign investment, including Chinese 
investment in the United States has proven beneficial to our 
economy and usually poses no threat to national security. That 
historical experience, however, does not absolve us from 
conducting our due diligence to ensure that such investments do 
not compromise the security of the U.S.
    Responsibility for that review course is vested in the 
Committee on Foreign Investments in the United States (CFIUS), 
which you chair. Many have suggested that CFIUS is in need of 
reform. In fact, both the House and Senate are giving serious 
consideration to reforming CFIUS.
    Is there a need for reform?
    Secretary Mnuchin. There absolutely is a need for a reform. 
I take my role very seriously in chairing CFIUS. It is a very 
important interagency committee. We have been very aggressive 
in using our powers. The administration very much supports the 
FIRRMA legislation, and we look forward to working with 
Congress getting this passed as soon as possible.
    Mr. Rogers. If the Foreign Investment Risk Review 
Modernization Act had been enacted earlier, would CFIUS had 
looked at the attempted Qualcomm-Broadcom acquisition 
differently, do you think?
    Secretary Mnuchin. In that circumstance I think as you know 
it was one of the few times where the committee acted rather 
rapidly on an evolving situation, and we reviewed that very 
carefully.
    We were comfortable that we had those powers under the 
existing legislation. But there are many transactions that have 
gone through that we do not have the ability to enforce because 
the legislation is old and needs to be expanded. So that 
specific transaction, we had authority but notwithstanding, 
again, I encourage Congress to work on expanded authorities.
    Mr. Rogers. Now, are U.S. investments welcomed in foreign 
countries? Are those investments subject to similar national 
security review? And would changes to CFIUS here result in 
corresponding changes by other countries?
    Secretary Mnuchin. Well, let me first comment that the 
United States is the most open market in the world for both 
trade and investment, and that is something we are very proud 
of and something we are very pleased with. So going back to the 
trade issue, the President wants free and fair reciprocal 
trade. So we are only looking for to be treated the same way 
abroad.
    As it relates to investment, we welcome foreign investment. 
We also welcome our ability to invest overseas. So, no, Mr. 
Chairman, I do not see anything that will hinder this, and if 
anything, we are working with the European countries on 
enacting similar CFIUS-type of legislation and we would 
encourage them to have appropriate restrictions for national 
security concerns.
    Mr. Rogers. Back a minute to the multilateral development 
banks--MDB. Last year, I asked you about proposed cuts to the 
MDB program. That trend of cutting multilateral development 
bank contributions continues into this year. Do these cuts 
reflect your doubt about the cost-effectiveness of MDBs?
    Secretary Mnuchin. No, I think in general we very much 
support the multilateral development banks. I also want to put 
this in context that last year we had a program very carefully 
on taxpayer dollars.
    In the original plan of last year's, the original budget 
was to make sure that we could pay for the increases in 
military by cutting nonmilitary where we thought we could do so 
without doing much harm. Now, obviously, since then the omnibus 
has been passed. We are comfortable with the 2019 request, but 
again, these were all put in the context of we were concerned 
about government spending in general.
    Mr. Rogers. Mrs. Lowey.
    Mrs. Lowey. Before I go to my question, Mr. Secretary, I am 
a little confused, because Secretary Mattis has made it very 
clear that the less we spend on diplomacy, the more we are 
going to have to spend on bullets. So he has been a real strong 
advocate of most of the programs, if not all of the programs, 
that we are advocating for in this bill.
    So I was a little confused with what you are saying. 
Certainly, an increase in defense doesn't mean we should 
automatically decrease some of these other programs.
    But let me follow up on Mr. Fortenberry's question, and I 
would like you to elaborate on your answer. Mr. Secretary, U.S. 
interests transcend borders, and the only way to tackle global 
challenges is through partnerships. There appears to be a 
change in policy regarding U.S. participation in multilateral 
institutions that have not been discussed with the Congress.
    Last year, for example, the U.S. abruptly announced it 
would no longer support the Global Agricultural and Food 
Security Program and for the first time in 30 years did not 
make a pledge to the replenishment of the International Fund 
for Agricultural Development, despite participating in the 
replenishment process over the course of a year. Why are you 
stepping away from these institutions?
    Secretary Mnuchin. I would just make a general comment. 
Again, we appreciate what you allocated last year. I think our 
request is still for a very large amount of money. We are, in 
almost all of these facilities, the largest donor, and we 
continue to believe in all of these.
    So, again, I think this is more of a function of where we 
are suggesting to use taxpayer dollars, how we allocate them. 
Some of these we control at Treasury. As you said, some of them 
are controlled through the State Department, as well.
    Mrs. Lowey. Now, it is my understanding that USAID was not 
consulted. Were they consulted on these decisions?
    Secretary Mnuchin. These go through an interagency process 
that OMB and the White House coordinates. So, yes, that is--it 
is OMB's responsibility to coordinate these on an interagency 
basis and I believe they have done that.
    Mrs. Lowey. Can you say or do you think you should get back 
to us with certainty that USAID and the people there who have 
the expertise in these programs were consulted?
    Secretary Mnuchin. Well, I cannot tell you--I did not 
personally consult with them, but I speak to the people at 
USAID on lots of international issues, but I will look into 
that and get back to you.
    Mrs. Lowey. I would appreciate it. And, if you could 
explain, again, how a 50 percent cut to the Global Environment 
Facility serves U.S. interests?
    Secretary Mnuchin. Because that facility has a very 
specific purpose on cleaning up certain things. Those issues 
have been cleaned up. So, again, it is not to say that the 
environmental issues are not important.
    But, again, this entity had a mandate. This mandate will be 
filled and we are not looking to use taxpayers' dollars to 
expand it beyond its original mandate. If there is a need and 
the mandate changes, we would fund that. We believe we are 
meeting the obligation of what the purpose of specific cleanups 
were.
    Mrs. Lowey. I would be most appreciative if you could get 
back to me with specifics about how this mandate was fulfilled, 
because we must have a different view of that.
    And lastly, the Treasury Department and the State 
Department are responsible for tracking illicit financing and 
interrupting the activities of criminal networks overseas 
before they become threats to the U.S. One of our greatest 
national security threats comes from North Korea, which, as a 
result of years of international economic sanctions, 
increasingly relies on illicit financing to keep weapons 
programs afloat.
    Can you discuss the current pressure on North Korea by 
targeting these flows? How can we increase the pressure on 
North Korea by targeting these flows? Can you explain any 
action in this regard?
    Secretary Mnuchin. Absolutely. Well, first of all, we have 
requested and we appreciate the additional money that we 
received this year to support our TFI functions. We have 
increased the resources dramatically that we have allocated to 
North Korea and these other issues. We have done more sanctions 
against North Korea in the last year than we did in the 
previous history.
    We believe that a major reason why the process is going 
forward is the maximum pressure campaign that not only we have 
done, but we have worked with our allies and China on, and we 
will continue to do so.
    Mrs. Lowey. Thank you. Thank you, Mr. Chairman.
    Mr. Rogers. Mr. Price.
    Mr. Price. Thank you, Mr. Chairman and I apologize for my 
late arrival, but we have multiple hearings, as everyone knows. 
Mr. Secretary, welcome.
    I would like to pick up, first, on what I understand you 
have said, previously, this morning about the Iran sanctions 
situation and then turn to the question of arrears with respect 
to multilateral organizations.
    But just to clarify on the Iran sanctions, we are facing a 
situation where U.S. participation in the Iran agreement could 
be terminated. I strongly oppose such termination. Iran has 
abided by this deal, although their behavior in other areas 
leaves a lot to be desired and is still sanctioned. I can't 
imagine anything they are doing that wouldn't be made more 
dangerous if they also had nuclear capacity or were, once 
again, actively working toward developing nuclear weapons.
    So, it would be, I think, a catastrophic decision. But if 
it were to be made, then the sanctions go back on. I think it 
is important to realize, though, that the sanctions that 
brought Iran to the table were not just U.S. sanctions. They 
were U.S.-led, but these were multilateral sanctions.
    The sanctions that brought Iran to the table in the first 
place were the result of an extraordinary diplomatic effort 
which included the countries, not just our western allies, but 
also Russia and China.
    So I am sure you did not mean that were we to abrogate the 
deal or to pull out, that the international sanctions regime 
would be reinstated. And since I know you could not have meant 
that, I need to ask what the effectiveness of unilateral U.S. 
action, in this regard, could possibly be?
    Secretary Mnuchin. Well, first of all, I just want to 
comment that this is a deal that was not approved by Congress. 
Two, it is not a function of us pulling out of the deal. It 
will be a function of whether the President decides to sign a 
certification that he is required to sign by Congress for the 
sanctions relief to stay in place.
    If the President decides not to sign that, it does not mean 
that we are necessarily pulling out of the deal. What it means 
is that the primary and secondary sanctions will go back in 
place. It is an automatic procedure under the congressional 
legislation. And we would expect to enforce those international 
sanctions, both primary and secondary sanctions.
    In this format, I do not want to--again, let me be clear. 
We have no interest in having Iran having nuclear weapons. That 
is absolutely something we would prevent. Again, some of our 
allies were interested in signing the deal, some of them were 
not interested in signing the deal. But there is bad behavior 
all over the world, including in Syria right now, that the 
President is very focused on.
    Mr. Price. You are saying that failing to waive the 
sanctions would not constitute pulling out of the deal? I mean, 
the deal is all about sanctions and lifting sanctions. It is 
these international sanctions, sanctions observed by Germany, 
Great Britain, France, Russia, China, and many other countries. 
The international aspect of those sanctions is what brought 
Iran to the table in the first place.
    Secretary Mnuchin. And we have the ability to enforce many 
aspects of those international sanctions in dollars if the 
sanctions go back in place. But again, I look forward to 
talking to you more about this in a different setting.
    Mr. Price. All right, I have used most of my time Mr. 
Chairman. But I would appreciate some commentary--if we could 
have it--about these arrearages. We have been a leader, of 
course, in fostering international cooperation, and so when we 
are in arrears, it sends signals as well as hampers the 
operations of these international institutions. So I wonder 
about the cuts.
    Secretary Mnuchin. Mr. Chairman, if you would like me to--I 
would be happy to comment on the arrears issue, if you would 
like me to.
    Mr. Price. Please do.
    Secretary Mnuchin. So, first of all, I look forward to 
working with the committee on this issue. The issue of arrears 
has to do with the way these commitments go forward. So the way 
we make commitments to these entities is Treasury negotiates a 
commitment, Treasury works with OMB on the approval for that 
commitment, and we sign a commitment. That commitment is 
obviously subject to appropriations since we cannot bind the 
U.S. government without Congress acting.
    So the issue of these arrears is really a legacy issue that 
we have inherited. We look forward to working with the 
committee on that. But when Congress appropriates money, we 
apply that money to the most recent commitments, and again 
these previous commitments are obviously--had been subject to 
at the time appropriations.
    Mr. Price. My time has expired. Mr. Chairman, if I could 
ask for the record that we have a rationale provided about the 
cuts that have been included in this budget that apply, as I 
understand it, precisely to the very multilateral development 
institutions that we have made payments to and given some 
priority to in recent years. Thank you.
    Mr. Rogers. Mr. Fortenberry.
    Mr. Fortenberry. Mr. Secretary, I want to return just 
briefly to the Global Environment Facility, the GEF, you give 
in your answer. But one thing to keep in mind is--I think the 
administration has done a very good job of encouraging a reset 
in a lot of our multinational agreements and relationships, in 
other words, saying in this century, the United States' 
sacrifice and generosity has to be partnered in an authentic 
way with your own sacrifice and contributions.
    Regarding the GEF, it is important to keep in mind that the 
U.S. contribution is leveraged six to one by other major 
donors. So this will probably continue to come before the 
committee because there is, as you suggest, maybe the narrower 
mission might be somewhat accomplished, but there are broader 
aspects of dynamics out there regarding emerging missions, 
wildlife trafficking has its ties to terrorist funding, as well 
as sustainability issues in terms of attacking global poverty 
that are important to see through the lens of this facility, as 
well. But I will leave it there for now.
    You mentioned in your testimony--clearly these are 
priorities for you, the relationship with the World Bank and 
the IMF--our alternative executive director to the IMF. I would 
encourage you to put as a part of our mission or make a 
priority as part of our mission, the fight of anticorruption 
and bring a fight to anticorruption measures in international 
finance institutions.
    This is very important so that we ensure back to the 
longer-term strategy if we are participating in multilateral 
initiatives that it is going to the right place to help the 
most vulnerable and to build out the sustainable systems that 
actually bring about protection for those who are most in need 
in just governance structures.
    I think the IMF with its extraordinary role that it plays 
in reform around the world should integrate this into their 
primary mission. I would like your perspective on that.
    Secretary Mnuchin. I agree with you and we look forward to 
following up and talking about that, but I do agree with you.
    Mr. Fortenberry. Let me ask you about JCPOA one more time, 
as well. What would you recommend to the President?
    Secretary Mnuchin. I am not going to in the setting comment 
on my personal recommendations to the President. Those are 
obviously confidential. But I am intricately involved in this, 
and I support the President's view, and we think very similarly 
on this.
    Mr. Fortenberry. I didn't think you would answer the 
question. I respect your prudence in that regard, but it was 
meant to be provocative. Obviously, this is coming upon us 
quickly and given Congress's--the problem we have of lurching 
from crisis to crisis without the ability to think through 
long-term strategic planning, I do think that both the 
consequences of being in this and the consequences of not being 
in this, be thoroughly thought through--in a dynamic, ongoing 
conversation with us if it does need to be in private is of 
absolute urgency.
    Secretary Mnuchin. OK. I just want to assure you, these 
discussions have been going on for the last year. The President 
has signed the waiver several times with very clear 
instructions as to what he wanted to do. I look forward to, 
hopefully, Director Pompeo being confirmed soon because he has 
been an integral part of these discussions and he would, in his 
new role, continue to be.
    Mr. Fortenberry. Well, look, a lot of us--I didn't vote for 
the agreement, either. One of the reasons I didn't was 
concerned about Iran's ballistic missile program and there were 
dynamics associated with the agreement that clearly have 
unleashed that.
    However, what we do not want to end up with, obviously, is 
some type of new arms race in the Middle East or our inability 
to actually leverage with international partners outcomes that 
we see that are desirable. If it is a delay moving toward a 
permanent stopping of Iran's nuclear weapons capability, 
wonderful. Losing that, though, is of course a huge problem and 
demands that we have an alternative strategy in place. But you 
have offered several times to meet in confidence or in another 
setting with some of us. I would appreciate being a part of 
that.
    Mr. Secretary, could I be a part of that?
    Secretary Mnuchin. Yes, I am sorry. I thought that was--I 
shook my head yes----
    Mr. Fortenberry. It was both a question and a statement. 
Thank you.
    Mr. Rogers. Thank you. Mr. Secretary, let me ask you more 
or less a philosophical question. It may appear to be rambling, 
and I am not sure how to phrase this subject. I am really 
thinking about the prowess of the China economic juggernaut.
    Everywhere that I go or hear from in the world, the Chinese 
are there with something that they had not had before, some 
office or some money or what have you. Tell us your 
philosophical thoughts about this new chess game, economic 
chess game that we are in with China and how you see that 
playing out.
    Secretary Mnuchin. I do not believe we are in an economic 
chess game at all. First of all, as I have said, I think 
President Trump and President Xi probably have the two best 
relationships of any two leaders between the United States and 
China. President Trump speaks to him regularly. I have met with 
and spoken to my counterparts over the last year regularly.
    We have been very clear in what the issues are. So these 
are issues that I think we all share. The trade deficit is too 
large. We have agreed to try to work together on that. The 301 
that Ambassador Lighthizer led was something that was carefully 
reviewed on an interagency basis and coordinated.
    The report is several hundred pages and goes through 
details on protecting our intellectual property. There were 
hearings on this. The President has announced potential 
tariffs. There will be discussions and reviews on this in a 
public format. So I think we have been very transparent in what 
our objectives are and what we are trying to do.
    As I have said now publicly many times, our objective on 
the trade dispute is to reach an agreement on our common vision 
of lowering the trade deficit and making sure that our 
companies have the same opportunities in China that Chinese 
companies have today here. If we are able to accomplish that, 
that is one of the biggest, single, opportunities for our 
companies in a large growing economy.
    Mr. Rogers. I appreciate your statement about the 
President's friendship with President Xi, but we have got an 
enormous trade deficit with China that keeps growing. And we 
are talking hundreds of billions of dollars a year. And it has 
been going on, now, for a long, long time.
    We have seen the Chinese economy grow to enormous 
proportions, enormously fast, at our expense. So what is it 
about that picture that we are not seeing? I mean, why is this 
trade deficit so huge? And how are the Chinese able to build 
that kind of an economy at our expense?
    Secretary Mnuchin. Well, I think the simple reason why it 
is so large is because our markets are completely open and 
their markets are not. We buy over $500 billion of goods from 
them and they buy $130 billion of goods from us. Our economy is 
roughly--is not quite twice the size. Their number of people is 
multiples of ours. So, as I have said, this is something that 
we believe--our objective is to increase our exports. That is 
our clear objective to narrow this deficit.
    Mr. Rogers. Well, in the meantime, we are seeing the 
economic structure of this country being eroded by this 
enormous difference in trade with China principally. So I wish 
you and the administration all the good luck in the world in 
trying to bring that balance that is necessary into more of an 
even nature.
    Secretary Mnuchin. Thank you. That is the President's 
objective.
    Mr. Rogers. Mrs. Lowey.
    Mrs. Lowey. Are we going or concluding?
    Mr. Rogers. Do you have other questions?
    Mrs. Lowey. No, I think we have explored a whole range of 
issues, and I do hope, Mr. Secretary, we will have some ongoing 
discussions. And, certainly, there were several areas where you 
said this would not be the appropriate forum for discussing it, 
such as additional sanctions that are being considered by the 
U.K., France, and Germany and Iran's ballistic programs, the 
production of nuclear fuel, et cetera, separate from the JCPOA.
    I think you have heard from our panel is unanimity of 
thought on keeping the JCPOA in place but considering other 
sanctions dealing with ballistic missiles and other 
inappropriate actions by Iran. I want to thank you for having 
this hearing. Thank you for appearing before us.
    Secretary Mnuchin. Thank you very much. Appreciate it.
    Mr. Rogers. Mr. Secretary, thank you very much for being 
with us this morning, and we hope you stay in touch with us. We 
want to be of help to you. Your success is our success--I am 
talking about the country--and we wish you well. Hearing is 
adjourned.

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                                          Thursday, April 26, 2018.

           UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT

                                WITNESS

AMBASSADOR MARK GREEN, ADMINISTRATOR, USAID

                  Opening Statement of Chairman Rogers

    Mr. Rogers. Good morning. The subcommittee will come to 
order.
    We are pleased to welcome back to the House Ambassador 
Green. We appreciate your being here today, Mr. Ambassador, and 
we are proud of the fact that you represent us to the world, 
really, the House, that is, for your honorable service here a 
few years back.
    We look forward to hearing from you on how the budget 
request supports the administration's national security 
strategy, as well as the Department of State and USAID's joint 
strategic plan, while decreasing the reliance on foreign aid.
    I want to thank our Full Committee Chairman who I think 
will be here at some point during the hearing and the Ranking 
Member for their leadership on these issues. Chairman 
Frelinghuysen is well versed on foreign assistance, and so I am 
pleased to have his interest and input as we proceed.
    Last year, Ranking Member Lowey and I continued our 
longstanding tradition of working together to advance our 
shared goals, and I expect that we will continue that process 
through the appropriations process again this year.
    The president's fiscal year 2019 budget request is for 
programs within the jurisdiction of this subcommittee in the 
amount of $41.7 billion, which is $12.3 billion, or 23 percent, 
below current 2018 enacted level. I am once again dismayed by 
the magnitude of these cuts.
    Even after a budget agreement was struck, proposing such a 
significant cut for the second year in a row calls into 
question the value the administration places on diplomacy and 
development and its irrefutable contribution to our national 
security.
    While I support many of the goals proposed in this budget 
request, the funding levels requested, as compared to the 
enacted current level, call into question how such goals would 
be met. For example, the budget purports to counter Russian 
aggression, but the funding associated with these efforts is 
reduced by more than half. The request also claims to support 
U.S. leadership in Global Health, yet the budget reduces such 
funding by nearly 23 percent. USAID released a new mission 
statement that emphasizes democratic values, but funding 
requested for democracy programs was cut by 39 percent.
    There is bipartisan support in this subcommittee for 
continued investments in soft power, particularly at a time 
when diplomatic and development challenges have grown both in 
number and complexity. Just as we did in fiscal year 2018, this 
subcommittee will carefully review the proposals in the budget 
request, assess the current diplomatic and development 
challenges, and determine the funding amounts for such programs 
and activities within our allocation.
    In addition to setting funding levels, the state foreign 
operations bill will continue to focus on oversight and 
ensuring transparency for every taxpayer dollar spent.
    Before closing, I want to mention USAID's reorganization, 
or transformation, as I understand you now call it. We 
discussed this at your last hearing, and I had a chance to 
discuss it with you yesterday in my office, and I want to thank 
you for your efforts to share the additional information. Your 
staff and you have been very forthcoming with this 
subcommittee, and we appreciate that especially.
    I know you are just beginning your outreach on the details 
of the proposals, so I encourage you to keep us informed and be 
open and responsive to feedback as you already have done. I 
also urge you to proceed carefully. The transformation touches 
nearly all aspects of the agency. Implementation will need to 
be done in a manner that enables USAID to implement, monitor 
and evaluate programs and activities in a timely manner.
    Finally, I want to thank the men and women of USAID who are 
doing important work around the globe during very difficult 
times, both abroad and here at home. We appreciate their 
service to the country, as we do you, Mr. Ambassador, and your 
staff here.
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    Let me now recognize Madam Ranking Member for her opening 
remarks, Mrs. Lowey.

                Opening Remarks of Ranking Member Lowey

    Mrs. Lowey. Thank you, Mr. Chairman and Administrator 
Green. Thank you for joining us today.
    Since your confirmation, I have been impressed by your 
passion and your dedication to USAID and the important work of 
our development professionals. You demonstrate a commitment to 
bettering the lives of the most vulnerable, including almost 70 
million displaced men, women and children around the world.
    And yet, you come before us today to defend the Trump 
administration's budget, which will once again cut 30 percent 
from our diplomatic and development efforts. If enacted, it 
would not only hamstring our diplomacy, it would: substantially 
harm the development capabilities of USAID; recklessly 
undermine U.S. leadership; put our embassies and staff at risk; 
stymie our efforts to counter violent extremism; and fight 
terrorism, and harm the very people you and your agency are so 
dedicated to helping.
    Some of the most catastrophic parts of this request: ignore 
the impact of climate change on national security; zero out 
funding for food aid and vulnerable children programs; and 
severely cut historically bipartisan programs such as bilateral 
family planning, basic education, water and sanitation, the 
Global Fund, PEPFAR, nutrition, and international disaster 
relief.
    Many of the lawmakers in this room and throughout Congress 
understand that our national security is strongest when 
development, diplomacy, and defense are equally supported. We 
cannot make America stronger by eliminating the programs that 
make our nation more secure. As a result, I am confident 
Congress will again reject these insufficient levels and 
instead boost our international investments.
    But I am gravely concerned by the long-term damage this 
administration is inflicting on USAID. The president, who seems 
to view development assistance as ill-advised charity, does not 
seem to appreciate that global challenges do not have military 
solutions alone and, ``soft power'' is a fundamental tool of 
our national security.
    As Secretary of Defense Mattis said, ``America has got two 
fundamental powers--the power of intimidation and the power of 
inspiration. Soft power is largely found in the power of 
inspiration.''
    Our foreign and civil service officers at USAID and State 
are the backbone of our overseas efforts. Without them, we are 
unable to promote American interests, build relationships, and 
help those most in need.
    In addition, while I appreciated the opportunity to discuss 
USAID's transformation plans with you yesterday and acknowledge 
the improved consultative process since your arrival, this 
Committee continues to have serious concerns regarding the 
Administration's so-called, ``reorganization and redesign'' 
efforts, at State and USAID. To date, the effort has led to 
stagnation, confusion, and low morale throughout the agencies 
that execute our foreign policy.
    I have consistently said that I support reforms to make our 
overseas programs more efficient and accountable. However, any 
redesign at State and USAID will not be sustainable over the 
long term without Congressional assent and the lack of 
communication from this Administration, including OMB, on 
reorganization efforts will not lead to sustainable reforms.
    Again, thank you for appearing today. I look forward to our 
discussion. And I must tell you again, as I have said both 
publicly and privately, it is very special for me to have a 
person of your experience and of your commitment in this 
position. Thank you for appearing before us today. Thank you.
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    Mr. Rogers. Mr. Administrator, we would like to hear from 
you.

                Opening Statement of Administrator Green

    Mr. Green. Thank you. Thank you, Chairman Rogers, Ranking 
Member Lowey, and members of the subcommittee. Thank you for 
this opportunity to summarize my written testimony.
    I would like to begin this morning by welcoming the 
nomination of Director Pompeo. I had the opportunity to 
initially discuss with him how development and diplomacy go 
hand-in-hand, and I very much look forward to working with him 
closely should he be confirmed.
    In the meantime, as many of you have alluded to at USAID, 
we have urgent work to do. From unprecedented humanitarian 
challenges to exciting development opportunities, our work has 
never been more important. That has certainly been a clear 
takeaway from my travels over these last 8 months.
    I have just returned from Peru and the Summit of the 
Americas. While there, Acting Secretary Sullivan and I met with 
courageous pro-democracy activists from Cuba. They shared with 
us that this is a critical moment in Cuba's history and urged 
us to support seeds of true liberty and democracy, not only for 
Cuba, but for Venezuela and elsewhere around the hemisphere.
    In fact, much of the recent summit focused on Venezuela. 
The vice president and I announced $16 million for our 
humanitarian response to the flight of Venezuelans from the 
Maduro regime. This displacement of families is unprecedented 
in Latin American history. What makes the tragedy even more 
painful is that it is entirely manmade. It is caused by the 
Maduro regime's continued mismanagement and corruption.
    And similar forces are causing humanitarian crises in 
nearly every corner of the globe. Near-famines continue to rage 
in Nigeria, Yemen, Syria, and Somalia, all manmade. As I know 
you agree, in order to fully respond to these crises we need to 
address their underlying causes. Just as we lead the world in 
humanitarian assistance, we should also lead in our commitment 
to democracy, human rights, and responsive governance.
    Our fiscal year 2019 budget request includes funding for 
our democracy and governance programs in Venezuela that support 
civil society, the democratically elected legislature, and the 
free flow of information.
    Last month, I addressed the U.N. Security Council on the 
crisis in the DRC. I urged the Kabila government to hold 
credible and inclusive elections by the end of the year. And I 
am deeply concerned, as I know you are, over reports of 
horrific human rights abuses in Burma in the northern Rakhine 
state. I will soon be traveling to Burma and Bangladesh to 
assess this situation first-hand.
    Members of the subcommittee, I have had the chance to 
discuss with many of you the rising negative influence of 
Russia and China. Many of you have noted a disturbing global 
trend toward the repression of basic liberties. Many of you 
have pointed out that these are significant challenges, not 
only for our interests, but for the future of the countries 
involved. In response, our 2019 request includes targeted 
investments in Europe and Eurasia that support democratic 
institutions and civil society, while countering the Kremlin 
influence.
    We also recognize that China's investments in developing 
countries are rarely aimed at actually helping those countries 
achieve their economic independence. Often, they come with real 
strings attached. We must offer these countries a better 
choice. We should offer to help them on their journey to self-
reliance, not burden them with unsustainable indebtedness.
    Members of the subcommittee, the fiscal year 2019 request 
for USAID fully and partially managed accounts is approximately 
$16.8 billion. This represents $1.3 billion more than requested 
last year, including $1 billion for humanitarian assistance. We 
readily acknowledge that this request will not provide enough 
resources to meet every humanitarian need or to seize every 
development opportunity. Indeed, no budget in modern times has.
    This request attempts to balance fiscal needs at home with 
our leadership role on the world stage. And our work has never 
been more important or, sad to say this morning, more 
dangerous. In April alone, we have seen humanitarian workers 
killed in South Sudan and Yemen, simply for trying to ease the 
suffering that pervades both countries.
    We are committed to taking every step to extend the reach 
and effectiveness of our taxpayer resources and to try to 
protect our staff and partners. We are also committed to 
working closely with this committee to ensure that your ideas 
are reflected in our agency's transformation plan.
    Finally, I would like to say a quick word about recent 
published reports of sexual abuse and misconduct by aid 
workers. Like you, I am deeply troubled by the allegations. 
Needless to say, sexual exploitation violates everything we 
stand for as an agency. I have met with partner organizations 
and made it absolutely clear that USAID will not tolerate 
sexual harassment or misconduct of any kind. And we have taken 
numerous other steps and actions and will do whatever else it 
is that we need to do. I assure you this is an action and an 
issue that I am personally tracking.
    With your support and guidance, we will ensure that USAID 
remains the world's premier international development agency. 
And with that, Mr. Chairman, thank you for the opportunity to 
appear. And I welcome your questions
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    Mr. Rogers. Well, thank you, Mr. Ambassador. Your team 
began consultation with our subcommittee on your proposed 
reorganization 2 weeks ago. And we appreciate the fullness of 
those briefings and look forward to ongoing consultations and 
formal notification as required in the 2018 bill.
    I understand that the inspector general recommended a 
number of key areas for you to focus on as you develop the 
reform plan. It seems to me this reorganization presents an 
opportunity for a more efficient and effective agency if you 
can address those chronic management challenges that we have 
seen for a long time.
    Explain to us how your proposed reorganization will address 
the top management challenges identified by the inspector 
general.
    Mr. Green. Thank you, Mr. Chairman. I appreciate the role 
of the OIG at USAID. She or her representative sits in our 
senior management meetings every week, and I have also very 
much appreciated their role on the process of transformation. 
So we have already incorporated a number of their 
recommendations into our redesign process, and we will continue 
to do so as we go forward. That is an important part of the 
work that we do in making sure that whatever we do is 
sustainable.
    I should also point out that we have worked very hard to 
take the constructive work of the OIG and build them into both 
our programming and our overall operations. In the last 6 
months, we have reduced the backlog of audits from OIG by 75 
percent. They were at 100 percent last year. They are down to 
23 percent, and we are on track to eliminate the entire backlog 
by June. And so we continue to incorporate those results.
    But in the process of redesign, we have worked closely with 
OIG, making sure that we take the office input and incorporate 
them into the design process.
    Finally, I would like to say one of the things of which I 
am most proud with respect to the redesign process, all of the 
work that we have done, the five principle work streams, which 
is how we organize the recommendations, since day one have been 
led by our career staff. We believe it is the best way to make 
sure they reflect the years of experience and best ideas that 
we have at USAID, and we also believe it is the only way to 
make the work sustainable.
    What we are looking to do is to make sure that USAID is not 
only the world's premier agency today, but it continues to be 
in the years ahead, and that is really the spirit within which 
or under which this whole process has been undertaken, and that 
includes involving the Office of the Inspector General to make 
sure that we take their counsel, their input and incorporate it 
into our work.
    Mr. Rogers. As I mentioned in my opening remarks, one thing 
that has stood out thus far is that the reorg would touch 
nearly the entire agency. It is one thing to develop a proposal 
for a reorganization of this scope; implementation, though, is 
where the real work begins.
    I have previously chaired the, at that time, new Homeland 
Security Subcommittee, trying to help merge 23 agencies into an 
effective organization. That work is still going on, and far 
from completion. So this likely will be a longlasting effort. 
Do you agree with that?
    Mr. Green. Very much, Mr. Chairman. We are--again, we have 
organized the recommendations that were produced by our staff 
into five work streams, and the only one that we have really 
sort of gone public with at this point is the structural piece, 
because you are exactly right. This will take months and months 
to do, and we will do it the right way.
    So I absolutely agree with that.
    Mr. Rogers. Well, undertaking such significant reforms as 
you are over a short period of time could impact your ability 
and your effectiveness in delivering and monitoring foreign 
assistance in the meantime. How can you assure us that your 
agency's work will not suffer due to the amount of work 
required to reorganize and reform?
    Mr. Green. Thank you, Mr. Chairman. A number of ways. First 
off, our commitment in monitoring and evaluation continues 
unabated and will continue to be a part of every one of our 
programs and projects. Secondly, we continue to be in 
consultation with the Office of the Inspector General to make 
sure that we are constantly getting that feedback, as well. And 
also, the work that we are doing is led by our experienced 
career staff and making sure that we are doing things, again, 
the right way.
    But I think the most important point is the one that you 
began with. This will take quite some time and is intended to 
be done gradually, each step building on the other, in full 
consultation with your staff and the other committees of 
jurisdiction. We have provided more than 40 briefings so far to 
members and their staff and will continue to do that.
    We look at our consultation role as just that, 
consultation, not notification, not informing, but coming 
forward, showing you what our career staff have produced, the 
logic behind it, what the implementation plan is, getting your 
feedback, making sure that what you bring forward is 
incorporated and considered in the work that we do. So we are 
absolutely committed to it.
    All of the changes that we are looking to do, whether they 
be in structure, which is actually only about 20 percent of the 
work, but the other changes, they are all really built around 
what I have been talking about since the day I was nominated. 
We believe that the purpose of foreign assistance must be to 
end the need for its existence. And so everything that we are 
trying to do is to work with country partners, assess capacity, 
commitment, and work with them on their journey to self-
reliance so that one day if the steps are taken and the 
commitments are made and the work is done, these countries will 
be able to lead their own development, and that is the goal.
    What we believe is what we are looking to do through 
transformation, which is identifying metrics, is making sure 
that our programming reflects assessments that are done in the 
field and are field-driven to cross-fertilization of best 
ideas. All of it is with that in mind. That is the way that we 
believe that we live up to the commitments that we have made to 
all of you, our generous funders.
    Mr. Rogers. Have you reduced your reorganization plan to a 
chart?
    Mr. Green. You have seen it. We have actually given our 
proposal on the structure. We have briefed your staffs with 
that. So, yes.
    Mr. Rogers. I have seen the chart. I didn't know whether it 
was public yet or not.
    Mr. Green. It is part of consultation, so it is not 
finalized. But we are taking your input--we don't believe it is 
finalized until we have had an opportunity to hear more from 
your staff and incorporate all of that. But----
    Mr. Rogers. Do you have that chart available for us?
    Mr. Green. We will get it to you again today, absolutely.
    Mr. Rogers. Yes, I think our members would like to see it. 
I have seen it, and two things strike me. One, you are naming 
two new associate directors----
    Mr. Green. Administrators, yes.
    Mr. Rogers. Administrators, one essentially over contents 
of programs. The other, in a simplified way, an operations 
director, I guess you would call it. Is that right?
    Mr. Green. That is the proposal. That is what we are 
putting out for discussion and your feedback, yes.
    Mr. Rogers. I like the wisdom of doing that, so I salute 
you in that regard so far. Now, you have consulted OMB about 
the plan, correct?
    Mr. Green. Yes, we have.
    Mr. Rogers. And what did they say?
    Mr. Green. To date, the feedback has been very 
constructive. They have continued to allow us to move forward 
as we are with you.
    Mr. Rogers. Have you had a chance yet to discuss this with 
Secretary-to-be Pompeo?
    Mr. Green. I have not. He has been otherwise occupied 
recently. But the single conversation that I had with him, 
substantive conversation a couple of weeks ago, when we talked 
about general notions on development and the role of 
development alongside diplomacy were very constructive. And so 
we believe that the State Department--we will work closely with 
the State Department.
    The redesign that obviously we are talking about here and 
that you have seen is the USAID redesign. This is not the joint 
State-USAID redesign that was contemplated previously under 
Secretary Tillerson.
    Mr. Rogers. But so far, you have got the green light from 
the powers that be?
    Mr. Green. So far, so good, Mr. Chairman.
    Mr. Rogers. Before I yield to Mrs. Lowey, let me just make 
one point. You know, we hear--all of us in our home districts 
and elsewhere--that if we would just reduce foreign aid, we 
would balance the budget. People have a lot of misinformation 
about the amount of money that this country spends on foreign 
aid.
    I calculated it. All the money in this bill amounts to 4 
percent of total federal discretionary spending, 4 cents on the 
dollar. I just wanted to be sure that we understood the numbers 
we are talking about.
    Mr. Diaz-Balart. I apologize, Mr. Chairman. That is 
discretionary. If you actually get all of the expenditures, it 
is then--it is not even a rounding error, right, almost.
    Mr. Rogers. We will calculate that while we are talking 
here. Mrs. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman. I want to say again 
that you are a breath of fresh air and it is such a delight to 
have you in this capacity. I appreciate your experience and 
your commitment.
    Following up on the Chairman, just tell us today, do you 
believe the 30 percent cut to foreign assistance sends a signal 
that America is abdicating its leadership, moral values, or 
humanitarian commitments?
    Mr. Green. Congresswoman Lowey, I believe the 
administration had difficult choices to make. There was a 
difficult balance, balancing American leadership abroad versus 
needs here at home, and I think this budget request reflects 
that.
    Mrs. Lowey. Do you agree that should--you personally----
    Mr. Green. So, what I would say, Ranking Member, is that my 
obligation is to take the precious money that you provide and 
to make it go as far as we possibly can, with quality 
programming worthy of taxpayer support. So we are taking steps 
from working better with the private sector to asking other 
partners to do more, and they are. Funding is increasing, ODA 
funding, countries like Germany, Japan, South Korea, and 
others, and to try to make these dollars go as far as they can.
    I readily admit this will not meet every humanitarian need, 
nor will this seize every opportunity that is out there. That 
is most definitely true.
    Mrs. Lowey. I just want to express to you my concerns which 
you are aware of. How can the president and his OMB director be 
so confident that those who fill the void will support our 
values or care about the national security of the United 
States? Are you?
    Mr. Green. We are lucky to have good funding partners in a 
number of places of the world, but I do not believe there is a 
substitute for American leadership.
    Mrs. Lowey. And does this administration believe that 
military power alone can prevent radicalization or prevent 
despair that leads to outburst, of violence and instability?
    Mr. Green. No, and I would point to the stabilization 
assistance review that has been formalized--Department of 
Defense, Department of State, and USAID--that talks about the 
important role of each, as well as the national security 
strategy. I think the administration recognizes the importance 
of development and diplomacy, and I know that nominee Pompeo 
does, as well.
    Mrs. Lowey. I look forward, in fact, to discussing these 
issues with nominee Mr. Pompeo, as well. So my question is--and 
this goes to the facts--why should the administration propose a 
budget that undercuts the very programs that prevent 
radicalization?
    Mr. Green. Again, Ranking Member Lowey, I think there are 
tough choices that are being made. I recognize that. I will do 
everything I can to capitalize on what is provided to us and 
make it go as far as we possibly can.
    Mrs. Lowey. Thank you. Another issue which disturbs me is 
the reimposition of the Global Gag Rule, particularly this 
administration's unprecedented decision to expand this terrible 
policy to all global health assistance. By inserting the policy 
into every area of global health, malaria, TB, pandemic 
preparedness, nutrition, vaccinations, and more, we undermine, 
in my judgment, our effectiveness and make it harder to reach 
the most vulnerable.
    I have repeatedly expressed my concern that the 
administration did not consider all the potential effects of 
this expansion, or worse did not care. We already know from 
past implementation that the policy increases the rate of 
abortions and unwanted pregnancies. Can USAID say with 
confidence that there will be no break in services for even the 
most remote populations?
    Mr. Green. First, if I may, you are a passionate advocate 
on this cause, and you have been passionate about the cause 
both publicly and with me privately. And what I have pledged to 
you and I repledge again today is to make sure that as we go 
forward in this process that we are absolutely truthful in 
providing information on what we see.
    We briefed your staff on the initial 6-month report on the 
implementation of protecting life and global health assistance. 
Your staff pointed out with, I think, some evidence that that 
is only the first part of the report that was only 6 months 
into the program, and we have pledged to once again work with 
the State Department as it provides a year-end review, and we 
will report the numbers to you accurately. We will be straight 
up and show you everything that we see and be very open in the 
process to make sure, in fact, that we are living up to our 
commitments.
    Mrs. Lowey. Well, just for the record, or if you have a 
response, that really surprises me that more analysis was not 
done before imposing the Global Gag Rule on all global health, 
including areas with no connection to pregnancy. What steps 
were taken to ensure that we would be able to find capable 
partners to continue providing life-saving interventions?
    Mr. Green. Thank you for the question. What I can say is as 
PLGHA was coming online, USAID--and I am sure State Department 
did, as well--undertook an education effort with all of our 
partners and potential partners. Fifty-three hundred I believe 
were done to make sure that there was clarity around the 
understanding of the provisions and do everything we can to 
make sure that there was no disruption.
    And so that is what we have undertaken to take. And as I 
have indicated earlier, my obligation to you is as we conduct 
this next review is to be very clear on the impacts and show 
you the numbers that we have so we are all working off the same 
facts.
    Mrs. Lowey. I appreciate that, but I am sure you realize 
that in February, State released a report on the first 6 months 
of the expanded policy's implementation. The report revealed 
that the policy has caused mass confusion, wasted implementers' 
valuable time, trying to understand and comply with the policy. 
How will the next review assess and evaluate service 
disruptions, inefficiencies caused by this policy? And how will 
USAID address the mass confusion created by this policy?
    Mr. Green. We will, as we have done to date, make sure that 
we are in constant communication with grantees, contractors, 
subs that we work with, or that are interested in working with 
us in the global health area, again, and this is as of some 
months ago had conducted 5,300 outreachs. In the 6-month 
report, as I understand it, 4 prime grantees and 12 subs, 
indicated that they would not receive funding, that they would 
not follow the PLGHA restrictions.
    But other than that, they were able to shift--we were able 
to fill the gaps by shifting over the work that they were 
doing. But again, my promise to you is to be absolutely clear 
with the facts that we have and the data that we have.
    Mrs. Lowey. Thank you. And thank you, Mr. Chairman. And 
because this is so critical in the field and because of my 
years of interaction with many of these grantees, I hope that 
there will be a careful analysis and report, and that there can 
be a movement in correcting these directives which seem to be, 
as I mentioned, causing mass confusion out there in the field.
    Thank you. Thank you, Mr. Chairman.
    Mr. Rogers. Thank you, Ma'am.
    Mr. Diaz-Balart is going to be recognized, but he brought 
up a point. We have calculated the percentage of total federal 
spending that is comprised in this bill. And what we spend on 
foreign aid is about 1 percent, about 1 percent of total 
federal spending.
    It is not 25 percent. It is not a third. It is not a half. 
It is 1 percent. Mr. Diaz-Balart.
    Mr. Diaz-Balart. Mr. Chairman, thank you. And before I 
begin, let me apologize. I am chairing my subcommittee next 
door, so I will have to leave after this.
    But, Ambassador, let me, again, first, thank you for your 
attendance, your leadership at the summit, which you mentioned, 
I think specifically meeting with members of--Cuban civil 
society. You talk about that. Also for your deep understanding 
of the nature and the reality of whether it is the Castro 
regime, the Maduro regime, the Ortega regime. It is--and there 
are fake NGOs. It is frankly refreshing.
    Also, you mentioned that you and the vice president's 
efforts for humanitarian relief for the Venezuelans, who are 
now the refugees who are either in Colombia or Brazil.
    So let me first ask you something about Nicaragua. The 
State Department's 2017 human rights report stated that the 
Ortega regime was responsible for arbitrary or unlawful 
killings, torture, lack of independence in the judiciary. I 
could go on and on. And last week, unfortunately, we saw that 
behavior in just all of its colors, right, where you saw the 
Ortega regime shut down at least four television stations. And, 
frankly, you saw people even dying in the streets.
    So how much of USAID's funding for Nicaragua is going to 
civil society and good governance? And how much of it for 
infrastructure and other development? Do you know?
    Mr. Green. Thank you. I believe that nearly all of it is 
going towards civil society, trying to foster voices at civil 
society in democracy and to encourage independent media and 
free voices in the country.
    Mr. Diaz-Balart. I appreciate that, Ambassador, because if 
anybody had any false ideas of the nature of it----
    Mr. Green. And--$6.5 million is going towards civil 
society.
    Mr. Diaz-Balart. Great. I think the notion that that regime 
was a decaffeinated dictatorship is no longer the case.
    Let me now go to, again, the--you like the decaffeinated 
part? Let me now talk about--and I know the vice president and 
you are committed to some serious funding for the humanitarian 
effort for the refugees and Venezuelans who are struggling with 
that dictatorship, how will USAID administer your portion of 
the funding? Will you also work with UNHCR or NGOs on the 
ground? Or how are you looking at doing that, making sure that 
it gets to the people that need it, as opposed to it filtering 
to the regime that is using all of the resources to repress the 
people of that country?
    Mr. Green. Thank you, Congressman. You know, first, I am 
struck as you are talking--when we take a look at some of the 
world's greatest humanitarian challenges right now, places like 
DRC and Venezuela, we have countries that should be donors. 
These are countries that should be, in fact, helping with 
assistance in the region, and yet they are drivers of the 
problems.
    With respect to Venezuela, when I had the opportunity to 
meet with Venezuelan opposition voices, first off, the 
suffering is almost indescribable that is taking place. But 
secondly, their own personal courage is really quite striking 
and remarkable.
    What is very clear is that what is happening in Venezuela 
is not simply a Venezuelan problem, as bad as it is in 
Venezuela. It is causing potentially dangerous forces to sweep 
across the region, Colombia, Brazil. I also had a chance to 
meet with the CARICOM nations, and some of those leaders were 
warning that they are starting to feel the impact of this surge 
in migration. So I think it is of severe consequences.
    So the $16 million that the vice president and I announced, 
that was for humanitarian assistance for those who have fled 
the country. We are also looking for--and it is on top of $2.5 
million we had announced about a month ago. We are looking for 
ways to try to help alleviate suffering in Venezuela. As you 
know, that is an extraordinarily difficult task because of the 
Maduro regime's rejection of such assistance. But again, the 
suffering that we are all seeing is horrendous and is--I worry 
that this is a problem that is going to be destabilizing and 
damage the entire region's prospects.
    Mr. Diaz-Balart. Mr. Chairman, thank you. You have been 
very generous. Let me just--and I appreciate--I think the 
statement that you just made is a key statement. It is not just 
a Venezuelan problem. Would you not agree, though, that that is 
the same situation--because if you look at Venezuela and you 
look at Cuba, in particular, that has been there even longer, 
not only are they problems for the region and the hemisphere, 
but they have close ties to Iran, to North Korea, to Assad in 
Syria, and, you know, you are seeing an increase of--you 
started seeing an increase of Russian presence in Cuba with 
their spy ships.
    So, again, it is so refreshing, Ambassador, to you and 
frankly the administration understands the situation that just 
because it is in this hemisphere that it is not less of a 
threat to our national security, but obviously and to the 
people who are struggling under those dictatorships. So, again, 
it is refreshing, and I look forward to continue working with 
you.
    Mr. Chairman, thank you for your leadership, sir, and I 
apologize that I have to go next door. Thank you.
    Mr. Rogers. Thank you, Mr. Chairman. We understand. Ms. 
Lee.
    Ms. Lee. Thank you very much. Well, since my colleague 
mentioned Cuba, let me just start by asking you about the 
``democracy promotion activities'' and I know my views are just 
the opposite of our colleague from Florida, because the greater 
the void and the greater the gap that the United States allows 
to take place in Cuba because of our lack of engagement, the 
more it is going to be filled by Russia and other countries.
    I also want to mention to you the situation with Alan 
Gross, USAID contractor, and want to make sure that U.S. 
dollars are not being spent in a way that would subject U.S. 
subcontractors and employees for liability, for violating not 
only Cuban law, but any laws of any country where we are doing 
what we call democracy promotion work. That is the first 
question.
    Mr. Green. Thank you for the question. First, as you know, 
we are legally obligated to ensure that assistance that is 
provided to Cuba inure to the benefit of the people and not to 
the regime or the military. And that is the overriding 
restriction, legal restriction that is upon us.
    So we support human rights. We support voices of democracy. 
We have provided humanitarian assistance to political prisoners 
in Cuba. That is a longstanding part of our work.
    Ms. Lee. But it is not very transparent. And oftentimes, it 
is perceived as being part of our undercover work.
    Mr. Green. Well, if I may--and this is true in many parts 
of the world--as you know, the Brownback amendment means that 
in those areas where there is closed or closing space, we 
balance our commitment to transparency to the security of those 
with whom we work. So providing assistance to voices in--well, 
pick your country, and many of the countries with closing space 
in Russia, wherever it may be, could put them in severe risk. 
And so we have to balance those important concerns.
    Ms. Lee. Okay, but you didn't answer my question. With U.S. 
contractors and employees such as Alan Gross, who got caught up 
unfortunately in--according to the Cuban government--criminal 
activity and who was incarcerated for 5 years, he was not aware 
of Cuban law and so there were no, protection by the U.S. 
government for him.
    Mr. Green. It was obviously long before my time. But I 
would be happy to come in with my team and brief you on 
precisely what we are doing.
    Ms. Lee. Yes, I would like to talk with you about that.
    Mr. Green. Sure.
    Ms. Lee. And let me ask you about the Kemp-Kasten amendment 
as it relates to UNFPA. I was at the United Nations this week, 
and I just have to tell you, the withholding of funds from 
UNFPA is really devastating. I believe that it is $68 million 
in funding that has been lost as a result of this policy. And 
these are services--reproductive health care services, 
maternity health care services, throughout the world, and 
especially in humanitarian situations that are being 
jeopardized.
    So what I am trying to figure out is, what are you doing 
with this money? Are you reallocating it to other 
organizations? How are we filling in the gaps? Why was the 
decision made to stop the funding? It is really tragic what is 
taking place.
    Mr. Green. Thank you for the question. The termination was 
made by the administration that--funding to UNFPA was not 
consistent with U.S. law and the provisions of protecting life 
and global health assistance.
    But to the first part of your question, which I think is 
key, yes, we are in fact in the process of developing a plan to 
reprogram that money towards maternal health, and it is not 
finalized yet, but we would be very happy to brief your staff 
on what it is that we are looking to do with the resources.
    Ms. Lee. Yes, I think we need to know that, because the 
organizations----
    Mr. Green. Oh, and we will absolutely----
    Ms. Lee [continuing]. That are doing this very important 
work are really stuck.
    Mr. Green. Absolutely.
    Ms. Lee. And they don't know how to proceed. They don't 
know what the U.S. is going to do. They are scrambling for 
resources, and they need to know.
    Mr. Green. First off, I know that other donors are 
providing such resources. But in terms of the U.S. resources, 
we are reprogramming it towards maternal health, and would 
definitely appreciate the opportunity to come in and brief your 
staff and let you know what we are looking at and what we are 
trying to finalize putting together.
    Ms. Lee. And finally, let me just say, I associate myself 
with all the remarks made by my colleagues with regard to these 
extreme budget cuts, because development and diplomacy seems 
now to not be a priority. It is primarily defense, when you 
look at the huge increase in the defense budget.
    You are cutting the budget--you are zeroing out Title II 
food for peace within, of course, ag appropriations. We look at 
Nigeria, Somalia, South Sudan and Yemen facing extreme hunger 
and famine. Treasury is requesting to eliminate the 
contribution for the International Food and Agricultural 
Development Fund. Are these cuts really necessary? I mean, how 
are we going to justify cuts when, in fact, the need is greater 
and we know the importance of development and diplomacy.
    Mr. Green. Congresswoman Lee, you are a passionate advocate 
and have been for a long time in the cause of development and 
diplomacy. And, quite frankly, the agency owes you a great debt 
for all that you have championed.
    With respect to the famine response, as you know, the way 
that the request has been made, IDA funds will be used in part 
to provide such assistance and support that assistance. In 
addition, again, I am not going to suggest to you that we can 
meet every humanitarian need that is out there with this budget 
request. That would not be truthful. It is not true.
    We are trying to balance needs here at home with leadership 
on the world stage. And my obligation is to do everything I can 
to make these dollars go as far as I can possibly take them. 
Leveraging the support of other donors, which is on the 
increase, which is good news, working better with the private 
sector, undertaking procurement reform, more effective 
partners, new partners, refreshing our work, all of those are 
obligations that we are undertaking.
    Mr. Rogers. The chair recognizes the gentleman from 
Pennsylvania, who has been a great member of this subcommittee 
and chairs another one of the subcommittees. This is his last 
hearing with the subcommittee. He is going into the private 
sector in--is it May?
    Mr. Dent. Middle of May.
    Mr. Rogers. So the chair recognizes Charlie Dent.
    Mr. Dent. Well, thank you, Mr. Chairman. And I want to 
thank you publicly for your good friendship and leadership and 
mentorship to me when you were chair of the full committee, 
and, of course, the chair of the subcommittee, as well. So 
thank you, Chairman Rogers, for all you have done to help me in 
my career here. It has been a great honor serving with you and 
everybody else on this subcommittee, for that matter.
    Administrator Green, I am excited that you are in the 
position given your passion and interest and commitment to 
these issues. I am thrilled that you are where you are. And I 
do also want to talk about the budget cuts and the challenge 
that I think you face and that--those who are concerned about 
the development mission of this country that it seems to me 
that we haven't done a very good job selling development in the 
United States.
    Frankly, we haven't done a very good job selling 
development to the budget director, apparently, at OMB. And 
that is why there is a 30 percent or 33 percent proposed 
reduction. And I suspect that this subcommittee and the full 
committee at the end of the day will pull USAID's chestnuts out 
of the fire and restore some of that--a significant portion of 
that funding.
    But I just wanted to get your thoughts about how USAID does 
a better job--can do a better job selling its mission to the 
people of the United States. The great work you do overseas is 
appreciated, certainly, by all of us. But if it doesn't have 
the support of the people at home, and particularly in the 
budget office, it is pretty hard to sustain the mission.
    Mr. Green. Thank you, Congressman Dent, for that thoughtful 
question. I will just for a moment say as I was walking in the 
jungles of Peru 10 days ago looking at some of the new cacao 
plants that were there, I couldn't help but think of your 
district and all the work that you have done around that issue 
and that crop.
    To your question, as we undertake our redesign efforts, an 
important part of that is trying to build the agency around the 
notion that I think is at the heart of America. And that is 
that we are not providing handouts. We are providing literally 
hands up.
    We are looking to help countries on their journey to self-
reliance because we believe in human dignity, we believe that 
every human being, man, woman, young, old, wants to lead their 
family, their community, wants their nation to have what we 
call the American dream. I would argue it is universal.
    And so we are trying to build around that notion. And I 
know, I come from flyover country in the Midwest. When I talk 
to people back home about how we are trying to help countries 
rise, to take on their own challenges, to build their own 
capacity, and that we are requiring them to commit to do these 
things in order to do that, what I generally get is, yes, okay, 
that makes sense to us.
    I think they have this notion that we are providing buckets 
of money to bad guys. As you know, we fund largely NGOs. We 
don't fund governments. There are very few places where we are 
actually funding governments, and where we are it is for 
capacity-building purposes. Shame on us. We have simply not 
been doing a very good job of describing that.
    I would go further and argue that we have another choice or 
comparison to lay out, and that is the different models of 
development that are out there. China now does development. 
They provide a lot of money upfront. But what they do is the 
opposite of self-reliance. They essentially impose servitude. 
What they do is they lock up countries for long-term debts, 
lines on extractives, and they are looking to essentially push 
back on all the things that we stand for.
    So both here at home and I think around the world, we need 
to be open and say, look, we want to help you rise. You have 
got to do it yourself. You are sovereign. You lead. We will 
help you get there. You are going to have to make tough 
choices, but we believe in freedom, we believe in market 
economies. That is what we stand for.
    We simply haven't done that very well. And that is on me. 
That is a job that I need to undertake better.
    Mr. Dent. And in my remaining time--though thank you for 
that very thoughtful answer--I am just going to quickly ask you 
what USAID is doing to elevate the discussion about your 
mission towards global nutrition programs. That is very 
important. And also global health security. And finally just a 
quick update on Nicaragua. Sorry. Not much time left.
    Mr. Green. Thank you for those questions. I will provide 
quick, brief answers, then welcome the chance to come in and 
talk with you further and brief you further.
    On nutrition programs, we are working to build on I think 
the tremendous success of Feed the Future and its nutrition 
programs. As I have said readily, that is the most important 
advancement I have seen in development since I was in the field 
back in my day as an ambassador in Tanzania. We didn't have 
these tools. Fabulous. They are really remarkable tools.
    Secondly, on global health security, it is an area that I 
have a personal interest in. I have spent some time talking to 
Dr. Tedros from the World Health Organization, as well as 
meeting with some of the pandemic experts at a conference at 
Texas A&M.
    I think a number of you have pointed to the need to connect 
this for the average taxpaying American. I think Zika and Ebola 
do that in spades. What happens in terms of pandemics on far 
shores is not simply somebody else's problem. It is a real risk 
to us.
    And so developing the frontline capacity in these nations 
to be able to respond and defeat these pandemics overseas 
before they reach our shores is obviously in our interest.
    In the case of Nicaragua, we obviously call for the 
immediate release of political prisoners, an end to the 
violence. We are trying to support civil society and 
independent media. I thought Vice President Pence was very 
eloquent at the Summit of the Americas when he called for a 
hemisphere of freedom. Obviously, Nicaragua is not there. It is 
moving in the opposite direction.
    Mr. Rogers. Thank you, Mr. Dent. Before I recognize Mr. 
Ruppersberger, I am going to ask Mr. Dent if he would take the 
Chair. I am going to go next door to the Attorney General's 
hearing, and I shall return, as they say.
    So, Mr. Dent, if you would take the Chair. Mr. 
Ruppersberger, you are recognized.
    Mr. Ruppersberger. Ambassador, thank you for being here 
today. USAID is so important to the world and our influence in 
the world. I want to talk to you about China and Russia's 
influence from a national security strategy.
    You know, today the United States must compete for positive 
relationships around the world. China and Russia target their 
investments in the developing world to expand influence and 
gain competitive advantages against the United States. China is 
investing billions of dollars in infrastructure across the 
globe. Russia, too, projects its influence economically through 
the control of key energy and other infrastructure throughout 
parts of Europe and Central Asia.
    The United States provides an alternative to state-directed 
investments, which often leave developing countries worse off. 
I appreciate you mentioning China's growing influence in your 
written testimony. They are spending a lot of money and have 
great ambitions, like the Belt and Road Initiative that will 
open markets and create strategic hubs for China.
    I was--maybe 8 years ago I was in Yemen. And there looked 
to be community centers that were built by the Chinese. The 
only positive news is that the president said, you know, those 
Chinese, they come in, they spend all this money, but we still 
don't like them. So I don't know what that experience is with 
the Chinese throughout, but we also have Russia doing the same 
thing.
    Can you discuss how our budget competes against the Chinese 
development ambitions? How do we ultimately win the influence 
game when China is throwing around a lot more money than we 
are, they have more money? What is the impact of U.S. national 
security and our strategic interest in terms of spreading 
Chinese influence? And if we have time, Russia influence, also? 
And does your agency provide advice to countries to make sure 
they don't succumb to bad, unsustainable Chinese debt 
commitments?
    Mr. Green. Congressman, thank you.
    Mr. Ruppersberger. Okay.
    Mr. Green. You have touched upon issues that I think are of 
vital strategic importance, very, very much so. My experience 
in Africa when I served as an ambassador with respect to 
Chinese investment was actually similar to yours. At least 
farsighted leaders understood exactly what they were getting 
and not getting with Chinese investment. I worry that perhaps 
not all leaders recognize until it is too late the long-term 
indebtedness that they carry and what it can mean for the 
natural resources that belong obviously to their people, not to 
anyone else.
    So we are trying to compete in a number of ways. The Indo-
Pacific Strategy is based upon incentivizing and capacity-
building in the area of rule of law, level playing field. I 
think we all believe that American businesses can more than 
compete if there is a level playing field, if there is respect 
for rule of law, protection of intellectual property, and other 
such matters. We are looking to build out that work even more.
    Mr. Ruppersberger. But as you know, there are so many 
countries that are so poor that they take what they can get.
    Mr. Green. And there is an interesting study that I have 
seen from the Center for Global Development that is talking 
about the level of indebtedness that a number of countries are 
carrying and its long-term potential consequences. And it is 
very, very worrisome, absolutely.
    I think we need to develop new tools. I think we are doing 
a better job in development in leveraging the private sector. 
It is the genius of entrepreneurship and the private sector 
that is our competitive advantage. And provided that they have 
those rule of law protection, intellectual property 
protections, I think we will do extraordinarily well.
    But not everywhere provides those protections. And that is 
work that we have to do.
    With respect to countering Kremlin influence, I used to 
lead an organization that under my tenure was declared 
undesirable by Vladimir Putin, so it is a personal cause for 
me. I think one of the best ways that we can counter the 
influence and strength of the Kremlin is success in all the 
bordering countries. I think the success of Ukraine as it 
rises, pushes back against corruption, but grows its economy, 
is energy independent, and has free and independent media, that 
is the best rebuke that we can possibly provide.
    So I think we have a great interest in strengthening the 
democracies, governing capacity, transparency, and civil 
society of all those countries in the countries in the region. 
I think it is one of the most important things that we can do.
    Mr. Ruppersberger. Based on everything you just said, do 
you feel you have enough in your budget to take on that 
mission?
    Mr. Green. I have----
    Mr. Ruppersberger. You also talked about Venezuela. Are 
China or Russia involved there at all?
    Mr. Green. I am not the expert to be able to speak on that 
with authority. I want to be careful on that front. I recognize 
that there are tradeoffs in the budget. I will never have all 
the resources that I need to take on every opportunity that is 
out there. We will make the dollars go as far as they can. And 
we are working on ways to advance our tools in these causes.
    I think also our voices in multilateral and international 
flora are very important. I think we need to work hard at 
building our alliances. There are a number of----
    Mr. Ruppersberger. You have a lot on your plate. But my 
reason for this question, when you are managing and looking at 
all the issues and all the countries, please make this--the 
issues I raised here a priority, especially with respect to 
China and Russia.
    Mr. Green. You have my word. I agree with you.
    Mr. Dent [presiding]. Okay, Mr. Fortenberry.
    Mr. Fortenberry. Thank you, Mr. Chairman. Mr. 
Administrator, welcome. First of all, let me say how fortunate 
we are to have you in this essential position, given your 
background and your passion and your previous leadership in 
this space of international development and economic 
regeneration and leadership in human rights areas, as well. So 
thank you for your service.
    Throughout your written testimony, you talked about the 
word transformation with a big T. You also talked about 
developing the metrics that are going to be applied across 
programs. And I think this begs a big question, and I want to 
touch on that for a moment and ask you a specific about 
northern Iraq and the process you have undertaken to assure the 
possibility that those affected by genocide may be able to 
return to their homes.
    In regards to development, I think we--I am glad to hear 
you are rethinking some fundamentals here, because I think we 
have to ask ourselves, what does that actually mean? If it 
means that we are going to try to bring some order and harmony 
and prosperity where there is death and misery and poverty, 
beautiful, perfect. I think that is the fundamentals of this 
mission.
    If it means that we are going to have good intentions, plus 
more money, that may just result in fragmentation or the 
imposition of unsustainable initiatives. And I think we may be 
somewhere in between.
    So whatever you can do in regards to the specifics of the 
metrics of how you are going to measure the outcomes toward the 
fundamental goals, which I just outlined which I think are 
consistent with your mission, I would like to understand that 
process more deeply. And when will you have those? And what is 
currently in the works?
    And then, secondly, if you could give us an update on those 
who have been so heinously affected by ISIS's attempt to wipe 
them out, particularly in northern Iraq, the Yazidis, the 
Christians, and others who have throughout a time claimed that 
as their ancestral home, as well, and have provided a pluralism 
that is absolutely necessary for the long-term stability of 
greater Iraq, as well.
    Mr. Green. Thank you for those questions. First, in the 
area of metrics, again, since I looked to join USAID, I talked 
about my philosophy and the journey to self-reliance. And I 
have lived in Africa twice in my life, and I have always been 
struck by the innate desire of everyone I met to shape their 
own future. Over and over again, people want the chance to 
shape their own future.
    Everything that we are doing is designed towards helping 
people do just that, is giving people, giving leaders the tools 
they need, the information they need--yes, some of the 
resources they need to be able to do that. Some months back, as 
we began to look at the opportunity to re-posture the agency 
around that vision, I turned to my experienced staff, I turned 
to people in the field, career professionals here at D.C., as 
well as some of the outside observers that have been working in 
this field for a long time, and I ask them to help me 
determine, help me identify those metrics that can help measure 
a country's capacity and their commitment in the major sectors 
where we are working.
    I think commitment is as important, if not more important 
than capacity, because if a country is not willing to put its 
own skin in the game, if it is not willing to make some of the 
tough choices, all the money in the world is not going to get 
there in terms of their rise.
    And so we do ask them, we say, look, we don't have all the 
answers, but based upon our experience, these are things that 
you need to do.
    Mr. Fortenberry. And commitment flows out of leadership.
    Mr. Green. Absolutely.
    Mr. Fortenberry. Virtuously oriented leadership.
    Mr. Green. Absolutely. So civil society, as well as 
governing leadership. With respect to minorities in northern 
Iraq, I have to give you a great deal of the credit. As I was 
going through my confirmation process, and we sat down and we 
met, you were one of the most passionate voices for helping 
Christians, Yazidis, and other religious and ethnic minorities 
who want to return to northern Iraq, helping them along the 
way, making sure that they had some of the assistance necessary 
to return to some semblance of normalcy. So we were able to 
mobilize modest resources almost immediately.
    Secondly, the money that had been previously pledged 
towards UNDP, we worked out an MOU with the United Nations 
Development Programme to ensure that $55 million of the first 
$75 million tranche of a larger $150 million would be aimed at 
that area to do some restoration of essential services. And on 
top of that, again, I think inspired by what you brought 
forward, we have launched something called a broad agency 
announcement, which is a process--we already had on the books, 
just we don't use it all that often, and it basically said 
everyone who cares about this issue and area and has some 
experience, what are your ideas? We don't have all the answers 
sitting back here, either, at the agency or in DC. What are 
your ideas?
    And it is a relatively low bar for participation. I think 
it is a two-page statement of interest. Gets the process going. 
And the input and interest we got was, quite frankly, 
overwhelming.
    So we are moving to a point in the process where we hope to 
be able to announce what the outcome will be and how that 
programming will go. But we think it offers real hope for 
making sure that we are able to tailor some assistance that 
protects that diversity.
    Mr. Fortenberry. Do you have a time--Mr. Chairman, a 
timeline on that?
    Mr. Green. Well, I had forgotten I am actually going to 
Iraq soon myself in a matter of weeks.
    Mr. Fortenberry. Okay.
    Mr. Green. And at that point, we are hoping to be able to 
make an announcement.
    Mr. Fortenberry. In those areas?
    Mr. Green. Yes.
    Mr. Fortenberry. Thank you very much.
    Mr. Dent. Thank you, Mr. Fortenberry.
    Before I recognize Ms. Meng, I would like to recognize 
Ranking Member Lowey.
    Mrs. Lowey. I just wanted to welcome these wonderful young 
people who are here for their day--I don't know if it is the 
whole day in Congress, but this gentleman who is talking with 
us about the whole world, and he is very smart, so you really 
should listen to him carefully. And maybe you will join one of 
these organizations as you grow older. Thank you very much for 
coming today.
    Thank you, Mr. Chairman.
    Mr. Green. Mr. Chairman, I cannot resist----
    [Applause.]
    So the Ranking Member was nice enough to say I am smart. So 
I will just say she is nice enough to also display her 
diplomatic skills.
    [Laughter.]
    Mr. Dent. Yes, welcome to our young visitors. Thank you for 
joining us today.
    Ms. Lee. Mr. Chairman, may I introduce them?
    Mr. Dent. Absolutely. Sure, please do.
    Ms. Lee. Thank you very much. Yes. First of all, I was 
going to do this on my time when hopefully I get it back, but 
thank you very much, Congresswoman Lowey. Talea Frost, why 
don't you stand up, who is 12 years old, and Talea lives in 
Brownstown, Michigan.
    [Applause.]
    Her father was in the Navy, passed away in 2010. It is good 
to see you.
    Also we have Tysea Frost, who is 9 years old, and Arabella 
Wilson, who is also 9 years old.
    [Applause.]
    And who lives in Pennsylvania, Parker, Pennsylvania? 
Because our chairman lives in Pennsylvania and represents 
Pennsylvania. So thank you--it might be one of your 
constituents.
    Mr. Dent. Where in Pennsylvania do you live?
    Ms. Lee. Is it Parker, Pennsylvania?
    Mr. Dent. Oh, Parker. Okay, I am sorry.
    Ms. Lee. Parker, Pennsylvania. And they have one brother. 
So thank you all very much. You are representing us very well. 
And glad to see you today.
    [Applause.]
    Mr. Dent. Well, thank you for those introductions. And we 
will be happy to be able to provide formal excuses to school 
today to explain why you were not there today. So delighted you 
are here.
    Ms. Lee. They are in school here, believe me. We learn a 
lot every day.
    Mr. Dent. This is better than a doctor's excuse. Okay. I 
would like to recognize Ms. Meng for 5 minutes.
    Ms. Meng. Thank you, Mr. Chairman. Thank you, Administrator 
Green, for your service. I applaud USAID for its recent 
guidance, ensuring that aid delivered and funded by the U.S. 
government is labeled in the appropriate language with the 
message from the American people. There are USAID commission 
reports and ample anecdotal evidence demonstrating that this 
fosters goodwill and positive views of Americans abroad.
    You know, Mr. Dent referred to this and Chairman Rogers 
alluded to what is often the American people's overestimation 
of U.S. aid, foreign aid to other countries, and the 
underestimation of the return on our investment. So I was 
wondering, what are other examples in which USAID has pursued 
policies showcasing that the good work it is doing is supported 
by the American people? And on the other end, how can we better 
advocate for that development with the American people here in 
the United States?
    Mr. Green. Thank you. First, I was reminded that it is take 
your child to work today day also at USAID. Because I am here, 
I caught a video in advance swearing in a number of visiting 
members of USAID who are back running the place probably better 
than I ever could.
    If I can, you ask a very important question. I will give 
you my honest opinion that dates back to my days as an 
ambassador. I just don't think we do this very well. From the 
American people I think is the right tagline. Quite frankly, I 
think it should be across the board.
    It doesn't matter to someone receiving food aid in Yemen 
that it is from USAID versus another part of the U.S. 
government. None of this is from the government. It is all from 
the American people. I think we need to do a better job of 
pushing that out.
    We are also making sure, to be very honest, sometimes I 
worry that our implementing partners, the way that they brand 
the assistance that we provide, sometimes it implies that it is 
actually their assistance as opposed to coming from hard-
working taxpayers. We are actually undertaking an effort right 
now to tighten that up a little bit. We are delighted at the 
work that they do as partners, but this comes from hard-working 
families all across the United States of America who give 
generously. We want to make sure that they receive credit.
    But it goes further than that. I personally believe that we 
do best when our programs--we don't tie them to an 
administration, we don't tie them to an individual. We just 
say, look, it is from the American people to the people of 
Tanzania or the people of Yemen. I think we need to constantly 
remind those that we are trying to assist that this really is 
part of the American character. This is who we are as 
Americans.
    And we just don't do that often enough. Specifically, we 
have revamped our website I think to make it easier to use and 
to help us push out the messages more often. Secondly, I am 
trying to push out more voices within USAID. We have a tendency 
to use my face and voice way too often. We have wonderful, 
talented people from all over the world, from all walks of 
life, and I want to push those voices out. And I think that is 
a better way of demonstrating who we are as a people, what we 
stand for, and that this is entirely broad-based. So that is 
something that we need to do a better job of.
    And I think also our youth work, we are really working hard 
at providing modest seed money to reinforce youth groups in 
civil society to essentially foster the next generation of 
partners, allies, implementing partners. We think that is the 
other way to make sure that everybody understands that this is 
literally a people-to-people enterprise.
    Ms. Meng. Thank you. And just really quickly--I know I am 
running out of time--just wanted to change gears and talk about 
concern about the spread of mosquito-borne diseases in certain 
areas where previously they did not even exist. Just go 
straight to the question. I know we have previously touched on 
this, but can you describe or guarantee how global health 
security will be prioritized with all these budget cuts?
    Mr. Green. I am a malaria survivor from my days as a 
teacher in Kenya a long time ago now. So it is personal to me, 
and I have had students pass from malaria back from those 
teaching days. So mosquito-borne illnesses in particular are 
near and dear to my heart, and it is the work I did when I 
first came back to Washington, D.C.
    Global health security, quite frankly, thanks to the 
generosity of this committee, there is a reserve fund for what 
we do against pandemics, and it is terrifically important. It 
is a priority to us, priority to me personally. I have got to 
tell you that need is outstripping resources.
    We look at the cholera challenges in Yemen, the cholera 
challenges in Haiti and elsewhere. There are just a lot of 
challenges that we need to meet. The President's Malaria 
Initiative, that program is one of the most successful programs 
that we have in global health. And I would like to build on 
those lessons, which is the mobilization of resources, the 
focusing on individual countries and making sure that you have 
clear metrics to measure progress, and also enhancing the 
capacity of frontline health care workers, because the disease, 
the afflictions may change, but if you have skilled nurses and 
health care workers and laboratory facilities, obviously, that 
helps you not simply with the particular cause through which 
the funding may flow, but for other causes which undoubtedly 
will come.
    Ms. Meng. Thank you. I yield back.
    Mr. Dent. Thank you. I would like to recognize Mr. Price 
for 5 minutes.
    Mr. Price. Thank you, Mr. Chairman. Welcome, Ambassador 
Green, to our subcommittee. We are glad to see you. And I want 
to congratulate you on hitting the ground running, as they say, 
at the agency, and particularly on some of these very promising 
and overdue reorganization efforts, which we are eager to 
collaborate on with you.
    We work hard on this subcommittee to enact bipartisan 
appropriations bills, and we worked in a cooperative fashion to 
reject and correct the last year's budget proposal coming from 
the administration in major ways. I am afraid that the 2019 
budget, though, looks like more of the same. It is alarming, 
the degree of these cuts and how much damage they would do.
    I want to ask you to comment in general on that, but I do 
want to focus on something you know a great deal about and have 
a passion for, and that is the support we give to governance 
and democracy in some of the most unstable and dangerous parts 
of the world. And this is basic. If government fails, 
everything fails.
    I serve as the ranking Democrat on the House Democracy 
Partnership (HDP), as you know. It is a congressional 
commission that works to strengthen parliaments in emerging 
democracies. We have worked hand in glove with USAID, in 
supporting development assistance programming on the ground. I 
think it has been a good complementary relationship.
    USAID and its contractors such as IRI under your 
leadership, NDI, RTI--these organizations have been 
instrumental in improving democratic practice in countries 
otherwise challenged by financial hardship and dangerous 
conflict. I am sure you are aware that our subcommittee 
directed in each of the last few years that legislative 
strengthening programs be conducted in every country HDP is 
operating in.
    Yet this budget proposal cuts assistance to various HDP 
partner countries by more than 70 percent. These are countries 
we have identified as emerging democracies in critical regions 
whose governments are eager and ripe for democratic reform. Sri 
Lanka, cut by 74 percent. Liberia's development assistance cut 
by 84 percent. Georgia's overall assistance cut by 76 percent. 
And a cut almost that large in Ukraine, Ukraine of all places. 
Guatemala, development assistance cut by 41 percent.
    Former U.K. Prime Minister David Cameron chaired a much 
touted commission recently and noted that poverty alleviation 
and assistance in teetering countries is needed because, half 
the impoverished people of the world will live in fragile 
states by 2030. That is not far off.
    Yet the administration's request proposes to cut democracy 
and governance assistance by 40 percent overall, and to cut 
USAID programs by over 30 percent. So I would like you to 
comment on a couple of things, first, to give us your 
interpretation of where governance and democracy assistance 
stands with respect to U.S. security interests and other aid 
priorities. How would a 40 percent cut to governance and 
democracy assistance affect the work USAID is doing in fragile 
democracies?
    And then remark particularly on what happens when we leave 
a country prematurely. We have seen a lot of that in HDP. We 
have made investments, and yet we are quick to move on to other 
priorities, other countries. How is USAID working to ensure 
that we do not prematurely abandon USAID's mission in a country 
where we have made investments and where the full promise of 
those investments has not yet been realized?
    Mr. Green. Thanks, Congressman. Good to see you again. And 
as you know, I am a big supporter of HDP and the work that HDP 
does around the world.
    The importance of democracy and responsive governance, as 
you alluded to, is important to me personally. We are, as we go 
through our redesign, our transformation process, we will be 
working with you because one of our key metrics as we measure 
country capacity is around democracy. It is around democracy 
and also the health of civil society.
    I share your point of view. Our investments are not 
sustainable unless we also foster responsive governance. One of 
the changes that I am trying to bring to USAID is a renewed 
emphasis on responsive governance. Sometimes in the development 
sector we see an emphasis on governance, which is very 
important, but authoritarians may be good at governance. It is 
responsive governance, obviously, that is the key.
    And so that is what we are trying to measure and foster as 
we go. So we are working on these metrics.
    Secondly, we certainly take note of what the committee and 
what the Congress has allocated in the omnibus bill, the 2018 
omnibus towards democracy and governance, and the important 
priority that has been placed with that earmark. And our job 
will be to utilize those funds as best as we possibly can.
    Finally, you ask a really important question about leaving 
a country. In the journey to self-reliance, as we talk about 
it, we talk about strategic transitions towards--I won't say 
the end of the journey, but perhaps the final phases. And I 
don't see that as leaving or turning off the lights.
    I look at a place like India in which we have a robust 
presence there, but our work is fundamentally different than it 
was just a few years ago. Decades ago, India was a country that 
received food aid. If we mentioned food aid, they would be 
quite insulted these days.
    Instead, what we are doing in India is helping to catalyze 
private investment. We are helping them to pilot new 
technologies with the understanding that we can help them test 
and they scale them up. And so that to me is a transition--it 
is a new relationship, but it is a fundamentally important 
relationship and it is not walking away.
    We do have a tendency, the U.S. government over the last 
number of decades, where we get some irrational exuberance and 
we tend to look at an election as democracy, and therefore we 
can walk away. And it is almost always a mistake. We almost 
always regret it.
    So we--for us, a transition is the beginning of a 
conversation about what a relationship can look like. In most 
cases, it is a private-sector-driven one, because that is what 
the country is looking for. But it is very important to me that 
we continue to have a close working relationship based on 
shared experiences and shared values and shared ideals.
    And so we are looking in a few countries like an India as 
to what that can look like. I will give you another example--I 
was just down in Peru, and in the jungles of Peru, I was 
looking at a very successful program that we have--our partner 
is DEVIDA, Spanish for our counterpart there, working around 
coca eradication, together with alternative economics. What 
they have discovered, what we have discovered is you can pull 
up coca plants all day long, but if you don't bring anything 
behind them, if you don't work with communities to create 
alternative livelihoods and some sense of an infrastructure 
that allows for progress, the coca will come back.
    That program that we have going in Peru, there was a day in 
which we almost funded it entirely. We are now the minority 
funder. It is the government of Peru and private business that 
are doing most of the funding. Ours is relatively small and my 
guess is it will get smaller as it goes. And it is a great 
thing. It is helping to foster something based upon our skills, 
our experience, our capacities, and then having them take it 
over so that it is theirs and they are leading it.
    That to me is the model for what we should be aiming to do. 
In some countries, those days are not far off. In other 
countries, it is a long way off. But in every case, it is 
working with those countries to help them lead their own 
future.
    Mr. Price. Thank you. Thank you, Mr. Chairman.
    Mr. Rogers [presiding]. Thank you. I think we--if you have 
time, Mr. Administrator, I would like to do a second round.
    Mr. Green. Mr. Chairman, I always have time for you.
    Mr. Rogers. That is why he is paid the big bucks. He has a 
feeling. Let me ask you about Central America and what we are 
getting for our investment there. That southwest border 
entryway for all of the drugs that are ruining the nation, our 
country, as well as illegals and law enforcement problems, we 
have invested heavily in Colombia, well, all across Southern 
and Central America.
    Tell us about what good it is doing and what are the 
prospects. I mean, we have invested tons of money, $2.5 
billion, for the so-called U.S. Strategy for Central America. 
Over half that funding is managed by USAID. What can you tell 
us that we could raise some hopes on?
    Mr. Green. Thank you, Mr. Chairman. Some of the first work 
that I took a look at and examined upon arrival at USAID was 
the work that we are doing in the northern triangle. I took an 
early trip down to Mexico City to meet with all of our mission 
directors from the region, as well as AMEXCID, which is our 
Mexican counterpart, a younger development agency, but looking 
to partner with us.
    And it is challenging work. But we are seeing progress 
being made where we are able to invest dollars to push back 
against some of the growth in gangs, as challenging as it is. 
Some of the alternative economic programs that I describe with 
respect to Peru is bearing some fruit. But part of what we need 
to do in these countries is to help build the capacity of local 
mayors, local police chiefs, community leaders to create safe 
places for families so that you don't have unaccompanied minors 
out of desperation driven miles through some of the worst 
conditions on the face of the Earth to head north for security 
and safety. And so it may seem like slow going, but the work 
is, we believe, terrifically important.
    We also have tremendous economic interests there. And so if 
we are able to foster rule of law, governing capacity, work 
around fighting corruption, and it is uneven work. It is 
challenging work. It is in our economic interests. It helps to 
create commercial opportunities for American business and also 
stronger ties between the U.S. and that region of the world.
    So the work is bearing fruit, but we have much more to do. 
We have pulled together across the interagency some ideas to 
enhance the work, to work together around developing disaster 
response capacities, and I am hopeful that we will be able to 
pull something together and brief you on it in coming months. 
But we think it is very much in the U.S. interest to continue 
our engagement there.
    Mr. Rogers. Well, the unrest and corruption and general 
malaise in Central America and on into South America has led to 
a flood of drugs coming to us, principally out of Colombia, but 
by way of Central America and by way of Mexico, and into this 
country, speeded along the way by the huge, brutal cartels in 
Mexico.
    I know that is a law enforcement matter, but the conditions 
that allow that problem to fester is something that you have 
been working on for a long and we have been working on for a 
long time, apparently without too much success. Would you agree 
with that or not?
    Mr. Green. What I can say is that in areas where we have 
been able to focus resources, an example would be San Pedro 
Sula in Honduras, we have seen a dramatic reduction in crime, a 
dramatic reduction in the activities of gangs. And so we see 
that the work succeeds and makes progress, but it is certainly 
uneven.
    We are working with at-risk youth to try to prevent the 
growth and spread of gangs. Going forward, I think a key part 
of our work is good governance. And as you know, the monies 
that you generously provided in the last--in the omnibus bill 
toward the Central America strategy requires certifications and 
progress in fighting corruption, in strengthening the work of 
the attorneys general, in battling against some of the 
corruption that has led too easily to some of the conditions 
that you are talking about.
    You know, we support those requirements, and we support 
helping to enhance the capacity of those nations to meet the 
requirements, to push back against the conditions that I think 
too easily foster what you are rightly pointing to.
    Mr. Rogers. Let me switch gears briefly here before 
yielding on metrics. I don't know whether that has been covered 
in the testimony so far or not.
    Mr. Green. A little bit.
    Mr. Rogers. And my definition roughly of the metrics matter 
is, how do we objectively measure the need in one of these 
programs in a particular part of the world? And how do we also 
then measure whether or not it is working? An objective 
analysis of the money we are spending, how can we grade that, 
judge it?
    Mr. Green. Thanks for the question. And I think you point 
to a very important distinction that I probably have not done a 
very good job of enunciating. So we use metrics in two 
different ways.
    There are the metrics that we have around every program, 
every grant, third-party monitoring, the monitoring and 
evaluation that we do to actually measure what the program 
delivers, how the program is working, to ensure that there 
isn't lost resources, diversion of resources, vitally 
important, and I think USAID has led the world in doing that. 
We are well-known for it, and we will absolutely continue. It 
is important. Along with that, of course, is the work of the 
inspector general.
    Secondly, there are the metrics that we have been talking 
about earlier today, and these are the metrics that have been--
that are being pulled together to help us think through long-
term priorities, helping to assess where countries are in their 
own development progress.
    MCC has metrics that we all helped to develop that are 
designed to say when a country is eligible to receive any 
funding. This is not that. These are countries with whom we are 
already working, but it is aimed at seeing where they are as 
they build the capacities that we all believe are necessary to 
advance and also making sure that there is commitment that they 
are putting resources in so that we know that this is not 
something that is being forced upon them, but that we are 
sharing this journey.
    Those metrics are long-term. They don't define when we work 
with a country. Hopefully we come to you and we all talk about 
how these metrics can help us think through where funding 
priorities should be in the long run. And those are metrics 
about development.
    But the very important metrics that you are pointing to, 
the monitoring and evaluation, that absolutely continues. It is 
enshrined in our redesign effort. The learning that we get from 
every program, every place we work is vitally important to not 
just USAID, but the development community.
    Mr. Rogers. That kind of information is critical for us in 
trying to design a bill and fund what is working and not fund 
that which is not working, but also selling that idea to our 
brothers and sisters in the Congress, as well as the 
countryside. So proof that what you are doing is working is 
important.
    Quickly, rescissions. We hear a lot of talk about a 
possible rescission bill. Some of us are concerned that a 
possible rescission might seek to take away monies from 2017 
and perhaps earlier that are unobligated balances. If that 
should happen, tell us what the practical result of that would 
be.
    Mr. Green. Sorry. Mr. Chairman, I think you have more 
information than I do, quite frankly, on the process. I would 
refer you to the White House. What we have been instructed to 
do is to continue on as we normally do in the planning process 
coming out of 2018. Obviously, we will spend--we will move the 
money that is appropriated for us. The needs are out there.
    As we have talked about, there are needs on the 
humanitarian front everywhere we look around the world. There 
are also some important development opportunities, strategic 
and economic. So I can't tell you we have excess resources, 
because we don't. The money that you have generously provided, 
the needs are great.
    Mr. Rogers. The normal process of these funds being 
obligated is a multiyear matter, is it not? So that if you go 
back and rescind, say, 2017 monies that were programmed into 
the normal process, it would not be spent for a couple of years 
under normal circumstances, if you cut that off at the neck, 
you are running the real risk of a problem, aren't we?
    Mr. Green. Mr. Chairman, I didn't fully appreciate until I 
arrived at USAID just what it is that you are laying out in 
terms of how long that arc is, in terms of moving from when 
funds are appropriated and allocated to when they are fully 
obligated. In some cases, it does take some time. But, again, 
you know, we don't have access funds. The funds that we 
receive, we push out as prudently, as efficiently as we 
possibly can.
    Mr. Rogers. It is an arcane process.
    Mr. Green. It is your words, Mr. Chairman. [Laughter.]
    Mr. Rogers. Mrs. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman. Again, I apologize. 
There are many hearings going on.
    But getting back to the issues at hand, thank you again. 
The White House is currently conducting two assistance reviews, 
one on stabilization efforts in Syria, one on assistance to the 
West Bank and Gaza. While there are sensitive issues and these 
are sensitive areas where assistance should support our foreign 
policy objectives, I am worried that these reviews may have 
consequences like breaks in programming and negative outcomes.
    First, what is USAID's role in these reviews? And when can 
we expect them to conclude? And in the case of West Bank and 
Gaza, why is all assistance to the region being held even for 
programs that do not directly impact the peace process? And at 
what point will these reviews compromise programs through 
delays or expiration of funds?
    So, first, if we can discuss USAID's role in these reviews, 
and when can we expect them to be concluded?
    Mr. Green. Thank you, Congresswoman. Actually in both 
cases, our understanding is that the reviews should be 
completed soon. I don't have a precise date, but we are, like 
you, eagerly anticipating their completion.
    With respect to West Bank, Gaza, we have been in discussion 
with all of the affected partners in the interagency. We have 
been in touch with the World Food Programme, as well. Part of 
what I think our role is, is to explore with partners what 
needs are, how gaps are being filled, so that is our role in 
this process.
    With respect to the Syria funding that you made reference 
to, as you know, I don't believe that humanitarian assistance 
is affected, so we continue to provide humanitarian assistance, 
and as we always have, that is as to need, not as to whether 
the area is controlled by the regime or another force. We 
continue to do that work.
    But the stabilization assistance has been--the $200 million 
has been held pending a review by the White House. And I know 
the interagency process is working on it literally as we speak.
    Mrs. Lowey. I would appreciate any information on both 
issues, but I am very concerned that in West Bank and Gaza, all 
assistance is being held. And as you know, we are all focused 
on the peace process, but in the meantime, I worry about the 
schools, I worry about feeding programs, and this is not a 
healthy response. And I think it could really put children, 
families in jeopardy.
    So can you tell me again on that issue, when will these 
reviews be completed? Do you have any idea? And will they 
compromise these programs through delays or expiration of 
funds?
    Mr. Green. Thank you, Congresswoman. First off, some of the 
accounts to which you are referring are not actually 
administered by USAID. UNRWA, for example, is administered by 
the State Department, so I would refer you to them.
    Mrs. Lowey. That is right. And you have no input into that?
    Mr. Green. Well, again, we talk about needs all the time. 
But, no, it is a State-managed account. In terms of the precise 
timing, I honestly don't have any more information. What we 
will do is I will make sure my staff follows up with yours and 
as much information as we are capable of providing, we will 
provide. We are watching the situation, obviously, closely, as 
well. Our humanitarian obligations are such that we pay close 
attention to it and are watching.
    Mrs. Lowey. Thank you. Thank you, Mr. Chairman.
    Mr. Rogers. Ms. Lee.
    Ms. Lee. Thank you very much. Let me just make one comment 
with regard to the promotion of the good things we are doing 
abroad which quite frankly U.S. taxpayers should get credit 
for. UNFPA, for example, I saw pictures of cribs that prior to 
the cuts, the $68 million, cut to UNFPA, there was a USAID 
little sign on a crib. Now that USAID presence is missing on 
that crib and throughout the world.
    The more we cut back and withdraw, the view of our country 
as it relates to our commitment to development and diplomacy is 
beginning to diminish.
    I want to ask you--and this is not a question as it relates 
to your personal views, Mr. Ambassador, because I think we met 
when you were in Africa. And so don't take this personally. But 
I want to ask you about the ``s-hole'' countries that the 
president talked about and look at this budget, because as I 
look at this budget, the ''s-hole'' countries are getting a 
large--they are getting large cuts from our accounts.
    And I can't--and I haven't been able to go through every 
country right now, but each one that I have been able to go 
through on the continent of Africa are receiving some huge 
cuts, which makes me wonder, are these budget cuts the result 
of the attitude about the continent of Africa? And are the 
policies following this general attitude about the continent? 
Because China is on the move on the continent. We are 
disengaging and divesting from the continent.
    And it does reflect an attitude of this administration, not 
yourself personally, but this administration, that they do 
believe these countries really--are ``s-hole'' countries.
    Mr. Green. Congresswoman, I would just say, first off, we 
remind ourselves, we are the largest donor of humanitarian 
assistance in the world, and nobody else is even close. Even 
under the reduced budget amounts in 2019, we are far and away 
the largest contributor.
    Ms. Lee. Sir, we are the wealthiest country in the world, 
also.
    Mr. Green. Yes.
    Ms. Lee. And, what, 1 percent of our total, but--so, Mr. 
Ambassador, we need to be up at least to 25 percent before I 
can even agree that that is even something we can accept.
    Mr. Green. But I think it is important to realize that we 
are still the leading donor of humanitarian assistance in the 
world, and I think that is a point of pride, and it is 
something that we should be very much proud of.
    Ms. Lee. But we are cutting it every year.
    Mr. Green. We are still the leading donor and number-two 
and-three put together don't equal what we are doing. As you 
know, I am an advocate for--you know, we have humanitarian 
needs in many parts of the world. But to be fair, we are the 
largest donor of humanitarian assistance. We are asking others 
to do more. And I think they are doing more, and that is all a 
good thing. I think we all think that that is a good thing to 
do.
    We recognize that tough choices are being made. You know, 
we continue to be--and I am very proud of this--we are the 
leading development assistance country in the world. I believe 
that USAID is the premier international development agency in 
the world. And I believe that our humanitarian assistance is 
second to none. And I don't say that as an argument for doing 
less. I say it as a point of pride and, quite frankly, 
gratitude to all of you.
    Ms. Lee. Mr. Ambassador, okay, granted, everything you said 
is true. Still a very small portion of our federal budget, 1 
percent less than, 1.5 percent is foreign and finance. 
Secondly, the question I ask is, the budget as it relates to 
the continent of Africa, in terms of the divestment and the 
budget cuts, I would like to look at and find what cuts and the 
proportion of cuts of this overall 30 percent cut are directed 
to the continent of Africa.
    And I have a special understanding of the continent of 
Africa and its challenges. And I know for a fact that you would 
not support the ``s-hole'' country framework that this 
administration has, but when I look at the budget and these 
cuts, these cuts are disproportionately affecting the continent 
of Africa.
    Mr. Green. The allocations that are made on the development 
side are made on the basis of need and opportunity. That is how 
the Feed the Future countries are chosen, target countries. It 
is based upon opportunity and commitment of our partners. Our 
PEPFAR programs are obviously disproportionately in Africa, 
because that is where the greatest need is.
    So I am very proud of the work that we do in Africa and the 
tools that we provide. I think we do more than anyone else. I 
do think we need to be careful in terms of the rise of China 
and the rival model it presents. But we don't take a backseat 
to anyone, in terms of the investments that we make, the 
humanitarian assistance that we provide.
    Ms. Lee. Thank you, Mr. Ambassador, but I hope that one day 
you will understand what I am saying in terms of the budget and 
framework, and the impact i that this administration's views 
about continent of Africa has on our presence there. Thank you 
again.
    Mr. Rogers. Mr. Fortenberry.
    Mr. Fortenberry. Thank you, Mr. Chairman. And while you had 
been out of the room, Mr. Chairman, we did discuss the issue of 
metrics, as well, so I am glad that you highlighted and put an 
accent mark on it. And I do think that this is very important, 
and I want to return to it in just a moment.
    I think it would be helpful to all of us as you work 
through defining that more clearly you actually keep us 
informed, because metrics are based on certain premises, as 
well. And then you have to have space for judgment. So if we 
over-objectify everything, you don't have the flexibility and 
malleability that is needed that can never be quantified based 
upon all the variables that are out there.
    So this is a complicated task. Without objectives or 
metrics, you can get fragmentation and chaos. With too much of 
it codified, you can have a paralysis of analysis. So there is 
a balance here. And I think that also necessitates ongoing 
communications with us so that we can help identify, again, the 
working premises, whether they are based upon intensity of 
poverty, intensity of diplomatic or military missions that rise 
unpredictably, and other variables.
    The other is, again, committed leadership. Now, the 
chairman mentioned Central America. And then you mentioned San 
Pedro Sula. I had visited there several years ago, went to a 
place called Dos Caminos, suburb of there, near there, where 
the highest murder rate in the world exists, or existed. You 
gave me some new information.
    And we looked at an NGO, USAID project where a bakery run 
by women received a little bit of subsidy. One of the women who 
was a principal in this, her husband had been killed 3 weeks 
earlier by the violence. But to see both younger women and 
older women coming together in a collaborative business 
initiative, beaming with pride, being successful, making plans 
to scale this regionally, combatting despair and poverty and 
disorder, very courageously, was quite moving to me, and I am 
gratified to hear that these efforts, among others, have now 
reduced this murder rate substantially. That is very helpful.
    But the bigger issue here is, again, scalability. So what 
did we do? We took a little bit of resource, working with 
partner agencies who are out there, and we took the limited 
capacity that existed where the risk profile, if we just use 
business terms, is too great for any business to start up, and 
we subsidize that, provide some technical expertise, and then 
let it potentially succeed.
    I think that this actually is the way forward to--if we can 
combine the best of what we traditionally call private market 
initiative with some public subsidy where it cannot exist 
simply because the structures aren't there, then we move from 
false economic expectations that are based upon certain 
premises that we have that we don't even take for granted, 
namely structure, trust, contracts, enforcement of contracts, 
property rights, and the rest of it, and then we start to 
create those systems in a parallel way to actually helping 
attack the structures of poverty that exist in so many places.
    You also mentioned--so I love the name of this place, by 
the way, Dos Caminos, two pathways. One of poverty, despair and 
death, or one of brightness and hope and opportunity. And 
again, one of those scalable ideas that is out there that I 
think is a part of what we ought to really integrate--and you 
have been touching on it all throughout your testimony.
    Another example, Haiti to our south, our own background, 
our own neighborhood. We have so many interactions with Haiti. 
It is so strategic. It is so proximate. The long-held 
relationship, the volatility, the poverty, and yet the 
beautiful depth of spirit of the people there and the number of 
Haitians who have migrated to our country, all necessitates a 
particular emphasis there that we do have, and yet we have to 
be very guarded against creating an aid-dependent culture, 
because we haven't built the systems necessary for continuity.
    When we can leverage the best of the private market system 
with what might be an initial public subsidy or a necessary 
initial public subsidy, with committed leadership that is based 
in virtue, and certain metrics, social metrics that are 
defined, the return on that is huge, versus writing checks that 
create unsustainable problems.
    I am sorry there is not really an embedded question there. 
I am kind of editorializing out loud and affirming some of what 
you are doing in order to encourage you in this task, but also 
to suggest that you have a lot of heart here on this 
subcommittee and a lot of investment of time and energy. And so 
as you work through these metrics, I think pulling us in, 
seeing----
    Mr. Green. We will--all of these, your staff will be 
briefed and consulted. We are looking for your input very much.
    Mr. Fortenberry. Yes, seeing us as partners in this. The 
other quick point, re-examining language. I challenged us a 
little bit the word development. What does that really mean? It 
is an old word in the old days. It used to imply something. It 
may not anymore.
    Direct foreign investment I think should become investment 
partnerships. It is not about us doing this. It is about 
finding committed leadership elsewhere for continuity and 
sustainability. Thank you, Mr. Chairman.
    Mr. Rogers. I am going to recognize Mr. Price next, but 
briefly, Ms. Lowey, do you have a question you want to get----
    Mrs. Lowey. Yes.
    Mr. Rogers. You are recognized.
    Mrs. Lowey. Okay. Actually, before I get to my question, 
because I think it is very related to what my colleague was 
saying, I can remember a visit to Tanzania--I hope it is still 
there--several years ago, with Land O'Lakes. Were you with us, 
Craig? No, with Jim Kolbe. And Land O'Lakes partnered with the 
women in Tanzania. They stood taller. They were so proud of 
their success and the profits they made. These partnerships 
between the private sector are absolutely essential.
    But I will get to my questions very quickly. And you can 
just answer yes or no. Women are more than half of the world's 
population. Research shows that they are key to more stable 
communities and healthy families. Our national security and 
development objectives will not be achieved if we de-prioritize 
women.
    Okay, yes or no. Cutting support to GAVI, eliminating 
vulnerable children programs, cutting funding for maternal and 
child health programs by 25 percent will harm women, children 
and babies. You could just say yes or no, because I know our 
hearing is about to close.
    Mr. Green. We continue to make huge investments in all 
those areas. With the 2018 budget, as you know, we fulfilled 
our pledging obligation to GAVI. We are continuing to fund 
GAVI. We think the innovations that we are getting from GAVI, 
we being all of us, are extraordinarily valuable.
    You will see in our redesign efforts and in our programming 
enshrining the principles that you are talking about, making 
sure that we have women's empowerment, making sure that we have 
obviously gender equity in our programs. We agree with all of 
those sentiments.
    In terms of specific dollar amounts, I readily admit that 
tough tradeoffs are involved and difficult choices have been 
made. And we are not meeting every need that is out there that 
we see.
    Mrs. Lowey. Okay, another quick question. 131 million girls 
are out of school. 131 million girls around the world are out 
of school. Can a 50 percent cut to basic education programs 
improve girls' access to education?
    Mr. Green. Congresswoman Lowey, as you know, I started off 
as a teacher in Africa. That is how I started in all of this 
process. It is near and dear to my heart. We do not have enough 
money, nor could you get for us enough money to meet every 
education need that is out there to provide enough teachers, to 
provide access for every girl and every boy in Africa in 
education. It is simply true.
    Although I will say I think that the monies you have 
generously provided we will put to good use. You have my word 
on it. You have been a champion. We are fulfilling the 
principles that you have enshrined in the READ Act. And we will 
do everything we can to make these programs go as far as we 
possibly can.
    Mrs. Lowey. And lastly, you can just say yes or no, has 
USAID determined the impact that a 25 percent cut to water and 
sanitation programs would have on women, given in most cultures 
they bear the primary burden for collecting clean water? Also, 
how will the cut impact women's abilities to pursue the 
economic opportunities that you and I all recognize to be so 
important?
    Mr. Green. Well, I can honestly say, I have not seen that 
analysis or determination done. What I can say is the amount 
requested for the WASH program is the largest amount ever 
requested for the WASH program. It exceeds what was requested 
last year and the previous year. It is not as much as you 
generously provided in the 2018 appropriations omnibus bill.
    Mrs. Lowey. It is a 25 percent cut. And I know that the 
chairman and I and this committee, as you can see, there is 
really bipartisan support for these programs. And we look 
forward to being your partner. And we thank you very, very 
much. We are thrilled to have a leader who cares and has the 
knowledge to fulfill the important challenges. So, thank you.
    Thank you, Mr. Chairman.
    Mr. Rogers. Thank you, ma'am.
    Mr. Price.
    Mr. Price. Thank you, Mr. Chairman. Mr. Administrator, I 
want to touch on a couple of points from earlier discussions 
and then move to a critical question about Burma and 
Bangladesh. But this metrics discussion I think is important. 
We have all struggled with it. It is especially challenging, I 
think, when you think about aid to governance efforts.
    The Frost-Solomon Commission in Eastern Europe years ago 
struggled with it. When does a country graduate? When do you 
think the work is over? And of course, we struggle with it now 
with HDP. I think your observation that sometimes one does not 
just cut off, one moves to a different kind of support. With 
the India example, that is a useful point.
    I think it also goes without saying that budget cuts of the 
magnitude we are talking about in this budget--Sri Lanka, 74 
percent, Liberia, 84 percent and so forththose cuts are not 
based on any kind of metric. I know that without asking. There 
is no metric proving or showing success that would justify 
those kinds of cuts.
    I do think the plea for consultation from both sides of the 
aisle here is important. These are subtle matters. These are 
not easily reduced to simplistic measures. And we need to be 
sharing the best information we have about the state of play in 
these countries before these decisions to terminate or to shift 
the kind of aid are made.
    I would also like to underscore also the importance of the 
West Bank-Gaza matter, the humanitarian assistance there. It is 
a matter of desperation. As you know, these programs are 
running out of money. USAID ought to be a part of this White 
House review, and I would hope that in Syria, too. I mean, 
there is some ambiguity here today about exactly what has been 
cut off in Syria, and how much humanitarian aid is still 
flowing in Syria. I can't imagine that whatever the disputes 
might be that they would justify holding this assistance up any 
longer.
    Now, finally, to Bangladesh and Burma, you of course know 
the statistics about the number of Rohingya who have fled from 
Burma. More than seven hundred thousand is the latest number I 
have seen. There is an awful campaign of ethnic cleansing and 
crimes against humanity in Rakhine state. Bangladesh is to be 
applauded, I think, for opening its borders and receiving the 
huge influx of refugees and working to protect the Rohingya.
    I have heard, though, that there are significant 
bureaucratic constraints that are impeding the delivery of aid 
to the Rohingya refugees in Cox's Bazar, from U.S., and other 
international NGOs. What are you doing to ensure that American 
NGOs and other international organizations are able to operate 
effectively to meet the needs of these refugees?
    And in regard to assistance to Burma, it has been 
documented that the Burmese are bulldozing and building on top 
of Rohingya villages under the guise of international 
development. It makes repatriation nearly impossible. I know 
that USAID does not provide assistance to infrastructure 
projects in Rakhine state, but are you working with the 
development partners, like the Japanese, like the World Bank, 
to ensure that assistance provided takes into account such 
human rights issues?
    Mr. Green. Thank you. You raise a number of very important 
points. First, on metrics, to be very clear, we--first off, we 
will consult. It is our obligation, just as we have on the 
structural piece. We did more than 40 consultations with your 
staff and the Congress, absolutely have my commitment we will 
be doing the same thing on metrics.
    Our metrics are not our own. We have tapped into the 
brightest minds in the development community, many of the 
outside groups, our own advisory council, and we will continue 
to show you what we are looking at. These will not be metrics 
for purposes of cutting off aid. This is not MCC. These are not 
a report card. It is instead very broad-based indicators that 
help us understand what a country's capacities are and where 
their weaknesses may lie, so that we can be sure to help them 
address challenges so they can continue to rise. So that is how 
we use metrics.
    Secondly, I am planning to go to Burma and Bangladesh 
myself in the next couple of weeks. One of the great challenges 
that we have is access as the rest of the development and 
diplomatic community have been having. It is a great challenge 
in getting there. I know in the U.N. Security Council is 
going--is attempting to go to Rakhine soon, is the plan, as in 
days from now. We will be taking note of that. I want to get 
there myself.
    I agree with your assessment on Bangladesh. Again, I think 
challenges--they are not so much bureaucratic challenges as 
challenges of access. But we want to make sure that we continue 
to provide humanitarian assistance, which we have been and we 
will continue to do. But also there are long-term development 
needs that need to be addressed, as well.
    But we have been providing humanitarian assistance and 
support on the global health side, and we will continue to do 
that. And we are in constant touch with our multilateral 
partners. I met with the U.N. High Commissioner for Refugees 
just last week to talk at greater length about Burma and 
Bangladesh. I have met with Amnesty International. I have met 
with a number of figures.
    I just spoke to the ambassador to Burma, as well, to make 
sure that we have accurate information before we go to better 
prepare the trip to make it as effective as possible. I hear 
all of your concerns.
    The State Department has, as you know, reached a conclusion 
that ethnic cleansing has taken place in northern Rakhine. They 
have not gone final in their determinations at this point. But 
it is clear that a human rights catastrophe has taken place 
there, and it is of great concern to obviously every single one 
of us.
    But I want to go and have eyes on myself. It is something 
that I need to understand and make sure that our programs are 
as effective as they can be and they are getting to where they 
need to go and having the outcomes that obviously you desire.
    Mr. Price. Thank you. Thank you, Mr. Chairman.
    Mr. Rogers. Thank you, Mr. Price.
    Mr. Ambassador, thank you again for your time this morning 
and for your testimony. You have set forth some ambitious goals 
for this agency, which we welcome. You have faced humanitarian 
and development challenges across the world. In the weeks 
ahead, this committee will closely examine the budget request, 
assess its impacts, recommend funds that we can pass on to the 
full House that enable us to achieve your goals and ours to 
further our nation's economic and security interests.
    I think I speak for the whole subcommittee when I say we 
are thrilled that you are the leader of this organization. We 
think you are doing a great job with it under difficult 
circumstances. And I was thinking here a while ago as we were 
talking about some of the hot spots around the world that that 
is all you deal with. You are----
    Mr. Green. I don't read the newspaper as innocently as I 
used to.
    Mr. Rogers. But there must be times when you become 
disappointed. There must be times when some of these conditions 
that you see every day around the world cause you great mental 
pain. And so we want to encourage your spirit, and we want you 
to keep up your commitment. We know you will. You have. But we 
wish you all the best. And we are here to help in any way that 
we can. Thank you.
    Mr. Green. Thank you. And I am very grateful for the 
support that you have shown, and I really appreciate the 
partnership. I would just close with this, Mr. Chairman. Every 
trip that I have taken--I haven't taken that many--but every 
trip that I have taken as administrator I come across at least 
one moment in which I encounter someone that just lifts 
everything up.
    When you see the spirit of the people with whom we work, 
things that they have done, that makes it all worthwhile. We 
do--we being the U.S. people--I think we make a difference. And 
I think our leadership matters. But I am very grateful to all 
of you for your support. I really am.
    Mr. Rogers. Thank you.
    Mr. Green. Thank you.
    Mr. Rogers. The subcommittee stands adjourned.
    
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