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 You are in: Secretary of State Condoleezza Rice > Former Secretaries of State > Former Secretary of State Colin L. Powell > Speeches and Remarks > 2001 > April

Prepared Statement for the House Appropriations Subcommittee on Commerce, Justice, State and the Judiciary

Secretary Colin L. Powell
House Appropriations Subcommittee on Commerce, Justice, State and the Judiciary
Washington, DC
April 26, 2001

[As Delivered]

As Prepared

Mr. Chairman, members of the subcommittee, I am pleased to appear before you for the first time as Secretary of State, and to testify in support of the President's State Department Budget for FY 2002.

This Budget represents a significant increase in the Department's resources for the upcoming fiscal year, and we are pleased with that. This is a good start. It is the first fiscal step in our efforts to align both the organization for and the conduct of America's foreign relations with the dictates of the 21st Century.

As Secretary of State I wear two hats -- one as CEO of the Department, the other as the President's principal foreign policy advisor. Being successful in both roles is important because we must be properly organized, equipped, and manned to conduct America's foreign policy as well as formulate good policy. So wearing my CEO hat, I want to highlight what this budget contains with respect to my three highest priorities: embassy construction and security, information technology, and hiring new people.

Our important multi-year program for embassy construction, refurbishment, security, and maintenance will continue to move forward if this budget is approved. $1.3 billion supports this effort for FY2002, including $665 million for construction of new secure facilities.

In addition to continuing this ambitious program set in place by my predecessors and the Congress last year, we are using new and more efficient ways to execute this program. For example, as we have notified the Congress I intend to move the Foreign Buildings Office (FBO) out from under the Bureau of Administration and put it directly beneath Under Secretary for Management Grant Green.

Moreover, I've hired an experienced executive to manage overseas construction, retired Major General Charles Williams, U.S. Army Corps of Engineers. His adaptation of industry best practices to our overall program, plus skilled management techniques, will make this program hum.

We are committed to getting the average cost of embassy construction below the current figure of $100 million. If anyone can do it, Chuck Williams can. It will be no mean feat because, as you are well aware, there are special provisions and requirements for every embassy and those provisions and requirements drive up costs enormously. But we're going to give it all we've got.

Along with well-built, secure and modern embassies, we want broad-based Internet access for all our people. I want every State employee to have access to the Internet and to be able to talk to each other. Likewise, we want to modernize our classified information networks. We've got $210 million in the budget for these initiatives.

There is no disputing that America needs to have the right people on the front lines of diplomacy. But we also need to have enough people. The budget has $134.5 million for a major investment to recruit, hire, and train sufficient new people to create a training float so that we can begin to do something about the serious shortages we're experiencing in Foreign Service Officers (FSOs) in the field. In addition, we are seeking $488 million to continue and enhance our worldwide security readiness program. This enhancement includes hiring more security personnel and we have $17.1 million within the $488 million to do just that.

On the CEO side of my ledger, these are the priorities -- embassies, people, and information technology. Wrap all three up in a fourth priority called "security", and you have the high points of the President's FY2002 Budget for State operations.

But let me talk about one more change we are making before I go into levels of detail about the budget. We are reorganizing the way the Department manages its finances. When I first arrived at State and looked around, frankly, I could not find any single authority in charge of all of the Department's finances. There was a Chief Financial Officer but he had no control over the Foreign Operations portion of the money -- two-thirds of the overall budget. I knew we needed to change that situation.

Under our planned change, we will bring together all our dollars -- both those for State operations and foreign operations. We'll then put them all under one bureau headed by an assistant secretary of state for resource management. The assistant secretary will report to the Deputy Secretary.

This new bureau will also be responsible for our strategic planning. Previously, such planning was accomplished in a number of different offices and as a consequence it was quite often separated from actual resource decisions. With the new bureau, we are going to streamline and consolidate so as to synchronize our actual resource allocation with our strategic goals.

Consolidating under one bureau will also establish accountability. All dollars under the purview of the Secretary of State will be coordinated within this bureau. Linking more directly our strategy and our dollars, and making the expenditure of those dollars more accountable, will make us more effective, more efficient, and infinitely better able to justify our resources.

Mr. Chairman, there is of course much more to the President's Budget for FY 2002 for State operations. Let me provide some of the details under three general headings: Administration of Foreign Affairs, International Organizations, and Related Appropriations.


Diplomatic and Consular Programs (D&CP):

  • The FY 2002 request for D&CP, the State Department's chief operating account, totals $3.705 billion.
  • This account funds the diplomatic activities and programs that constitute the first line of defense against threats to the security and prosperity of the American people. Together with Machine Readable Visa and other fees, it supports the salaries, operating expenses, and infrastructure required to carry out U.S. foreign policy.
  • The FY 2002 request provides $3.217 billion in D&CP for ongoing operations -- a net increase of $459.3 million over the FY 2001 level. Increased funding will enable the State Department to make critical improvements in diplomatic readiness, particularly in human resources and overseas infrastructure.
  • The United States must have the right people in the right place at the right time with the right skills to advance national interests effectively. To meet this requirement, the State Department will implement a strategy to recruit, hire, train, and deploy the additional professionals needed around the world. We will put in place processes to test the effectiveness of our strategy and to ensure accountability. With new D&CP funding in FY 2002 of $134.5 million, the State Department will add 360 professionals and create a work environment that will help attract and retain talent in a highly competitive economy.
  • The United States requires a strong and secure diplomatic platform to support the work of more than 30 Federal agencies at more than 250 posts overseas. With new D&CP funding of $78 million, the State Department will restore infrastructure and address deferred maintenance. In FY 2002 the Department will replace a third of its obsolete equipment and unreliable vehicles; increase training, essential service contracts, and Foreign National employee wages; and continue consolidating overseas financial functions in the Charleston Financial Services Center.
  • The D&CP ongoing budget also includes new base funding of $102.7 million for the operating and maintenance costs of information technology investments. These costs have been carried by the Information Resources Management (IRM) Central Fund, using two thirds of its resources for maintenance rather than modernization.
  • An increase of $17 million will support priority foreign policy initiatives. These include projects in the areas of intelligence and research, Freedom of Information and Privacy Act compliance, arms control and international security (meeting nonproliferation, disarmament, and verification obligations), and international trade.
  • The FY 2002 request also provides $487.7 million in D&CP for Worldwide Security Upgrades -- an increase of $78.6 million over last year.
  • This funding includes $349.3 million to sustain security programs begun with the FY 1999 emergency supplemental, such as worldwide guard protection, physical security equipment and technical support, information/systems security, and personnel and training.
  • Worldwide Security Upgrades also includes $74 million to help continue the perimeter security enhancement program for 232 posts; $47.3 million to improve technical, counterintelligence, and domestic programs; and $17.1 million to add 186 security professionals.

Capital Investment Fund

  • The FY 2002 request provides $210 million for the Capital Investment Fund, the State Department's principal funding for information technology (IT) enhancements. The request represents an increase of $113.2 million over the FY 2001 level.
  • Together with an estimated $63 million in Expedited Passport fees, this request finances the IRM Central Fund to permit vital IT investments and enable more effective interaction and information sharing among agencies in the foreign affairs community.
  • Funding for the IRM Central Fund will provide $236.9 million for IT infrastructure. A key initiative will extend classified connectivity to every post that requires it, adding new posts and replacing obsolete equipment that posts are still using for classified operations. Another priority initiative will expand desktop access to the Internet for State Department employees around the world through full deployment of OpenNet Plus, an intranet for sensitive but unclassified e-mail plus Internet access.
  • Funding will also provide $26.2 million for IT applications and software that directly support foreign affairs activities and $9.9 million for IT training of systems managers and users.
  • This request makes the IRM Central Fund a true investment fund, shifting IT operating and maintenance funding to D&CP.

Embassy Security, Construction, and Maintenance (ESCM):

  • The FY 2002 request for ESCM is $1.291 billion. This total -- an increase of $213.4 million over the FY 2001 level -- reflects the Administration's continuing commitment to protect U.S. Government personnel serving abroad, improve the security posture of facilities overseas, and correct serious deficiencies in the State Department's overseas infrastructure.
  • For the ongoing ESCM budget, the Administration is requesting $475 million. This budget includes maintenance and repairs at overseas posts, facility rehabilitation projects, construction security, renovation of the Harry S Truman Building, all activities associated with leasing overseas properties, administration of the overseas buildings program, and construction of a classified annex in Bogota, Colombia.
  • In Worldwide Security Upgrades, the Administration is requesting $665 million for capital projects. This request will continue the program of relocating posts at highest risk begun with the FY 1999 emergency security supplemental.
  • Funding will be used for the design and/or construction of about seven new embassies or consulates. Possible sites include Beijing, China; Cape Town, South Africa; Conakry, Guinea; Damascus, Syria; Harare, Zimbabwe; Phnom Penh, Cambodia; Sao Paulo, Brazil; Tashkent, Uzbekistan; Tbilisi, Georgia; and funding may also be used for a post opening in Medan, Indonesia.
  • Capital projects funding will also be used to acquire sites at five to ten other posts for which design/construction funding will be sought in the outyears and to construct Marine Security Guard quarters at posts with new diplomatic compounds. Funding includes $50 million for construction of new on-compound facilities for USAID.
  • In Worldwide Security Upgrades, the Administration is also requesting $150.9 million to strengthen perimeter security at 28 additional vulnerable posts and meet recurring security support costs associated with the embassy construction and perimeter security program.

Educational and Cultural Exchange Programs (ECE):

  • The FY 2002 request of $242 million for ECE will fund some of the U.S. Government's most effective international exchanges.
  • Authorized by the Mutual Educational and Cultural Exchange Act of 1961

(Fulbright-Hays Act), as amended, these strategic activities build mutual understanding and develop friendly relations between the United States and other countries. They establish the trust, confidence, and international cooperation necessary to sustain and advance the full range of U.S. national interests.

  • The request provides $140.3 million for Academic Programs. These include the

J. William Fulbright Educational Exchange Program for exchange of students, scholars, and teachers and the Hubert H. Humphrey Fellowship Program for academic study and internships in the United States for mid-career professionals from developing countries.

  • The request also provides $72.6 million for Professional and Cultural Exchanges. These include the International Visitor Program, which supports travel to the United States by current and emerging leaders to obtain firsthand knowledge of American politics and values, and the Citizen Exchange Program, which partners with U.S. non-profit organizations to support professional, cultural, and grassroots community exchanges.
  • The total request for ECE represents an increase of $10.4 million over the FY 2001 level. While most of this increase is needed to cover built-in requirements (particularly federal pay raises), $2.2 million will provide program enhancements for Fulbright, International Visitors, Citizen Exchanges, and global academic programs (including university partnerships, English teaching, and overseas educational advising).

Other State Programs:

Representation Allowances:

  • The FY 2002 request of $9 million will reimburse diplomatic and consular personnel in part for officially representing the United States abroad and before international organizations. The increase of $2.5 million over the FY 2001 level begins to restore the buying power that has been lost in this account over the past twelve years.

Emergencies in the Diplomatic and Consular Service (EDCS):

  • The FY 2002 request of $15.5 million increases support for the EDCS account by $10 million over the FY 2001 level to help meet emergency requirements in the conduct of foreign affairs.
  • Funding for this no-year account will cover the evacuation of American officials and their families from areas of political unrest or natural disaster. It will also pay rewards for information concerning international terrorism, narco-terrorism, and war crimes.


Contributions for International Peacekeeping Activities (CIPA):

  • The FY 2002 request for CIPA totals $844.1 million. It represents the U.S. share of the expenses of United Nations (UN) peacekeeping operations and provides for full funding of projected FY 2002 operations.
  • The request funds U.S. assessed contributions to continuing UN operations in Kosovo, Bosnia and Herzegovina, East Timor, the Golan Heights, Lebanon, Cyprus, Georgia, Western Sahara, Iraq/Kuwait, Sierra Leone, the Democratic Republic of the Congo, and Ethiopia/Eritrea. It also includes funding for the War Crimes Tribunals for the former Yugoslavia and Rwanda.
  • UN peacekeeping operations serve the national interests of the United States by helping to support new democracies, lower the global tide of refugees, reduce the likelihood of unsanctioned interventions, and prevent small conflicts from growing into larger wars.
  • Acting through the United Nations allows the United States to share the risks and costs of responding to international crises. Funding the U.S. share of assessed UN peacekeeping budgets ensures continued American leadership in shaping the international community's response to developments that threaten international peace and security.
  • The Administration requests that 15 percent of these funds be appropriated as "two-year funds" because of the unpredictability of the requirements in this account and the nature of multi-year operations with mandates overlapping the U.S. fiscal year.

Contributions to International Organizations (CIO):

  • The FY 2002 request for CIO totals $878.8 million. It provides full funding of U.S. assessments, consistent with U.S. statutory restrictions, to 44 international organizations.
  • The request recognizes U.S. international obligations and reflects the President's commitment to maintain the financial stability of the United Nations and other international organizations.
  • The international organizations funded by the CIO appropriation further U.S. economic, political, social, and cultural interests. In addition to the United Nations, they include the World Health Organization, the North Atlantic Treaty Organization, the International Atomic Energy Agency, and the Organization for Economic Cooperation and Development.
  • Membership in international organizations benefits the United States by building coalitions and pursuing multilateral programs which advance U.S. interests. These include promoting economic growth through market economies; settling disputes peacefully; encouraging non-proliferation, nuclear safeguards, arms control, and disarmament; adopting international standards to facilitate international trade, telecommunications, transportation, environmental protection, and scientific exchange; and strengthening international cooperation in agriculture and health.


The Asia Foundation:

  • The Asia Foundation is a non-governmental grant-making organization with a sustained presence in Asia and the Pacific. Its programs complement official efforts to advance U.S. interests in the region.
  • Through its network of 14 small field offices, the foundation supports local groups and hands-on programs that build democratic institutions and leadership, develop non-governmental and regional organizations, and advance the rule of law and human rights.
  • The FY 2002 budget request of $9.25 million will enable The Asia Foundation to help develop stronger and more effective open market economies and support the adoption of sound governance practices on which the region's long-term economic recovery depends.

East-West Center:

  • The Center for Cultural and Technical Interchange Between East and West was established by Congress in Hawaii in 1960. It promotes better relations and understanding between the United States and nearly 60 nations of Asia and the Pacific through research, study, and training.
  • The FY 2002 budget request of $13.5 million will assist the East-West Center's continuing programs to maximize regional cooperation and minimize conflict. The center is part of the overall U.S. public diplomacy effort directed toward a region with more than 50 percent of the world's population.

North-South Center:

  • The Dante B. Fascell North-South Center, a private non-profit institution affiliated with the University of Miami, promotes better relations among the United States, Canada, and the nations of Latin America and the Caribbean. It is a national and regional source of information and analysis, serving as a catalyst for change.
  • In FY 2002, the Administration is requesting $1.4 million for the North-South Center in the Educational and Cultural Exchange Programs account (ECE). Funding will support programs that advance long-term U.S. interests and address multilateral needs, including strengthening democracy and encouraging open markets in the hemisphere.

National Endowment for Democracy (NED):

  • The National Endowment for Democracy is a private non-profit organization created in 1983 to strengthen democratic institutions and processes around the world. NED makes grants to numerous U.S. organizations for programs in such areas as labor, open markets, political party development, human rights, rule of law, and independent media.
  • The FY 2002 budget request of $31 million will help expand important democracy-building programs in Africa, the Middle East, the NIS, and Latin America. Funding will also support countries in transition, strengthen civil society, assist democratic activists in authoritarian countries, encourage free market reforms, and develop regional networks.

Eisenhower/Israeli Arab Exchange Programs:

  • The Eisenhower Exchange Fellowship Program promotes international understanding by bringing rising leaders to the United States, and sending their American counterparts abroad, on custom-designed professional programs.
  • The Israeli Arab Scholarship Program fosters mutual understanding by enabling Arab citizens of Israel to study and conduct research in the United States.
  • The two programs are supported by interest and earnings from their respective trust funds.

There are of course many more details on our budget available, and I know that Deputy Secretary Armitage and Under Secretary Green will be meeting with you later to examine more closely the Department's operations. Moreover, I invite all of the subcommittee members' attention to a most comprehensive pamphlet entitled "United States Department of State: THE BUDGET IN BRIEF -- Fiscal Year 2002."

And now, Mr. Chairman, I'm prepared to answer your and the members' questions.

Released on April 26, 2001

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