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President's Budget Request for Fiscal Year 2005

Secretary Colin L. Powell
Testimony before the Subcommittee on Commerce, Justice, State and the Judiciary
Senate Appropriations Committee
March 25, 2004

(10:00 a.m. EST)

SECRETARY POWELL: I'm almost reluctant to say anything after that, I mean. But Mr. Chairman, I thank you, and Senator Hollings and Senator Byrd, I thank you. And I am just back from Madrid. I flew overnight, the night before last, attended a very moving memorial service, the Spaniards who were killed in the terrible tragedy of 3/11, had meetings with outgoing Prime Minister Aznar and with the new Prime Minister coming in, Mr. Zapatero.

And although we have some disagreements with Mr. Zapatero on Iraq, and we'll work our way through that, one thing there is no disagreement on is that the United States and Spain will be united in this fight against terrorism. Spain has been fighting terrorism long before 3/11 and 9/11. They've had to face the ETA terrorists. I'm confident that we will find ways to cooperate in this battle against terrorism.

It's always a pleasure to appear before this committee and this isn't like the old army story, like we're always glad to see the IG. But in this case, really it is true because, Mr. Chairman, you and the members of the committee have been supportive of what we've been trying to do in the Department for the last three years. And I remember during my transition, pre-confirmation period, when we talked about some of the problems that you saw in the Department with respect to management, with respect to construction of our embassies, and things of that nature, I have tried in the three years I've been Secretary to be responsive to your concerns.

And before I go further, let me take this opportunity, especially, Senator Hollings, since this may well be the last chance we will have to see each other in this particular capacity, to thank you for your support, your prodding --


SECRETARY POWELL: -- and your friendship for so many years, Dr. Hollings.

SENATOR HOLLINGS: He and I got honorary degrees at Tuskegee together, and that's Dr. Powell, and I'm Dr. Hollings.

A PARTICIPANT: Very appropriate.

A PARTICIPANT: And is that a doctor -- also, is that a veterinarian that you got?


SENATOR HOLLINGS: We had Chappy James in the Air Force down there.

SECRETARY POWELL: Yes, we did. Yes, sir, we did.


SECRETARY POWELL: I think it was the Honorary (inaudible), if I recall. Yes.

SENATOR HOLLINGS: The Tuskegee flyers that trained in South Carolina.

A PARTICIPANT: Oh yes, they did.

SECRETARY POWELL: The Tuskegee Airmen.

SECRETARY POWELL: Well, Mr. Chairman and the members of the subcommittee, I thank you for the opportunity to testify on the State Department's portion of the President's Budget Request for fiscal year 2005. And I have a longer statement I would submit for the record, Mr. Chairman, with your permission.


SECRETARY POWELL: Well, I know that this subcommittee's specific oversight deals with that part of the request that involves State Department operations. I want to give you, as well, an overview of what those operations will support in the way of foreign policy. So let me give you the overall budget picture first, and then touch on foreign ops. Finally, I'll deal with the top priorities of our specific funding request before you.

The 2005 International Affairs Budget for the Department of State, USAID and other foreign affairs agencies totals $31.5 billion, broken down as follows: Foreign Operations, 21.3; State Operations of principal interest to this subcommittee, 8.4 billion; P.L. 480 Food Aid, 1.2 billion; International Broadcasting, 569 million; and the Institute of Peace, 22 million.

President Bush's top foreign policy priority reflected in this budget is winning the war on terrorism. Winning on the battlefield with our superb military forces is just one step in this effort. To eradicate terrorism altogether, the United States must help create stable governments in nations that once supported terrorism, like Iraq and Afghanistan. And I visited in both of those places last week, and I hope in the course of our questioning I can say a word about what I saw in both of those places.

We must go after terrorist support mechanisms as well as the terrorists themselves, and we must help alleviate conditions in the world that enable terrorists to bring in new recruits. To these ends, the 2005 budget will support our foreign affairs agencies as they focus on the reconstruction of Iraq and Afghanistan.

We will continue to support our coalition partners to further our counterterrorism, law enforcement and intelligence cooperation, and we will continue to expand democracy and help generate prosperity, especially in the Middle East.

48 percent of the President's foreign affairs budget supports the war on terrorism. For example, 1.2 billion supports Afghanistan reconstruction, security and democracy building in 2005; more than 5.7 billion provides assistance to countries around the world that have joined us in the war on terrorism; 3.5 billion indirectly supports our war on terrorism by strengthening our ability to respond to emergencies and conflict situations; and finally, $190 million is aimed at expanding democracy in the Greater Middle East -- crucial if we are to attack successfully the motivation to terrorism.

Two of the greatest challenges facing us today are the reconstruction of Iraq and the reconstruction of Afghanistan. With respect to Iraq, the Coalition Provisional Authority and the Iraqi Governing Council, in my judgment, have made great strides in the areas of security, economic stability and growth, and democratization. Iraqi security forces are now in the forefront of our security efforts, and you can see that they are taking casualties as they go about securing their country for their people.

In addition, the CPA has established a new Iraqi army, issued a new currency, and refurbished schools, hospitals, the sanitary infrastructure, working on the oil infrastructure -- so much good work is going on with respect to reconstruction that it's unfortunate that the continuing security situation we face tends to drown out or throw a black cloud over the good work that is being done.

But much work remains to be done. Working with our coalition partners, we will continue to train Iraqi police, border guards, the civil defense corps and the army, in order to ensure the country's security.

At the same time, as I noted, we're going to work on these critical infrastructure needs, but there is progress taking place, and a definitive example of that progress, on March 8th, the Iraqi Governing Council adopted a Transitional Administrative Law, which was essentially an interim constitution for Iraq, and this was a remarkable milestone.

You will recall that Friday when we thought it was going to be signed, and suddenly there was the signing table, 25 pens, and nobody showed up because there was a problem over it. And over the weekend that problem was solved -- through argument, through debate, through a democratic process, something that they had never been experienced with before. But it happened.

And this administrative law recognizes freedom of religion. It puts the judiciary on an independent track. It puts the military firmly under civilian control. It gives women the access to civil society and the political life of the country. It's a huge step for the Iraqi people and we should not sell short what an accomplishment this is.

The UN Secretary General's Special Advisor Mr. Brahimi, Ambassador Brahimi, has been invited back to Iraq by the Governing Council in order to work with the Governing Council and the CPA to put in place a revised interim government that will take sovereignty from the CPA on the 1st of July. And in my visit with Ambassador Bremer last week, we talked about the transition from the CPA to a very large State Department chief of mission operation, a very large embassy. Already I have four ambassadors over there working with Ambassador Bremer and trying to make this transition as smooth as possible.

Mr. Chairman, Afghanistan is another high priority, and I was there last week. We are committed to helping build a stable and democratic Afghanistan. They had a very fine constitutional process at the end of last year where they adopted a constitution for this country that just a few years ago was a basket case, a despotic basket case. Now it has a constitution, and as you saw in press reporting this morning, President Karzai has scheduled elections for early September for both a new president as well as for a legislature.

There are still problems along the Afghan-Pakistan border. There are still problems out in Herat. But as I drove through Kabul last week, you could see buildings going up. You could see women who felt secure enough in their life now to remove the burka -- about 50 percent covered and 50 percent not covered.

I visited a registration place in a school where women were registering to vote, filling out the forms, stepping forward, getting their registration cards and proudly showing to me that they are now part of the life of the new Afghanistan.

So we have accomplished a lot in Afghanistan, but here, too, there is much more work to do. I was watching some footage yesterday that we are going to use at the donors conference next week that shows some of our reconstruction efforts in Afghanistan, and one shot on this video was of the new blacktop road, complete with markers, that go -- the road goes from Kabul to Kandahar. And we will continue that road around to Herat, working with our Saudi partners, our Japanese partners, and provide a beltway for this country. But it's more than just a beltway. It is a road that will link the country together, give the central government ability to control the regions a little more effectively. It will contribute to the economic life of the country. But more importantly, it will also link Afghanistan with the other nations of Central Asia.

Pakistan is looking at this and is starting to readjust its infrastructure, its port activities, to take into account that there will be peace in this part of the world as we go into the years ahead. And the old silk route of 2,000 years ago is going to be recreated, except this time it will be with hard roads, with ports, with an information infrastructure, and I hope, eventually, with pipelines that crisscross this area and move oil and natural gas from Central Asia to the east, and not just to the west.

So the opportunities here are enormous and we have to deal with security. We've got to get rid of these remaining Taliban and al-Qaida elements. But we should not sell short, not only our accomplishments over the last couple of years, but the potential that lies ahead for a region -- the Caucasus and Central Asia, South Asia -- all being linked in a new hub of transportation and trade as long as we can keep the peace and security, and that's what we are committed to.

The 2005 budget, as I said, contains $1.2 billion in assistance for Afghanistan, which is on top of the 2.2 in '04 -- 1.2 already out there, and I will make a public announcement of the other billion dollars at the Afghan donors conference in Berlin next week.

As important as waging the war on terrorism is to America, we have other priorities in our foreign affairs budget: HIV/AIDS -- 8,000 people a day are dying of this terrible disease. It's extremely difficult to make economic improvements in a country if you're not working on these kinds of problems, and the President is with his HIV/AIDS program.

Over the past year, we have worked with Congress to pass legislation laying the groundwork for this fight. And marking our progress earlier this month, Ambassador Tobias, who heads the program for us, Senator Thompson, Administrator Natsios of AID and I rolled out the strategy for the HIV/AIDS plan and announced the first dispensation of dollars for these programs: $350 million in contracts we'll roll out to some of the NGOs and PDOs.

As a crucial next step, the 2005 budget request expands on the President's plan with $2.8 billion to combat AIDS in the most affected countries in Africa and the Caribbean. Together, the Department of State, USAID and Secretary Thompson's Department of Health and Human Services will use the significantly increased resources quickly and effectively to achieve the President's ambitious goals in the fight against global AIDS.

Just as a digression, we are also seeing polio back in certain parts of Africa, and this has to be part of our health efforts as well, coming out of the Department of State and coming out of USAID. Of course, there are other dimensions of economic success in Africa and a program that we are pushing forward and you know a great deal about, the Millennium Challenge Corporation; the corporation has now been formed.

I'm the Chairman of the Board. We have sent a nominee to the Senate to be the CEO of this Board, Mr. Paul Applegarth, and the MCC, the Millennium Challenge Corporation, will fund infrastructure and other similar proposals to those countries that are committed to democracy, free enterprise system, individual rights of men and women, the rule of law and the end of corruption. We have other foreign assistance accounts, but the Millennium Challenge Corporation will invest in those countries that are moving in the right direction.

Let me turn now, gentlemen, to the part of the budget request that is of particular interest to you -- State operations. As you recall, we created the Diplomatic Readiness Initiative in 2002 to address staffing and training gaps that had become very inverse to the conduct of America's diplomacy. The goal of the Defense Readiness Initiative was to hire 1158 new foreign and civil service employees over a three-year period.

These new hires, the first over-attrition hires in years, would allow us to provide training opportunities for our people and greatly improve the Department's ability to respond to crises, to ramp up, when we needed to, such as we have had to do in Iraq and Afghanistan. I cannot say strongly enough what a dynamic impact this program has had on the Department. The Department sees that its leadership, but more importantly, its leadership in Congress, cares about the Department, and you are willing to invest in the readiness of our people, bring in new people.

I got a report from the Under Secretary for Management yesterday that some -- close to 30,000 people have already signed up -- if I've got the number right, guys -- some 30,000 people have signed up for the next giving of the foreign service exam. We've been averaging 50,000 people a year for the last two years who want to become part of this new team, which I think has been energized by the support we have been receiving from the Congress, and for that I am very appreciative.

We also created new mandatory leadership and management training. It's great for our people to learn how to speak different languages and learn all about foreign policy, and to be experts and write papers. They also have to be able to lead and manage people in these very, very complicated missions that we have around the world.

And so beginning from the first day you come into the Foreign Service and go to the JO course, the Junior Officers' course, the entry-level course, you will start to receive leadership and management training and will continue throughout your whole career. If this bears a marked similarity to the way they do it in the military, it is not coincidental or accidental. We're essentially adopting what I learned in the military and bringing it over to the Foreign Service and to the civil service. We're giving leadership training to our senior civil service employees, as well.

The other thing I am very proud of, of course, is the information technology investment that we have made with your support. It has paid off. Every desk in the State Department, everywhere in the State Department, now has an Internet-capable computer sitting there. We did it in-house, for the most part, and it works, it works.

A PARTICIPANT: Not, not like some of our other agencies.

SECRETARY POWELL: Well, we, frankly, we looked outside, and then we decided we can do this ourselves. We can do this ourselves.


SECRETARY POWELL: And as you may recall, gentlemen, that you had a real problem with the way we were running our diplomatic telecommunications service for years. And Mr. Tenet and I sat down and said, "Let's figure out who can deliver the capacity best?" And we solved that one.

And Mr. Tenet provides the capacity, and the person working for Mr. Tenet to do that works for me. And so we have a good deal that's worked. Our capacity has increased. The cost has gone down considerably and everybody's happy. Therefore, I can put broadband capability in every mission around the world.

As just a little war story on how this works, as you know, part of our effort to reach out to the Congress was to create an office up here, State Department office, to respond to Members of Congress, and I was able to get an office in the House. I don't want to point any fingers, but I have not yet been able to get a room on the Senate side.

Be that as it may, 30 percent of the work of my House office comes from the Senate side. And I was in there the other day waiting for a hearing to begin and just talking to my folks who work there -- three people are in there, and I said, "What kind of request are you getting?" Constituent requests, visa problems, all of this, hundreds and hundreds -- the volume is going up 300 percent in the last year.

I said, "Well, give me an example of how you solve a problem that a Member of Congress brings to you?" And they said, "Well, visa problems are a common one. Somebody will come in and say, 'Why didn't a friend of mine get a visa when they applied in New Delhi or Mumbai, or somewhere like that?"

I said, "Well, how do you handle that? Do you go to the Department and ask Consular Affairs?" They said, "No, we go right to the embassy."

"How do you go right to the embassy?" "Information technology." I said, "Show me." And the women who is working in the office went to her computer and in ten seconds she had not only gotten to the embassy, she got into the embassy's consular section and she had gotten into the database in the embassy's consular section, and in less than 20 seconds she had pulled up the specific visa application with a picture of the individual who had applied for the visa and why the visa was denied.

Now, all secure. We have firewalls. It's not -- anybody can just go in like you're going to Google. But the fact of the matter is that the kind of information technology system we have put in place allows us to provide that kind of service, not only to Members of Congress, but to the public.

In that same vein, now that we have this individual technology system coming along, we have to change the way we do business. It can't just be an information system without a change in the process and the thinking of the Department. And that's what our Project Smart is all about that we're asking for your support: Get rid of cables, get rid of the way we used to do it in World War II. My staff gave me a mounted chart, mounted a display the other day, and it was recognizing that the last Wang computer left the Department three months ago. Well, I'm pleased to hear that. It should have left ten years ago. But we are now in the Information Age and I ask for your support for our Smart Program so that we can change the thinking in the Department as well as just put new computers and software into place.

Mr. Chairman, the Department has a responsibility to protect more than 60,000 government employees who work in embassies and consulates abroad. I know how interested you have been in this program over the years. You know that we have reorganized our efforts; we reorganized the Office of Building Operations to manage the effort with speed, efficiency and effectiveness under the leadership of General Chuck Williams.

At the beginning of this Administration, we were building one new secure embassy a year. Today, we are building ten new secure embassy compounds a year. Many of these compounds also have separate facilities for USAID. They are also deserving of protection. Moreover, we have reduced the embassies' program costs by 20 percent, using modern management techniques, using common components among our embassy projects.

Within the budget, we are launching a plan to replace the remaining 150 embassies and consulates that do not meet current security standards over the next 14 years, for a total cost of $17 billion. And to fund construction of these compounds, we will begin the Capital Security Cost-Sharing Program in 2005. Not everybody is crazy with this cost-sharing program, but it has to be done and I'm working with my cabinet colleagues on it.

Each agency with staff overseas will contribute annually towards construction of the new facilities based on the number of positions that that department or agency wants in the type of space that we are preparing for them. We arrived at the cost shares in the 2005 President's Budget Request in consultations with each agency and department.

Along with securing our facilities, we have focused on assuring that overseas staffing is deployed where they are most needed to serve U.S. interests. As agencies assess the real cost of maintaining staff overseas, I hope they will adjust their overseas staffing levels to the minimum absolutely necessary, since they will now have to contribute to the cost of maintaining them overseas.

Our budget request also, I might say, touches on physical security improvements to those soft targets in our missions: schools, recreational facilities. And you know that we have an extensive plan to go after this soft targeting possibility, providing physical security improvements to overseas schools attended by dependents of government employees and other citizens. Our '05 request includes $27 million for this effort, including $10 million for the schools, $5 million to improve security at employee association facilities, and $12 million for residential security upgrades. Protection of Americans living and working overseas is one of our highest priorities.

We also appreciate the ongoing support from this committee for our peacekeeping budget. UN peacekeeping operations in troubled and fragile reasons have -- regions, excuse me, have been and remain critical to ensuring that such places are given stability and the time they need to work on long-term solutions to their underlying conflicts and problems. UNAMSIL in Sierra Leone and UNMISET in East Timor have been effective, UNMISET in East Timor have been effective in helping new governments to establish themselves.

We have also supported in Liberia and Ivory Coast, and I just ask for your continued support. I'm going to have difficulty meeting all the peacekeeping financial responsibilities that I expect to arise over the next year, but the '05 submission is certainly a good start on meeting those responsibilities. We'll just have to see how the cost flows out in the course of the fiscal year.

Mr. Chairman, Senator Hollings, Senator Byrd, thank you for this opportunity to present our case. I thank you for your past support and I will thank you in advance for your future support. (Laughter.) Hopefully, that is.


Released on March 25, 2004

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