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[Senate Hearing 109-335]
[From the U.S. Government Publishing Office]

                                                 S. Hrg. 109-335, Pt. 3

                                                        Senate Hearings

                                 Before the Committee on Appropriations

_______________________________________________________________________

                                             State, Foreign Operations,

                                                   and Related Programs

                                                         Appropriations

                                                            Fiscal Year
                                                                   2007

                                         109th CONGRESS, SECOND SESSION

                                                              H.R. 5522

PART 3
        DEPARTMENT OF STATE
        NONDEPARTMENTAL WITNESS
        UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT

 State, Foreign Operations, and Related Programs Appropriations, 2007 
                          (H.R. 5522)--Part 3

                                                 S. Hrg. 109-335, Pt. 3

  STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR 
                            FISCAL YEAR 2007

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

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                                   on

                               H.R. 5522

AN ACT MAKING APPROPRIATIONS FOR FOREIGN OPERATIONS, EXPORT FINANCING, 
AND RELATED PROGRAMS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2007, AND 
                           FOR OTHER PURPOSES

                               __________

                         PART 3 (Pages 1-113)

                          Department of State
                        Nondepartmental Witness
           United States Agency for International Development

                               __________

         Printed for the use of the Committee on Appropriations

  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html

                    U.S. GOVERNMENT PRINTING OFFICE
31-506                      WASHINGTON : 2007
_____________________________________________________________________________
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                               __________

                      COMMITTEE ON APPROPRIATIONS

                  THAD COCHRAN, Mississippi, Chairman
TED STEVENS, Alaska                  ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico         PATRICK J. LEAHY, Vermont
CHRISTOPHER S. BOND, Missouri        TOM HARKIN, Iowa
MITCH McCONNELL, Kentucky            BARBARA A. MIKULSKI, Maryland
CONRAD BURNS, Montana                HARRY REID, Nevada
RICHARD C. SHELBY, Alabama           HERB KOHL, Wisconsin
JUDD GREGG, New Hampshire            PATTY MURRAY, Washington
ROBERT F. BENNETT, Utah              BYRON L. DORGAN, North Dakota
LARRY CRAIG, Idaho                   DIANNE FEINSTEIN, California
KAY BAILEY HUTCHISON, Texas          RICHARD J. DURBIN, Illinois
MIKE DeWINE, Ohio                    TIM JOHNSON, South Dakota
SAM BROWNBACK, Kansas                MARY L. LANDRIEU, Louisiana
WAYNE ALLARD, Colorado
                    J. Keith Kennedy, Staff Director
              Terrence E. Sauvain, Minority Staff Director
                                 ------                                

    Subcommittee on State, Foreign Operations, and Related Programs

                  MITCH McCONNELL, Kentucky, Chairman
ARLEN SPECTER, Pennsylvania          PATRICK J. LEAHY, Vermont
JUDD GREGG, New Hampshire            DANIEL K. INOUYE, Hawaii
RICHARD C. SHELBY, Alabama           TOM HARKIN, Iowa
ROBERT F. BENNETT, Utah              BARBARA A. MIKULSKI, Maryland
CHRISTOPHER S. BOND, Missouri        RICHARD J. DURBIN, Illinois
MIKE DeWINE, Ohio                    TIM JOHNSON, South Dakota
SAM BROWNBACK, Kansas                MARY L. LANDRIEU, Louisiana
THAD COCHRAN, Mississippi (ex        ROBERT C. BYRD, West Virginia (ex 
    officio)                             officio)

                           Professional Staff

                               Paul Grove
                              Tom Hawkins
                             Robert Lester
                         Tim Rieser (Minority)
                        Kate Eltrich (Minority)
                        Jennifer Park (Minority)

                         Administrative Support

                            LaShawnda Smith

                            C O N T E N T S

                              ----------                              

                        Tuesday, March 28, 2006

                                                                   Page

Department of State: Office of the Secretary.....................     1

                         Thursday, June 8, 2006

United States Agency for International Development...............    39
Nondepartmental witness..........................................    91

 
  STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR 
                            FISCAL YEAR 2007

                              ----------                              

                        TUESDAY, MARCH 28, 2006

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met, at 2:17 p.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Mitch McConnell (chairman) 
presiding.
    Present: Senators McConnell, Bond, Bennett, Brownback, 
Leahy, and Durbin.

                          DEPARTMENT OF STATE

                        Office of the Secretary

STATEMENT OF HON. CONDOLEEZZA RICE, SECRETARY OF STATE

             opening statement of senator mitch mc connell

    Senator McConnell. The hearing will come to order.
    Madam Secretary, I apologize for holding you up. Today's 
hearing will examine the fiscal 2007 budget request for your 
Department and Foreign Operations, and affords us an 
opportunity to learn more about transformational diplomacy and 
foreign assistance reform. I expect there will also be a 
question or two on matters falling under the subcommittee's 
jurisdiction regarding the fiscal 2006 supplemental request.
    My opening statement will be brief. The President's request 
totals $33.8 billion, $23.7 billion in Foreign Operations and 
$10.1 billion in State Department operations and related 
programs. This represents an increase of $2.8 billion and $600 
million respectively above last year's enacted levels. As in 
previous years, significant resources are targeted toward the 
Middle East, the Millennium Challenge Corporation, and 
combating HIV/AIDS.
    The President is to be commended for his commitment to 
advancing democracy worldwide, as reflected in the National 
Security Strategy and through his words and deeds. According to 
the Office of Management and Budget, the fiscal year 2007 
request includes $1.7 billion for democracy, governance, and 
human rights programs, an increase of $400 million above the 
fiscal 2006 estimated levels. As this subcommittee has long 
been a strong supporter of democracy abroad, most recently 
demonstrated in the creation of a new Democracy Fund account in 
the bill last year, it would be helpful to hear your views on 
why democracy promotion is such a priority to this 
administration. Is there a connection between good governance 
and poverty alleviation? What role do democracy programs play 
in the war against terrorism? Should more activities be 
targeted toward Asia and the former Soviet Union, where 
countries like Belarus and Russia seem to be heading in the 
wrong direction?
    As you were recently in Southeast Asia, I would appreciate 
hearing more about your trip, particularly any insights you may 
have with regard to the Burma problem. Let me also state for 
the record that I recognize your strong support for the 
struggle for freedom in Burma and the aggressive efforts of the 
State Department to encourage other governments to take that 
posture as well and to support Aung San Suu Kyi's cause.
    I am hopeful that the administration can again urge the 
United Nations Security Council to debate the security threat 
Burma poses to the region. This year we need a formal debate 
and a resolution on Burma at the United Nations.
    Let me close by reiterating my concern with terrorism in 
Southeast Asia. I note that the request includes $32 million in 
military assistance for countries in that region, a decrease of 
$6 million below the previous fiscal year, and $9.8 million for 
military training programs. While I support the increase in 
military aid to Indonesia, whose democratic achievements since 
1998 have been remarkable, I hope you will clarify the $12 
million cut to the Philippines. Many of us remain concerned 
with the ongoing conflict in the southern Philippines.
    Again, Madam Secretary, thank you for being here. Let me 
turn to Senator Leahy and then we will get right to your 
statement.

             OPENING STATEMENT OF SENATOR PATRICK J. LEAHY

    Senator Leahy. Thank you, Mr. Chairman.
    Madam Secretary, always good to have you here. This is 
probably the first and last time we are going to hear from you 
on the fiscal year 2007 budget request until we get our 302(b) 
allocation and our bill is on the floor of the Senate. At that 
time the game is pretty much over because we usually lose 
ground in conference with the House. Programs that are 
important to you and to us are cut further.
    These hearings are useful, but I think you and the State 
Department could mount a far more effective effort. You have 
allies with Senator McConnell and myself, but there are many 
people who are not allies, and we have to convince them, too. 
Now, I believe your transformational diplomacy initiative has 
much to recommend it. We discussed this before. I commend you 
for it. But I think the funds requested fall short of what you 
need.
    It is one thing to deploy your staff more strategically and 
plan and coordinate foreign aid programs effectively. I think 
that is important. But I think ``transformational'' suggests 
something more far reaching.
    This budget cuts many of USAID's core programs to promote 
democracy and fight poverty. It is true that in the aggregate 
it represents an increase, but that's only because of funding 
for AIDS and the Millennium Challenge Corporation. We are 
providing hundreds of millions of dollars to the Millennium 
Challenge Corporation, but a lot of that goes to tiny countries 
which really do not have any significant security importance to 
the United States.
    But in doing that, again the money--it is a rob Peter to 
pay Paul thing. You cut programs that have bipartisan support, 
proven results and that fund everything from girls education to 
providing clean water and improving agriculture.
    It is going to be a difficult year for this subcommittee. 
You will not find two stronger supporters than the chairman and 
myself, but a lot of domestic programs are being cut this year 
and it is going to be hard to say why we have to put more into 
foreign aid. You have to convince the chairman and ranking 
members of the House and Senate Appropriations Committees.
    I have some other concerns which are not only related to 
appropriations. There is the image and the reputation of the 
United States, which has obvious importance to our security. 
After 9/11 we had almost all of the countries in the world, 
with two or three exceptions, behind us, an outpouring of 
sympathy from every corner of the globe. Now we are seen by an 
alarming and growing number of people as an aggressive, 
occupying bully who locks up innocent people indefinitely, 
humiliates and physically abuses them, and denies them the 
right to even know what they are accused of.
    We get regular reports of Iraqi civilians, including women 
and young children, who have been mistakenly killed by U.S. 
soldiers. We spend billions on grossly overpriced 
reconstruction projects that are poorly designed, may never get 
finished, but have made some U.S. contractors rich. That does 
not make us safer, especially when we are such a good and 
generous country.
    Then there is U.N. peacekeeping. The United Nations is 
operating 18 different peacekeeping missions. One of them, in 
the Democratic Republic of the Congo, is trying to provide 
security for the first democratic elections in a half a 
century. At the same time, it is coping with armed militias and 
every possible logistical challenge in a destitute country the 
size of Western Europe, but one with virtually no 
infrastructure. That is just one example.
    Darfur will be next. It involves similar challenges and 
costs. We vote to send U.N. peacekeepers to some of the world's 
most dangerous places, but then we underfund these missions. I 
might point out that, in underfunding them, they together cost 
in a year less than our military spends in a week in Iraq.

                           PREPARED STATEMENT

    It is time for us and the other nations who do not 
contribute troops to support these missions the way we would 
expect our own soldiers to be supported.
    I will put the rest of my statement in the record. I look 
forward to hearing from you and I have already discussed with 
you a couple of the questions I will ask.

             Prepared Statement of Senator Patrick J. Leahy

    Madam Secretary, thank you for being here. This is be the first and 
last time we hear from you on your fiscal year 2007 budget request, 
until after we receive our 302b allocation and our bill is on the floor 
of the Senate. At that point the game is pretty much over since we 
usually lose ground in conference with House, when programs that are 
important to you and to us are cut further.
    Hearings like this are useful, but they are far from sufficient. 
You need to mount a far more effective effort than you have in the past 
to get the funding you need, because the party in the Majority in 
Congress, with the exception of a few allies like Chairman McConnell, 
will want to cut your budget.
    While I believe your transformational diplomacy initiative has much 
to recommend it--and I commend you for it--I am afraid that the amount 
of funds you are requesting falls far short of what you would need to 
implement it effectively.
    It is one thing if all you hope to do is deploy your staff more 
strategically and plan and coordinate foreign aid programs effectively. 
But to me, ``transformational'' suggests something significantly more 
far reaching.
    This budget, contrary to the President's promise, cuts many of 
USAID's core programs to promote democracy and fight poverty. It is 
true that in the aggregate what you propose represents an increase, but 
that is only because of funding for AIDS and the Millennium Challenge 
Corporation.
    While we are providing hundreds of millions of dollars from the MCC 
to tiny countries with little if any foreign policy or security 
importance to the United States, you would cut funds for programs that 
have bipartisan support, proven results, and that fund everything from 
girls' education to providing clean water and improving agriculture.
    Chairman McConnell and I are among your strongest supporters here, 
but with the cuts the President is proposing to so many domestic 
programs this is going to be a very difficult year for this 
subcommittee.
    You may have big plans, you may have great policies. But if you 
don't have the funds to implement them they won't amount to much. They 
certainly won't be transformational. Unless you can convince the 
Chairmen and Ranking Members of the House and Senate Appropriations 
Committees, much of what you hope to do will not be possible. I want to 
mention a few issues of special concern to me, and I will have 
questions on other topics as well:
  --First, is the image and reputation of the United States, which has 
        obvious importance to our security. After 9/11 there was an 
        outpouring of sympathy from every corner of the globe. Today, 
        we are seen by alarming numbers of people as an aggressive, 
        occupying bully that locks up innocent people indefinitely, 
        humiliates and physically abuses them, and denies them the 
        right to even knowwhat they are accused of.
    We get regular reports of Iraqi civilians, including women and 
young children, who have been mistakenly killed by U.S. soldiers. We 
have spent billions on grossly over-priced reconstruction projects that 
were poorly designed and may never get finished, but which made U.S. 
contractors rich. This is not making us safer.
  --Second, is U.N. peacekeeping. The United Nations is operating 18 
        different peacekeeping missions. One of them, in the Democratic 
        Republic of the Congo, is trying to provide security for the 
        first democratic elections in half a century, while it copes 
        with armed militias and every possible logistical challenge in 
        a destitute country the size of Western Europe with virtually 
        no infrastructure. This is just one example. Darfur may be 
        next, and it will involve similar challenges and costs.
    Yet while the Administration votes to send U.N. peacekeepers to 
some of the world's most dangerous places, we under-fund these missions 
which together cost in a year less than our military spends in a week 
in Iraq. It is time for us and the other nations who don't contribute 
any troops, to support these missions the way we would expect our own 
soldiers to be supported. Yet, again, your budget does not do that, and 
it is going to cause serious problems.
  --Third, is Latin America. It has been sorely neglected by this 
        Administration, despite protestations by State Department and 
        White House officials to the contrary. Senator DeWine has noted 
        it. Senator Coleman has noted it. There is no end to the 
        interests we share with our southern neighbors--immigration 
        being just one--and yet your programs and policies are a mere 
        shadow of what they should be. It is a missed opportunity and 
        this budget continues business as usual.
    Madam Secretary, I voted for you because I felt you have the 
qualities to do a good job. I know you are trying and I think you have 
outstanding people here and in our missions around the world. But I 
have to say I think the foreign policies of this Administration have 
too often been misguided and harmful to our national interests.
    I am sure you disagree, but I do not believe this country is safer 
because of these policies, and I do not believe the budget you are here 
to support is nearly adequate to protect our interests in today's 
increasingly divisive and dangerous world.

    Senator McConnell. Madam Secretary, I assume you have a 
prepared statement. If you do, we will make that a part of the 
record, you can make some observations, and then we will go to 
questions.

               SUMMARY STATEMENT OF HON. CONDOLEEZZA RICE

    Secretary Rice. Thank you very much, Mr. Chairman, Senator 
Leahy. I thank you very much for this opportunity. I will ask 
to enter my entire statement into the record, but I will just 
make a few comments so that we may have ample time for 
discussion and questions.
    I do want to thank the members of this committee for the 
tremendous support that you have given to our need to support 
our men and women who practice diplomacy. The funding requested 
by the President for the State Department and for foreign 
operations, of course, does more than just support diplomacy, 
because it is really strengthening our national security. The 
challenges that we face are of course sometimes military, but 
overwhelmingly they are political and economic, and they are a 
matter of helping to create a cadre of states that are well 
governed and that are democratic.
    America is of course a Nation at war and we are engaged in 
a conflict against terrorists and violent extremists. Across 
the world our Nation's men and women in uniform and the members 
of the foreign and civil supervisor, as well as our foreign 
service nationals, are shouldering great risks and 
responsibilities in advancing America's diplomatic mission, 
working in dangerous places far away from friends and family 
and loved ones. They are performing with courage and fortitude 
and heroism, and I would just like to take this opportunity to 
honor them, particularly those who have given their lives, and 
to recognize the courageous public servants and their families 
who endure long times of service abroad.
    Mr. Chairman, the President's budget is in support of a 
number of core missions: first of all, of course, to defeat the 
extremism and terrorism that we face in the world. You will see 
that there is support for coalition partners and for front-line 
states that are literally on the front lines against 
terrorists. But of course we know that it is not enough to have 
a short-term solution to terrorism, that is defeating the 
terrorists who on a daily basis plot and plan to destroy 
innocent life, but also to deal with the creation--with the 
circumstances that created those terrorists. We believe that 
the ideology of hatred which they espouse can only be met by 
advancing liberty and democracy. That is the goal that we have 
in the support for the young democracies of Iraq and 
Afghanistan, for a broader Middle East initiative that seeks to 
press authoritarian regimes throughout a region that for 60 
years has had an absence of freedom, to press for change in 
that region. Change is coming. It comes with turbulence, it 
comes with difficulty, but change in the Middle East is coming.
    Of course, our democracy agenda is not limited to the 
Middle East, but also to continuing to press for the 
democratization of those places that are still not democratic 
in Europe. In Asia, you mentioned Burma, Mr. Chairman, and we 
have been very active in that front, but also to press for 
change--for the stabilization of democracy in places that have 
already had democratic elections, for instance in Latin 
America.
    We face global challenges. HIV/AIDS--the President's 
emergency plan for AIDS is to have an effect on those afflicted 
with AIDS and on those who might be afflicted with AIDS. We 
fight the counter-drug fight with allies around the world, and 
of course we have taken on recently the new challenge of the 
possible pandemic of Avian flu.
    Finally, we are engaged in working with transformational 
states. Those are the states that we believe have the capacity 
to make a great leap forward. They are states that are very 
poor, where poverty is still a problem, but where they can be 
recognized for their democratic tendencies, for their good 
governance, for their desire to fight corruption. It is really 
a new paradigm for the delivery of foreign assistance and the 
President's Millennium Challenge Account has been a real tool 
in pressing countries to deal with the kinds of problems that 
retard development and that retard the development of state 
capacity, so that American foreign assistance is not simply a 
crutch, but rather an enabling mechanism for states to one day 
become independent of foreign assistance and to be able to 
attract trade and investment, which is after all how states 
really grow.
    Let me say that we have a number of initiatives under way 
in the Department, what we have called transformational 
diplomacy, and I would only mention two. That is that we have 
done a good deal now of global repositioning. We have 
repositioned 100 people from posts that are, we believe, posts 
that can afford to have fewer personnel, to reposition them to 
front-line posts in places like India and China where we really 
need more people.
    We are also requesting more positions, but I just want the 
committee to know that we have made a commitment that we will 
also reposition existing resources, that we will not just ask 
for new resources, that we will indeed make the hard choices 
about changing our global posture, which still looks more like 
the 1980s and 1990s than it should in 2006.
    Finally, we have also made changes in our foreign 
assistance under the authorities that are granted to me for the 
direction of foreign assistance, with the creation of a post in 
the Department which will help us to better align the programs 
of USAID and the State Department. That is about 80 percent of 
all foreign assistance. We believe that, with this program, 
which I have asked Randy Tobias to take on, and should he be 
confirmed by the Senate he would also be the USAID 
Administrator--the point here is to make sure that we make the 
best use of the very precious resources that we are given.

                           PREPARED STATEMENT

    We recognize that the American people have been generous in 
their support of the diplomatic mission, of foreign assistance. 
We recognize that the American people want to be generous 
because we are compassionate when we look to helping developing 
societies, when we deal with humanitarian crises. But we also 
recognize that we have an obligation of stewardship and 
efficient use of those resources, and we believe that this new 
structure should give us better opportunity to do so.
    Thank you very much, Mr. Chairman.
    [The statement follows:]

              Prepared Statement of Hon. Condoleezza Rice

    Chairman McConnell, ranking member Leahy, members of the 
Subcommittee, thank you for the opportunity to present the President's 
fiscal year 2007 budget for State Department, Foreign Operations, and 
Related Programs and agencies. I appreciate this opportunity to address 
the members of the subcommittee and to talk about America's role in 
meeting the unprecedented challenges of our world today. I look forward 
to working closely with Congress to ensure that America's diplomacy has 
the necessary resources to secure our interests, advance our ideals, 
and improve people's lives around the world. In all of these mutual 
efforts, of course, we must remain committed to our responsibility to 
be good stewards of the American taxpayers' hard-earned dollars.
    The President's fiscal year 2007 International Affairs Budget for 
the Foreign Assistance Programs, Department of State Operations, USAID 
and other foreign affairs agencies totals $35.116 billion. This total 
includes $23.72 billion for Foreign Operations and $10.078 billion for 
State Operations, as well as $1.317 billion in Public Law 480 Food Aid, 
and reflects a funding increase of $3.539 billion from the level 
appropriated last year.
    As I did last year, I want to emphasize that it is important to 
maintain a balance of resources between State operations and foreign 
assistance. The diplomatic platforms that we have--our people, our 
ability to operate in the field, our facilities--are the platforms from 
which we conduct our diplomacy and we are especially concerned that our 
people have the training, technology and facilities that they need, all 
with the requisite security. These vital components are necessary to 
the success of our diplomatic efforts and foreign assistance programs.
    Additionally, I would like to take this opportunity to encourage 
the members of this committee to continue to provide their full support 
and leadership in passing the fiscal year 2006 Emergency Supplemental 
request that is before you now. This urgently needed funding will 
support immediate political, economic, humanitarian, and operational 
requirements that will allow us to meet new challenges--and seize new 
opportunities--to build a better, safer, and freer world.
    Mr. Chairman, the funding requested by the President for State 
Department and Foreign Operations will do more than support our 
diplomacy; it will strengthen our national security. America is a 
Nation at war. We are engaged in a conflict against terrorists and 
violent extremists. Across the world, our Nation's men and women in 
uniform and the members of our Foreign and Civil Service, as well as 
our Foreign Service Nationals, are shouldering great risks and 
responsibilities advancing America's diplomatic mission--often working 
in dangerous places far away from their friends and loved ones. They 
are performing with courage, fortitude and heroism. Today, I want to 
honor those who have given their lives in this cause and to recognize 
the courageous public servants and their families who endure long 
periods of service abroad.
    America's enemies remain eager to strike us, but our actions in the 
past 4 years have weakened their capability. Our diplomacy plays a 
vital role in defeating this threat. We are building partnerships with 
traditional allies and with new partners that share our perception of 
the threat. Most importantly, we are working directly with foreign 
citizens who wish to build thriving free societies that embrace 
democratic values and freedoms.
    This is indeed an extraordinary period. It is a time that is unlike 
any other since perhaps the end of World War II, when the United States 
took on the mantle of creating a stable and democratic Europe. Europe 
at that time was weak and divided. Today it is free and at peace. We 
learned from that experience that if we are faithful to our democratic 
values we are safer and more secure. When democracy and freedom are in 
retreat, we are more vulnerable, which we learned in a very graphic and 
painful way on September 11, 2001.
    The President has said that the only way to deal with the 
ideologies of hatred that we face in the world today is to present the 
world with the antidote, which is the spread of liberty and freedom. 
The men and women of our diplomatic service work daily in this cause. 
In his Second Inaugural Address, President Bush laid out the vision for 
American leadership in the world today: ``[I]t is the policy of the 
United States to seek and support the growth of democratic movements 
and institutions in every nation and culture, with the ultimate goal of 
ending tyranny in our world.'' The President's vision stems from the 
recognition that we are living in a time of extraordinary change, where 
the prospect of violent conflict among great powers is more remote than 
ever. Nations are increasingly competing and cooperating in peace, not 
preparing for war. Democratic reform has begun in the Middle East. The 
United States is working with our democratic partners in every region 
of the world to build global stability through a balance of power that 
favors freedom and advances liberty.
    At the same time, other challenges have assumed new urgency. The 
greatest threats today emerge more within states than between them, and 
the fundamental character of regimes matters more than the 
international distribution of power. It is impossible to draw neat, 
clear lines between our security interests, our development goals, and 
our democratic ideals in the world today. Our diplomacy must integrate 
and advance all of these goals, through a strategy that is rooted in 
partnership, not paternalism--in doing things with people, not for 
them. This is the objective of our diplomatic efforts today and in the 
future.

                       TRANSFORMATIONAL DIPLOMACY

    Mr. Chairman, the 2007 budget represents what we call 
transformational diplomacy. The objective of transformational diplomacy 
is to work with our many partners around the world to build and sustain 
democratic, well-governed states that will respond to the needs of 
their people and conduct themselves responsibly in the international 
system.
    We must transform old diplomatic institutions to serve new 
diplomatic purposes, and we must empower our people to practice 
transformational diplomacy. With the generous support of the Congress, 
my good friend and predecessor, Colin Powell, brought American 
diplomacy into the 21st century. Now, my leadership team and I are 
building on this strong foundation and beginning the generational work 
of transforming the State Department and USAID. This will not only 
strengthen national security, it will improve our fiscal stewardship. 
We are committed to using American taxpayers' dollars in the most 
effective and responsible way to strengthen America's mission abroad.
    In the past year, we have begun making changes to our organization 
and our operations that will enable us to advance transformational 
diplomacy. We are forward-deploying our people to the cities, 
countries, and regions where they are needed most. We are starting to 
move hundreds of diplomats from Europe and Washington to strategic 
countries like China, India, South Africa, and Indonesia. We are 
supplying our people with additional training and language skills in 
order to engage more effectively with foreign peoples. Our national 
security depends, in part, on the ability of American diplomats to 
speak and master critical foreign languages. We must improve our 
communication skills in critical foreign languages such as Arabic, 
Farsi, Mandarin, Hindi, and Urdu to promote our national security, 
foster greater economic integration, and further the agenda of freedom. 
Consistent with our language and education initiative, the President's 
fiscal year 2007 budget includes proposals to manage for results. We 
are enabling our diplomats to work more closely with America's 
servicemen and women creating the most cohesive and unified diplomatic 
team in our history.
    To ensure better coordination of our financial resources I have 
announced the creation of the new position of Director of Foreign 
Assistance. This essential reform will sharpen our capability to use 
foreign assistance more efficiently and effectively to: further our 
foreign policy goals; bolster our national security; encourage 
prosperous, democratic and lawful societies that join us in overcoming 
the forces of terror; reduce poverty; and improve people's lives around 
the world.
    We are making these initial changes using our existing authority. 
The additional funding we are requesting in the fiscal year 2007 budget 
will help us to implement our vision to transform the State Department 
to meet the challenges of the 21st century. For this purpose, we are 
requesting $9.3 billion for State Department operations. 
Transformational diplomacy begins by ensuring that our people are in 
the right places, with the necessary tools and training to carry their 
mission. We are requesting $23 million for 100 new positions on the new 
frontlines of our diplomacy: key transitional countries and emerging 
nations in Africa, Latin America, the Middle East, and Asia. These new 
positions will complement the 100 positions that we are already moving 
as part of our ongoing effort to best balance our global diplomatic 
posture. This repositioning effort will require a renewed commitment to 
secure and to modernize many posts overseas, and we are seeking $1.5 
billion for security-related construction and rehabilitation of our 
diplomatic facilities.
    More and more, we are calling on our diplomats to leave their 
families and serve overseas in unaccompanied assignments, or ``hardship 
posts''. With your help, as part of our effort to modernize the Foreign 
Service, we will institute a new pay-for-performance system that fairly 
compensates our men and women working abroad. New training will also 
make full use of dynamic new technologies, and we are asking for $276 
million to provide for our workforce the latest information technology 
and to support professional training needed for success.
    These new tools and training will better enable our Nation's 
diplomats to tell America's story to the people of the world, and in 
turn, to listen to the stories they have to tell. We have heard the 
legitimate criticisms that have been made of our public diplomacy, and 
we are re-engineering how we do business. I have stressed that public 
diplomacy is the responsibility of every single member of our 
diplomatic corps, not just our public diplomacy specialists. We are 
creating forward-deployed, regional public diplomacy centers. These 
centers, or media hubs, will be small, lean operations that work out of 
our embassies or other existing facilities, enabling us to respond 
quickly to negative propaganda, to correct misinformation, and to 
explain America's policies and principles. The $351 million that we 
seek will be essential to continue to revitalize our public diplomacy.
    To complement our public diplomacy, we must ensure that America 
remains a welcoming place for tourists, students, and businesspeople, 
while at the same time protecting our homeland from terrorists and 
criminals who would exploit our open society to do us harm. The State 
Department, in partnership with the Department of Homeland Security, 
has taken new steps in the past year to realize the President's vision 
of secure borders and open doors. Our request of $1.1 billion will fund 
the Border Security Program and enable us to hire 135 new consular 
officers and passport staff to meet the growing demand of foreign 
citizens seeking to travel to America, while maintaining its 
fundamental commitment to serve each and every American citizen who 
travels abroad. At the same time, we are seeking $474 million to 
support educational and cultural exchanges, which increase mutual 
understanding between our citizens and the peoples of the world.
    Finally, we must continue to enable our Nation's diplomats to work 
effectively with our partners in the United Nations and other 
international organizations. The United States takes its international 
obligations seriously, and we remain committed to strengthening the 
financial stability, efficiency, and effectiveness of international 
organizations. We seek $1.6 billion to fund assessed and voluntary 
contributions to international organizations.
    Mr. Chairman and members of the subcommittee, America's purpose in 
this young century is to fuse our democratic principles with our 
dramatic power to build a more hopeful world. Our purposes are 
idealistic, but our policies are realistic. The men and women of the 
State Department have risen to the challenge of transformational 
diplomacy with enthusiasm and courage and are helping our partners 
around the world to build a future of freedom, democracy, and hope.
    Realizing the goals of transformational diplomacy will require a 
sustained effort over the course of a generation. Most importantly, it 
will require a strong partnership with the Congress. We will do our 
part to use our existing authority to make foreign assistance more 
effective and to enhance our ability to serve as responsible stewards 
of the American taxpayers' money. Our goal in establishing the new 
position of Director of Foreign Assistance is a first step. We welcome 
a dialogue with Congress about how we can work together to improve 
further America's foreign assistance, enabling us to respond more 
quickly and more effectively to the world's development challenges.

                            DEFEATING TERROR

    When we speak about the Global War on Terrorism, we first think of 
what our military is doing in the mountains of Afghanistan or the towns 
and cities of Iraq. But we also need to think of the important role of 
our foreign assistance and diplomatic presence in places beyond 
Afghanistan and Iraq and in the array of states that are now fighting 
side-by-side with us in the Global War on Terrorism. As they are 
supporting us, we need to support them. In this budget we are 
requesting $6.2 billion to strengthen the coalition partners who are 
standing shoulder to shoulder with us on the front lines in the fight 
against terrorism. Our assistance empowers our partners to practice 
more effective law enforcement, police their borders, gather and share 
essential intelligence, and wage more successful counterterrorism 
operations. In many nations, our assistance will also help to bolster 
thriving democratic and economic institutions reducing the societal 
divisions that terrorists exploit for their own ideological purposes. 
Our fiscal year 2007 request includes $739 million for Pakistan, $560 
million for Colombia, $154 million for Indonesia, $457 million for 
Jordan, and $335 million for Kenya.
    Essential to winning the war on terrorism is denying our enemies 
the weapons of mass destruction that they seek. We must develop new 
tools for counter-proliferation to confront and dismantle the networks 
involving rogue states, outlaw scientists, and black market middlemen 
who make proliferation possible. We are building on the achievements of 
the Proliferation Security Initiative, the G-8 Global Partnership, and 
U.N. Security Council Resolution 1540. We are working to stop Iran and 
North Korea from succeeding in their quest for weapons of mass 
destruction, and we continue to do everything in our power to deny 
terrorists access to the world's most dangerous weapons, including 
conventional weapons like MANPADS. The fiscal year 2007 budget proposes 
to increase funding for the State Department's efforts to help 
countries counter the proliferation of dangerous weapons and materials.

                    ADVANCING LIBERTY AND DEMOCRACY

    In December over 12 million Iraqi people voted in free elections 
for a democratic government based on a constitution that Iraqis wrote 
and adopted. Iraq is on a track of transformation from brutal tyranny 
to a self-reliant emerging democracy that is working to better the 
lives of its people and defeat violent extremists. The President's 
request of $771 million, along with the supplemental request, is an 
essential part of our National Strategy for Victory in Iraq. The 
funding for the Department's operations and programs is a critical 
counterpart to the efforts of our troops in the field as we pursue 
integrated security, economic, and political tracks to success in Iraq. 
The supplemental request will fund programs that are integral to our 
counter-insurgency campaign and to the operation and security of our 
diplomatic mission, while the fiscal year 2007 request supports 
capacity development essential for Iraq's transition to self-reliance.
    Our work also continues in Afghanistan. Four years after the United 
States, along with our Afghan allies and others, removed the Taliban 
regime, the Afghan people have established a democratic government. 
Millions of men and women have voted freely for the first time. Today, 
Afghanistan has a democratic constitution, an emerging free economy, 
and a growing, multi-ethnic army. Despite this dramatic progress, there 
is still much hard work to be done. The President's request of $1.1 
billion for Afghan reconstruction, along with supplemental funding, 
will allow us to continue working with the people of Afghanistan to 
meet the remaining political, economic, and security challenges they 
face.
    The people of Iraq and Afghanistan are helping to lead the 
transformation of the Broader Middle East from despotism to democracy. 
This is a generational challenge. Elections are an important and 
necessary beginning and the freedom to choose invests citizens in the 
future of their countries. But one election does not complete the 
fulfillment of democracy. Successful democracies are characterized by 
transparent, accountable institutions of governance; a thriving civil 
society that respects and protects minority rights; a free media; 
opportunities for health and education; and the renunciation of 
terrorism and ideologies of hatred. On this last point especially, we 
will continue to insist that the leaders of Hamas agree to the 
conditions of the quartet to reject terrorism and work toward peace 
with Israel.
    Helping the nations of the broader Middle East to make progress in 
building the foundations of democratic societies is the mission of the 
Middle East Partnership Initiative, for which we are seeking $120 
million. We are also requesting $80 million for the National Endowment 
for Democracy to continue its work in promoting lasting democratic 
change around the world.
    Progress in the broader Middle East offers hope, but the region 
still faces determined enemies, especially the radical regime in 
Tehran. Through its aggressive and confrontational behavior, Iran is 
increasingly isolating itself from the international community. In 
recent months, our diplomacy has broadened the international coalition 
to address Iran's nuclear ambitions. This issue is now before the U.N. 
Security Council.
    The Iranian people should know that the United States fully 
supports their aspirations for a freer, better future, which is why the 
President requested $75 million in supplemental funding for democracy 
promotion activities. As we aim to isolate the government of Iran 
because of its defiance of the international community over its nuclear 
program, it is all the more important that we make clear to the Iranian 
people our commitment to their well-being. The funds we are requesting 
in the supplemental will enable us to expand considerably our direct 
communication with the Iranian people through public diplomacy, 
educational and cultural exchanges, and expanded broadcasting.

                       MEETING GLOBAL CHALLENGES

    Like terrorism and nuclear proliferation, many other challenges in 
today's world are global and transnational in nature. These threats 
breach all borders and affect all nations. Today's global threats 
require global partnerships, and America's diplomats are helping to 
transform our relationships with countries that have the capacity and 
the will to address shared global problems.
    One major global threat comes from disease, especially the scourge 
of HIV/AIDS. This pandemic affects key productive members of society: 
the individuals who drive economies, raise children, and pass on the 
customs and traditions of their countries. The United States is 
committed to treating people worldwide who suffer from AIDS because 
conscience demands it, and also because a healthier world is a safer 
world. The hallmark of our approach is the President's Emergency Plan 
for AIDS Relief.
    The Emergency Plan is rooted in partnership. Our approach is to 
empower each nation to take ownership of the fight against HIV/AIDS 
through prevention, treatment, and care. The results to date have been 
remarkable. In the past two years, the Emergency Plan has expanded 
life-extending antiretroviral treatment to 471,000 people worldwide, 
400,000 of whom are located in sub-Saharan Africa. As of last year, the 
Emergency Plan has extended care to more than 1.2 million orphans and 
vulnerable children. The President's 2007 Budget requests $4 billion, 
$740 million more than the current year, to continue American 
leadership in the global fight against HIV/AIDS. Additionally, the 2007 
budget includes $225 million to fight malaria, which is a major killer 
of children in sub-Saharan Africa. These funds respond to a pledge to 
increase United States funding of malaria prevention and treatment by 
more than $1.2 billion over five years.
    The United States is also playing a key global role in preparing 
for the threat of a possible avian influenza pandemic by providing 
political leadership, technical expertise, and significant resources. 
The most effective way to protect the American population from an 
influenza outbreak abroad is to contain it beyond our borders. The 2007 
budget provides resources to continue these activities in countries 
already experiencing outbreaks of influenza and in other countries on 
the cusp of infection.
    Another key global challenge is to curtail the illicit drug trade 
and to dissolve the relationships between narcotic-traffickers, 
terrorists, and international criminal organizations. The 2007 budget 
requests $722 million for the Andean Counterdrug Initiative, which 
advances the President's goal of strengthening democracy, regional 
stability, and economic development throughout the hemisphere. The 
Initiative provides funding for law enforcement, security programs, and 
alternative livelihood assistance for those at risk from the trade of 
illicit narcotics.
    The United States remains the world's most generous provider of 
food and other emergency humanitarian assistance. We are also helping 
refugees to return to their countries of origin. Where that is not a 
viable option, the United States leads the international community in 
resettling refugees here in the United States. The fiscal year 2007 
request of $1.2 billion for humanitarian relief, plus $1.3 billion in 
food aid, will ensure that we are prepared to extend the reach of 
American compassion throughout the world.

                        BUILDING STATE CAPACITY

    Many states cannot meet the basic responsibilities of sovereignty, 
including just and effective control over their own territory. It is 
critical to American security to build state capacity where it does not 
exist, to help weak and poorly governed states to develop, and to 
empower those states that are embracing political and economic freedom.
    We must anticipate and prevent the emergence of failed states that 
lead to regional instability and which become havens for terror and 
oppression that threaten America's security. The Office of the 
Coordinator for Reconstruction and Stabilization has been established 
to address complex and challenging situations around the globe. The 
2007 budget proposes to strengthen planning efforts for countries and 
regions of greatest concern. We seek to coordinate the deployment of 
United States resources to prevent the emergence of failed states, and 
to respond quickly and effectively to states emerging from conflict 
around the world. With an early and effective response, we can reduce 
the need for a more robust and costly military commitment. This budget 
request includes $75 million for the conflict response fund.

                       HELPING DEVELOPING STATES

    Where the basic foundations of security, governance, and economic 
institutions exist, the United States is advancing bold development 
goals. The President has embarked on the most expansive development 
agenda since the Marshall Plan, including new debt relief initiatives, 
the doubling of Official Development Assistance since taking office, 
and performance-based funding for international financial institutions. 
Development is an integral pillar of our foreign policy. In 2002, the 
President's National Security Strategy for the first time elevated 
development to the level of diplomacy and defense, citing it as the 
third key component of our national security. States that govern 
justly, invest in their people, and create the conditions for 
individual and collective prosperity are less likely to produce or 
harbor terrorists. American diplomacy must advance these development 
principles.
    Our development assistance focuses on building the tools for 
democratic participation, promoting economic growth, providing for 
health and education, and addressing security concerns in developing 
nations, as well as responding to humanitarian disasters. Such 
investments are crucial to improving the lives of people around the 
world and enhancing our own national security. We seek to provide the 
necessary tools and incentives for governments to secure the conditions 
for the development of free and prosperous societies.
    Relieving the burden of heavily indebted countries is essential to 
ending a destabilizing lend-and-forgive approach to development 
assistance. At the Gleneagles summit last July, the G-8 agreed on a 
landmark initiative to provide 100 percent cancellation of qualifying 
Heavily Indebted Poor Countries' debt obligations to the World Bank, 
the African Development Bank, and the International Monetary Fund. 
United States leadership was instrumental in securing this agreement. 
We estimate that a total of 42 countries will receive up to $60 billion 
in debt relief as a result of this initiative. The Budget that I 
present to you today supports the United States share of the 
multilateral debt forgiveness provided by the G-8 proposal.
    We are also seeking support for our share of the G-8's assistance 
package for Africa. This package will fight malaria, HIV/AIDS, and 
corruption and help to create an environment where democracy and 
economic opportunity can flourish. Specifically, the 2007 budget 
supports the President's commitment to double assistance to Africa 
between 2004 and 2010. In addition, the request supports our commitment 
to help African countries to build trade capacity; to educate their 
citizens through a $400 million Africa Education Initiative; and to 
combat sexual violence and abuse against women through a new Women's 
Justice and Empowerment Initiative.
    Although Africa is a primary focus of our efforts to reduce poverty 
and invest in people and reform, it is by no means the only continent 
on which our resources are directed. We seek a total of $2.7 billion 
for worldwide Development Assistance and Child Survival and Health 
funds.

                   EMPOWERING TRANSFORMATIONAL STATES

    We also seek to empower those states that are governing justly. The 
flagship of our efforts is the Millennium Challenge Account, which is 
helping states that are making measurable progress to achieve 
sustainable development and integration into the global economy.
    In 2002, in Monterrey, Mexico, the nations of the world adopted a 
new consensus on reducing international poverty. Developed nations 
agreed to increase their assistance to developing countries, and 
developing countries committed to making progress toward good 
governance, economic freedom, and investments in the health and 
education of their people. In response to this Monterrey Consensus, the 
Administration and the Congress created the Millennium Challenge 
Account, which targets new development assistance to countries that 
meet benchmarks of political, economic, and social development. This 
innovative approach partners with and invests in low and lower-middle 
income countries that take ownership of their own economic development.
    In the past year, we have accelerated our efforts to negotiate and 
sign development compacts between transformational countries and the 
Millennium Challenge Corporation. To date, the MCC has identified 23 
countries eligible for development compacts, and has approved compacts 
worth a total of $1.5 billion with eight countries: Armenia, Benin, 
Cape Verde, Georgia, Honduras, Madagascar, Nicaragua, and Vanuatu. Nine 
eligible countries have prepared proposals totaling $3.1 billion, and 
another six will soon submit proposals. We are seeking $3 billion of 
new funding in the fiscal year 2007 budget, with the goal of approving 
up to 10 new compacts.

                               CONCLUSION

    Mr. Chairman and members of the subcommittee, realizing the goals 
of transformational diplomacy will require a sustained effort over the 
course of a generation. Most importantly, it will require a strong 
partnership with the Congress. We at the Department of State will do 
our part to use our existing authority to make our diplomatic 
initiatives and our foreign assistance programs more effective and to 
enhance our ability to serve as responsible stewards of the American 
taxpayers' money. I look forward to working with the subcommittee.

    Senator McConnell. Thank you, Madam Secretary.
    Even though it is arguably only indirectly related to your 
budget, I would like to start off with the biggest issue 
confronting the State Department, the administration, and the 
country, and that is Iraq. Yesterday, I had in my office a 
Kentucky soldier who was in Iraq for a year. He left in 
January. This is a soldier who is completely apolitical, who 
gave me a report on his own initiative of his observations of 
what had happened during his year there. He served with a 
transportation company that was frequently squiring vehicles 
around the country and had a number of experiences, including 
80 IED attacks on his convoys.
    During the course of the year his company lost two 
soldiers. This soldier went on to say that extraordinary 
progress had been made in Iraq in every aspect that he could 
witness, and he also expressed his complete and total 
frustration that nobody in this country seems to know anything 
about this progress.
    I know that there is a tendency to teach in journalism 
school that only bad news is news, but in a place like Iraq, I 
find a lot of soldiers completely frustrated by the fact that 
almost nothing that they are doing is being characterized as 
good work and almost no visible signs of progress seem to get 
out.

                                  IRAQ

    Could you itemize for us some of the progress you see being 
made? Three successful elections last year; I think everybody 
thinks that that is a good thing. But what are some of the 
indicators of progress that are not being written about and 
therefore not being learned about by Americans here at home?
    Secretary Rice. Thank you, Senator McConnell. I would start 
with the political news because it is indeed very difficult 
when you see the bombings every day or the violence on TV. It 
is a harder story to tell of the political progress that is 
being made. I also recognize that at times it seems that the 
Iraqis are engaged in argumentation and debate and they cannot 
get this formed and they cannot get that formed. I would remind 
people that in fact these are people who are for the first time 
in their entire history, and really one of the only times in 
this entire region, that people who are very, very different--
Sunnis, Shia, Kurds--sitting down to try and solve their 
problems politically, not by violence and not by repression.
    Of course it is difficult and of course it is contentious. 
But that is the process of democracy. The forming of a 
government of national unity, which we have encouraged that 
they do it as quickly as possible, but it is not surprising 
when they have existential issues, like resource allocation or 
how to deal with the Baathists who repressed people in the 
past, that it is going to be contentious and difficult.
    The good news is all elements of Iraqi society are now 
engaged in that and they are moving ahead. As you said, they 
have had three elections. The last one, 11 million Iraqis 
voted. That demonstrates that the Iraqi people want a political 
course, not a course of violence.
    Second, it is true that the reconstruction has in some 
places been slower than we would have liked. But there is also 
very good news about reconstruction. The United States has been 
able with reconstruction funds to improve the capacity of an 
electrical grid that only had 50 percent of the generating 
power that the country needed. It was true that Baghdad was 
getting power most of the day, but most of the country was 
getting none. Now it is true that the power in Baghdad has been 
less than at the time of the war, but in part that is because 
the power is being spread over the entire country. We are 
increasing the capacity and expect that by the end of the year 
we would have increased that capacity significantly so that the 
country will have a more even distribution of power.
    Schools and clinics and children going to school are really 
the result of the reconstruction funds that this Congress has 
appropriated to the Iraqi people. Probably most importantly, 
the Iraqi people now on any day recognize that the time will 
come when there will be a government elected by them governing 
them, over which they have a say and where repression will not 
be the case.
    I would mention just one other thing and that is that the 
security forces of Iraq have improved quite substantially over 
the last year. During this most recent uptick in sectarian 
violence, the Iraqi army performed very well indeed. The Iraqi 
army is now often in the lead in counterterrorism operations 
and in stability operations. They have taken territory. They 
themselves are in control of 50 percent of the Baghdad area.
    We are making progress then in creating security forces, in 
helping to improve the infrastructure of a country that had a 
completely deteriorated infrastructure, of getting schools and 
clinics and hospitals either refurbished or built, and in 
supporting the Iraqis in a political process that is going to 
lead to a dramatically different Iraq. That is the good news 
story against obviously a backdrop of significant violence.
    Senator McConnell. So what are the next important 
milestones that we should expect in the next few months?
    Secretary Rice. The next important milestone is the 
formation of a government, the national unity government. Then 
we would expect that they will issue a program on which they 
will govern.
    If you do not mind, I will just take one moment to clear up 
something. I hear a great deal of the time that the Iraqis are 
slow in forming this government because they are haggling over 
jobs. That is the way that it is sometimes put. In fact, they 
are developing a program on which the national unity government 
would govern. They are developing the rules by which they will 
actually govern, what will be the responsibilities of the 
deputy prime minister, what will be the relationship of those 
ministers to subordinate ministries. And they are working on 
who will actually take certain positions.
    So you can see that it is a much more complicated set of 
negotiations that they are in than if they were just haggling 
over who was going to take the prime ministership. That said, 
we are pressing that they should finish this work as soon as 
possible. That is the next major milestone, Senator. After 
that, I think there will be milestones in Iraq security forces 
taking responsibility for larger and larger pieces of territory 
in Iraq.
    Senator McConnell. What are the Iranians doing in the 
country and in what way is that impeding progress for the new 
government?
    Secretary Rice. Well, the Iranians are not helpful in the 
south. We believe that there are indications that they may be 
supporting troublemakers, militias and the like, in that 
region. We also are concerned that they are not always 
transparent in relations with people in Iraq about trying to 
influence the direction of Iraq.
    We believe that--the Iraqis disagree, and we do not 
disagree, that Iran has to be a good neighbor, that they ought 
to have a good relationship with Iran. The British, of course, 
have been concerned that Iranian technology has showed up in 
some of the IEDs that are so devastating to personnel in Iraq. 
So there are several elements of Iranian policy that we find 
deeply troubling.
    Should Zal Khalilzad exercise the authority that he has to 
meet with the Iranian ambassador, an authority he has had for 
several months, these are some of the issues that we would 
intend to bring up with Iran in what would be a very limited 
set of discussions about Iraq.
    Senator McConnell. Two more questions before I turn to 
Senator Leahy. Am I correct that American casualties are 
substantially down in recent months, and is that--if I am 
correct--a reflection of just what you were talking about 
earlier, that the Iraqis are taking on more and more of the 
burden of being on the point and dealing with the security 
issues?
    Secretary Rice. Senator, the trends are as you noted. Of 
course, every casualty is one that we mourn, but the trends are 
in that direction. Some of it may indeed be as a result of the 
fact that the Iraqis are more on the front line. There are some 
who believe that the insurgents or the terrorists have also 
taken a different tactic in who they are actually going after.
    But whatever the case, we would hope that as Iraqis step 
forward more and more that in fact they are going to have to do 
the brunt of the fighting. That is only as it should be because 
Iraq is their country.
    Senator McConnell. Finally, what did you make of the 
reports that the Russians were providing information to Saddam 
Hussein as we began the war?
    Secretary Rice. I have gotten my hands on the document, 
which I wanted to do, and I have talked with the Russian 
foreign minister and asked them to look into this and to take 
it very seriously. We take very seriously any implication that 
someone might have been passing information that endangered the 
operation at the outset of the war and we will look for an 
answer back from the Russian Government once, hopefully, they 
have had a chance to look into it.
    Senator McConnell. Senator Leahy.
    Senator Leahy. Thank you.
    Will we be able to find out what that answer is?
    Secretary Rice. Absolutely. We have wanted not to conclude 
before we have the discussion, but it is obviously a very 
serious matter and we are taking it up with the Russians.

                     SPECIAL COURT FOR SIERRA LEONE

    Senator Leahy. Madam Secretary, while we were waiting 
before the hearing began I discussed a matter with which I have 
a great deal of concern. That is the matter of Charles Taylor. 
A number of us had urged Nigeria for years to transfer Charles 
Taylor to the Special Court for Sierra Leone. We asked the 
State Department for a strategy to get Taylor to the court. We 
have not got that.
    Finally, last week Liberia and Nigeria cleared the way for 
getting Taylor to the court, which was good news. But then, 
rather than turn Taylor over, Nigerian President Obasanjo told 
Liberia to just come and get him. Now we find out according to 
reports that he has escaped and may no longer be in Nigeria, 
escaped from the villa where he was sitting and involving 
himself with matters in a number of countries.
    Now, if after all that time he has been sitting there, for 
all that time nothing happened, finally they said, okay, now we 
will turn him over, and now they let him escape, that boggles 
the imagination. It is totally outrageous. President Obasanjo 
has for years thwarted attempts to get Taylor to a court. I 
believe he bears responsibility for letting him escape.
    I understand he plans to meet with President Bush at the 
White House tomorrow. I would urge you to cancel that visit, 
cancel that visit until Taylor is in custody of the court where 
he belongs. I think it would send the wrong message if he 
escapes one day and the next day the person who had him in 
custody and let him escape is greeted at the White House.
    Do you want to comment on that?
    Secretary Rice. Thank you, Senator. I certainly believe 
that the Nigerian Government has a responsibility, has a 
responsibility to transfer Charles Taylor safely to Liberian 
custody so that he can be brought to the court. I cannot 
confirm at this point what has happened to Charles Taylor, 
whether or not he has escaped. But obviously it would be a 
matter of the utmost seriousness if that did indeed take place.
    The Nigerians indeed did take Charles Taylor, at the behest 
of the international community, but I think there was an 
understanding that he would be monitored and that he would be 
at some point, President Obasanjo said when there was a 
Liberian government, turned over for prosecution on the court, 
and we were on course for that. If we are no longer on course 
for that, then we will have to examine why this happened and 
have consequences accordingly.
    Senator Leahy. You said two things: one, he would be 
monitored; and second, when there is a government in Liberia he 
could be turned over. Now, they do have a democratically 
elected president. She was here just recently visiting, a very 
impressive person. I think it was known that Taylor was being 
monitored and he was involved in activities outside Nigerian 
borders. So the monitoring broke down if there was any 
monitoring.
    So they had a couple strikes against them. One, that broke 
down. Two, he wasn't turned over. There was a court prepared to 
take him in Sierra Leone. He could have gone there. Now, if he 
has escaped, I think after the monitoring failed, after getting 
him to a court failed, after keeping him in custody failed, I 
really think it would be a mistake to have President Obasanjo 
here with the kind of imprimatur of the United States on that 
visit that a presidential meeting would bring.
    Secretary Rice. We consider it a very serious matter, 
Senator, if he has indeed escaped, very serious.
    Senator Leahy. Do you agree with me that Charles Taylor is 
a threat----
    Secretary Rice. Absolutely.
    Senator Leahy [continuing]. To security in that region?
    Secretary Rice. Absolutely.
    Senator Leahy. Many of us consider him a mass murderer too, 
for what he did before.
    Secretary Rice. I think that it was really the President 
who at one point when he was in Africa insisted that he step 
down. We then supported the Liberians to end the violence 
there, in fact at one point having marines help in ending that 
violence. We believe now that we have a great deal at stake 
also in the success of the new Liberian Government.
    So I strongly agree with you, Senator, it is a very serious 
matter.
    Senator Leahy. In that regard, considering what it cost 
when we did intervene, let us be willing to spend a fraction of 
that money now to help the new president succeed. Sometimes 
success is a lot less expensive than trying to clean up the 
mess afterwards, as you know.

                  WESTERN HEMISPHERE TRAVEL INITIATIVE

    The State Department has a program called the Western 
Hemisphere Travel Initiative that was enacted in the 
Intelligence Reform Act. This was one of those ideas that kind 
of zips through without a great deal of debate. Now the 
Department of State and Homeland Security have to implement it. 
We are talking about how to control the Canadian border and the 
Mexican border. It is almost treating them as though they are 
both the same thing. They are not.
    Canada is our largest trading partner. We have got a huge 
trade surplus with them, which we do not have with many 
countries. The State Department has a prototype of the card but 
there is no agreement on what format the card will be. Congress 
has authorized you to begin hiring staff to meet demand. 
Homeland Security still cannot figure out what technology it 
wants to use nor identify what kind of border crossing cards.
    The new Canadian Ambassador to the United States, Michael 
Wilson, strongly opposes the proposed card. I think we are on 
our way to a real train wreck here. I live an hour's drive from 
the Canadian border. I see the travel back and forth. I see 
families that go across. There is a tremendous amount of 
commerce with the border States.
    Your Department has devoted a lot of time to meet the 
deadline. Are you just going to implement a law and then tell 
Canada to catch up? Or are you working with Canada? You have a 
lot of people in Canada who think that they are under attack.
    Secretary Rice. Well, Senator, we are working with both 
Canada and Mexico on this issue. There is a law that requires a 
standard document for passage on the two borders and we 
recognize that these borders are borders on which there is a 
great deal of commerce, a great number, a lot of people. I can 
tell you that the first thought was that we would require 
passports and----
    Senator Leahy. I am sorry? I did not get that.
    Secretary Rice. I said the first thought when this law came 
out was that we would require passports.
    Senator Leahy. Which would be crazy.
    Secretary Rice. I was going to say that the first objection 
to that came from the former Governor of Texas, the President, 
who said that that would of course not work on borders where 
people move so easily. So we went--he asked us to go back to 
the drawing board. We did, and Mike Chertoff and I have worked 
to come up with an inexpensive but standard card that could be 
used for passage on those borders.
    We are working with both Canada and Mexico. We have gotten 
favorable response to the initiative that Mike Chertoff and I 
have taken, and we will try to make it as----
    Senator Leahy. Favorable in Canada?
    Secretary Rice. Favorable from--my Canadian counterpart at 
the time--of course there is a new government in Canada, but my 
Canadian counterpart at the time and Mexican counterpart 
understand that we have the law and they want to help us 
implement it in a way that is as helpful as possible.
    Senator Leahy. You said it is in the law. Has the 
administration considered delaying this for a while or perhaps 
look at it again? If a family of four, for example, from Canada 
is going to have to spend about $250 to come down and visit the 
United States, they are not going to come down to the United 
States to spend money.
    Secretary Rice. Well, it is our hope that, Senator, we can 
have an answer that is in fact inexpensive and that is perhaps 
a one-time issuance, where people can go back and forth who go 
back and forth often. I do think that we need to recognize that 
the law was put there because we did have in fact very porous 
borders on both sides prior to September 11 and there were a 
number of problems on both borders, even on the Canadian 
border, prior to September 11.
    Senator Leahy. There is one store in Vermont with a line 
painted down the middle because, since they changed the border, 
half of it is in Canada, half in the United States. Are we 
going to say, Joe, can you get me that box of Rice Krispies 
over there? I am sorry, I will toss it to you because I do not 
have a passport. I mean, it is going to get that ridiculous.
    Secretary Rice. Well, we will try to make it as simple as 
possible for the people, Senator.
    Senator McConnell. Thank you, Senator Leahy.
    Senator Bennett.
    Senator Bennett. Thank you very much, Mr. Chairman.
    Madam Secretary, welcome. I too have had the recent 
experience of going to Southeast Asia and I can report that it 
is fun to go to a country where they like Americans. I was with 
Senator Durbin in France. We did not quite have that sense 
while we were there. It is fun to go to countries that not only 
like Americans, but want to become like Americans themselves, 
want to participate in the international economy, and want very 
much to trade with us.
    I congratulate you on the diplomatic efforts of the people 
we met there. The people you have on the ground there are some 
of our very finest. We do not often give them the sort of 
public accolades that they deserve. But the various Ambassadors 
and other State Department personnel that we met through this 
trip--we were in China, Vietnam, Cambodia, and Thailand. Then 
we made a fueling stop in Kyrgistan, which turned into an 
evening when they were not able to fix the airplane. So we saw 
more of Kyrgistan than we had anticipated, but that was 
interesting too.
    On a more parochial note, there are several matters from 
the fiscal 2006 appropriations bill in which my office has an 
interest. I will not raise them specifically here, but I would 
like to send you some paper on both of these and would 
appreciate whatever help you can give us in nudging these 
things forward a little. They have gotten lost in the pattern.

                            MICROENTERPRISE

    You are aware, I am sure, of my continuing support of 
microenterprise activities. This is something that I pushed 
since I have been a Senator and particularly since I have been 
a member of this committee. Can you focus on that for us just a 
minute as to what is included in the 2007 budget and what you 
see for that kind of activity?
    Secretary Rice. Yes, absolutely, Senator. I can try to 
break out the numbers for you. I will send you the numbers, but 
let me just say that we have had a very strong emphasis on 
microenterprise in a number of places around the world. In 
Africa in particular, we have had a strong microfinancing, 
microenterprise approach.
    I would note that I have visited personally several places 
that are, for instance, women-owned businesses, where just a 
very small loan allows essentially a cooperative of women to 
get together and make goods that they can sell on the market. 
We have been very supportive of microenterprise.
    I also visited in Mexico very recently--it was actually 
when I was first Secretary, I think in my first couple of 
weeks, a trip to Mexico--a place that was not doing 
microlending, but actually a kind of small credit union that 
was helping communities to do microlending. So we feel very 
strongly that, particularly for the empowerment of women, 
microenterprise tends to be a very important tool that we can 
use.
    We used it, as you know, as well in Eastern Europe. So we 
have used it effectively all over. The United States has a good 
deal of this kind of activity, but we have tried to encourage 
it, not just in the United States but also in the international 
development banks, to have a focus on microlending, because it 
really does do wonders and it does so for a very small amount 
of money.
    But I will get for you a breakdown of the complete picture 
on how much is in this current budget.
    Senator Bennett. I would appreciate that. My experience has 
been that there are at least some elements in the State 
Department that are less than enthusiastic about this. I 
understand the nature. Bureaucrats do not like money they do 
not control. I have not run into that during your 
administration. That comes out of previous efforts on this 
issue. As I say, I have been interested in it for the last 
dozen years.
    So I would appreciate it if you and your leadership would 
continue to focus on this. Like you, I have a piece of 
embroidery in my office purchased from a woman in Morocco, who 
had I believe a $50 loan that allowed her to buy the cloth and 
the thread necessary to produce this. She was working on one 
when I was in Morocco and I said: Can I buy that from you? She 
said: No, this one is already sold. So she did another one for 
me and sent it to me, and I keep it as a memento of how 
important that program is.

                             UNITED NATIONS

    Let us talk about the United Nations. The United Nations 
has had some rough times. The Oil for Food scandal I do not 
think has played itself out yet, although we may have most of 
the problem out as a result of the Volcker report. Secretary 
Bolton--Ambassador Bolton has been very forceful in insisting 
on some changes and reforms in the United Nations and at least 
on the surface U.N. officials have expressed support for these 
fundamental changes.
    Can you describe to us where you think we are on that and 
whether or not that is going to impact future budgets?
    Secretary Rice. Absolutely, Senator. We have been very 
strong advocates of U.N. reform, and of course there has been 
complete bipartisan support for pushing that agenda and coming 
even out of the commission that was headed by Senator Mitchell 
and Newt Gingrich. It was a very good road map in a sense for a 
lot that had to go on in the United Nations.
    We have had some progress. There are small things, like for 
instance there is now an ethics office, which one would have 
thought would have been useful some time ago, but we did 
finally get that. There is a peace-building commission, which 
should help with the process of creating peacekeeping forces 
and the infrastructure of stability support for countries that 
are going through post-stability operations. We think that is a 
very--post-conflict operations. We think that is a very useful 
new element.
    As you know, the Human Rights Council, which will replace 
the Human Rights Commission, we supported very strongly that 
there should be a replacement for the Human Rights Commission. 
We did not think that the Human Rights Council quite lived up 
to what it needed to be. So----
    Senator Bennett. You mean the commission?
    Secretary Rice. After the commission--when the Human Rights 
Council was put forward, the new Human Rights Council----
    Senator Bennett. I see, okay.
    Secretary Rice [continuing]. We still thought there were 
considerable problems with it. So we did not vote for it. It 
did go through and we have agreed that we will do everything 
that we can to make it work because we think it is important to 
have a Human Rights Council.
    The problem with the Human Rights Commission was at the 
time that Sudan was being accused of genocide it was actually 
sitting on the Human Rights Commission. It makes a joke of the 
notion of a Human Rights Commission. So we are hopeful that the 
new Human Rights Council will be better, although we are 
concerned about some of the aspects of it.
    On management reform, which to us is really the key, that 
is improving the secretariat and the way that it functions, 
improving and being able to streamline personnel decisions, 
being able to create efficiencies in management, and perhaps 
most importantly, oversight of things like peacekeeping 
missions, some of which have had some very bad things happen 
within them, or something like the Oil for Food program.
    The secretariat needs to be reformed and there needs to be 
management reform. We have been the leaders on that. We have 
been very clear we agreed to a 6-month budget this time because 
we were not going to agree to an annual budget until these 
management reform issues are addressed.
    So we are working cooperatively, but we have also made very 
clear that we have to be able to--I have to be able to come to 
you and say that the American taxpayer dollar is being spent 
well in the United Nations and that the current structures do 
not allow us to have the kind of oversight and transparency and 
accountability that we need. So we will continue to press this 
reform agenda very hard.
    Senator Bennett. Thank you.
    I just close with a comment I just received in a 
conversation this morning. Senator McConnell talked about his 
conversation with the GI from Kentucky. A very prominent figure 
who has experience in this whole area said to me that the new 
parlor game in Europe, he said, after everybody has had a nice 
dinner and a few drinks and the uninteresting guests have gone 
home, they sit around and they play this parlor game, which is: 
What if, and then you fill in the blank with another country's 
name, had the power and influence that America has? And they 
speculate, what would the world be like if, France, Germany, 
China, India, fill in the blank, had the kind of influence and 
control that America has.
    He said in every case, regardless of how they play it, the 
result is a disaster compared to the kind of world we have. You 
have an enormous responsibility, Madam Secretary, for the 
entire world, not just this country, and we appreciate the 
competent way in which you handle it.
    Secretary Rice. Thank you, sir.
    Senator McConnell. Thank you, Senator Bennett.
    Senator Durbin.
    Senator Durbin. Thank you very much, Mr. Chairman.
    Madam Secretary, thank you for joining us. Madam Secretary, 
last year an overwhelming bipartisan majority of the Senate 
voted 79 to 19 that 2006, this year, would be a year of 
transition in Iraq; change would take place. The Iraqis would 
assume more responsibility for their own future. The United 
States would start looking to the day when we could leave 
successfully. We would hold the Iraqis responsible for good 
governance and protecting their own country and the President 
would report to us on a timely basis the progress that we are 
making.
    Many of our colleagues have just returned from Iraq. They 
spent the last year there--pardon me, last week there. Some of 
them came back to our luncheons today with reports that were 
not encouraging. Though it may be true that the number of 
American soldiers being killed on a daily basis has gone down, 
the fact is that the killing in Iraq has increased. Some 
suggest we are in the midst of a civil war, of sectarian 
violence. This week, of course, American troops were used in an 
attack with Iraqi soldiers on a Shiite mosque, or at least near 
a Shiite mosque, involving the Sadr militia.

                                  IRAQ

    The question I would like to ask you is this. For the last 
several weeks, the President has been counseling patience to 
the American people. In fact, last week when the President was 
asked when the day would come when there would be no U.S. 
forces in Iraq, he said: ``That will be decided by future 
Presidents,'' suggesting at least 2.5 more years that we would 
see American ground troops in Iraq.
    Is that not exactly the wrong message to be sending the 
Iraqis? Should they not at this point in time believe that we 
plan on leaving, that they have the responsibility to protect 
their own country? Is not the real test of the success of your 
policy when Iraqi soldiers will stand and fight and be willing 
to die for their own country so that American soldiers can come 
home, a day that we have not seen yet?
    Secretary Rice. Thank you, Senator. I do not think there is 
any doubt that it is the responsibility of the Iraqis to secure 
their democracy. The United States and the coalition of willing 
partners liberated Iraq from Saddam Hussein. But I think the 
Iraqis themselves understand that the creation of a functioning 
democracy is in fact their responsibility.
    What we are there to do is to help them to get the tools 
and the capability to defend that democracy. They have a very 
difficult task because it is a country in which, first of all, 
in which that has never been done, in which the politics was 
always by either repression or violence. They are now trying, 
on the basis of the three elections and the constitution, to 
form structures of government and habits of governance that are 
indeed democratic and therefore require compromise and 
politics.
    They need our support in doing that. That is the kind of 
support that Ambassador Zal Khalilzad is giving them. It is the 
kind of support we intend to give them as we help them to make 
their ministries more capable, so that their ministries can 
deliver. It is the kind of support that we intend to give them 
in helping their provisional leaders to become more capable.
    Senator Durbin. But I guess the point I am asking you is, 
should they not sense the feeling that I feel as I travel 
around the State of Illinois? The people I represent are 
impatient--2,316 of our best and bravest have died. 15,000, 
16,000, 17,000 wounded. Should not the Iraqis know that we are 
not going to stay there forever, sit by patiently while they 
work out their governmental difficulties? Should they not know 
that we want to bring our troops home as quickly as possible? 
When the President says be patient, is that not the wrong 
message?
    Secretary Rice. Senator, I think they do know that we want 
to come home. Indeed, I think the great majority of them want 
us to come home because they want their own responsibility. We 
are training their security forces. Their security forces are 
standing up and dying in the line of fire in Iraq. We mourn 
every one of our own deaths, but Iraqis are dying. They are 
taking that responsibility.
    Many brave Iraqis are dying because they are willing 
against terrorists to speak out for the need for democracy and 
for justice, judges for instance who have been killed because 
they were willing to try people. So the Iraqis are taking 
responsibility. They just do not have at this point the tools 
to fully secure themselves.
    We have helped other----
    Senator Durbin. For 2 years--go ahead.
    Secretary Rice. I am sorry. We have helped other states to 
have those tools. I think that the patience that the President 
was referring to is the need to be willing to give them the 
tools or to help them develop the tools, not the patience to 
continue to shoulder the responsibility ourselves. I think they 
are doing it.
    I would just suggest on the government formation that we 
are pressing them that this needs to get done and get done very 
soon. But they are doing something very difficult. Sunnis were 
not a part of the political process until very recently and 
they have now been brought into the political process. They are 
really dealing with some of the hard issues that they must deal 
with in order for this government to function.
    Senator Durbin. I would just say, Madam Secretary, we have 
given them over the past 3 years many things, including a lot 
of American lives and American soldiers risking their lives, 
billions of dollars. Support that we have never given to other 
countries in the past we have given to them. We have stood by 
them, deposed their dictator, tried to bring them to the point 
of self-governance.
    My suggestion is if this is descending into a civil war, as 
Mr. Allawi suggested, if we have opened Pandora's box, as our 
own ambassador, Mr. Khalilzad, has said with the sectarian 
violence there, that there ought to be a clear message from our 
Government to their government that now is the time for them to 
accept responsibility. For 2 years we have been told, we are 
training soldiers, we are training policemen, things are going 
along just fine. Yet the American soldiers are still there. The 
National Guard units are still being rotated into Iraq. The 
families back home are going through the stress of separation. 
That still continues to this day.
    I just do not sense the feeling in the administration, as 
we voted in the Senate, that this is truly going to be a year 
of transition, that we will see American troops coming home. 
That is why the President's message I think does not make it 
clear and may send a mixed signal at a time when we should be 
extremely clear.
    Secretary Rice. Senator, the President's message I think, 
first of all, was to a very particular question. But he has 
been very clear that we will come home when the Iraqis are 
capable of performing these functions themselves. I think 
General Casey has testified that we--it will all be conditions-
based, but we anticipate that there can be reductions of 
American forces.
    But I think we have to remember why we are in Iraq. I know 
that there were disagreements about whether or not it was time 
to deal with the threat of Saddam Hussein. But by dealing with 
the threat of Saddam Hussein, by taking out the most murderous 
and aggressive dictator in the region, we have helped to create 
conditions in the Middle East in which it can be a different 
kind of Middle East, a Middle East in which you are not going 
to have the kind of ideologies of hatred that led people to fly 
airplanes into buildings on September 11.
    That is a long-term project, is to leave a Middle East to 
our children and to our grandchildren that is not going to be 
poisonous in the way that the Middle East is currently 
poisonous. So I think when we think about what support we are 
giving to the Iraqis or the Afghans or to the broader Middle 
East initiative, that we think about it not just in terms of 
how it will make their lives better, but in terms of how it 
will make our lives more secure. That is why we are in Iraq.
    Senator Durbin. You mentioned the coalition that came 
together for the invasion, the coalition of the willing, as the 
administration called it, primarily the British and others who 
were supporting us, but the British larger in number than 
others. That coalition has dwindled, has it not, over the 
years? It has really become more and more an American force, 
with few allies actually on the ground risking their lives.
    What does that tell us about the world view of what we are 
trying to achieve in Iraq?
    Secretary Rice. Well, in fact the coalition with a few 
exceptions has stayed relatively stable. We have had troops 
from as far away as South Korea. The South Koreans just agreed 
to re-up on their presence there. Poland just agreed to re-up 
on their presence there. Some forces have been taken out, but 
the countries have gone to other kinds of missions. For 
instance, the Dutch, who removed their forces, are now very 
integrally engaged in the training process for Iraqi forces.
    So I think you would find that if you went down the list of 
coalition members, with a few exceptions, we have lost very few 
and we have lost almost none in terms of support for the Iraqi 
enterprise, even if their forces are no longer on the ground.
    Senator Durbin. I do not question that many nations have 
sent something, and we thank each one of them for doing that. 
But it clearly is an American undertaking, with the help of 
some coalition partners, and it has become more American by the 
day as they have reduced their numbers and our troops have had 
to stand alone, or, I should say, stand more to themselves and 
not with the broader coalition that initially started.
    I think that is a troubling development. It suggests that 
if the goals you describe, which sound so good as you speak 
them, were so clear to the rest of the world, they would be 
joining us, and they have not.
    Secretary Rice. Senator, I just think--and I can get you 
the numbers, but I think with very few exceptions the numbers 
of states actually represented on the ground is substantially 
as it was when we started. The difference is that we are using 
more Iraqi forces. That has allowed us to rely less on some 
coalition forces. There are places that are now stable where 
coalition forces can actually be removed because those places 
are stable.
    But yes, the United States bore, really commensurate with 
our size and military power, most of the weight of the military 
operation. Britain of course was the second largest and there 
have been contingents from others. But I think it is important 
not just to focus on the numbers. The commitment of all of 
these countries to actually send their soldiers into harm's 
way--Japan for the first time since World War II to send its 
forces from the Asian continent; South Korea, to send its 
forces into Iraq; small countries like Estonia and Lithuania 
and Latvia to send their forces into Iraq, because they 
understand the price of freedom--I think is something we ought 
to applaud.
    Senator Durbin. Thank you, Madam Secretary.
    Senator McConnell. Thank you, Senator Durbin.
    Senator Brownback.
    Senator Brownback. Thanks, Mr. Chairman.
    Welcome, Madam Secretary.
    Secretary Rice. Thank you.
    Senator Brownback. Glad to see you here and congratulations 
on a lot of initiatives you have going. You have got a lot of 
irons in the fire and I am appreciative of them.

                                  IRAN

    I want to talk about, if I could, Iran and Sudan and Chad, 
and then finish up on North Korea, just to give you kind of the 
sequence of things I would like to talk about. First, I 
appreciate your request for the $75 million on Iran and 
democracy-building in the supplemental, the bulk of that 
request for broadcasting purposes. I wondered if you could 
outline for us your current state of thinking of how we address 
the issue of Iran, the lead sponsor of terrorism, the lead 
state sponsor of terrorism in the world, apparently seeking 
nuclear technology for weaponizing purposes. I do not know that 
anybody knows that for sure. But I would appreciate your 
thinking about how do we go at Iran?
    Secretary Rice. Thank you, Senator. I think there is no 
doubt that Iran is the single biggest threat from a state that 
we face. As you have put it, it is the fact that they are 
seeking, we believe, a nuclear weapon, indeed they are 
seeking--or at least they are seeking under cover of civil 
nuclear power to acquire the technologies that would make them 
capable of creating a nuclear weapon. They are the central 
banker for terrorism in the Middle East and problems in Iraq, 
problems in Lebanon through Hezbollah, problems in the 
Palestinian territories through some of the arms that they use 
of terrorism, and of course it goes without saying an unelected 
few who repress the aspirations of the Iranian people.
    So we have built an international coalition--the diplomacy 
I think has gone relatively well--to tell the Iranians that 
they will be isolated from the international community if they 
continue to seek the weapons, the nuclear activities that they 
are seeking, that could lead to a weapon.
    We need now to broaden that thinking and that coalition, 
not just to what Iran is doing on the nuclear side, but what 
they are also doing on terrorism. Those are some of the 
discussions that I have with these same states, that we cannot 
on the one hand talk about the need for a peace agreement in 
the Middle East and turn a blind eye to what Iran is doing in 
the Palestinian territories. We cannot talk about getting rid 
of Syrian influence in Lebanon and having democracy in Lebanon 
without thinking about what the Iranians are doing for 
Hezbollah.
    So we have a number of tools I think at our disposal, 
including in sharpening the contradiction between the Iranian 
people and a regime that does not represent them through our 
democracy activities, through broadcasting, through support for 
nongovernmental organizations there, through highlighting the 
Iranian human rights record, and if necessary within the U.N. 
Security Council going to other measures that, should the 
Iranians not turn around on their nuclear effort, going to 
other measures that would further isolate the Iranian 
Government.
    So we have a full program, but I think diagnosing the 
problem is the most important, and it is that Iran is a problem 
not just on the nuclear side, but also concerning terrorism and 
its human rights record at home.
    Senator Brownback. Are you getting cooperation from the 
Europeans to a fair degree on this? It seems like we are 
getting a lot more--I hear of a lot more, but I am not seeing 
the actions by the Europeans.
    Secretary Rice. We have been very united with the Europeans 
on the nuclear issue, completely united. Indeed, we have been 
able to bring the Russians along to a degree, but we have had 
to work harder on that and on the Chinese. The Europeans also 
increasingly note the problems with the Iranian regime. In this 
regard, the rise of President Ahmadinejad, who talks in very 
clear, shall I say, ways about the ambitions of the Iranian 
regime, has made it clearer to allies who thought, I think, 
that the Iranian regime was just a normal regime whose 
interests could be accommodated, to really worry about the true 
nature of the Iranian regime. When you have a president of a 
country saying that another country should be wiped off the 
map, that is just not right in civilized company in the 
diplomatic arena, and I think it has helped crystallize what 
kind of regime Iran really is.

                             SUDAN AND CHAD

    Senator Brownback. I want to speed into other topics 
quickly. On Sudan and Chad, it looks like the genocide in Sudan 
is spreading to Chad and many of the same tools being used. I 
am hopeful that we can get NATO involved in this operation. The 
United Nations, the African Union has worked some and been 
somewhat helpful, but it has not stopped it at all, and it 
appears to be starting back up again.
    Do we have a decent chance of getting NATO involved in the 
Sudan-Chad border area?
    Secretary Rice. Well, I think we certainly have a very good 
probability of getting NATO involved in support of first the 
African Union mission. NATO is there, as you know, providing 
some support. But perhaps in a more robust way logistically. 
One of the problems is mobility for the African Union forces, 
so you can imagine NATO more helpful on some of the mobility 
issues so that the monitors can go out to places, which when 
there is monitoring the violence is less. It is just that it is 
a very, very big area.
    We also expect that when there is a U.N. force, which will 
be more stable and more capable, that NATO can contribute also 
to the effectiveness of that force. The President talked with 
NATO Secretary General Yabu Skeffer when he was here last week. 
I have also had conversations, Senator, just very recently with 
the head of the AU and with the Nigerians, who have great 
influence in the AU, because the AU needs help. Sometimes they 
send mixed signals about whether they want help because the 
government of Sudan sends mixed signals.
    We are all for a peace process going forward and we are 
working very hard on that peace process. But we also have to be 
sure that the violence does not worsen in the meantime. You 
rightly note that western Darfur, where the troubles in Chad 
threaten to really create a really bad situation, we have got 
to deal with that, and we can only deal with that with more 
robust security forces.
    Senator Brownback. Well, I think we are really going to 
have to step it up. I applaud what the President has done on 
it, but people are still dying and they are dying now spreading 
into Chad. I appreciate what you have done. I appreciate 
particularly what the Assistant Secretary has done, being over 
there four times. The President is very aware of it. But the 
genocide continues and it is spreading now into another 
country. I would really implore you to step it up further.

                              NORTH KOREA

    I noted in one of your testimonies recently you were 
calling for North Korean refugees to be admitted to the United 
States. Thank you. It is in the North Korean Human Rights Act, 
to allow that to take place. I talked with Secretary Chertoff 
about allowing them into the United States. That has been the 
holdup before, has been the Department of Homeland Security. So 
I am really hopeful we can.
    I think it really would send a strong signal to the North 
Koreans that we are serious about this and that the human 
rights issues are at the core of the violations of what this 
regime has done in North Korea. In 2 weeks we will have a 
group, a North Korean rally here on Capitol Hill with a number 
of refugees. I hope, if your schedule would allow it, you or 
even the President could meet with some of these refugees. They 
have incredible stories to tell of what they have experienced 
and the difficulty that they have had.
    But I do think us going not just at the nuclear questions 
on the Six Party Talks, which I think is good and important, 
but to expand the debate into the human rights area, where the 
North Koreans are amongst the world's worst, if not the world's 
worst on human rights violations--and you have got a lot of 
people coming out now to talk. They can tell real stories 
about, this is what I experienced there. It would be very 
useful and an important thing to tell on what this regime is.
    Secretary Rice. I agree completely, Senator. We also, as 
you know, have a human rights envoy in Jay Lufkowitz, who is 
trying to spread the word also around the world. We think one 
of the important elements here is to mobilize public opinion 
internationally about the human rights situation in North 
Korea.

                             AID TO AFRICA

    Senator Brownback. We are working on a bill on African aid, 
mirrored after the malaria effort that the President did last 
year. When we dug into this topic, we found that about 90 
percent of our malaria funding was going to conferences and 
consultants, and most of the African leadership was saying: We 
know what to do here; we do not have any money to do it with. 
So they wanted assistance for bed nets, sprays, drugs, and they 
said that will really help. The President redirected the 
funding.
    What I have noticed in the African aid area the times I 
have been there is that we have put millions, billions of 
dollars into aid in Africa and there are many countries that 
are worse off today than 20 years ago. A lot of the money is 
scatter-shot. A lot of the money is spent on conferences and 
consultants and in capitals, and the problem is outside of the 
capitals and it is not needed for another building in the 
capital city.
    So I would like to see us--and we are working on this--to 
go at this approach, where we get, let us say half of the aid 
that goes to Africa goes for things or training Africans to do 
things, like doctors or teachers, rather than conferences and 
consultants. We will be working further with your office on 
that.
    Secretary Rice. Well, thank you, Senator. We will be a 
willing partner in that, because I think building capabilities, 
not building dependency, is part of this. I think also making 
sure that we are getting out and really touching people's lives 
is very important. Randy Tobias will I think be a focal point 
for that should he be confirmed.
    Senator Brownback. I have already met with him. Thanks.
    Senator McConnell. Thank you, Senator Brownback.
    Senator Bond.
    Senator Bond. Thank you very much, Mr. Chairman.
    Madam Secretary, I just returned from meeting with a lot of 
your people in Seoul, Korea, and in Delhi, in New Delhi. Some 
of the things just seem to make sense to me, that we ought to 
be using some of that malaria money for DDT spraying. That 
would save a whole lot of lives with minimal risk.
    But in North Korea the anecdotes we had, I tell my 
colleague from Kansas, what they told us: They rescued a full-
grown man from North Korea who had fallen in the river. They 
outfitted him--it was easy to outfit him because the full-grown 
man was 5 foot 1 and weighed 120, because of the near-
starvation diets they live on.
    They have got a great project, an industrial park, just 
over the line in North Korea. The stories we hear is that the 
North Korean Government would be paid $50 a month for the 
labor, the laborers, and the laborers may get a whopping $5 or 
$6 a month out of it. That obviously, I concur with Senator 
Brownback on the extreme problems there.
    I want to commend your operations in India. I had a 
thorough briefing with your USAID Director there and they seem 
to be doing the proactive things, bringing in all the different 
resources that are needed to help India with its tremendously 
overwhelming poverty issue in so many of the rural areas.
    One of the things I particularly commend them is their 
participation in the President's agricultural knowledge 
initiative in India. The USAID office there is going to U.S. 
land grant colleges, which makes a whole lot of sense to me, 
and they will bring in the ag econ experts, they will bring in 
farm credit resources, and they also need to bring in food 
processors.

                              AFGHANISTAN

    Now, India is going to have to wake up and lift some of the 
regulatory redtape burdens on businesses. I told them that we 
are more than willing to help if you have a system under which 
U.S. businesses can come in and provide assistance. But I 
recall the question I have asked you previously, because when I 
returned from Afghanistan I learned from the president of 
Afghanistan and people over there, including our uniformed 
officers, that they are not getting the agricultural assistance 
that they need. It was apparently a contractor had not been 
able to provide those resources.
    It was my recommendation that USAID reprogram a small 
amount of that money and work in concert with our very able and 
dedicated land grant colleges to bring extension service 
personnel over. I wonder if there are funds that could be 
reprogrammed, because it is critical in the effort to stabilize 
Afghanistan when we--when, let us say, not ``we,'' but when the 
poppy fields are destroyed, the poppy farmers have an 
alternative source of income and some way of getting back on 
their feet, whether it is pomegranates or other crops that they 
raise.
    Is there some way that money could be reprogrammed? Or what 
can you do on that?
    Secretary Rice. Well, we do have a substantial alternative 
livelihood program going in Afghanistan to try to support the 
anti-drug efforts there. I think, Senator, at one point we 
talked about needing to have a strong agricultural program in 
Iraq as well. Of course, we, as you say, have this new 
initiative in India.
    As I understood your intervention the last time, you were 
asking, though, more about the structure of what we are doing 
than just are we spending money; in other words, the use 
perhaps of extension programs and of the land grant colleges. 
We will take a look at whether our programs are able to fully 
deliver. I am actually a big fan of the land grant colleges. I 
know the good work that they have done in agricultural 
extension. They are very popular because of what they have done 
in India during the Green Revolution and going forward.
    Again, it is something that we will certainly want to look 
at with our Afghan people. I do not know about the 
reprogramming of moneys that have already been dedicated to 
what is a substantial program on alternative livelihoods, but 
it is something we would certainly want to look at in the 
structuring of our programs. So I think it is a very useful 
thought.
    Senator Bond. I have done a lot of inquiry about the 
effectiveness of our agricultural efforts in Afghanistan, both 
from knowledgeable experts in agriculture from the United 
States, our leaders in that part of the world, and from the 
Afghan leadership itself. The simple answer is it is not 
working, and I can give you more details if we have a face to 
face discussion. But it is not working and we are just trying 
to make sure it works, because I think everybody realizes if we 
cannot wean the Afghan agriculture off of its poppy production 
then we are going to have continuing problems.
    It should not be that hard once you give the farmers on the 
ground an alternative crop. They are not getting that much from 
poppies. It is the warlords who are making the money off of it. 
But indigenous agriculture, if brought back, ought to be able 
to give them the livelihood, and we need to deal other ways 
with the warlords to get them out of the production business.
    Well, let me leave it at that.
    Secretary Rice. I would like to--we should talk about that, 
Senator. I would like to hear what you have heard.
    Senator Bond. If you would give me a call----
    Secretary Rice. I will do that, absolutely.
    Senator Bond. I would be happy to discuss that with you.
    Secretary Rice. Thank you.
    Senator Bond. Thank you very much, Mr. Chairman, and we 
appreciate, Madam Secretary, all you are doing. I would say 
that as I have traveled around the world your efforts and the 
President's efforts have really inspired people in many 
countries. India is one of the most enthusiastic countries. 
They talked about the nuclear initiative that the President 
proposed. That was new to me, but I have done my due diligence 
and I agree with the President and will strongly support the 
President in his proposal that can provide the energy that 
India needs to begin to bring its population up, particularly 
in the rural areas. Thank you.
    Secretary Rice. Thank you, Senator.
    Senator McConnell. Thank you, Senator Bond.

                                 BURMA

    Thanks to the leadership of the President and you, the 
world's list of pariah regimes is slightly smaller than it was 
when you came to office. We can safely remove from the list 
Iraq and Libya. Regretfully still on the list is a country that 
I have a great deal of interest in, that you and I have 
discussed on numerous occasions, and that is Burma.
    Nothing ever seems to change in Burma since the democratic 
election in 1990, which was swept by Aung San Suu Kyi's party, 
the National League for Democracy. Shortly after the election 
Suu Kyi was put under house arrest and, except for a brief 
period a couple of years ago, she has remained there for 16 
years.
    I am told the Malaysian foreign minister went to the 
country recently. I do not know whether he requested to see Suu 
Kyi or not, but he did not. In fact, he did not even see Than 
Shwe, the top general.
    What in your view could the United Nations do to begin to 
squeeze this regime? What are you and the administration doing 
to try to move the United Nations in that direction? If we are 
having problems increasing pressure against the regime, who is 
preventing progress toward shedding the kind of light on that 
regime that it well deserves and is the only way that gives us 
a chance to change it down the road?
    Secretary Rice. Thank you, Senator. Well, absolutely Burma 
is one of the very worst regimes in the world. We have 
succeeded over the last year in getting a discussion of Burma 
at the Security Council. We finally were able to remove the 
blocks to doing that and I think that did raise the profile for 
a lot of countries that perhaps did not focus as intensely on 
what was going on in Burma. For instance, a number of my 
European colleagues told me that after that discussion they 
went back and looked at what they had been doing on the Burma 
human rights dialogue and that they are now increasing their 
activities concerning this. So that is very helpful.
    But the truth of the matter is we need more help in the 
region. We need from the Southeast Asians and from ASEAN, which 
has from time to time told us that they would engage in quiet--
--
    Senator McConnell. Other than canceling the ASEAN meeting 
which was originally going to be in Rangoon this year, have any 
of the ASEAN countries developed greater interest in this 
problem?
    Secretary Rice. ASEAN actually issued a reasonable 
statement on Burma and asked that the Malay chair go to Burma. 
I think that the thought was that they would see Aung San Suu 
Kyi. I guess that that did not happen, but they continue to 
press to see Aung San Suu Kyi. That is a good thing.
    We have pressed very hard--the Indonesian president went to 
Burma and I know that he did talk very directly with the 
Burmese about their isolation. We need actually China to be 
more active on this front. We have our human rights problems--
--
    Senator McConnell. India as well, I suppose.
    Secretary Rice. India as well.
    We have our human rights problems with China, but it is not 
like Burma, and we would hope that they would raise some of 
these issues. India is a democracy and of course should raise 
this, and the president of India assured us that he would. So 
we are working the diplomacy. We have gotten a couple of good 
statements. I think we have gotten renewed interest from the 
Europeans.
    Of course, we are sanctioning everything concerning Burma. 
We do not allow travel and the like. So we have taken those 
steps.
    Senator McConnell. I was the author of that bill.
    Secretary Rice. You were, and we use it to its fullest.
    Senator McConnell. We both know it is not likely to do much 
good unless we get more cooperation.
    Secretary Rice. That is what we are trying to do.
    I do think that we have, by raising the profile, we have 
brought other countries on board. Frankly, I think the ASEAN is 
somewhat embarrassed by Burma and is therefore somewhat more 
active.
    I found myself in an unusual position up at the United 
Nations, Senator, during the U.N. General Assembly. We had an 
ASEAN meeting and I suddenly realized the Burmese foreign 
minister was in attendance. He launched into a discussion about 
how the biggest problem that was faced was drugs. I was glad 
actually at that point that I did have a chance to confront him 
directly about Burma's human rights record. So I think we have 
to continue to do that and we have to continue to press 
countries in the region to take an active and more public line 
concerning Burma. Places outside of the region, places like 
Europe, can make a difference.
    Senator McConnell. When you meet with the Chinese and the 
Indians, is Burma your agenda?
    Secretary Rice. Absolutely, every time. Not just my agenda. 
It is on the agenda for the President. He raises it as well.

                                BELARUS

    Senator McConnell. One other country I would like to 
discuss. I had a chance on a trip last summer to meet with some 
of the potential opposition from Belarus. What do you make of 
the status of the opposition in the wake of the unfair election 
that occurred recently, and do you have any hope that that 
regime might change from within.
    Secretary Rice. Well, I am glad that there was opposition 
this time, Senator. I think that is an achievement in a place 
that is the last really bad dictatorship in Europe. The 
Lukashenka Government is beyond the pale in comparison to 
anybody else in Europe.
    The fact that there was actually a single opposition 
candidate was in large part thanks to efforts that we and the 
Europeans and the Lithuanians had made to encourage the 
opposition to find a single focal point around which to rally, 
and they did that. I was with them in Lithuania and at that 
time they were very fractured. They came together. They were 
able to put forward a single candidate. He actually did get 
double digits in the vote, which is extraordinary given how 
unfair this election was.
    Senator McConnell. I assume there were no international 
observers?
    Secretary Rice. There were. The OSCE was there and they 
declared it not free and fair. But there were observers there. 
That is a step forward. I am told that, despite the unfair 
playing field, there was a lot of press coverage, even some 
underground press about what is going on there. I noted today a 
little news item that Lukashenka has for some reason decided to 
put off his inaugural for a few days. We do not know the reason 
for that, but I do know that the opposition is planning to put 
up posters that continue to challenge him. People stood in the 
streets. They were arrested. They are still fomenting against 
the regime.
    So it is the nascent, incipient stages of opposition in 
Belarus. But it is far more lively than, frankly, I would have 
guessed a year ago when I met with what was a very fractured 
opposition in Belarus. I do not believe that Lukashenka under 
these circumstances and under greater isolation--you know that 
the Europeans have put forward some further sanctions. We also 
will put forth some further sanctions.
    I think he has been surprised at the opposition and the 
fact that there is opposition to him. I think it is a good 
thing.

                           REFORMS IN UKRAINE

    Senator McConnell. Finally, I had a chance also to be in 
Ukraine last summer, and we have all followed with interest the 
elections there. Ukraine seems to be shifting back in the 
direction which it shifted away from during the Orange 
Revolution. I am curious as to what your observations are about 
that election and what it portends for the reform movement in 
Ukraine, a country desperately in need of genuine reform.
    Secretary Rice. Well, Yanakovic, the deposed leader the 
last time around as a result of the Orange Revolution, did win 
the single largest vote count, but it was not large enough to 
form a government by any means. In fact, Team Orange, the two 
separate parts of it--part of the problem was that there was a 
split in the people who led the Orange Revolution. But if you 
put those numbers together they actually have greater vote 
count than Yanakovic did. Tomoshenko and Yoshenko together have 
a greater vote count than Yanakovic did.
    So I think it is probably fair to say that the expectations 
of what the Orange Revolution could deliver probably were out 
of line with what they were actually able to deliver. They did 
have some splits, personality differences, policy differences, 
that weakened their united effort. But we will see now what 
happens in government formation.
    I am encouraged by the fact that you still had, despite all 
the problems that the reform movement has had, that you still 
had more votes on that reform side than you had on the side of 
the Party of Regions, which is the Yanakovic----
    Senator McConnell. Under their system, what does that mean, 
that the reformers will have a majority in the parliament?
    Secretary Rice. Well, it means that now you have separate 
blocs and they will now have to form a government. So some 
combination of blocs have to come together in order to appoint 
the prime minister.
    I should say that of course we will work with whatever 
government comes into being there. It is our hope that whatever 
government comes into being, whether that is the bloc that 
includes Team Orange or if it is the Yanakovic bloc, is going 
to be respectful of what the Ukrainian people have clearly 
spoken for, which is reform, independence of Ukrainian policy, 
and a desire to have good relations with the West.
    So we will see how this turns out, but that is what is now 
happening. There were several blocs of parties, several parties 
that got votes. They now have to form a government and no 
single party has enough to form a government on its own.
    Senator McConnell. Well, Madam Secretary, thank you so much 
for being here today.

                   ADDITIONAL SUBCOMMITTEE QUESTIONS

    There will be some additional questions which will be 
submitted for your response in the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing.]
               Question Submitted by Senator Thad Cochran
    Question. President Ellen Johnson Sirleaf addressed a Joint Session 
of Congress 2 weeks ago, and met with Congressional leaders and the 
President to discuss her reform agenda for Liberia. Africa's first 
woman president made a very positive impression on many of us in 
Washington.
    After decades of civil war, Liberia has no shortage of problems. 
Given America's historical ties to that country and support for 
President Johnson Sirleaf's reform efforts, the House included an 
additional $50 million for assistance for Liberia in its supplemental 
bill.
    Madam Secretary, do you support additional funding for Liberia--a 
democracy dividend, if you will--and is it in America's security 
interests to improve governance in Liberia?
    Answer. Thanks to strong Congressional support in fiscal years 
2004, 2005, and 2006, the United States has been able to play the 
leading role in helping Liberia begin recovery from 14 years of civil 
war, generations of corruption, and a near-total absence of government 
services and of respect for human rights and the rule of law. This 
funding is key to helping the new government of Liberia establish the 
conditions for consolidating the peace and building prosperity.
    Our fiscal year 2006 programs, in addition to the Administration's 
fiscal year 2007 request of $89.945 million for Liberia, will 
accomplish our goals of reconstructing schools, hospitals, and 
government buildings; expanding primary health care and post-war 
rehabilitation and reconstruction activities; providing civilian police 
to the U.N. mission to monitor, mentor and reform the Liberian National 
Police; supporting security sector reform to create a professional, 
capable and fiscally sustainable Liberian military; supporting the 
return and reintegration of Liberian refugees and internally displaced 
persons; and many other activities.
    We plan to sustain the long-term, multi-year commitment necessary 
to support Liberia's reconstruction efforts by maintaining programs and 
funding levels to meet Liberia's needs. We have ongoing discussions 
with the Liberian government about the country's needs and will 
continue to consider those needs in conjunction with our policies and 
budget priorities. We will, of course, work closely with Congress in 
formulating and pursuing these priorities.
    As for the impact on America's security interests of improving 
governance in Liberia, the connection is clear. Liberia's civil 
conflict was driven in large measure by a history of poor governance, 
exclusion, and corrupt misrule. Improved governance will enhance 
Liberia's stability and prevent conflict; help address the needs and 
aspirations of Liberians; and set the foundation for investment and 
economic growth. Accomplishing these goals will clearly advance 
America's security interests in West Africa.
                                 ______
                                 
            Questions Submitted by Senator Richard J. Durbin

    Question. Reports of executions in Iraq continue to grow. The New 
York Times this weekend, described a pet shop owner, a Sunni, seized by 
gunmen. His body was found the next morning at a sewage treatment 
plant. He had been hog-tied, his bones broken, his face and legs 
drilled with power tools, and finally he had been shot. In the last 
month, hundreds of men have been kidnapped, tortured, and executed in 
Baghdad. The city's homicide rate has tripled from 11 to 33 a day, 
according to military reports. The period from March 7 to March 21 was 
typically brutal: at least 191 bodies, many mutilated, surfaced in 
garbage bins, drainage ditches, minibuses, and pickup trucks.
    Former Prime Minister Ayad Allawi has said, ``If this is not civil 
war, then God knows what civil war is.'' Prime Minister Jaafari has 
blamed ``foreign terrorists'' for these attacks on Sunni civilians 
rather than Shiite-militias; but he depends on the political support of 
those militias.''
    Where does the Administration draw the line between sectarian 
violence and civil war? Whichever term you prefer, how does this 
growing violence, these waves of executions, affect U.S. policy in 
Iraq?
    Answer. The increase in sectarian violence is a major concern to us 
and is one of the prime issues raised at every level with Iraqi 
governmental and political leaders. Nonetheless, we do not see this as 
a civil war. In Iraq, only terrorist leader Abu Musab al- Zarqawi and 
his Al-Qaida in Iraq organization is calling for civil war.
    Given the large turnout in Iraq's elections and the broader support 
expressed for the efforts to form a government inclusive of all Iraqis, 
we believe that Iraq can and will overcome its ethnic and religious 
differences. Indeed, Iraq's political leaders are committed to a 
government of national unity. Progress on the formation of that 
government of national unity continues despite an upsurge sectarian 
violence that began with the February 22, 2006 bombing of the Golden 
Mosque in Samarra. Those who attacked the Golden Mosque sought to 
exploit divisions among the Iraqi public and the political leadership 
to foment and prolong sectarian strife. Iraqi government and religious 
leaders alike, in a demonstration of national unity, condemned the 
attacks, called for an end to sectarian unrest, and for security forces 
free from sectarian and militia loyalties.
    The United States and international community joined Iraqis in 
denouncing the attacks and underscored the importance of national unity 
and defying the terrorists and extremists who seek to provoke such 
conflict. The USG has been in touch with Iraqi leaders to urge calm and 
will do our utmost to support the Iraqi government's efforts to achieve 
it.
    The violence in Iraq only underscores the importance of our mission 
there. Helping the Iraqi Security Forces develop their capacity to 
secure their own country while carrying out a campaign to defeat 
terrorists and neutralize the insurgency is and continues to be our 
objective.
    Question. Russia has become an increasingly difficult partner for 
the Administration, in Europe, in the countries Russia thinks of as its 
``near abroad,'' and beyond. The Administration has worked to 
strengthen ties with Russia, but the effort seems to have turned sour. 
What went wrong? The Russian government has tightened its grip on non-
governmental organizations at home. It has a mixed record in dealing 
with Iraq and Iran, and Russian authorities may have passed sensitive 
military information to Saddam's government before the start of 
military operations in Iraq. These are matters of serious concern, as 
are Russia's outreach to Hamas, and its support for the undemocratic 
regime in Belarus. How does the Administration intend to face these 
challenges? What trajectory do you see the U.S.-Russian relationship 
following today? Does Russia still merit a place at the table with the 
members of the G8?
    Answer. The United States is deeply concerned and candid about 
problems in United States-Russia relations and United States-Russia 
differences. These include the direction of Russia's internal 
evolution, including democracy, and many aspects of Russia's relations 
with its neighbors.
    In discussions with Russian officials, we have been frank about our 
differences and concerns. For example, we made clear our concerns about 
the new NGO law, through both diplomatic channels and public fora as 
the bill was considered by the Russian Duma. We believe that our 
attention moved the Government of Russia to modify that bill. Now that 
the bill is law, we remain concerned about its potential impact on 
Russian civil society. We have pushed for fair, transparent, and 
consistent implementation of the law and intend to monitor the law's 
implementation closely. We will continue to press for robust democratic 
development in Russia more broadly.
    On Belarus, the United States has acted in concert with our 
European partners to press for democratic elections and to protest the 
fraudulent ballot that took place March 19 and the subsequent crackdown 
against opposition leaders and other Belarusian citizens. We have also 
expressed our disappointment with Russia's defense of these fraudulent 
elections and its condemnation of the performance of the OSCE 
Monitoring Mission, which documented that the elections were not free 
or fair. We have urged Russia to take a more constructive approach by 
pressing Belarus towards democratic reform and urging it to fulfill its 
OSCE commitments.
    President Bush has emphasized the importance of historical 
perspective: history is on the side of freedom. Speaking at Freedom 
House March 29, he reminded us that the 11advance of freedom is the 
story of our time,'' and that ``it's an interest of a country like 
Russia to understand and welcome democracy.'' That is why President 
Bush is committed to maintaining a frank discussion with Russia, aware 
that this path may not yield immediate solutions, but remains far more 
promising than seeking to isolate Russia.
    In this context, we continue to believe that attending the G8 
Summit, a forum in which we advance our interests on major global 
issues such as energy security, is the right course of action. As 
President Bush has said: ``I think that it would be a mistake for the 
United States not to go to the G8. . . . I need to be in a position 
where I can sit down with [President Putin] and be very frank about our 
concerns.''
    A balanced and honest view of United States-Russian relations must 
recognize areas of progress, too. It is in our interest to continue to 
seek cooperation with Russia, including on counter-terrorism, 
nonproliferation, Iran and the Middle East.
    On Iran, Russia has joined the international community in seeking 
an end to Tehran's pursuit of nuclear weapons, most recently by joining 
other members of the U.N. Security Council in issuing a March 31 
Presidential Statement that expresses support for the IAEA's call on 
Iran to suspend all enrichment-related activities and return to 
negotiations.
    On Iraq and the possible compromise of military information, I have 
made clear to Russian officials, both publicly and privately, that the 
United States takes these reports seriously, we hope Russia does also, 
and will respond to our inquiries with a serious answer.
    Question. A growing body of literature points to the importance of 
nutrition in preventing progression from HIV to AIDS and in supporting 
the care of AIDS patients. Seven out of 15 focus countries under the 
President's Emergency Plan for AIDS Relief (PEPFAR) are food insecure. 
PEPFAR has begun implementing 6-month bridge programs for individuals 
receiving ARVs, but their nutritional needs will likely persist or 
reappear after this 6-month period. What is the U.S. strategy to 
integrate food security and nutrition programs with our HIV/AIDS 
treatment programs? How are we coordinating with the World Food 
Programme, USAID's Food for Peace, and private voluntary organizations 
to integrate food and ARV programs?
    Answer. The areas that are affected by HIV have long been plagued 
by systemic and chronic food insecurity. Food insecurity and consequent 
nutritional problems do play a role in every aspect of the Emergency 
Plan. However, factors contributing to the resolution of food 
insecurity are extremely complex, and largely beyond the scope of the 
Emergency Plan. Other organizations and international partners have a 
strong comparative advantage in the area of food assistance, 
agriculture and food security. Therefore, a key precept of 
interventions supported by the Emergency Plan is to remain focused on 
HIV/AIDS and the factors that may increase food/nutrition needs for 
people living with HIV/AIDS (PLWHA), and thus to provide support for 
food only in limited circumstances, while leveraging other resources 
when possible.
    The Emergency Plan is committed to evidence-based best practices in 
providing food and nutritional support for PLWHA receiving care and 
treatment. Recognizing that this is too large and complex a problem for 
any one agency to handle on its own, the Office of the Global AIDS 
Coordinator (S/GAC) will partner with other U.S. Government agencies, 
namely USAID, USDA, HHS, and Peace Corps, as well as relevant U.N. 
agencies and the private sector, to leverage resources to carry out 
targeted, therapeutic and supplementary feeding, micronutrient 
supplementation, and food security and livelihood support.
    Interventions to address the food and nutrition needs of PLWHA work 
at multiple levels and involve a variety of partners. The Emergency 
Plan strategy considers specific objectives, such as: to improve 
quantity and quality of diet among PLHWA and Orphans and Vulnerable 
Children (OVC); build or replenish body stores of nutrients; prevent or 
stabilize weight loss; preserve and gain muscle mass; prevent diarrhea 
and other infections; speed recuperation from HIV-related infections; 
and prepare for and manage AIDS-related symptoms that affect food 
consumption and nutrient utilization.
    We have established an inter-agency working group to identify 
program models and comparative advantages in this area. Membership 
includes USAID, USDA, HHS, and Peace Corps. And we are consulting with 
potential partners, such as the World Food Program, Food and 
Agriculture Organization, WHO and UNICEF, as well as PVOs and others 
from the private sector. A report to Congress detailing the Emergency 
Plan food and nutrition strategy is currently in development, and will 
be published in May 2006.
    Question. Secretary Rice has said that the Department of State will 
forward deploy officials to high priority cities and countries. How 
does the Department plan to provide adequate security for these 
forward-deployed officials, particularly in ``presence posts'' where it 
will establish only minimal infrastructure?
    How are the departments of State and Defense providing for the 
security of personnel serving in provincial reconstruction teams in 
Afghanistan and Iraq? Are these teams getting the ``force protection'' 
support they need to do their jobs effectively?
    Answer. The Bureau of Diplomatic Security is currently 
participating in an inter-departmental working group that is studying 
the concept of American Presence Posts (APP) and developing guidelines 
and procedures for opening APPs. The Secure Embassy Construction and 
Counterterrorism Act (SECCA) of 1999 (Public Law 106-113) requires that 
any new diplomatic facility meet collocation and 100-foot-setback 
statutory requirements. The collocation, setback, and waiver 
requirements uniformly apply to embassies, consulates, and American 
Presence Posts (APPs). Once a post has identified a potential APP site, 
the Regional Security Officer (RSO), in coordination with DS 
Headquarters and the Bureau of Overseas Buildings Operations (OBO), 
will conduct a physical security survey of the location to determine 
security requirements. APP sites must adhere to or be in the final 
stages of compliance with the Overseas Security Policy Board (OSPB) 
standards prior to occupancy. Additionally, waivers to SECCA and 
exceptions to OSPB standards must be obtained for any site deficiencies 
that cannot be remedied.
    The Department of State continues to provide security for 
Provincial Reconstruction Teams (PRTs) based in Regional Embassy 
Offices (REOs) throughout Iraq. The substantial security features of 
REOs include, but are not limited to, perimeter security in the form of 
``T-walls,'' access control measures, anti-ram barriers, mylar on 
office windows, sandbags on housing trailers, and bunkers for use 
during sustained attacks. The amount requested in the Iraq supplemental 
under consideration by Congress will provide funding for perimeter 
security upgrades and overhead cover for housing and common use 
facilities. Extensive local guard programs, protection details, and an 
armored vehicle program support State Department personnel in the 
execution of their mission off compound. The Department of Defense is 
responsible for security at PRTs established on U.S. military forward 
operating bases (FOBs) and incorporates similar security programs for 
the protection of PRT personnel.
    At the present time, there are at least 752 U.S. military and 
civilian personnel assigned to 23 PRTs located throughout Afghanistan. 
There are currently nine PRTs under International Security Assistance 
Forces (ISAF) responsibility and fourteen under the responsibility of 
Operation Enduring Freedom (U.S./Coalition Forces). Force protection 
for U.S. civilian personnel assigned to PRTs is the responsibility of 
the military commander of the PRT. Force protection and security 
responsibilities for U.S. civilian personnel assigned to PRTs under 
U.S. military control are outlined in an MOU between Combined/Joint 
Task Force-180 (CJTF-180) and the U.S. Department of State signed in 
2002.
    No formal force protection/security agreement exists for U.S. 
civilian officers assigned to ISAF/NATO controlled PRTs. However, 
informally it is understood that U.S. personnel receive the same level 
of force protection as required by the host nation's senior civilian 
PRT staff.

                          SUBCOMMITTEE RECESS

    Senator McConnell. Thank you all very much. The 
subcommittee will stand in recess to reconvene at 2:30 p.m. on 
Thursday, June 8, in room SD-124. At that time we will hear 
testimony from the Honorable Randall L. Tobias, Administrator, 
United States Agency for International Development.
    [Whereupon, at 3:42 p.m., Thursday, March 28, the subcom- 
mittee was recessed, to reconvene at 2:30 p.m., Thursday, June 
8.]

  STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR 
                            FISCAL YEAR 2007

                              ----------                              

                         THURSDAY, JUNE 8, 2006

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 3:04 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Mitch McConnell (chairman) 
presiding.
    Present: Senators McConnell, Brownback, and Leahy.

           UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT

STATEMENT OF HON. RANDALL L. TOBIAS, ADMINISTRATOR

             OPENING STATEMENT OF SENATOR MITCH MC CONNELL

    Senator McConnell. Okay, why don't we get started?
    Welcome, Ambassador Tobias. As you wear two hats these 
days, as the administrator of the U.S. Agency for International 
Development and director of Foreign Assistance at the State 
Department, this hearing will examine the President's fiscal 
2007 budget request for USAID and the administration's efforts 
to reform foreign assistance.
    I know my colleagues are keen on asking questions on 
specific programs and activities, and will, therefore, make 
only a few brief opening observations.
    Let me begin by expressing this subcommittee's support for 
your efforts to improve the efficiency and effectiveness of 
U.S. foreign assistance programs and activities. We're aware of 
the significant achievements of the President's emergency plan 
for AIDS relief under your leadership, and I expect you have 
the gratitude of millions of HIV-positive people across the 
globe for getting that important initiative up and running. 
This was certainly no small achievement, and we wish you 
similar success with your new responsibilities.
    According to the budget justification materials, the fiscal 
2007 request for USAID programs and activities totals $3.9 
billion, a decrease of $371 million below last year's enacted 
level. As I'm sure you're aware of the strong congressional 
interest in health and development programs, it would be 
helpful if you could explain the rationale for the decrease in 
the Child Survival and Health Programs Fund and Development 
Assistance accounts. I'm specifically interested in the impact 
the reduction will have on USAID's democracy activities and 
programs that promote economic growth, agriculture, and trade.
    With respect to foreign aid reform, the subcommittee would 
appreciate an update on the administration's efforts up to this 
point. We've tried, over the years, to underscore the 
importance of foreign assistance programs to U.S. security 
interests overseas. Our country learned, at great cost, that 
ungoverned spaces, such as those that allowed al Qaeda to train 
in Afghanistan, pose great risk to our way of life, and that 
all elements of our national power--military, economic, and 
diplomatic--must be integrated if we are to prevail in the long 
struggle against Islamic extremists.
    Be it through assistance to countries at risk of increasing 
acts of terrorism, like Indonesia or the Philippines, or 
assisting representative governments that will directly 
contribute to regional stability, such as in Afghanistan and 
Iraq, the allocation of our assistance resources should support 
strategic objectives.
    It is important to underscore two basic assumptions 
underlying any foreign aid reform effort.
    First, programs must support policy. For this reason, the 
Senate recommended a new Democracy Fund account last year, the 
purpose of which was to consolidate all democracy programs and 
activities under a single account. I'm pleased that the 
President made the expansion of freedom abroad a major 
component of America's foreign policy, but, to succeed, USAID 
and the State Department will need to coordinate all of our 
programs and policy in support of the national security 
strategy to a degree this subcommittee has, frankly, yet to 
see. I hope, under your leadership, that will be the case.
    Second, given limited resources, our assistance must be 
prioritized to those countries important to U.S. national 
interests. Frankly, this is sometimes out of kilter in the 
budget request. For example, in fiscal 2007, only $733,000 is 
requested for democracy and government programs in the People's 
Republic of China, while $4 million is requested for similar 
programs in the Democratic Republic of Timor-Leste. Need I say 
more? I can assure you that democracy programs for China will 
be significantly increased as the legislative process moves 
forward.
    So, thank you for being here today, Mr. Ambassador. With 
that, I'll turn it over to my friend and colleague Senator 
Leahy.

                 STATEMENT OF SENATOR PATRICK J. LEAHY

    Senator Leahy. Thank you, Mr. Chairman.
    Ambassador Tobias, you had a nice writeup in the Wall 
Street Journal yesterday. I think you deserved it. We're going 
to spend an hour or so to cover the entire world of USAID's 
programs, so I'm going to put most of my statement in the 
record.
    I join the chairman in welcoming you to this subcommittee 
for the first time as both USAID Administrator and Director of 
Foreign Assistance. I also want to thank you for the job you 
did as the Global AIDS Coordinator. My impression is that you 
got that program off to a good start, despite some less-than-
helpful constraints in the law. Fighting AIDS is different from 
other problems you're going to face now: reforming 
dysfunctional judicial systems, building potable water systems, 
responding to famines or hurricanes, stopping deforestation, 
supporting nascent political parties, providing economic 
alternatives for opium growers, and building democratic 
institutions and market economies. Your new role will require 
more interaction with Congress. While the chairman and I tried 
to bring out a bill that had strong bipartisan support, we 
still have 100 different views here. Then you go across the 
street to the House, and there's another 435. The President's 
priorities are often ours, but not always. So, you have to 
balance presidential priorities and congressional ones.

                           PREPARED STATEMENT

    I will put the rest of my statement in the record, because 
I really would like to hear from you, and then I'll have some 
questions.
    [The statement follows:]

             Prepared Statement of Senator Patrick J. Leahy

    Ambassador Tobias, we have 90 minutes to cover the entire world of 
USAID's programs, so I will be very brief.
    I join Chairman McConnell in welcoming you to this Subcommittee for 
the first time as USAID Administrator and as the Director of Foreign 
Assistance. I also want to thank you for the job you did as Global AIDS 
Coordinator. My impression is that you got that program off to a good 
start, despite some less than helpful constraints in the law.
    Yours is a heavy responsibility. While your previous role involved 
some of the same countries and problems, fighting AIDS is different 
from reforming dysfunctional judicial systems, building potable water 
systems, responding to famines or hurricanes, stopping deforestation, 
supporting nascent political parties, or providing economic 
alternatives for opium growers.
    Building democratic institutions and economic systems that offer 
real opportunities for people to improve their lives within a just 
society, presents unique, long term challenges and opportunities.
    Your new role will also involve more interaction with the Congress 
than you are accustomed to. Some of it may not always be welcome, 
because in the Senate we have 100 different points of view of what's 
wrong in the world and what USAID should do about it. And you also have 
to deal with the House.
    I hope you understand that the way we get this bill passed is by 
balancing the President's priorities with the Congress's priorities. 
They are often the same, but not always. Let me give you some friendly 
advice: don't forget who pays the bills.
    You have already discovered that USAID has outstanding people. But 
its staff is a fraction of the number that are needed to effectively 
manage programs in so many countries with so many problems. It is also 
plagued by burdensome and self-defeating procurement and contracting 
procedures that one might expect to find in Russia, but not here. I 
want to know--not today but soon--how you plan to fix these problems.
    I have long believed that the United States needs a Director of 
Foreign Assistance. We need far better coordination, and I only wish 
your oversight extended to the international programs of other agencies 
besides State and USAID, like the Departments of Agriculture and 
Energy, the U.S. Foreign Service and the CDC. At the same time, there 
are good reasons for USAID's autonomy, and we want to protect it.
    I am concerned that there has not been nearly enough consultation 
with the Congress about your position or the Secretary's 
``transformational diplomacy'' initiative. Your testimony today does 
not give us much more than the vague generalities we have heard 
already. One thing we have learned over many years is that when it 
comes to foreign policy and foreign assistance, real reform is 
difficult and it doesn't happen unless the Congress is fully on board.
    We know what the problems are and there is a lot we can do to make 
our foreign assistance programs more effective. But we have to work 
together, from the beginning, which has not been the practice of this 
Administration. I hope this will be different because there is a lot at 
stake for all of us.
    Thank you Mr. Chairman, and thank you Ambassador Tobias for being 
here.

    Senator McConnell. Thank you, Senator Leahy.
    Mr. Ambassador, why don't you tell us what you think we 
need to know without reading a very lengthy statement--that 
would be appreciated--and we'll get to the questions.

              SUMMARY STATEMENT OF HON. RANDALL L. TOBIAS

    Ambassador Tobias. Thank you, Mr. Chairman. Thanks for the 
opportunity to testify before the subcommittee today.
    I want to begin by expressing my appreciation to you, Mr. 
Chairman and to Senator Leahy, for your guidance and support in 
my former role as U.S. Global AIDS coordinator, and to thank 
you for your commitment both to that and to our foreign 
assistance programs. I look forward to working with both of 
you, and with the other members of the subcommittee, in my new 
capacity.
    My first couple of months as USAID Administrator have 
reinforced my belief that the men and women of the Agency are 
motivated by a true sense of mission and commitment, and I'm 
eager to do all that I can to sustain their dedication and 
ensure that their experience and capabilities are fully engaged 
as we embark on reforming our approach to foreign assistance.
    I have submitted a more detailed statement for the record, 
but I would like to focus some very brief opening remarks on 
the administration's reform of foreign assistance for fiscal 
year 2007 and beyond. Beyond the discussions that we're going 
to have in a few minutes, my staff and I certainly stand ready 
to address any detail of the fiscal year 2007 budget request 
with you or your staff as we go forward.
    Secretary Rice launched her Transformational Diplomacy and 
Development Initiative in January to address the incoherence 
and lack of focus in our foreign assistance programs. In doing 
so, she noted that both the content and the organization of 
foreign assistance require adjustment to meet the new 
challenges of today's world. The Secretary noted that ``The 
current structure of America's foreign assistance risks 
incoherent policies and ineffective programs, and perhaps even 
wasted resources. We can do better, and we must do better.'' 
Today, I want to commit to you that we will do better.
    In our current environment, the locus of national security 
threats has shifted to the developing world, where poverty, 
oppression, and indifference are exploited by our foes to 
provide haven for terrorists and the preparation of terrorist 
acts. As you have recognized with your attention to democracy 
programs, Mr. Chairman, foreign assistance can be an effective 
tool for countering these new threats. For this reason and 
others, foreign assistance has become a foundational pillar of 
our new national security architecture.
    As you know, under the reform initiative, the President has 
appointed me to be the Director of U.S. Foreign Assistance, in 
addition to my Senate-confirmed position as Administrator of 
USAID. The President and the Secretary have assigned me the 
task of bringing greater strategic coherence to our planning, 
our budgeting, and our implementation of foreign assistance. I 
intend to do this first by focusing on our three greatest 
challenges: the lack of strategic focus in our programs, our 
fragmented budgeting process, and our inability to adequately 
track, transparently and in sufficient detail, where our 
funding goes, all problems that I know the Congress has 
recognized for some time.
    First, as your staffs have been briefed, we have begun to 
introduce a new strategic framework to bring focus to the 
foreign assistance funding appropriated to both the Department 
of State and to USAID. The framework establishes a set of broad 
objectives for foreign assistance that will help transform 
countries into better, more effective partners to create a 
safer and more just international system.
    On the country level, this framework serves as a roadmap, 
guiding programming to help us achieve our overall goals. Here 
in Washington, with essential input from Congress, the 
framework will more clearly establish the goals toward which 
foreign assistance will be directed, and the measures by which 
we will track progress. Under the leadership of each of our 
ambassadors, U.S. Government country teams in the field will 
define the activities for which funds will be used to most 
effectively pursue those goals. These plans will then be 
reviewed in Washington for their consistency with overall goals 
and expectations, with funds allocated only after the plans are 
approved. It is my expectation that this approach will not only 
help us better manage foreign assistance, but will also help 
Members of Congress perform their oversight responsibilities 
more effectively.
    Second, with this framework in place, budgetary decisions 
and program funding proposals will be weighed against how they 
contribute to the overarching goal the Secretary has set for 
helping countries become more effective partners.
    Finally, we will track where the money goes, including the 
results it is producing. As you know from your experience in 
working with me on the President's Emergency Plan for AIDS 
Relief, I have placed a great deal of emphasis on transparency 
for our funding, and I want to do the same for all of foreign 
assistance.
    It is our intent to produce joint country plans for 35 
countries for fiscal year 2007 that we can share with you in 
February. By August 2006 we aim to have our new information 
system in place to begin to collect and track this data.
    Beyond this more strategic approach to planning and 
budgeting and the transparency we intend to provide, I also 
want to improve our responsiveness at USAID to the Congress in 
other ways. So, beginning today, I want to commit that USAID 
will provide answers to you for your information requests 
within 48 hours, and to formal letters within a week, or when 
that is not possible, we will be in touch with your offices 
within those timeframes to explain the reasons why and to work 
with you to establish a reasonable schedule that we will then 
meet. Along the same lines, I want to also commit to delivering 
congressional reports on time to enable you to do your 
necessary oversight to make our programs stronger.
    As articulated by both President Bush and by Secretary 
Rice, we are entering a new era of foreign assistance where our 
resources will be better aligned with our strategic priorities. 
We will be more accountable to the American taxpayers, and use 
their resources more efficiently and effectively.
    None of this will be easy. But, in recognition of the fact 
that our future as Americans is inextricably linked to those we 
seek to assist, we must be certain that our investments are 
producing the greatest results at the lowest cost to the 
taxpayers, and we will need the help of the Congress to achieve 
this aim.
    On a final note, Mr. Chairman, as you know, Abu Musab al-
Zarqawi was killed in Iraq yesterday by U.S. Armed Forces. 
President Bush noted that ``The ideology of terror has lost its 
most visible, aggressive leader.'' What I want to note here is 
that in 2003 al-Zarqawi was convicted in absentia and sentenced 
to death by a Jordanian court for masterminding the 2002 
assassination of Laurence Foley, a USAID official in Jordan. 
The death of Laurence Foley was but one of al-Zarqawi's many 
awful crimes, but I can think of no better way to articulate 
the deep connection between foreign assistance and our Nation's 
fortunes in the world. The people who carry out our foreign 
assistance programs are literally on the front lines in the 
battle between hope and darkness. We must all take very 
seriously the responsibility to enable them to manage the best 
and most efficient programs possible.
    Thank you very much, Mr. Chairman. I look forward to 
addressing your questions.
    [The statement follows:]

              Prepared Statement of Hon. Randall L. Tobias

    Thank you, Mr. Chairman, for the opportunity to testify before the 
Subcommittee today on the fiscal year 2007 USAID budget.
    I want to express my appreciation to you, Mr. Chairman, and to you, 
Senator Leahy, for your guidance and support in my former role as U.S. 
Global AIDS Coordinator and to thank you for your commitment to our 
foreign assistance programs. Your attention to strengthening democracy, 
Chairman McConnell, and your commitment to augmenting the voice of the 
disenfranchised, Senator Leahy, have helped citizens hold their 
governments more accountable across the globe. I look forward to 
working with you both, and with the other Members of the Subcommittee, 
in my new capacity as Director of U.S. Foreign Assistance and 
Administrator of USAID.
    My first couple of months as USAID Administrator has reinforced my 
belief that the men and women of the Agency are motivated by a true 
sense of mission and commitment. I am eager to do all that I can to 
sustain their dedication and to ensure that their valuable experience 
is brought to the table as we embark on reforming our approach to 
foreign assistance.
    I just returned from two weeks of travel through Pakistan, then 
Afghanistan, and Iraq--where hundreds of brave USAID employees put 
their lives on the line every day in an effort to help people in 
nascent democracies build a free and prosperous future for themselves. 
As I traveled through the region, the full range of USAID programming 
was on display, from the humanitarian intervention in societies ravaged 
by natural disasters to the reconstruction of societies ravaged by 
tyranny and war; from efforts to secure peace and security to efforts 
to invest in people and help them build richer fuller lives for 
themselves.
    The message I took to President Musharraf of Pakistan and President 
Karzai of Afghanistan, as well as to President Jalal Talabani, Prime 
Minister Nuri al Maliki, and the newly-formed government of Iraq was of 
our commitment to a long-term strategic partnership between the United 
States and their countries.
    Democracy is taking root in Afghanistan and Iraq and the leaders I 
met are committed to a new direction for their countries. We are seeing 
some economic progress and through programs like Afghans Building 
Capacity--a multi-year investment of up to $125 million that amounts to 
the largest and most comprehensive such USAID effort in perhaps 20 
years anywhere in the world--we will assist the Government and the 
people of Afghanistan as they develop the physical and human capacity 
in the public sector, private sector and civil society to sustain 
growth both in Kabul and the provinces.
    I recognize that my testimony this afternoon will be somewhat 
different from traditional budget testimony. I will briefly review the 
fiscal year 2007 budget request for USAID, but will focus my testimony 
on the Administration's reform of foreign assistance for fiscal year 
2007 and beyond. In addition to the discussion we are going to have 
today, my staff and I stand ready to address any detail of the fiscal 
year 2007 budget request with you and/or your staff after this hearing.

                        FISCAL YEAR 2007 BUDGET

    The fiscal year 2007 program budget continues efforts to build 
democracy, good governance and economic growth in Iraq and Afghanistan, 
and requests funds in support of other frontline states in the Global 
War on Terror. USAID will play a critical role in the Provincial 
Reconstruction Teams that will be deployed throughout Iraq and 
Afghanistan. In Sudan, we are well on our way to standing up a mission 
in Juba. This will enhance our influence in helping move the country to 
peace, reconciliation and a better future.
    USAID is requesting $3.15 billion for its fiscal year 2007 
programs. In addition, we anticipate working with the Departments of 
State and Agriculture on joint programs that total $5.4 billion in 
Economic Support Funds (ESF), Assistance for the Independent States of 
the Former Soviet Union (FSA), Assistance for Eastern Europe and the 
Baltic States, the Andean Counternarcotics Initiative and Public Law 
480 Title II. We will also manage a portion of the $2.9 billion 
requested for the Global HIV/AIDS Initiative by the Global AIDS 
Coordinator and a portion of the $3 billion for the Millennium 
Challenge Corporation. USAID is requesting a total of $679 million for 
Operating Expenses and $132 million for contributions to the Capital 
Investment Fund.

ENHANCING THE IMPACT OF FOREIGN ASSISTANCE: REDUCING INEFFICIENCIES AND 
                              INCOHERENCE

    Secretary Rice launched her Transformational Diplomacy and 
Development initiative in January to address the incoherence and lack 
of focus in our foreign assistance programs. In doing so, she noted 
that both the content and organization of foreign assistance require 
adjustment to meet the challenges of today's world. The Secretary 
noted, ``The current structure of America's foreign assistance risks 
incoherent policies and ineffective programs and perhaps even wasted 
resources. We can do better and we must do better.'' Today, I want to 
commit to you we will do better.
    Under the previous USAID and State organizational structure, each 
agency maintained independent budgeting and planning offices to focus 
on their own part of foreign assistance. This required two staffs to 
develop multiple and parallel iterations of their individual budgets in 
the same program areas, two staffs to agree to and integrate a set of 
numbers, two staffs to brief the Hill, and a myriad of programs that 
may be redundant--or worse, at cross purposes. While each agency 
collaborated with the other, in spite of the best efforts of the people 
involved, it was done at great cost in time, personnel, and impact.
    Of great concern to me--and I know to many of you--is the inability 
of our Washington information systems to capture ``all-spigots'' 
funding levels across sectors or in a variety of other dimensions--
information that is vital to the oversight work of both Congress and 
the Administration. I know it will not be easy, but we need to bring 
transparency and accountability to explaining the use and result of our 
foreign assistance funds.
    I realize that as I outline the challenges we face, I do not need 
to convince you this afternoon of what we need to do. Congress has 
consistently called for improved transparency in the way budgets are 
put together and funds expended--and vastly improved accountability for 
the results. I simply want to emphasize that I, too, am focused on that 
goal, and that I look forward to working with you in achieving it.
    In our current environment, the locus of national security threats 
has shifted to the developing world, where poverty, oppression, and 
indifference are exploited by our foes to provide haven for terrorists 
and the preparation of terrorist acts. As I know you have recognized 
with your attention to democracy programs, Mr. Chairman, foreign 
assistance is an effective tool for countering these new threats. For 
this reason and others, foreign assistance has become a foundational 
pillar of our new national security architecture.

                    OUR APPROACH: WE WILL DO BETTER

    As you know, under the reform initiative, the President has 
appointed me to be Director of U.S. Foreign Assistance, in addition to 
my Senate-confirmed position of Administrator of USAID. The President 
and Secretary Rice have assigned me the task of bringing strategic 
coherence to our planning, budgeting and implementing of foreign 
assistance. I intend to do this first by focusing on our three greatest 
challenges: the lack of strategic focus in our programs, our fragmented 
budgeting process, and our inability to track, transparently and in 
sufficient detail, where our funding goes--all problems I know that 
Congress has recognized for some time.
    First, as your staffs have been briefed, we have introduced a new 
Strategic Framework for foreign assistance appropriated to both the 
Department of State and USAID. This framework establishes a set of 
broad objectives for foreign assistance that will help transform 
countries into better, more effective partners to create a safer and 
more just international system. We believe that this goal of 
transforming countries can be accomplished if we focus on five 
objectives: achieving and maintaining peace and security; helping 
improve governance and democratic participation; contributing to and 
promoting investments in people; helping engender economic growth; and 
maintaining our commitment to respond to humanitarian disasters.
    At the country level, where the ``rubber of our programs meets the 
road,'' this Framework serves as a ``roadmap,'' guiding programming to 
help us achieve our overall goals. My intent is that we here in 
Washington--with essential input from Congress--will more clearly 
establish the goals toward which our foreign assistance will be 
directed and the measures by which we will track progress. Then, under 
the leadership of each of our Ambassadors, country teams in the field 
will define the activities for which funds will be used to most 
effectively pursue those goals.
    With their expert knowledge of country circumstances, our staff in 
the field will produce better integrated, more coherent country 
operational plans that indicate, for each activity, the partner, the 
amount of money, the expected outputs, and ultimate outcomes that will 
contribute most effectively to achieving the established goals.
    The country operational planning approach differs from the status 
quo in that all assistance agencies in country will work together as a 
country team to identify unified resources, both human and financial, 
to bring to bear on the goals and performance targets of each sector of 
assistance planned to drive country reforms. This process produces a 
single USG document detailing our approach to assistance guided by 
strategic goals.
    These unified plans will be reviewed in Washington for their 
consistency with overall goals and expectations, with final allocation 
decisions made only after plans are approved. By requiring detailed and 
specific planning up-front, directly before fiscal year 2007 funds are 
appropriated, we hope to improve the strategic focus of our programs 
sooner and increase the speed their implementation.
    Second, with the Framework in place, budgetary decisions and 
program funding proposals will be weighed against how they contribute 
to the overarching goal the Secretary has set of helping countries 
become effective partners. To ensure that our budget staffs at USAID 
and State allocate funds according to this goal in an integrated and 
consistent way, I have joined them into one budget, performance 
planning and results monitoring organization, under my direction. By 
bringing this staff together into one office, we have begun to 
streamline processes, improve efficiency and effectiveness, and reduce 
the burden that redundant functions place on our field staff.
    Finally, we will track where the money goes, including the results 
it is producing. As you know from your experience in working with me on 
the President's Emergency Plan for AIDS Relief, I have placed a great 
deal of emphasis on transparency for our funding. To bring that same 
level of accountability to the rest of our foreign assistance spending, 
we are in the process of building a new strategic information system 
for USAID and State funds that will tell both you and me exactly who is 
receiving our funds, what they were doing with the money, what is 
expected as a result, and how that result will help us reach our goals.
    These changes represent a substantive shift in the planning, 
allocation, and programming of foreign assistance resources, including 
new responsibilities for both Washington and the field. Accordingly, 
this effort will remain a work in progress for some time, but we are 
moving as quickly as we can. It is our intent to produce joint country 
operational plans for USAID and State funds for 35 countries for fiscal 
year 2007 that we can share with you in February. By August 2006, we 
aim to have our new information system in place to begin to collect and 
track this data.
    Beyond this more strategic approach to planning and budgeting and 
the transparency we intend to provide, I also want to improve our 
responsiveness to the Congress in other ways. Beginning today, I want 
commit that USAID will provide you with answers to your informational 
requests within 48 hours and to formal letters within a week; or, when 
that is not possible, we will be in touch with your offices within 
those timeframes to explain the reasons why, and to work with you to 
establish a reasonable schedule for getting the information to you. 
Along those same lines, I also commit to delivering Congressional 
reports on time to enable you to do your necessary oversight to make 
our programs stronger.

                               CONCLUSION

    As articulated both by President Bush and by Secretary Rice, we are 
entering a new era of foreign assistance where our resources will be 
better aligned with our strategic priorities. We will be more 
accountable to American taxpayers and use their resources more 
efficiently and effectively.
    None of this will be easy. But in recognition of the fact that our 
future as Americans is inextricably linked to those we seek to assist, 
we must be certain that our investments are producing the greatest 
results at the lowest cost to the taxpayer. We will need the help of 
Congress to achieve this aim.
    Thank you very much, Mr. Chairman. I will be happy to answer any 
questions you may have.

    Senator McConnell. Thank you, Mr. Ambassador.
    I appreciate your reference to the big news of the day. 
There has not been a whole lot of good news in Iraq recently, 
but certainly the death of al-Zarqawi and the appointment of 
the defense and interior ministers gives us some hope that 
progress will continue to be made.

                            HEALTH PROGRAMS

    I want to shift to another subject entirely, and that's 
health programs. I've been a strong supporter of polio 
eradication programs, along with Senator Leahy and other 
members of this subcommittee. I was curious as to why the 
budget request includes no funding at all for programs related 
to polio eradication in Nigeria, a country which the World 
Health Organization has identified as of concern with respect 
to polio.
    Ambassador Tobias. Mr. Chairman, my understanding is that 
we had significant polio eradication activities in fiscal years 
2004 and 2005 in Nigeria. We spent about $10.5 million. In 
2006, we developed a number of concerns about both 
mismanagement and corruption in the system, although we did 
continue to fund programs using some money that was carried 
over. A number of changes have been made in Nigeria to tighten 
up the system. So, in 2007 we expect that USAID Nigeria will 
receive polio funds. The level will be decided later in the 
year. We will take into account the epidemiology, the current 
pipeline, the scope of USAID's role, what other donors are 
doing, what the Government of Nigeria is doing. But it's 
clearly a very serious issue there, and one that we need to be 
addressing.

                                 BURMA

    Senator McConnell. Thank you. I'm glad you're moving in 
that direction. I also want to turn to another country that I 
have a longstanding interest in, and that's Burma. I think we 
all know what the humanitarian situation is there, from 
significant HIV/AIDS infection rates to avian flu and now the 
potential for polio to re-emerge. While negligent in providing 
for the welfare of the Burmese people, the military junta that 
runs the place, the State Peace and Development Council (SPDC), 
is guilty of human rights abuses against ethnic minorities, 
including murder, torture, and rape.
    Now, we all understand the solution to Burma's humanitarian 
problems is political in nature; namely, reconciliation between 
Aung San Suu Kyi, and her political followers, who won the 
election in 1990, and the SPDC. In the wake of all this, what 
can the international community do to effectively address these 
Burmese health crises?
    Ambassador Tobias. Well, I think there are a lot of things 
that we can do, but we need to be sure that the things that we 
are doing are really supporting the people in need, and that 
we're doing it separate from the government in power there.
    Senator McConnell. They're basically running the NGOs out, 
aren't they? Denying them space----
    Ambassador Tobias. We have to find NGOs with whom we can 
work, who are working with Burmese both inside and outside the 
country. We're doing a number of things there, some from 
Thailand along the Thai/Burma border. But this is a situation 
that calls for creativity when the governments of countries are 
oppressing their people and not willing to step up to meet the 
needs of their people, and we have to find organizations that 
we can work with. That's exactly what we're trying to do.
    Senator McConnell. Are there some?
    Ambassador Tobias. Yes, I think there are. I'm certainly 
not an expert yet on the circumstances there, but I believe 
there are some organizations that we are working with, and can 
work with.

                                  IRAQ

    Senator McConnell. You mentioned Iraq. What is your 
perception of progress in Iraq, as measured by USAID programs, 
and the likelihood of such programs achieving some level of 
success?
    Ambassador Tobias. I just came back from Iraq about 2 weeks 
ago, and there is real progress being made, but there's a great 
deal more that can be done.
    Senator McConnell. You met with the Prime Minister, did you 
not?
    Ambassador Tobias. I met with the Prime Minister. I met 
with the President. I met with all of our military and civilian 
leadership on the ground. I'll tell you, one interesting 
experience I had was sitting in a room one day in a town 40 or 
50 miles south of Baghdad with a group of about seven or eight 
leaders of Iraqi NGOs. Now, just think about that in the 
context of somebody trying to start an NGO in the time of 
Saddam Hussein. These people were enthusiastically explaining 
what their organizations were doing. They had already figured 
out that if they created an association among themselves they 
could have more influence on the provincial government that was 
being put in place. It was the beginning of democracy really 
happening there.
    But one of the things that we need to do with our USAID 
programs, and I took some steps both while I was there and 
since coming back to do this, is, certainly, to be focused on 
the long term, but we also need to be focused on what I refer 
to as short-interval scheduling. So, what I have asked my 
people to do is take it 90 days at a time. What can we do, in 
the next 90 days, that can demonstrate real progress and 
demonstrate our support to the new Iraqi Government?
    I had a great conversation with General Corelli, the 
commander of the ground troops, about ways in which USAID and 
the military can collaborate in going into neighborhoods, 
starting in Baghdad, working on the last mile of connecting 
electric lines, water, sewer, cleaning up the garbage, trying 
to get neighborhoods back to a more habitable circumstance, 
where people can get back to their lives.
    Our people there are working under extraordinary 
circumstances. The security requirements are enormous just to 
move around. I'm very impressed and very proud of what they're 
doing. But I think there's more that we can do by focusing on 
some smaller projects more quickly.

                              AFGHANISTAN

    Senator McConnell. One more question, and then I'll turn to 
Senator Leahy.
    Bring me up to speed on how you feel you're doing in 
Afghanistan. Let me just say that when I first went there, in 
the fall of 2003, I had the typical country-team briefing. I 
never met a more enthusiastic bunch of Americans about, (a) the 
way they were being greeted, and (b) how successful they were. 
That was almost 3 years ago. Now we read reports that there's 
some backtracking, and that the Taliban are more of a problem 
than they were previously. So, I'm interested in whether the 
enthusiasm level is still high for your people there, and 
whether they still think they're making great progress.
    Ambassador Tobias. It is very high. I'm, again, very 
impressed with the morale and the commitment that our people 
there have. But I think it's a situation that could tip either 
way, and we need to ensure that we're continuing to do the 
things that need to be done.
    I met with President Karzai. I met with all of our own 
people, of course. I had some interesting experiences on the 
ground, including a meeting with a group of former poppy 
farmers, who, somewhat to my surprise, talked to me about how 
growing poppies is contrary to the teachings of the Koran and 
how they were eager to progress with our alternative-
livelihoods program. These were people who were being taught 
skills like pruning fruit trees and getting orchards back into 
shape and growing other crops. But it's more than that, it's a 
need for roads--probably that's the greatest need--and the need 
to develop markets. I also visited a USAID program where we are 
training people, who are going to all have jobs when they leave 
this training program, in some very basic construction skills 
of plumbing, working with electricity, building concrete-block 
walls, and some of those kinds of things.
    Senator McConnell. In that regard, during my trip to 
Afghanistan we had extensive discussions with Karzai and others 
about the need to get trees planted. Afghanistan has basically 
turned into a desert, because all the trees have been cut down. 
Has any reforestation effort been initiated? I know there are a 
number of American foundations that are interested in this 
issue.
    Ambassador Tobias. There's work going on in reforestation, 
which is a very pressing issue.
    There is a lot of focus on building new government capacity 
and capacity in the private sector, and getting citizens to 
understand the role that they can play in a democracy. I saw, 
for example, the program that we're sponsoring with Voice for 
Humanity, which is using new technology to communicate with 
people in rural areas. I think that's making some progress. We 
need to try new things.
    Senator McConnell. Good.
    Senator Leahy.
    Senator Leahy. Thank you, Mr. Chairman.

                 TRANSFORMATIONAL DIPLOMACY INITIATIVE

    I understand that the Director of Foreign Assistance 
position was created as part of Secretary Rice's 
Transformational Diplomacy Initiative, in an attempt to better 
coordinate foreign policy priorities with foreign aid programs. 
But there's a lot of concern that this may strip USAID of 
decisionmaking authority over what little remains of its 
budget. What is your response to that?
    Ambassador Tobias. That's not the case. In fact, as I have 
said to a number of people at USAID, what now happens is that 
the person who is the Administrator of USAID has a seat at the 
senior-most tables in the decisionmaking processes at the State 
Department that no Administrator has ever had before.
    Senator Leahy. Is that the most transformational part of 
it?
    Ambassador Tobias. No, but it's something that will help in 
the beginnings of bringing USAID's efforts in foreign 
assistance, and the Department of State's efforts in foreign 
assistance into sync so that we're moving forward together in a 
more strategically aligned way. We are beginning to make good 
progress as we put processes in place.
    Senator Leahy. What is the most transformational part of 
this initiative?
    Ambassador Tobias. Well, the first thing that we've done, 
Senator, is to take the USAID people who are engaged in policy 
planning, budgeting, and monitoring and evaluation of programs 
and the people in the State Department who have been engaged in 
those same functions, and put them together into an integrated 
staff. They have all focused on foreign assistance, but they've 
been operating totally separately--they haven't even been on 
the same planning calendars. As we go forward, our intent is 
not to have a USAID budget or a State Department budget, but a 
Foreign Assistance budget that will make all of it more 
coherent in a way that I think all of us can better understand. 
I think you're going to be in a better position to make your 
decisions.
    Senator Leahy. Well, we'll be anxious to see what is done 
with the budget and how it will be structured. I would hope 
that there would be discussion with us as that goes along.

               STRATEGIC FRAMEWORK FOR FOREIGN ASSISTANCE

    In your statement, you speak of your strategic framework 
for foreign assistance. Let me make sure I have this right. You 
have five objectives: achieving and maintaining peace and 
security; helping improve governance and democratic 
participation; contributing to, and promoting, investments in 
people; helping to engender economic growth; responding to 
humanitarian disasters. What is new here? What is USAID doing 
today that does not already fit into one of these five 
objectives?
    Ambassador Tobias. I don't know that there is, but at USAID 
today there are 1,400 strategic objectives. We need to bring 
focus and coherence to the way in which we are doing these 
programs so that we are looking at them on a country-by-country 
basis across all of the programs, so we can get a total picture 
of what are the objectives we're trying to achieve on the 
ground.
    Senator Leahy. But you're not suggesting that one size 
would fit all?
    Ambassador Tobias. No, quite the contrary. To some degree 
there are 154 countries where we're currently doing some type 
of foreign assistance. I think there are buckets or categories 
that certain countries with similar characteristics will fit 
into that will have similar kinds of programs, and that's also 
a part of this framework. But we intend a process here where 
the Secretary is going to be able to provide specific guidance 
to the field, to each country, that will be very country 
specific.
    Senator Leahy. Well, I think you'll probably find a lot of 
those 1,400 objectives will be in many of those countries. I'm 
not suggesting it's not a wise thing to reexamine our strategic 
objectives and determine how to make them more relevant. I 
would not want to change simply for the sake of change. But no 
matter what you do, if you don't have the money, it's not going 
to make much difference. We spend a very small part of our 
budget on foreign aid, especially for a country that's our size 
and much less than a lot of other countries do as a percentage 
of their budgets.

                           FOREIGN AID BUDGET

    As you've talked about refocusing foreign aid, have your 
inter-agency discussions included a discussion of the need to 
significantly increase the budget for anything other than HIV/
AIDS and Millennium Challenge Corporation, or are we going to 
have cuts in next year's budget similar to cuts that we've had 
this year to many key USAID programs?
    Ambassador Tobias. The amount of foreign assistance, from 
the beginning of this administration to the present time, has 
almost tripled. It has been, obviously, the partnership of the 
administration and the Congress that has made that happen.
    Senator Leahy. Well, except that in this year's budget, the 
President cut global health programs by about 15 percent, $136 
million; and yet, one of the places we show the good face and 
generosity of our country has been in these programs. But 
that's been cut.
    Ambassador Tobias. But there's still significant money in 
those programs.
    Senator Leahy. Do you think there's enough?
    Ambassador Tobias. I don't think it's ever enough.
    Senator Leahy. Well, is $136 million less than last year's 
level enough?
    Ambassador Tobias. If there was more I could probably find 
a way to effectively spend it. But my real focus, at the 
moment, is to ensure that we are spending the money that we 
have as efficiently and as effectively as we possibly can. I 
don't believe we're doing that.
    Senator Leahy. Well, we've----
    Ambassador Tobias. I think we can generate some more funds 
by doing it all more efficiently.
    Senator Leahy. We've cut the contribution of the Global 
Fund to Fight AIDS, TB, and Malaria by $250 million. We spent 
almost twice that this week alone in Iraq. Actually it's $350 
million, if you count the additional $100 million taken out of 
the Labor, Health, and Human Services bill. In countries where 
USAID works, there are few doctors, and hospitals are often 
crumbling cement structures built in the 19th century. As 
someone who understands the crisis in public health, why would 
you cut these funds?
    If we are spending roughly a billion dollars or more a week 
in Iraq, and we want to win the hearts and minds of people, I 
might suggest to you that the work we do on Global Fund to 
Fight AIDS and global health is probably winning more hearts 
and minds. These global health programs are the faces of 
America that are most welcome around the world.
    Ambassador Tobias. We shouldn't lose sight of the size of 
the base in these programs. You mentioned HIV/AIDS. We're 
increasing the financial commitment to our very successful 
PEPFAR programs in order to meet the commitment that the 
President made at the beginning of that. That's been a very 
successful use of resources. We do need to support the Global 
Fund, but not at the expense of our bilateral programs.
    Senator Leahy. I understand, but at the same time the 
President's budget would cut family planning and reproductive 
health programs from $425 million to $357 million--an 18 
percent cut. By the President's statement, he said he knows 
that one of the best ways to prevent abortion is by providing 
quality, voluntary family-planning services. Yet, despite the 
administration's strong opposition to abortion, they want to 
cut a program that would primarily reduce unintended 
pregnancies and abortion and reduce child mortality. This 
defies logic.
    My time is up, but you know, I have a great deal of respect 
for your background and what you have done. I have no question 
in my mind of your commitment. I worry, as an American, that we 
have not just financial and security issues, but we have great 
moral issues to care about. Since we have so much more than 
most people, there's a certain moral obligation to give back. I 
look forward to sitting down and chatting about this.
    I appreciate having you here today.
    Ambassador Tobias. I'd be happy to do that, Senator.
    Senator McConnell. Thank you, Senator Leahy.
    Senator Brownback.
    Senator Brownback. Thank you, Mr. Chairman.
    Ambassador, welcome. Good to see you here.
    Ambassador Tobias. Thank you.
    Senator Brownback. Thank you for meeting with me on some of 
these topics previously. I also want to congratulate you on the 
announcement, I guess even just this morning, on inclusion of 
new countries in the President's Malaria Initiative--Malawi, 
Mozambique, Rwanda, and Senegal. I think that's an excellent 
move forward.
    I want to talk with you about a couple of idea areas that 
I'm curious about, and, you know, get your thoughts on them. It 
sounds like we're tracking on the same line on this. The last 
trip I took, with Senator Durbin, to--went to Congo, Rwanda, 
and Kenya--it was very striking to me the breadth of programs. 
It looked like, what you were saying, that we had 1,400 
different strategic initiatives, when you can only probably get 
a couple of these accomplished. In eastern Congo, where people 
are striving to just live, it seems like, to me, you've got a 
hierarchical set of needs, and you need to hit those first, 
that they need food, agriculture, they need water, they need 
healthcare and education, and you've--you get past that, that 
pretty much is going to eat up most of your efforts--and 
should, because that's what, you know, people need to survive, 
to start off with.
    I hope you can get this honed down to a few areas. We're 
working on a bill in my office to take the assistance programs 
to Africa and, in a blunt-instrument approach, just say, ``Half 
of this money has to go in one of these four areas, and it has 
to go for either commodities in these fields or training of 
people on the ground in those countries.'' As we saw in the 
malaria program, when we were studying that, that only 7 
percent of our malaria money--this is 2 years ago--was going 
for actual commodities of bed nets, sprays, or medicine, and 93 
percent was going for conferences and consultants and who knows 
what else. We had a hard time figuring out just what the money 
was going for. But the African leaders we met with said, ``We 
know what to do with malaria, we just don't have the money to 
do it with.'' The same with drilling a water well; you know, 
it's a pretty simple piece of equipment if you're not going too 
deep, not particularly sophisticated to operate, but they've 
got to have it. If they don't have it, there's not clean water 
in your--we may be behind the eight ball in a lot of places. 
So, I applaud that effort, and we're trying to do a similar 
bill to address those areas, in particular.
    I want to applaud your effort on AIDS. The President's 
initiative on HIV/AIDS is saving lives, and lots of them. 
That's one I hope the President and you are very proud of, 
because people are alive today because he went out on a limb to 
do that. I believe we're going to do the same with malaria.
    In suggestion areas, there's an emerging group of new NGOs 
and private groups that want to help out, particularly in the 
continent of Africa. I think there's a real opportunity here 
for you and your office to help point the way. Gates Foundation 
is doing beautiful work in the health field. I met with some 
people associated with another great company the other day that 
want to put significant money into Africa. I've heard of 
another group today. They're--you've got a great opportunity to 
help point people in the right direction and marry them with 
local NGOs. I would urge you to host a private donors summit, 
AID to host it, and to bring in some of these key new players. 
I think everybody knows the people that have been in the field 
for some period of time, and don't ignore 'em, because, you 
know, God bless 'em for the work they've done for years. But 
you've got a number of emerging new players that have 
significant new resources and new energy, and just a hosting, 
really, of a private donors conference, like we do public donor 
conferences for Iraq or Afghanistan, of these groups, and have 
your targets of, you know, ``Okay, one of our key targets is 
water-well drilling or orphans in Africa''--I think people 
would respond to it.
    If you could see fit--and you may not, on this one--but 
there's a burgeoning youth movement. There was 140 places 
across the United States, about a month ago, that walked on a 
night walk for the ``Invisible Children'' of northern Uganda. 
This is a college-student movement that a group of college 
students went over there, did a film, spread it around here, 
and then started chapters around the country. Then, I had a 
young man in my hometown last Sunday night sit down with me, 
saying, ``I want to go to northern Uganda and help these kids I 
just found out about.'' He's never left the United States. He 
may not have been out Kansas previously. But he'd like to help 
these kids in northern Uganda. I'm seeing a lot of that. I 
think there's a moment you can harvest, if you had a targeted 
set of programs of what young activists could be a part of. I 
don't know how you would do that. You've got great minds that 
could help out with that. I think you've got a great moment to 
be able to harvest some of those activities and marry 'em 
together, and you've got a left/right coalition that's coming 
together to sponsor that.
    Hope those are things you're looking at. I don't know if 
you could comment, for a minute or two, about that.
    Ambassador Tobias. Senator, I think those are wonderful 
ideas. As part of the malaria event that we had this morning 
that the First Lady hosted and that you referred to, we had a 
group of people from the private sector and foundation 
representatives who are interested in partnering with each 
other, and with the President's Malaria Initiative, to leverage 
what we're all doing together on the ground. When I was running 
the AIDS initiative, we started a New Partners fund where we 
set aside $200 million that was only available to organizations 
that have done less than $5 million with the Government on HIV/
AIDS work in the last 5 years in order to create an opportunity 
to bring new partners in. Part of that program is to train them 
and give them the skills to work their way through the 
contracting and procurement process with the Government.
    But there are other organizations out there. As you and I 
talked before, large churches, for example, have the resources 
and the wherewithal, but they don't know quite where to go.
    Senator Brownback. Don't know where to go. I----

                        FOREIGN AID COORDINATION

    Ambassador Tobias. I've got people working to create kind 
of a clearinghouse.
    Senator Brownback. If you've got the people on the ground I 
don't mean to butt in, but you've got people on the ground, and 
they've taken me to a number of just phenomenal facilities. You 
know, Dick Durbin----
    Ambassador Tobias. Right.
    Senator Brownback [continuing]. I went to an orphanage in 
Rwanda--600 kids in this orphanage--and they asked Dick and I--
we said--we asked, ``Can we help?'' And they said, ``Yeah, we 
need a cow.'' ``Okay,'' you know, ``we can help with that.'' 
But I was just thinking, your people knew about that, and if 
there was some clearinghouse you had here, and then somebody 
here that contacts a big church in Kentucky or Kansas, saying, 
``We've got this orphanage in eastern Rwanda, and 600 kids, 
and, frankly, they need help. Would you adopt them?''--I think 
these guys would jump all over it. Or a small corporation. Or a 
foundation. But you've got expertise on the ground that none of 
them have. If they could feed it here, and then you network 
with people here, it would be a--it would be a beautiful thing 
and really help people here who want to do that sort of thing. 
But you're probably the only clearinghouse possibility we've 
got, to do that.
    Ambassador Tobias. Frankly, I think part of what happens is 
that our people on the ground who have ideas like that, or 
people outside the Government who want to be involved, sort of 
look at the bureaucratic challenges, and they sort of give up. 
Part of what we have to do--and I think we can--is to get past 
that and make it easy, or make it sufficiently easy, for 
organizations to find the front door, to find the right place 
here, to get the information that we--that we can have, and----
    Senator McConnell. May I----
    Ambassador Tobias [continuing]. Put them in touch.
    Senator McConnell [continuing]. Interject on that point? 
Senator Brownback is right on the mark. I run into that all the 
time----
    Ambassador Tobias. Yeah.
    Senator McConnell [continuing]. Particularly with churches, 
who have both the interest and the wherewithal to help, but 
limited experience with Government bureaucracy. I think Senator 
Brownback is really onto something in suggesting that if you 
could harness those interested groups and people, you could 
magnify your impact exponentially.
    Ambassador Tobias. It also has the impact of building 
greater grassroots support among the American people for----
    Senator Brownback. Right.
    Ambassador Tobias [continuing]. Our whole foreign 
assistance program----
    Senator Brownback. Yeah.
    Ambassador Tobias [continuing]. And understanding why 
America needs to do what we're doing. I do, I think it's a 
wonderful idea, and----
    Senator Brownback. Well, if you could----
    Ambassador Tobias [continuing]. We'll pursue all these 
things.
    Senator Brownback. If there's any way I can help out with 
that, I'd love to do it, because----
    Ambassador Tobias. Thank you.
    Senator Brownback [continuing]. You know, we think we're 
going to have, what, 20 million AIDS orphans in Africa, and 
I've been to some of these places, and it's just enormous. It 
looks like, to me, what you're going to end up with is a lot of 
these children matriculating to towns, and then they're going 
to get trafficked or involved in crime or whatever, because 
their village structure is blown up and it's not just not going 
to happen, and the sooner we can get people to hook into there 
and help--and they would, but they need--they need your door--
--
    Ambassador Tobias. Right.
    Senator Brownback [continuing]. That you could do that.
    Then, finally--I'm past my time, but if you could 
personally host some of these corporate chieftans, and maybe 
just go to meet with them, with the CEO of Pfizer, others, and 
just say, ``Hey, you know, there's a great thing you can do 
here, and I've got a specific project for you.'' It may not be 
something they are interested in, but some of these guys that 
I've met with, they'd really like to help, and--but you've got 
to--I think, frankly, too, you've got to get 'em on the ground 
there to do that.
    Mr. Chairman, thank you very much.
    Senator McConnell. Senator Brownback, I have a meeting I'm 
going to have to make, but would you like to continue--if the 
Ambassador has a little more time--and then wrap the hearing 
up?
    Senator Brownback. Good. If you wouldn't mind, I'd 
appreciate that.
    Senator McConnell. Thank you very much for being here, Mr. 
Ambassador.
    Ambassador Tobias. Thank you, Mr. Chairman.
    Senator McConnell. You're doing a wonderful job, and we're 
proud of you.
    Ambassador Tobias. Thank you very much.
    Senator Brownback [presiding]. Mr. Ambassador--I don't mean 
to drive you overtime, but we've got you here--have you thought 
about that, a meeting with some of these business leaders? 
You've come and been in that environment, and personally taking 
some to some of these places that you would host 'em?
    Ambassador Tobias. Yes. Back in 2003, when I first came 
onboard as the AIDS Coordinator, then-Secretary Thompson of HHS 
had organized a trip to Africa that included a number of 
business leaders that I thought that was very successful. Many 
of them got very motivated. The problem was, at that point in 
time we weren't really in a position to say, ``Okay, now that 
we've got your interest, here's how we can harness that. Here's 
what you can do.'' We do have a program in USAID that is 
specifically focused on trying to find partnerships with the 
private sector. One of the most successful that has come to my 
attention recently is a program where we spent about $10 
million over 5 years in Rwanda helping about 40,000 farmers who 
were engaged in growing coffee, but hadn't really been growing 
it in a commercial way. They were helped to do a better job of 
cultivating and sorting and cooperatives were formed. The 
bottom line is that there are now 4,000 Starbucks stores in the 
United States that are carrying a premium brand of Rwandan 
coffee that came out of that project. USAID is out of the 
picture.
    That's what development is all about. There are skills that 
the private sector, in this case, Starbucks, can bring to bear 
in a whole variety of ways. I agree with you, having been a 
CEO, that there are ways in which we can harness that expertise 
and skill.
    Senator Brownback. Or even contacting 'em, saying, if 
they're interested in going on their own, which I think a lot 
of 'em would want to--say, ``You know, I've got the wherewithal 
myself to go. It'll be a time issue,'' but that if you can make 
it easy for them to see some of these front-line orphanages, 
healthcare clinics, I think----
    Ambassador Tobias. Right.
    Senator Brownback [continuing]. People, once they see it, 
they're just dramatically different. I think that's what 
happened to Bill and Melinda Gates when they went to 
Mozambique.
    Ambassador Tobias. I think it's a very under-utilized 
resource, and we should not only be encouraging the private 
sector on what it can do on its own, but ways in which we can 
partner. I saw a program in Africa a couple of years ago in the 
AIDS prevention area for young people, where Coca-Cola was 
loaning marketing people, the same marketing people who do 
focus groups and test marketing. They were testing prevention 
messages in the same way they would market a new soft drink to 
determine what are young people really going to pay attention 
to, what are they really going to hear? Those are the kinds of 
things that historically have been done mostly by public health 
professionals rather than marketing professionals. I think 
there are a variety of ways in which we can bring those 
resources together, and it is something I intend to pursue.
    Senator Brownback. Good, because I just--there's a real 
interesting moment right now that there's a lot of energy to do 
this, left and right, young and older. I think as we engage 
those in these difficult situations, if we'll engage the poor, 
they'll save our souls in the process, because----
    Ambassador Tobias. Yeah.
    Senator Brownback [continuing]. We get changed in the 
process, because we get changed doing it, and it's a----
    Ambassador Tobias. Right.
    Senator Brownback [continuing]. It's just been beautiful, 
what I've seen, thus far.
    I want to thank you and congratulate you. We will--as I 
say, we're working on a particular bill, and we'll be working 
with your office about that, because sounds as--like, from what 
you've described, that we're on some of the same track.
    I do hope, as a final thought and point, that, on the 
water-well drilling, in particular--I've worked with groups on 
drilling water wells that--they say they're not getting the 
support out of your office that has been funded by the 
Congress. I've sent a letter on this, and I know this is one of 
the strategic initiatives that's needed, because the AIDS 
money, it doesn't go as far if you don't have clean water and 
good food--or it does--isn't as effective if a person's 
drinking bad water. Same with malaria. It just weakens the 
system. There are quite a few groups out there willing to drill 
private water wells, and I think they--we can extend our money 
through them a lot of times, that they'll match it, at least 
one to one, if not higher. I'm hopeful that's something you can 
look at on getting more water wells drilled in some of these 
parts of Africa, in particular.
    Ambassador Tobias. The quest for water is what consumes 
most of the day for people--going someplace to get clean water 
and carrying it long distances. Access to clean water has to be 
a high priority.
    Senator Brownback. Good. Thank you very much. Godspeed.
    Mr. Ambassador, appreciate it. Appreciate the thoughts that 
you've shared here today.
    Ambassador Tobias. Thank you, Senator.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Brownback. There will be some additional questions 
which will be submitted for your response in the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Agency for response subsequent to the 
hearing:]

             Questions Submitted by Senator Mitch McConnell

                       FOREIGN ASSISTANCE REFORM

    Question. What do you see as Congress's role in foreign assistance 
matters, generally, and with respect to foreign assistance reform, 
specifically?
    Answer. Congress' role is essential to the success of our foreign 
assistance programs and, specifically, foreign assistance reform. I 
support the checks and balances system of our government that allows 
the executive branch to present a budget to Congress and for Congress 
to use its best judgment to direct how that money should be spent. We 
need to do our part to present Congress with a well-justified budget 
that clearly lays out our proposal for the way foreign assistance 
dollars should be spent, and transparently outlines the tradeoffs 
associated with diverging from this proposal. Our former foreign 
assistance budgeting practices did not clearly lay out these tradeoffs, 
leaving Congress with only one option--to use the best information they 
had available to earmark funds.
    The budgeting practices I am establishing with this reform will 
provide Congress with more detailed, timely and accurate information. 
In doing so, Congress will be better positioned to make informed 
decisions about how their budgeting priorities fit into a comprehensive 
picture of U.S. Government foreign assistance. We haven't been able to 
do this before.
    I see the reform as a collaborative effort on the part of the 
executive and legislative branches.
    Question. There have been significant political changes in Central 
and South America over the years--best characterized as a lean to the 
left. For years, Congress has advocated increased assistance to 
countries in those regions, but the administration has not included 
significant increases in its annual budget request.
    In your opinion, what countries in the Western Hemisphere are most 
important to U.S. national security interests, what are those 
interests, and how is U.S. assistance used to further our security 
objectives?
    Please answer the same question with respect to Africa, East Asia, 
the Pacific, the Near East, Europe and Eurasia, and South Asia?
    Answer. U.S national security interests require that we seek to 
expand freedom, prosperity, energy security, peace and stability in the 
Europe and Eurasia region, not just to provide for our own security but 
to improve the security and prosperity of the world as a whole, with 
which our future is linked. To achieve our objectives, we use a range 
of diplomatic and assistance tools in cooperation with our partners and 
other donors, and we also seek to empower and strengthen the 
capabilities of key multilateral institutions like NATO the OSCE, and 
OECD, and to strengthen the U.S.-EU relationship.
    In Southeast Europe, the United States continues to have a 
compelling national interest in helping break the circle of violence 
that plagued the countries of Southeast Europe in the 1990s and support 
their path to Euro-Atlantic integration. Our top priorities for the 
Balkans are to reach a settlement this year on Kosovo's future status 
without isolating Serbia, to help Serbia become stable and democratic, 
and to ensure the success of Bosnia and Herzegovina's efforts to build 
a more integrated modern state that will be able to function without 
strong international supervision. To achieve our objectives, U.S. 
assistance focuses on promoting democratic development and a viable 
market economy that offers opportunities to all, and putting the region 
firmly on the path of integration with Euro-Atlantic institutions.
    Also highly important to maintaining stability and promoting growth 
and democracy in the region is U.S. assistance to Macedonia, Albania, 
and the newly independent Montenegro. U.S. assistance is helping to 
achieve U.S. objectives by increasing local level stability through 
community development activities, supporting tolerance and multi-ethnic 
democratic pluralism, and promoting market-driven economic growth.
    U.S. interests also extend to Bulgaria, Romania, and Croatia. More 
than a decade of U.S. assistance has facilitated progress in the 
economic, democratic and social sectors, although shortcomings remain 
in some areas. Bulgaria and Romania are in the final stages of 
qualification for EU membership, and Croatia is in consultations with 
the EU on its future accession.
    In Eurasia, U.S. interests and assistance focus on supporting the 
sovereignty of post-Soviet states, as well as their democratic 
development, economic growth and energy security. Where possible, such 
as in Ukraine and Georgia, Euro-Atlantic integration is also a 
principal U.S. objective. Armenia and Georgia have achieved enough 
progress in their transition to have concluded compacts for Millennium 
Challenge Corporation assistance, while Ukraine, Moldova, and 
Kyrgyzstan are MCC threshold candidates. In Central Asia, U.S. 
assistance also aims to ease pressures stoking Islamic extremism. In 
the South Caucasus region, U.S. efforts are helping to foster stability 
and democratic practices. Regional conflicts threaten regional security 
and impede the full democratic and economic development of the South 
Caucasus and Black Sea region. The United States is working to promote 
just, lasting, and peaceful resolutions to the separatist conflicts in 
Abkhazia, South Ossetia, Nagorno-Karabakh, and Transnistria. U.S. 
efforts also seek to mitigate ongoing conflict in Chechnya and the 
North Caucasus. Throughout Eurasia we are continuing intensive counter 
narcotics efforts, as well as the fight against the epidemics of HIV/
AIDS and multiple drug resistant tuberculosis. In addition, our 
assistance programs address cross-border threats from terrorism, 
weapons of mass destruction proliferation, trafficking in persons and 
narcotics, and other criminal activity.
    The United States is interested in ensuring that Central Asia does 
not produce another Afghanistan and continues to provide its critical 
support to the Global war on terrorism. Repression, corruption, poverty 
and isolation make the region a breeding ground for terrorism and 
extremist ideologies. Through our assistance, we are working to 
mitigate those conditions by supporting nascent democratic development, 
ensuring successful economic reform, enhancing border security, and 
furthering regional integration in trade and energy.
    In Belarus and Uzbekistan, the United States supports the 
democratic aspirations of the people, with a focus on increasing access 
to information and supporting the growth and capacity of civil society 
groups and independent political parties.
    U.S. relations with Russia, of course, are highly important, with 
elements of cooperation as well as areas of disagreement. We remain 
actively and constructively engaged bilaterally, regionally and 
multilaterally on key issues from counterterrorism to stopping 
trafficking in persons. We work together to cut off terrorist 
financing, share law enforcement information, improve transportation 
security, and prevent proliferation of weapons of mass destruction. We 
are actively assisting with recovery and development in the North 
Caucasus region. As Co-Chairs of the OSCE's Minsk Group, we cooperate 
closely with Russia to promote a peaceful resolution of the Nagorno-
Karabakh conflict. We also urge Russia to cooperate constructively on 
peaceful resolutions of the Abkhazia, South Ossetia, and Transnistria 
conflicts that respect the territorial integrity of Georgia and Moldova 
within their internationally recognized borders. We encourage Russia to 
support reforms in Belarus and Uzbekistan, whose leaders have set these 
countries on courses of repression. The United States works with our 
NATO Allies and the EU to continue to urge Russia to fulfill remaining 
Istanbul commitments relating to withdrawal of its military forces from 
Georgia and Moldova. Fulfillment of the Istanbul commitments is a 
prerequisite for the United States to move forward with ratification of 
the adapted CFE Treaty.
    We are concerned about democratic backsliding in Russia. Russia's 
new NGO law, which went into effect in mid-April, is a particular 
object of our attention. The United States worked closely with our 
European and G-8 allies to communicate our concerns about this 
legislation while it was still under Duma consideration. We believe 
this law will chill and deter independent civil society in Russia. We 
have pledged, together with our European allies, to closely monitor the 
law's impact on civil society. Our assistance programs will continue to 
support NGOs and activists working to promote democracy in Russia.

                AUTHORITY OVER OTHER GOVERNMENT AGENCIES

    Question. As Director of Foreign Assistance, do you have authority 
over foreign assistance activities run by other government agencies--
such as Treasury, CDC, and the MCC?
    Answer. As Director of Foreign Assistance, I maintain authority 
over foreign assistance funds allocated to the State Department and 
USAID, which include approximately 80 percent of the foreign assistance 
dollars appropriated by Congress. I will serve in a coordinating role 
for all foreign assistance, including that delivered through other 
agencies and entities of the U.S. Government.

                     DIRECTOR OF FOREIGN ASSISTANCE

    Question. How has the new position of Director of Foreign 
Assistance been received by the various bureaus at State and USAID--
have you been welcomed, or are you seen as threat?
    Answer. My new position as Director of Foreign Assistance has been 
embraced by various bureaus at State and USAID. As expected with any 
proposed change to status quo, there are those who would prefer the old 
way of doing things. Those bureaus in support of the change recognize 
the need to reform the way we plan, implement and measure the impact of 
our foreign assistance resources to be more coherent and strategic.

                   CONGRESSIONAL BUDGET JUSTIFICATION

    Question. Have you had an opportunity to review the budget 
justification materials that the Committee receives each fiscal year, 
and if so, do you find them adequate? Are you contemplating any changes 
to these materials for the fiscal year 2008 request, or in the account 
structure of the budget request?
    Answer. Our fiscal year 2008 budget justification to Congress will 
differ markedly from previous justification materials. For fiscal year 
2008, USAID and State will present one united budget justification that 
will include all foreign assistance funds and USAID operating expenses. 
In the near future, my staff will be consulting with appropriations 
staff to review our proposal for justification material. At this time 
we are not proposing changes to the account structure for fiscal year 
2008. As the reform process evolves, if we encounter a need to 
recommend changes to account structure, we will work closely with your 
staff to explain the benefit of proposed changes.

                       TRANSFORMATIONAL DIPLOMACY

    Question. What is your definition of ``transformational diplomacy'' 
and how does the fiscal year 2007 budget request support this concept?
    Answer. ``Transformational diplomacy'' is defined by the Secretary 
as, ``To work with our many partners around the world to build and 
sustain democratic, well governed states that will respond to the needs 
of their people and conduct themselves responsibly in the international 
system.'' The fiscal year 2007 budget request aims to provide 
assistance to our partners to continue economic growth, support 
democracy, and expand individual opportunity.

                          REGIONAL PRIORITIES

    Question. There have been significant political changes in Central 
and South America over the years--best characterized as a lean to the 
left. For years, Congress has advocated increased assistance to 
countries in those regions, but the Administration has not included 
significant increases in its annual budget request.
    In your opinion, what countries in the Western Hemisphere are most 
important to U.S. national security interests, what are those 
interests, and how is U.S. assistance used to further our security 
objectives?
    Answer. The Western Hemisphere region as a whole is vital to U.S. 
national security interests. Those interests include U.S. efforts to 
defeat terrorism, to promote freedom, to fight the war on illegal drugs 
and to develop strong trading relationships. Allow me to highlight our 
assistance programs in five key Western Hemisphere nations: Bolivia, 
Colombia, Haiti, Nicaragua and Venezuela.
  --Bolivia.--Evo Morales and his Movement toward Socialism (MAS) party 
        have continued to waver on its commitment to free market 
        economic policy, pluralist democracy, and counternarcotics--key 
        U.S. national security interests. Among other activities, the 
        U.S. Government is focusing assistance to Bolivia on programs 
        that strengthen vibrant and effective democracies, including 
        the support of counterweights to one-party control such as 
        judicial and media independence, a strong civil society, and 
        educated local and state level leaders.
  --Colombia.--The key U.S. national security interest in Colombia is 
        to reduce the production and flow of illicit drugs to the 
        United States. The U.S. Government's alternative development 
        program creates an environment for sustainable and equitable 
        economic growth to create permanent licit alternative income-
        generating opportunities in areas vulnerable to drug production 
        and trafficking. The program stimulates increased private 
        investment and creates the policy and institutional conditions 
        required to sustain and accelerate private investment-based job 
        and income creation. U.S. assistance also encompasses 
        strengthening democratic institutions, expanding access to 
        justice and the rule of law, anti-corruption and the promotion 
        of human rights.
  --Haiti.--The installation of Rene Preval's administration marks the 
        resumption of constitutional governance in Haiti. The U.S. 
        Government is committed to working with the new government of 
        Haiti to help build a stable and well-governed state that is 
        responsive to the needs of its people. Mindful of the need for 
        economic development, the United States is supporting the 
        provision of short-term emergency jobs while helping create the 
        conditions for longer term growth and improved health and 
        education services. We will work with the newly elected Haitian 
        Parliament to strengthen institutional capacity and encourage 
        participatory democracy as a counterbalance to centralized 
        patronage politics. In the critical rule of law sector, our 
        focus will be to reform the justice system and improve access 
        to justice.
  --Nicaragua.--The highest priority in Nicaragua for the United States 
        is ensuring free and fair elections. Elections will be held on 
        November 5, 2006 for president, vice president, members of the 
        National Assembly and delegates to the Central American 
        Parliament. There is a continuing lack of public confidence in 
        the Supreme Electoral Council's handling of the electoral 
        process and in whether or not presidential elections will be 
        handled impartially. In coordination with a variety of 
        international donors and organizations--including the 
        Organization of American States and local nongovernmental 
        organizations--U.S. assistance provides support for voter 
        education activities, updating voter registries, delivering 
        voter identification cards, and domestic and international 
        election observers. U.S. funding is also helping to establish 
        mediation centers nationwide to help alleviate congestion in 
        the court system, improve access to justice, and enhance public 
        confidence in the justice system.
  --Venezuela.--The dismantling of democratic institutions by President 
        Hugo Chavez and increased control by the Venezuelan executive 
        branch over the country's five branches of government threatens 
        the continuation of representative democracy in Venezuela, a 
        key U.S. national security interest. Presidential elections 
        will take place in December 2006, and opposition groups have 
        raised serious concerns over the fairness and transparency of 
        the government-controlled electoral process. The U.S. 
        Government's work in Venezuela is handled through the Office of 
        Transition Initiatives. The objectives are to provide 
        assistance to strengthen and reinvigorate independent 
        democratic voices and reverse democratic backsliding by 
        enhancing civil society dialogue, supporting constitutional 
        processes, and strengthening democratic institutions.

             COUNTRIES MOST IMPORTANT TO THE U.S. IN AFRICA

    Question. In your opinion, what countries in Africa are most 
important to U.S. national security interests, what are those 
interests, and how is U.S. assistance used to further our security 
objectives?
    Answer. The Africa region as a whole is vital to U.S. national 
security interests. Key areas of critical importance throughout the 
continent include counter-terrorism and the implications of extractive 
industries; establishing peace and security; and cross-cutting issues 
of governance, gender, the impact of HIV/AIDS, urbanization and youth. 
Allow me to highlight our assistance programs in Somalia, Ethiopia, 
Eritrea, Sudan, Nigeria, and Liberia.
    The U.S. Government (USG) interests in Sudan are of both a security 
and humanitarian nature. Our goals in Sudan are to successfully 
implement the Comprehensive Peace Agreement, ending the crisis in 
Darfur and integrating all Sudanese regions into the Government of 
National Unity. Our assistance focuses on the displaced populations in 
Darfur, as well as on vulnerable populations in other regions of the 
country. We support resettlement activities for refugees and displaced 
persons and promote activities to protect civilians, especially the 
prevention of violence against women. Looking to the longer term, we 
are also raising local capacity to increase livelihood opportunities 
and strengthen community resilience and local economies.
    Liberia is a cornerstone in our strategy to promote regional 
stability and to inhibit the activities of illegal traffickers and 
terrorists in West Africa. After the signing of the Peace Agreement, 
the USG played a leading role in helping Liberia maintain the peace and 
begin the national reconstruction and rehabilitation process. In 
November 2005, Ellen Johnson Sirleaf was elected as Africa's first 
woman head of state in an election deemed free and fair by the 
international community. Current U.S. assistance is focused on 
solidifying the transition process by enhancing democratic governance, 
supporting agriculture and livelihoods, ensuring stability and security 
by taking the lead in reforming the armed forces and police, 
reintegrating refugees and Internally Displaced Persons, infrastructure 
development, and supporting the provision of essential social services.
    The Horn of Africa, Somalia in particular, is critical to U.S. 
national security interests, given the potential for harboring and 
spreading extremism. U.S. assistance helps reduce poverty and related 
lack of access to social services (education in particular) to help 
lift people out of despair and provide options to extremism. It also 
helps stabilize and strengthen governance institutions that allow for 
peaceful resolution of domestic and regional problems. We are also 
providing food assistance to avert famine and building the region's 
long-term capacity to ensure food security.
    In Nigeria, our interests are to fight corruption, counter 
increasing Islamic radicalization, and ensure stability in the energy 
sector. The USG is working with the Government of Nigeria to strengthen 
its governance institutions and reestablish military-to-military 
relationships. We are building partnerships to counter terrorist 
organizations, implementing recommendations to stabilize the energy 
sector, and working to expand formal financial systems. Our assistance 
is also being used to promote U.S. private sector involvement in the 
key sectors of agriculture and aviation to stimulate economic growth 
and trade.

                              GLOBAL FUND

    Question. If you can put your AIDS Coordinator hat back on for a 
moment, what level of funding is appropriate for the Global Fund in 
fiscal year 2007?
    Answer. The U.S. Government [USG] is by far the largest contributor 
to the fight against global HIV/AIDS. In fiscal year 2004, the USG 
provided approximately one-half of the world's commitment to 
international HIV/AIDS support. The U.S. Government has dramatically 
increased its commitment in fiscal years 2005 and 2006, while the rest 
of the world, so far, has not. With the $4 billion request for fiscal 
year 2007, the disproportion between the U.S. commitment and that of 
the rest of the world will likely continue to grow.
    Each country needs to find the right mix of bilateral and 
multilateral contributions to get the most immediate results from its 
investment. For the USG, the 20-year history of its bilateral programs 
means that these programs can move much faster in the focus countries 
than the Global Fund. Other governments have made similar 
determinations to invest heavily in bilateral efforts rather than 
multilateral options.
    The Global Fund remains an important part of the Emergency Plan 
strategy, and the U.S. Government remains by far its largest single 
contributor of funds. The Emergency Plan originally anticipated 
allocating $1 billion to the Global Fund over five years. However, we 
are now on track to provide over $2 billion to the Fund in just the 
first three years of the Emergency Plan, through fiscal year 2006. The 
President's fiscal year 2007 request for focus country bilateral AIDS 
programs funding--$2.717 billion within Foreign Operations and $2.776 
total--is, in part, an attempt to recover from the effects of the 
redirection of almost $527 million from focus country programs to the 
Global Fund and other components of the Emergency Plan over PEPFAR's 
first three years. If focus country budgets are not fully funded again 
in fiscal year 2007, the capacity needed for a dramatic expansion of 
services in fiscal year 2008 will not be possible--and no increase in 
fiscal year 2008 spending could undo this setback. Without the fiscal 
year 2007 level of funding for the focus countries, it will not be 
possible to meet the 2-7-10 goals of the Emergency Plan--especially the 
goal of supporting treatment for 2 million.
    If the Global Fund maintains its core mission and a model that 
Congress supports, and as the Fund's performance improves in the years 
to come, there will be opportunities to reassess the level of U.S. 
Government funding for it. For fiscal year 2007, however, it is crucial 
that the USG continue to concentrate its resources on focus country 
programs.

                               DEMOCRACY

    Question. What is the total funding level for democracy, governance 
and rule of law programs in the budget request?
    Answer. The USAID request for funding for democracy, governance and 
rule of law programs for fiscal year 2007 is $856,175,000 (including 
DA, ESF, SEED and FSA).

  FISCAL YEAR 2007 PRESIDENT'S BUDGET SUMMARY BY ACCOUNT FOR DEMOCRACY,
                      GOVERNANCE & HUMAN RIGHTS \1\
                        [In millions of dollars]
------------------------------------------------------------------------
                                                       Fiscal year
                                               -------------------------
                    Account                         2006         2007
                                                  estimate     request
------------------------------------------------------------------------
Foreign Operations............................      1,281.1      1,573.4
    Development Assistance....................        190.1        168.6
    Economic Support Fund.....................        655.7        756.3
        USAID-implemented Programs............        422.4        502.4
        State Department/Global Programs......        233.4        253.8
            MEPI..............................         99.0        120.0
            Iraq..............................         55.4         87.3
            South Asia Regional...............          1.0          2.0
            EAP Women's Issues................          1.0          1.0
            Laos..............................  ...........          0.3
            House Democracy Assistance Program          1.0  ...........
            Trafficking in Persons............         11.9          8.5
            UNHCHR Nepal......................          1.5  ...........
            Human Rights & Democracy Fund              62.6         35.0
             Program (DRL) \2\................
    Assistance for E. Europe & Baltics (SEED).        114.5         78.2
        State Department Programs.............         37.2         22.8
        USAID-implemented Programs............         77.3         55.4
    Freedom Support Act.......................        165.4        140.3
        State Department Programs.............         40.9         32.1
        USAID-implemented Programs............        124.5        108.2
    Democracy Fund (excluding UNDEF and HRDF).         23.6  ...........
        National Endowment for Democracy......         15.1  ...........
        Country Programs......................          8.5  ...........
    Inter-American Foundation: Local                    5.2          6.2
     Governance & Democracy...................
    INCLE.....................................         50.4        322.8
        Women's Justice Empowerment Initiative  ...........          9.5
        Trafficking in Persons................          5.0          7.0
        Administration of Justice/Rule of Law/         45.5        306.3
         Anti-corruption......................
    Andean Counterdrug Initiative.............         64.2         62.7
        Administration of Justice/Rule of Law/         29.0         27.9
         Anti-corruption......................
        USAID.................................         35.2         34.8
    IO&P......................................         11.9         38.4
        U.N. Democracy Fund \2\...............          7.9         10.0
        OAS Fund for Strengthening Democracy..          2.5          2.5
        U.N. Voluntary Fund for Technical               1.5          1.5
         Cooperation in the Field of Human
         Rights...............................
        UNDP Democratic Governance Thematic     ...........         24.5
         Trust Fund...........................
State Operations..............................         74.4         77.7
    Related Appropriations....................         74.4         77.7
        The Asia Foundation \3\...............          8.5          6.5
        National Endowment for Democracy \4\..         65.9         71.2
                                               -------------------------
          GRAND TOTAL.........................      1,355.5     1,651.1
------------------------------------------------------------------------
\1\ This table excludes: (1) funding for programs that support victims
  of war and victims of torture that is sometimes categorized as ``human
  rights''; (2) funding categorized as ``conflict management'',
  including all Transition Initiatives (TI) funds, some DA and ESF
  funding, and USG support for the U.S. Institute of Peace; (3) funding
  for educational and cultural exchanges and public diplomacy programs
  funded through State Operations that promote democracy.
\2\ Fiscal year 2006 funds were appropriated in the Democracy Fund.
\3\ Excludes portions of budget that are used for operating expenses and
  non-democracy grant programs.
\4\ Excludes portion of budget that is used for operating expenses.

                                                                             TAB 1.--USAID DEMOCRACY AND GOVERNANCE
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                  Fiscal year
                                                                             -------------------------------------------------------------------------------------------------------------------
                                                                                                    2006 estimate                                          2007 budget request
               Operating unit                     Appropriation  code        -------------------------------------------------------------------------------------------------------------------
                                                                                                                            Democracy                                                 Democracy
                                                                               Rule  of  Political    Civil    Governance      and       Rule  of  Political    Civil    Governance      and
                                                                                 law       process   society                governance     law       process   society                governance
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Africa:
    Africa Regional.........................  DA............................      3,550        288      3,166       6,590       13,594        288      1,368      2,734       5,962       10,352
                                              ESF...........................  .........  .........      4,000       4,613        8,613  .........  .........      9,000       9,250       18,250
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Africa Regional Total.................  ..............................      3,550        288      7,166      11,203       22,207        288      1,368     11,734      15,212       28,602

    Angola..................................  DA............................  .........  .........        550         500        1,050  .........  .........      2,482       1,586        4,068
                                              ESF...........................        250      1,850        270  ..........        2,370        200      1,500        200  ..........        1,900
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Angola Total..........................  ..............................        250      1,850        820         500        3,420        200      1,500      2,682       1,586        5,968

    Benin...................................  DA............................  .........  .........        400  ..........          400  .........  .........        400  ..........          400
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Benin Total...........................  ..............................  .........  .........        400  ..........          400  .........  .........        400  ..........          400

    Burundi.................................  DA............................  .........         99        288         393          780  .........        223        220         350          793
                                              ESF...........................  .........        611      1,200       1,200        3,011  .........        250      1,000         750        2,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Burundi Total.........................  ..............................  .........        710      1,488       1,593        3,791  .........        473      1,220       1,100        2,793

    Democratic Republic of the Congo........  DA............................  .........      1,316      1,000  ..........        2,316      1,000  .........      1,356       1,000        3,356
                                              ESF...........................      1,000  .........      1,950       2,000        4,950      1,000  .........      1,000       3,000        5,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
Democratic Republic of the Congo Total......  ..............................      1,000      1,316      2,950       2,000        7,266      2,000  .........      2,356       4,000        8,356

    Ethiopia................................  DA............................        573  .........  .........       1,000        1,573        600  .........  .........       1,000        1,600
                                              ESF...........................        460  .........      1,000       1,000        2,460        500  .........      1,000       1,000        2,500
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Ethiopia Total........................  ..............................      1,033  .........      1,000       2,000        4,033      1,100  .........      1,000       2,000        4,100

    Ghana...................................  DA............................  .........  .........        292         200          492  .........  .........        250         250          500
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Ghana Total...........................  ..............................  .........  .........        292         200          492  .........  .........        250         250          500

    Guinea..................................  DA............................  .........  .........        569  ..........          569  .........  .........  .........         579          579
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Guinea Total..........................  ..............................  .........  .........        569  ..........          569  .........  .........  .........         579          579

    Kenya...................................  DA............................  .........  .........        400       1,475        1,875  .........  .........        500       1,402        1,902
                                              ESF...........................  .........      1,200      1,520         250        2,970  .........      1,200      1,805         250        3,255
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Kenya Total...........................  ..............................  .........      1,200      1,920       1,725        4,845  .........      1,200      2,305       1,652        5,157

    Liberia.................................  DA............................      1,000  .........  .........       2,684        3,684      1,447  .........      1,300       1,000        3,747
                                              ESF...........................        500  .........      5,000       8,000       13,500      6,000  .........  .........       7,500       13,500
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Liberia Total.........................  ..............................      1,500  .........      5,000      10,684       17,184      7,447  .........      1,300       8,500       17,247

    Madagascar..............................  DA............................  .........  .........        492         400          892  .........  .........  .........         400          400
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Madagascar Total......................  ..............................  .........  .........        492         400          892  .........  .........  .........         400          400

    Mali....................................  DA............................  .........        100        429         600        1,129  .........        100        448         600        1,148
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Mali Total............................  ..............................  .........        100        429         600        1,129  .........        100        448         600        1,148

    Mozambique..............................  DA............................  .........  .........  .........         992          992  .........  .........  .........       1,000        1,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Mozambique Total......................  ..............................  .........  .........  .........         992          992  .........  .........  .........       1,000        1,000

    Namibia.................................  DA............................  .........  .........        490         272          762  .........  .........        465         310          775
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Namibia Total.........................  ..............................  .........  .........        490         272          762  .........  .........        465         310          775

    Nigeria.................................  DA............................  .........        132      1,318       1,846        3,296     10,352  .........  .........  ..........       10,352
                                              ESF...........................  .........      4,950  .........  ..........        4,950  .........      5,000  .........  ..........        5,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Nigeria Total.........................  ..............................  .........      5,082      1,318       1,846        8,246     10,352      5,000  .........  ..........       15,352

    REDSO-ESA...............................  DA............................  .........  .........        836       1,000        1,836  .........  .........        867       1,000        1,867
                                              ESF...........................  .........        300        500  ..........          800  .........        200        800  ..........        1,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      REDSO-ESA Total.......................  ..............................  .........        300      1,336       1,000        2,636  .........        200      1,667       1,000        2,867

    Regional Center for Southern Africa.....  DA............................  .........        500        483  ..........          983  .........      1,000        850  ..........        1,850
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Regional Center for Southern Africa     ..............................  .........        500        483  ..........          983  .........      1,000        850  ..........        1,850
       Total.

    Rwanda..................................  DA............................  .........  .........      1,000         629        1,629  .........  .........      1,000         648        1,648
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Rwanda Total..........................  ..............................  .........  .........      1,000         629        1,629  .........  .........      1,000         648        1,648

    Senegal.................................  DA............................  .........  .........        263         720          983  .........  .........  .........       1,000        1,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Senegal Total.........................  ..............................  .........  .........        263         720          983  .........  .........  .........       1,000        1,000

    Sierra Leone............................  DA............................  .........  .........  .........       2,041        2,041  .........  .........  .........       2,076        2,076
                                              ESF...........................  .........  .........  .........       5,940        5,940  .........        500        500       1,500        2,500
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Sierra Leone Total....................  ..............................  .........  .........  .........       7,981        7,981  .........        500        500       3,576        4,576

    Somalia.................................  DA............................  .........  .........      1,545  ..........        1,545  .........  .........      1,571  ..........        1,571
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Somalia Total.........................  ..............................  .........  .........      1,545  ..........        1,545  .........  .........      1,571  ..........        1,571

    South Africa............................  DA............................      2,178  .........      1,565       1,430        5,173  .........  .........      1,752       3,504        5,256
                                              ESF...........................      1,000  .........        287  ..........        1,287      1,300  .........  .........  ..........        1,300
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      South Africa Total....................  ..............................      3,178  .........      1,852       1,430        6,460      1,300  .........      1,752       3,504        6,556

    Sudan...................................  DA............................  .........      2,100      1,749         300        4,149  .........      2,100      1,749         300        4,149
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Sudan Total...........................  ..............................  .........      2,100      1,749         300        4,149  .........      2,100      1,749         300        4,149

    Tanzania................................  DA............................  .........  .........        264         800        1,064  .........  .........        310         764        1,074
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Tanzania Total........................  ..............................  .........  .........        264         800        1,064  .........  .........        310         764        1,074

    Uganda..................................  DA............................  .........      1,218        500         660        2,378  .........      1,000      1,419  ..........        2,419
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Uganda Total..........................  ..............................  .........      1,218        500         660        2,378  .........      1,000      1,419  ..........        2,419

    West African Regional Program (WARP)....  DA............................  .........  .........      4,280         600        4,880  .........  .........      6,354         600        6,954
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      West African Regional Program (WARP)    ..............................  .........  .........      4,280         600        4,880  .........  .........      6,354         600        6,954
       Total.

    Zambia..................................  DA............................  .........  .........        300         450          750  .........  .........        300         450          750
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Zambia Total..........................  ..............................  .........  .........        300         450          750  .........  .........        300         450          750

    Zimbabwe................................  DA............................  .........        376        500         500        1,376  .........  .........        700         700        1,400
                                              ESF...........................  .........        900        570       1,500        2,970  .........  .........      1,000       2,000        3,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Zimbabwe Total........................  ..............................  .........      1,276      1,070       2,000        4,346  .........  .........      1,700       2,700        4,400
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Africa Total..........................  ..............................     10,511     15,940     38,976      50,585      116,012     22,687     14,441     43,332      51,731      132,191
                                             ===================================================================================================================================================
Asia and Near East:
    Afghanistan.............................  DA............................      7,500  .........  .........      22,500       30,000     12,000      7,000  .........       6,000       25,000
                                              ESF...........................  .........      3,000      8,000      47,000       58,000  .........      3,000      9,000     124,000      136,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Afghanistan Total.....................  ..............................      7,500      3,000      8,000      69,500       88,000     12,000     10,000      9,000     130,000      161,000

    ANE Regional............................  DA............................  .........  .........  .........       2,028        2,028  .........  .........  .........       3,225        3,225
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      ANE Regional Total....................  ..............................  .........  .........  .........       2,028        2,028  .........  .........  .........       3,225        3,225

    Bangladesh..............................  DA............................      1,238  .........  .........       1,336        2,574  .........  .........  .........       1,550        1,550
                                              ESF...........................      1,000      2,000  .........       1,752        4,752      1,000      2,000  .........       2,000        5,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Bangladesh Total......................  ..............................      2,238      2,000  .........       3,088        7,326      1,000      2,000  .........       3,550        6,550

    Cambodia................................  DA............................  .........  .........  .........  ..........  ...........        237  .........  .........         673          910
                                              ESF...........................      6,113      3,485        817         960       11,375      4,595      4,160        975       2,770       12,500
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Cambodia Total........................  ..............................      6,113      3,485        817         960       11,375      4,832      4,160        975       3,443       13,410

    China...................................  DA............................      2,475  .........  .........  ..........        2,475  .........  .........  .........         733          733
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      China Total...........................  ..............................      2,475  .........  .........  ..........        2,475  .........  .........  .........         733          733

    East Timor..............................  ESF...........................      3,000  .........  .........       3,000        6,000      1,500      1,400  .........       1,100        4,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      East Timor Total......................  ..............................      3,000  .........  .........       3,000        6,000      1,500      1,400  .........       1,100        4,000

    Egypt...................................  ESF...........................     17,060      6,020     14,850      47,575       85,505     17,605      6,310     12,415      50,125       86,455
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Egypt Total...........................  ..............................     17,060      6,020     14,850      47,575       85,505     17,605      6,310     12,415      50,125       86,455

    India...................................  DA............................        326  .........  .........  ..........          326  .........  .........  .........  ..........  ...........
                                              ESF...........................        200  .........  .........  ..........          200  .........  .........  .........  ..........  ...........
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      India Total...........................  ..............................        526  .........  .........  ..........          526  .........  .........  .........  ..........  ...........

    Indonesia...............................  ESF...........................      5,200      7,000      3,400      14,850       30,450      1,975      3,464  .........      14,175       19,614
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Indonesia Total.......................  ..............................      5,200      7,000      3,400      14,850       30,450      1,975      3,464  .........      14,175       19,614

    Iraq....................................  ESF...........................  .........  .........  .........  ..........  ...........  .........  .........  .........      25,000       25,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Iraq Total............................  ..............................  .........  .........  .........  ..........  ...........  .........  .........  .........      25,000       25,000

    Jordan..................................  ESF...........................      3,000      3,000      5,000       3,000       14,000      3,000      2,000      4,000       3,000       12,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Jordan Total..........................  ..............................      3,000      3,000      5,000       3,000       14,000      3,000      2,000      4,000       3,000       12,000

    Lebanon.................................  ESF...........................  .........  .........      2,000       5,000        7,000      8,000  .........      1,000       1,000       10,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Lebanon Total.........................  ..............................  .........  .........      2,000       5,000        7,000      8,000  .........      1,000       1,000       10,000

    Mongolia................................  ESF...........................      2,000        100  .........         300        2,400      1,500  .........  .........         400        1,900
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Mongolia Total........................  ..............................      2,000        100  .........         300        2,400      1,500  .........  .........         400        1,900

    Morocco.................................  ESF...........................  .........      2,900        600       2,940        6,440  .........  .........      1,000       7,000        8,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Morocco Total.........................  ..............................  .........      2,900        600       2,940        6,440  .........  .........      1,000       7,000        8,000

    Nepal...................................  DA............................      1,485  .........  .........  ..........        1,485      1,500  .........  .........  ..........        1,500
                                              ESF...........................  .........        990  .........  ..........          990  .........      1,000  .........  ..........        1,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Nepal Total...........................  ..............................      1,485        990  .........  ..........        2,475      1,500      1,000  .........  ..........        2,500

    Pakistan................................  DA............................  .........  .........  .........       3,597        3,597  .........  .........  .........       3,000        3,000
                                              ESF...........................  .........     12,600  .........       7,400       20,000  .........      8,000  .........      19,000       27,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Pakistan Total........................  ..............................  .........     12,600  .........      10,997       23,597  .........      8,000  .........      22,000       30,000

    Philippines.............................  DA............................      1,000  .........  .........       1,000        2,000  .........        651  .........         250          901
                                              ESF...........................      3,000  .........      2,500       1,000        6,500      1,000        249  .........       6,500        7,749
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Philippines Total.....................  ..............................      4,000  .........      2,500       2,000        8,500      1,000        900  .........       6,750        8,650

    Regional Development Mission Asia (RDM-   DA............................  .........  .........        491  ..........          491  .........  .........        640  ..........          640
     Asia).
                                              ESF...........................  .........  .........      3,564  ..........        3,564  .........  .........      3,500  ..........        3,500
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Regional Development Mission Asia (RDM- ..............................  .........  .........      4,055  ..........        4,055  .........  .........      4,140  ..........        4,140
       Asia) Total.

    Sri Lanka...............................  DA............................  .........  .........      1,233  ..........        1,233  .........  .........  .........         750          750
                                              ESF...........................  .........  .........  .........       2,000        2,000  .........        250        250         800        1,300
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Sri Lanka Total.......................  ..............................  .........  .........      1,233       2,000        3,233  .........        250        250       1,550        2,050

    West Bank and Gaza \1\..................  ESF...........................     19,922      3,000      8,300       5,628       36,850      4,000  .........      6,000      15,500       25,500
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      West Bank and Gaza Total..............  ..............................     19,922      3,000      8,300       5,628       36,850      4,000  .........      6,000      15,500       25,500

    Yemen...................................  ESF...........................        644  .........        465  ..........        1,109        263  .........         50       1,685        1,998
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Yemen Total...........................  ..............................        644  .........        465  ..........        1,109        263  .........         50       1,685        1,998
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Asia and Near East Total..............  ..............................     75,163     44,095     51,220     172,866      343,344     58,175     39,484     38,830     290,236      426,725
                                             ===================================================================================================================================================
Europe and Eurasia:
    Albania.................................  AEEB..........................      1,200        500      2,127       2,100        5,927      1,000        300      1,554       1,935        4,789
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Albania Total.........................  ..............................      1,200        500      2,127       2,100        5,927      1,000        300      1,554       1,935        4,789

    Armenia.................................  FSA...........................        431      2,292      4,156       6,721       13,600        389        387      4,021       5,163        9,960
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Armenia Total.........................  ..............................        431      2,292      4,156       6,721       13,600        389        387      4,021       5,163        9,960

    Azerbaijan..............................  FSA...........................      1,143      1,885      4,335       1,486        8,849        672      1,422      4,040       1,000        7,134
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Azerbaijan Total......................  ..............................      1,143      1,885      4,335       1,486        8,849        672      1,422      4,040       1,000        7,134

    Belarus.................................  FSA...........................        414        970      3,732  ..........        5,116        390        906      4,641  ..........        5,937
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Belarus Total.........................  ..............................        414        970      3,732  ..........        5,116        390        906      4,641  ..........        5,937

    Bosnia and Herzegovina..................  AEEB..........................      3,500      1,700      3,230       4,206       12,636      2,450      1,600      2,300       3,002        9,352
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Bosnia and Herzegovina Total..........  ..............................      3,500      1,700      3,230       4,206       12,636      2,450      1,600      2,300       3,002        9,352

    Bulgaria................................  AEEB..........................      4,315  .........      1,104       3,446        8,865  .........  .........  .........  ..........  ...........
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Bulgaria Total........................  4,315.........................      1,104      3,446      8,865  ..........  ...........  .........  .........  .........

    Croatia.................................  AEEB..........................  .........  .........      2,125       3,711        5,836  .........  .........  .........  ..........  ...........
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Croatia Total.........................  ..............................  .........  .........      2,125       3,711        5,836  .........  .........  .........  ..........  ...........

    Eurasia Regional........................  FSA...........................        130         65        330          65          590        140         65        490          65          760
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Eurasia Regional Total................  ..............................        130         65        330          65          590        140         65        490          65          760

    Europe Regional.........................  AEEB..........................        265        108        704         118        1,195        216         95      1,104         103        1,518
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Europe Regional Total.................  ..............................        265        108        704         118        1,195        216         95      1,104         103        1,518

    Georgia.................................  FSA...........................      2,055        722        809       6,007        9,593      1,537        659        706       5,993        8,895
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Georgia Total.........................  ..............................      2,055        722        809       6,007        9,593      1,537        659        706       5,993        8,895

    Kazakhstan..............................  FSA...........................        856        397      3,864  ..........        5,117  .........  .........      4,238  ..........        4,238
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Kazakhstan Total......................  ..............................        856        397      3,864  ..........        5,117  .........  .........      4,238  ..........        4,238

    Kosovo..................................  AEEB..........................      5,575      2,175      3,575       2,730       14,055      6,297      1,925      2,646       5,150       16,018
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Kosovo Total..........................  ..............................      5,575      2,175      3,575       2,730       14,055      6,297      1,925      2,646       5,150       16,018

    Kyrgyzstan..............................  FSA...........................  .........  .........      2,644       1,800        4,444      1,000        200      3,180       1,676        6,056
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Kyrgyzstan Total......................  ..............................  .........  .........      2,644       1,800        4,444      1,000        200      3,180       1,676        6,056

    Macedonia...............................  AEEB..........................      2,687      1,612      1,931       3,996       10,226      2,615      1,000      1,807       2,546        7,968
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Macedonia Total.......................  ..............................      2,687      1,612      1,931       3,996       10,226      2,615      1,000      1,807       2,546        7,968

    Moldova.................................  FSA...........................      1,645      1,138      1,644       2,599        7,026      1,696      1,825      2,384         173        6,078
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Moldova Total.........................  ..............................      1,645      1,138      1,644       2,599        7,026      1,696      1,825      2,384         173        6,078

    Montenegro..............................  AEEB..........................      1,200        560      1,028  ..........        2,788        300  .........        600       1,250        2,150
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Montenegro Total......................  ..............................      1,200        560      1,028  ..........        2,788        300  .........        600       1,250        2,150

    Romania.................................  AEEB..........................        450      1,400      2,700         950        5,500  .........  .........  .........  ..........  ...........
      Romania Total.........................  ..............................        450      1,400      2,700         950        5,500  .........  .........  .........  ..........  ...........

    Russia..................................  FSA...........................      4,162      5,565     25,418       3,105       38,250      3,155      3,615     18,299       3,815       28,884
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Russia Total..........................  ..............................      4,162      5,565     25,418       3,105       38,250      3,155      3,615     18,299       3,815       28,884

    Serbia..................................  AEEB..........................      1,805      1,400      3,000       1,000        7,205      4,027      1,400      3,500       1,000        9,927
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Serbia Total..........................  ..............................      1,805      1,400      3,000       1,000        7,205      4,027      1,400      3,500       1,000        9,927

    Tajikistan..............................  FSA...........................  .........        350      2,100       1,636        4,086  .........  .........      2,554       1,692        4,246
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Tajikistan Total......................  ..............................  .........        350      2,100       1,636        4,086  .........  .........      2,554       1,692        4,246

    Turkmenistan............................  FSA...........................  .........  .........      1,090  ..........        1,090  .........  .........      1,100  ..........        1,100
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Turkmenistan Total....................  ..............................  .........  .........      1,090  ..........        1,090  .........  .........      1,100  ..........        1,100

    Ukraine.................................  FSA...........................      1,041      3,746      7,088       6,360       18,235      3,207      1,446      4,593       9,391       18,637
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Ukraine Total.........................  ..............................      1,041      3,746      7,088       6,360       18,235      3,207      1,446      4,593       9,391       18,637

    Uzbekistan..............................  FSA...........................        500  .........      2,710  ..........        3,210      1,002  .........      2,580  ..........        3,582
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Uzbekistan Total......................  ..............................        500  .........      2,710  ..........        3,210      1,002  .........      2,580  ..........        3,582
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Europe and Eurasia Total..............  ..............................     33,374     26,585     81,444      52,036      193,439     30,093     16,845     66,337      43,954      157,229
                                             ===================================================================================================================================================
Latin America and Caribbean:
    Bolivia.................................  ACI...........................      2,970  .........  .........         400        3,370      2,000  .........  .........  ..........        2,000
                                              DA............................  .........  .........  .........       2,574        2,574  .........  .........  .........       2,466        2,466
                                              ESF...........................  .........      1,000      1,356       1,109        3,465  .........      1,000      1,000       1,100        3,100
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Bolivia Total.........................  ..............................      2,970      1,000      1,356       4,083        9,409      2,000      1,000      1,000       3,566        7,566

    Caribbean Regional Program..............  ESF...........................  .........  .........  .........  ..........  ...........      1,000  .........  .........  ..........        1,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Caribbean Regional Program Total......  ..............................  .........  .........  .........  ..........  ...........      1,000  .........  .........  ..........        1,000

    Colombia................................  ACI...........................     13,750  .........      2,621       9,198       25,569     13,806  .........      2,694       8,522       25,022
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Colombia Total........................  ..............................     13,750  .........      2,621       9,198       25,569     13,806  .........      2,694       8,522       25,022

    Cuba....................................  ESF...........................  .........  .........      7,650  ..........        7,650  .........  .........      6,500  ..........        6,500
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Cuba Total............................  ..............................  .........  .........      7,650  ..........        7,650  .........  .........      6,500  ..........        6,500

    Dominican Republic......................  DA............................        280      1,350  .........         350        1,980        900        950  .........         150        2,000
                                              ESF...........................      1,000  .........  .........         980        1,980      2,000  .........  .........  ..........        2,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Dominican Republic Total..............  ..............................      1,280      1,350  .........       1,330        3,960      2,900        950  .........         150        4,000

    Ecuador.................................  ACI...........................  .........  .........  .........       2,000        2,000  .........  .........  .........       3,400        3,400
                                              DA............................        690  .........        300  ..........          990  .........  .........  .........       1,000        1,000
                                              ESF...........................        600        400        780         200        1,980        150        550        400       1,078        2,178
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Ecuador Total.........................  ..............................      1,290        400      1,080       2,200        4,970        150        550        400       5,478        6,578

    El Salvador.............................  DA............................      1,387  .........        500       1,840        3,727  .........  .........  .........         250          250
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      El Salvador Total.....................  ..............................      1,387  .........        500       1,840        3,727  .........  .........  .........         250          250

    Guatemala...............................  DA............................  .........  .........  .........       1,485        1,485  .........        100  .........       2,991        3,091
                                              ESF...........................      1,891        396  .........       2,168        4,455      1,850  .........  .........       1,150        3,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Guatemala Total.......................  ..............................      1,891        396  .........       3,653        5,940      1,850        100  .........       4,141        6,091

    Guyana..................................  DA............................        310        780        440         450        1,980      1,000  .........      1,000  ..........        2,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Guyana Total..........................  ..............................        310        780        440         450        1,980      1,000  .........      1,000  ..........        2,000

    Haiti...................................  DA............................  .........        795        791       2,350        3,936  .........      2,850      4,150       2,000        9,000
                                              ESF...........................      5,650      5,250      1,309      16,591       28,800  .........  .........      5,700      10,000       15,700
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Haiti Total...........................  ..............................      5,650      6,045      2,100      18,941       32,736  .........      2,850      9,850      12,000       24,700

    Honduras................................  DA............................        600  .........  .........       1,380        1,980        600  .........  .........       1,848        2,448
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Honduras Total........................  ..............................        600  .........  .........       1,380        1,980        600  .........  .........       1,848        2,448

    Jamaica.................................  DA............................      1,014  .........      1,261         200        2,475      1,687  .........        150  ..........        1,837
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Jamaica Total.........................  ..............................      1,014  .........      1,261         200        2,475      1,687  .........        150  ..........        1,837

    LAC Regional............................  DA............................        506        500         90       8,299        9,395  .........  .........      2,326       1,000        3,326
                                              ESF...........................      3,000  .........      2,960       1,000        6,960  .........      1,500      1,995       1,600        5,095
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      LAC Regional Total....................  ..............................      3,506        500      3,050       9,299       16,355  .........      1,500      4,321       2,600        8,421

    Mexico..................................  DA............................      2,610  .........  .........         790        3,400      1,700  .........  .........         300        2,000
                                              ESF...........................      2,083        400      2,100       1,533        6,116      3,000  .........      2,000       1,200        6,200
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Mexico Total..........................  ..............................      4,693        400      2,100       2,323        9,516      4,700  .........      2,000       1,500        8,200

    Nicaragua...............................  DA............................      2,750      2,000  .........       2,398        7,148      2,116  .........  .........       2,116        4,232
                                              ESF...........................  .........      3,366  .........  ..........        3,366  .........      1,500      1,500  ..........        3,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Nicaragua Total.......................  ..............................      2,750      5,366  .........       2,398       10,514      2,116      1,500      1,500       2,116        7,232

    Panama..................................  ESF...........................  .........  .........  .........         990          990  .........  .........  .........  ..........  ...........
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Panama Total..........................  ..............................  .........  .........  .........         990          990  .........  .........  .........  ..........  ...........

    Paraguay................................  DA............................        980  .........  .........       1,000        1,980        250  .........        250       1,330        1,830
                                              ESF...........................  .........        980      1,000  ..........        1,980        250        250        250       1,250        2,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Paraguay Total........................  ..............................        980        980      1,000       1,000        3,960        500        250        500       2,580        3,830

    Peru....................................  ACI...........................  .........  .........      1,200       2,960        4,160  .........  .........      1,000       3,400        4,400
                                              DA............................  .........  .........  .........       1,287        1,287  .........  .........  .........       1,740        1,740
                                              ESF...........................  .........      1,090  .........         890        1,980  .........      1,000  .........       1,000        2,000
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Peru Total............................  ..............................  .........      1,090      1,200       5,137        7,427  .........      1,000      1,000       6,140        8,140
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Latin America and Caribbean Total.....  ..............................     42,071     18,307     24,358      64,422      149,158     32,309      9,700     30,915      50,891      123,815
                                             ===================================================================================================================================================
Democracy, Conflict and Humanitarian
 Assistance:
    Office of Democracy and Governance......  DA............................      2,227     19,800      3,366       2,723       28,116      2,500      7,150      3,500       2,750       15,900
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Office of Democracy and Governance      ..............................      2,227     19,800      3,366       2,723       28,116      2,500      7,150      3,500       2,750       15,900
       Total.

    Office of Private and Voluntary           DA............................  .........  .........        891  ..........          891  .........  .........  .........  ..........  ...........
     Cooperation.
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Office of Private and Voluntary         ..............................  .........  .........        891  ..........          891  .........  .........  .........  ..........  ...........
       Cooperation Total.
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Democracy, Conflict and Humanitarian    ..............................      2,227     19,800      4,257       2,723       29,007      2,500      7,150      3,500       2,750       15,900
       Assistance  Total.
                                             ===================================================================================================================================================
Office of Global Development Alliances:
    Office of Global Development Alliances..  DA............................  .........  .........  .........       1,880        1,880  .........  .........  .........  ..........  ...........
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Office of Global Development Alliances  ..............................  .........  .........  .........       1,880        1,880  .........  .........  .........  ..........  ...........
       Total.
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Office of Global Development Alliances  ..............................  .........  .........  .........       1,880        1,880  .........  .........  .........  ..........  ...........
       Total.
                                             ===================================================================================================================================================
Program and Policy Coordination:
    Bureau for Policy and Program             DA............................         80         80         80          80          320         78         79         79          79          315
     Coordination.
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Bureau for Policy and Program           ..............................         80         80         80          80          320         78         79         79          79          315
       Coordination Total.
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Program and Policy Coordination Total.  ..............................         80         80         80          80          320         78         79         79          79          315
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
                                              ACI Sum.......................     16,720  .........      3,821      14,558       35,099     15,806  .........      3,694      15,322       34,822
                                              AEEB  Sum.....................     20,997      9,455     21,524      22,257       74,233     16,905      6,320     13,511      14,986       51,722
                                              DA Sum........................     34,759     31,434     32,122      85,629      183,944     38,255     24,571     39,122      62,682      164,630
                                              ESF Sum.......................     78,573     66,788     82,948     192,369      420,678     61,688     46,283     73,840     317,683      499,494
                                              FSA Sum.......................     12,377     17,130     59,920      29,779      119,206     13,188     10,525     52,826      28,968      105,507
                                              IDA Sum.......................  .........  .........  .........  ..........  ...........  .........  .........  .........  ..........  ...........
                                             ---------------------------------------------------------------------------------------------------------------------------------------------------
      Grand Total--USAID Democracy &          ..............................    163,426    124,807    200,335     344,592      833,160    145,842     87,699    182,993     439,641     856,175
       Governance.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Notional--program under review.

                                                               TAB 2.--USAID HUMAN RIGHTS
                                                                [In thousands of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Fiscal year
                                                             -------------------------------------------------------------------------------------------
                                                                              2006 estimate                              2007 budget request
           Operating unit             Appropriation  code    -------------------------------------------------------------------------------------------
                                                                          Victims   Trafficking    Total                Victims   Trafficking    Total
                                                               Victims       of          in        human     Victims       of          in        human
                                                               of  war    torture     persons      rights    of  war    torture     persons      rights
--------------------------------------------------------------------------------------------------------------------------------------------------------
Africa:
    Africa Regional.................  DA....................      2,950      2,778       1,966       7,694      3,000      2,825       2,000       7,825
                                     -------------------------------------------------------------------------------------------------------------------
      Africa Regional Total.........  ......................      2,950      2,778       1,966       7,694      3,000      2,825       2,000       7,825

    Ethiopia........................  ESF...................  .........  .........         300         300  .........  .........         300         300
                                     -------------------------------------------------------------------------------------------------------------------
      Ethiopia Total................  ......................  .........  .........         300         300  .........  .........         300         300
                                     -------------------------------------------------------------------------------------------------------------------
      Africa Total..................  ......................      2,950      2,778       2,266       7,994      3,000      2,825       2,300       8,125
                                     ===================================================================================================================
Asia and Near East:
    Bangladesh......................  DA....................  .........  .........         891         891  .........  .........       1,000       1,000
                                     -------------------------------------------------------------------------------------------------------------------
      Bangladesh Total..............  ......................  .........  .........         891         891  .........  .........       1,000       1,000

    Cambodia........................  DA....................  .........  .........       2,331       2,331  .........  .........  ...........  .........
                                      ESF...................  .........  .........  ...........  .........  .........  .........       1,000       1,000
                                     -------------------------------------------------------------------------------------------------------------------
      Cambodia Total................  ......................  .........  .........       2,331       2,331  .........  .........       1,000       1,000

    India...........................  DA....................  .........  .........  ...........  .........  .........        374  ...........        374
                                      ESF...................  .........  .........  ...........  .........  .........        270  ...........        270

      India Total...................  ......................  .........  .........  ...........  .........  .........        644  ...........        644

    Indonesia.......................  ESF...................  .........  .........       1,400       1,400  .........  .........         386         386
                                     -------------------------------------------------------------------------------------------------------------------
      Indonesia Total...............  ......................  .........  .........       1,400       1,400  .........  .........         386         386

    Iraq............................  ESF...................      5,000  .........  ...........      5,000  .........  .........  ...........  .........
                                     -------------------------------------------------------------------------------------------------------------------
      Iraq Total....................  5,000.................  .........  .........       5,000   .........  .........  .........  ...........

    Nepal...........................  ESF...................        301  .........  ...........        301  .........  .........  ...........  .........
                                     -------------------------------------------------------------------------------------------------------------------
      Nepal Total...................  ......................        301  .........  ...........        301  .........  .........  ...........  .........

    Pakistan........................  DA....................  .........  .........  ...........  .........  .........  .........       1,000       1,000
                                     -------------------------------------------------------------------------------------------------------------------
      Pakistan Total................  ......................  .........  .........  ...........  .........  .........  .........       1,000       1,000

    Philippines.....................  ESF...................  .........  .........  ...........  .........  .........  .........         250         250
                                     -------------------------------------------------------------------------------------------------------------------
      Philippines Total.............  ......................  .........  .........  ...........  .........  .........  .........         250         250

    Regional Development Mission--    DA....................        743  .........  ...........        743  .........  .........  ...........  .........
     Asia (RDM-Asia).
                                     -------------------------------------------------------------------------------------------------------------------
      Regional Development Mission--  ......................        743  .........  ...........        743  .........  .........  ...........  .........
       Asia (RDM-Asia) Total.

    Sri Lanka.......................  DA....................      1,000  .........  ...........      1,000      1,000  .........  ...........      1,000
                                     -------------------------------------------------------------------------------------------------------------------
      Sri Lanka Total...............  ......................      1,000  .........  ...........      1,000      1,000  .........  ...........      1,000
                                     -------------------------------------------------------------------------------------------------------------------
      Asia and Near East Total......  ......................      7,044  .........       4,622      11,666      1,000        644       3,636       5,280
                                     ===================================================================================================================
Europe and Eurasia:
    Albania.........................  AEEB..................  .........  .........       1,530       1,530  .........  .........       1,343       1,343
                                     -------------------------------------------------------------------------------------------------------------------
      Albania Total.................  ......................  .........  .........       1,530       1,530  .........  .........       1,343       1,343

    Bosnia and Herzegovina..........  AEEB..................  .........  .........         800         800  .........  .........       1,905       1,905
                                     -------------------------------------------------------------------------------------------------------------------
      Bosnia and Herzegovina Total..  ......................  .........  .........         800         800  .........  .........       1,905       1,905

    Bulgaria........................  AEEB..................  .........  .........         145         145  .........  .........  ...........  .........
                                     -------------------------------------------------------------------------------------------------------------------
      Bulgaria Total................  ......................  .........  .........         145         145  .........  .........  ...........  .........

    Eurasia Regional................  FSA...................  .........  .........  ...........  .........  .........  .........          80          80
                                     -------------------------------------------------------------------------------------------------------------------
      Eurasia Regional Total........  ......................  .........  .........  ...........  .........  .........  .........          80          80

    Europe Regional.................  AEEB..................  .........  .........         673         673  .........  .........         275         275
                                     -------------------------------------------------------------------------------------------------------------------
      Europe Regional Total.........  ......................  .........  .........         673         673  .........  .........         275         275

    Georgia.........................  FSA...................  .........  .........         222         222  .........  .........         220         220
                                     -------------------------------------------------------------------------------------------------------------------
      Georgia Total.................  ......................  .........  .........         222         222  .........  .........         220         220

    Kazakhstan......................  FSA...................  .........  .........         680         680  .........  .........         242         242
                                     -------------------------------------------------------------------------------------------------------------------
      Kazakhstan Total..............  ......................  .........  .........         680         680  .........  .........         242         242

    Kosovo..........................  AEEB..................  .........  .........  ...........  .........  .........  .........         200         200
                                     -------------------------------------------------------------------------------------------------------------------
      Kosovo Total..................  ......................  .........  .........  ...........  .........  .........  .........         200         200

    Kyrgyzstan......................  FSA...................  .........  .........         350         350  .........  .........         170         170
                                     -------------------------------------------------------------------------------------------------------------------
      Kyrgyzstan Total..............  ......................  .........  .........         350         350  .........  .........         170         170

    Moldova.........................  FSA...................  .........  .........         972         972  .........  .........         777         777
                                     -------------------------------------------------------------------------------------------------------------------
      Moldova Total.................  ......................  .........  .........         972         972  .........  .........         777         777

    Russia..........................  FSA...................  .........  .........         750         750  .........  .........  ...........  .........
                                     -------------------------------------------------------------------------------------------------------------------
      Russia Total..................  ......................  .........  .........         750         750  .........  .........  ...........  .........

    Tajikistan......................  FSA...................  .........  .........         510         510  .........  .........          28          28
                                     -------------------------------------------------------------------------------------------------------------------
      Tajikistan Total..............  ......................  .........  .........         510         510  .........  .........          28          28

    Ukraine.........................  FSA...................  .........  .........       1,218       1,218  .........  .........       1,195       1,195
                                     -------------------------------------------------------------------------------------------------------------------
      Ukraine Total.................  ......................  .........  .........       1,218       1,218  .........  .........       1,195       1,195

    Uzbekistan......................  FSA...................  .........  .........         600         600  .........  .........  ...........  .........
                                     -------------------------------------------------------------------------------------------------------------------
      Uzbekistan Total..............  ......................  .........  .........         600         600  .........  .........  ...........  .........
                                     -------------------------------------------------------------------------------------------------------------------
      Europe and Eurasia Total......  ......................  .........  .........       8,450       8,450  .........  .........       6,435       6,435
                                     ===================================================================================================================
Latin America and Caribbean:
    Ecuador.........................  ACI...................  .........  .........         100         100  .........  .........  ...........  .........
                                     -------------------------------------------------------------------------------------------------------------------
      Ecuador Total.................  ......................  .........  .........         100         100  .........  .........  ...........  .........

    Haiti...........................  DA....................  .........      1,400       1,000       2,400  .........      1,000  ...........      1,000
                                      ESF...................  .........  .........  ...........  .........  .........        300       1,000       1,300
                                     -------------------------------------------------------------------------------------------------------------------
      Haiti Total...................  ......................  .........      1,400       1,000       2,400  .........      1,300       1,000       2,300
                                     -------------------------------------------------------------------------------------------------------------------
      Latin America and Caribbean     ......................  .........      1,400       1,100       2,500  .........      1,300       1,000       2,300
       Total.
                                     ===================================================================================================================
Democracy, Conflict and Humanitarian
 Assistance:
    Office of Democracy and           DA....................      4,504      4,505  ...........      9,009      4,000      4,000  ...........      8,000
     Governance.
                                     -------------------------------------------------------------------------------------------------------------------
      Office of Democracy and         ......................      4,504      4,505  ...........      9,000      4,000      4,000  ...........      8,000
       Governance Total.
                                     -------------------------------------------------------------------------------------------------------------------
      Democracy, Conflict and         ......................      4,504      4,505  ...........      9,009      4,000      4,000  ...........      8,000
       Humanitarian Assistance Total.
                                     ===================================================================================================================
                                      ACI Sum...............  .........  .........         100         100  .........  .........  ...........  .........
                                      AEEB Sum..............  .........  .........       3,148       3,148  .........  .........       3,723       3,723
                                      DA Sum................      9,197      8,683       6,188      24,068      8,000      8,199       4,000      20,199
                                      ESF Sum...............      5,301  .........       1,700       7,001  .........        570       2,936       3,506
                                      FSA Sum...............  .........  .........       5,302       5,302  .........  .........       2,712       2,712
                                     -------------------------------------------------------------------------------------------------------------------
      Grand Total--USAID Human        ......................     14,498      8,683      16,438      39,619      8,000      8,769      13,371      30,140
       Rights.
--------------------------------------------------------------------------------------------------------------------------------------------------------

DEMOCRACY, GOVERNANCE AND HUMAN RIGHTS FUNDING (ALL-SOURCES)--NEAR EAST,
       EAST ASIA PACIFIC, AND SOUTH ASIA (INCLUDING CENTRAL ASIA)
                        [In thousands of dollars]
------------------------------------------------------------------------
                                                       Fiscal year
                                               -------------------------
                                                    2006         2007
                                                  estimate     request
------------------------------------------------------------------------
          Summary--Near East and Asia
Development Assistance........................       49,431       40,209
ESF...........................................      489,011      600,472
    USAID implemented.........................      299,426      390,152
    State/Global Programs.....................      189,585      210,320
    FSA--USAID & State Programs...............       40,384       34,303
    Democracy Fund (excl. HRDF)...............       12,673  ...........
    INCLE.....................................       27,590      286,425
    The Asia Foundation.......................        8,500        6,500
                                               -------------------------
      TOTAL...................................      627,589      967,909
                                               =========================
               Bilateral Detail
Development Assistance (DA):
    Afghanistan...............................       30,000       25,000
    ANE Regional..............................        2,028        3,225
    Bangladesh................................        3,465        2,550
    Cambodia..................................        2,331          910
    China.....................................        2,475          733
    India.....................................          326  ...........
    Nepal.....................................        1,485        1,500
    Pakistan..................................        3,597        4,000
    Philippines...............................        2,000          901
    RDM-Asia..................................          491          640
    Sri Lanka.................................        1,233          750
                                               -------------------------
      DA Subtotal.............................       49,431       40,209
                                               =========================
Economic Support Fund (ESF)--USAID
 implemented:
    Afghanistan...............................       58,000      136,000
    Bangladesh................................        4,752        5,000
    Cambodia..................................       11,375       13,500
    East Timor................................        6,000        4,000
    Egypt.....................................       85,505       86,455
    India.....................................          200  ...........
    Indonesia.................................       31,850       20,000
    Iraq......................................  ...........       25,000
    Jordan....................................       14,000       12,000
    Lebanon...................................        7,000       10,000
    Mongolia..................................        2,400        1,900
    Morocco...................................        6,440        8,000
    Nepal.....................................          990        1,000
    Pakistan..................................       20,000       27,000
    Philippines...............................        6,500        7,999
    RDM-Asia..................................        3,564        3,500
    Sri Lanka.................................        2,000        1,300
    West Bank and Gaza \1\....................       36,850       25,500
    Yemen.....................................        1,109        1,998
                                               -------------------------
      ESF Subtotal--USAID.....................      298,535      390,152
                                               =========================
Economic Support Fund (ESF)--State/Global
 Programs:
    Iraq......................................       55,440       87,270
    S. Asia Regional..........................          990        2,000
    MEPI......................................       99,000      120,000
    Laos......................................  ...........          250
    EAP Regional Women's Issues...............          990          800
    UNHCHR Nepal..............................        1,485  ...........
    HRDF......................................       31,680  ...........
        China.................................       19,800  ...........
        Muslim--outside Middle East \2\.......       11,880  ...........
                                               -------------------------
          ESF Subtotal--State/Global..........      189,585      210,320
                                               =========================
Assistance for the Independent States of the
 Former Soviet Union (FSA)--USAID implemented:
    Eurasia Regional..........................          590          840
    Kazakhstan................................        5,797        4,480
    Kyrgyz Republic...........................        4,794        6,226
    Tajikistan................................        4,596        4,274
    Turkmenistan..............................        1,090        1,100
    Uzbekistan................................        3,810        3,582
                                               -------------------------
      FSA Subtotal--USAID.....................       20,677       20,502
                                               =========================
Assistance for the Independent States of the
 Former Soviet Union (FSA)--State implemented:
    Eurasia Regional..........................        8,038        7,410
    Kazakhstan................................          555          538
    Kyrgyz Republic...........................        6,200        2,349
    Tajikistan................................        1,390        1,497
    Turkmenistan..............................          680          810
    Uzbekistan................................        2,844        1,197
                                               -------------------------
      FSA Subtotal--State.....................       19,707       13,801
                                               =========================
Democracy Fund:
    NED programs:
        China.................................        2,970  ...........
        Tibet.................................          248  ...........
        N Korea...............................          990  ...........
    Other Country Programs:
        Thailand..............................        1,980  ...........
        Iran and Syria........................        6,485  ...........
                                               -------------------------
          Subtotal Democracy Fund.............       12,673  ...........
                                               =========================
International Narcotics and Law Enforcement
 (INCLE):
    Afghanistan...............................       26,500       38,000
    Indonesia.................................          515          525
    Iraq......................................  ...........      247,600
    Philippines...............................          350          300
    Thailand..................................          225  ...........
                                               -------------------------
      INCLE Subtotal..........................       27,590     286,425
------------------------------------------------------------------------
\1\ Notional--program currently under review.
\2\ Programs may also be implemented outside of Asia.

 STATE DEPARTMENT/USAID DEFINITION OF DEMOCRACY AND GOVERNANCE PROGRAMS

    Democracy and governance programs are technical assistance and 
other support to strengthen capacity of reform-minded governments, non-
governmental actors, and/or citizens in order to develop and support 
democratic states and institutions that are responsive and accountable 
to citizens. They also include efforts to promote democratic 
transitions in countries that are not reform-minded.
    Programs are organized around core concepts considered the key 
building blocks of democracy. Democracy programs promote the rule of 
law and human rights, transparent and fair elections coupled with a 
competitive political process, a free and independent media, stronger 
civil society and greater citizen participation in government, and 
governance structures that are efficient, responsive and accountable.

                   COORDINATION OF DEMOCRACY PROGRAMS

    Question. Within USAID and State, who specifically has authority 
over democracy programs, and how do USAID and State currently 
coordinate to ensure that democracy programs support U.S. policy 
objectives? How about coordination with the National Endowment for 
Democracy? What are your plans to improve this coordination?
    Answer. The Director of Foreign Assistance has authority over all 
foreign assistance, including democracy programs. State and USAID are 
reforming foreign assistance processes to ensure that they advance the 
Secretary's transformational diplomacy goal of, ``Helping to build and 
sustain democratic, well-governed states that will respond to the needs 
of their people and conduct themselves responsibly in the international 
system.'' The reform has identified five primary objectives toward 
achieving this goal, of which one is supporting states to ``govern 
justly and democratically.'' All State and USAID programs in democracy 
will advance this objective in a manner that supports the Secretary's 
goal. At present, coordination with the National Endowment for 
Democracy (NED) is performed in Washington primarily through State's 
Bureau for Democracy, Human Rights and Labor, through which the NED 
receives its Congressional appropriation as well as additional 
Washington funds. Coordination in the field is done through the 
respective embassies and USAID missions. USAID works closely with the 
NED core institutes, such as the International Republican Institute 
(IRI) and the National Democratic Institute (NDI) both on policy issues 
and field operations with respect to the programs USAID manages.

                             DEMOCRACY FUND

    Question. Last year, Senator Leahy and I created a new ``Democracy 
Fund'' account as a first step to improve the conduct and management of 
democracy, governance and rule of law programs by consolidating 
activities under a single account. Do you support the Democracy Fund?
    Answer. I support the objective of the Democracy Fund. I concur 
that we need to improve the conduct and management of democracy, 
governance and rule of law programs, in addition to programs in other 
sector areas. As Director of Foreign Assistance, my aim is to bring 
increased coherence, accountability and transparency to the use of our 
foreign assistance resources. I look forward to sharing with the 
Committee our progress in this regard.

               DEMOCRACY AND GOVERNANCE PROGRAMS IN CHINA

    Question. Understanding you inherited the fiscal year 2007 budget 
request, how do you justify the inadequate request of $733,000 for 
democracy and governance programs in China?
    Answer. I agree we should be taking every reasonable opportunity to 
advance democracy in China. State's Bureau for Democracy Human Rights 
and Labor supports a $20 million/year democracy promotion program in 
China--USAID's request was to continue a modest Development Assistance 
(DA) funded program with universities (and possibly expanding to NGOs). 
The $733,000 allocated to democracy and governance, out of a total of 
$5 million in DA for China, was allocated with the additional $20 
million in ESF for democracy in mind.

                                BRANDING

    Question. What is USAID's branding policy with respect to democracy 
assistance? Would you agree that there should be exceptions to 
branding--such as assistance provided to support elections?
    Answer. USAID's branding policy for assistance awards was 
established by federal rulemaking, including solicitation and 
adaptation of comments by USAID grantees, and is published at 22 C.F.R. 
 226.91. The published regulation anticipated Congress's concern by 
including seven ``presumptive exceptions'' under which branding is not 
required for programmatic reasons, including several that may apply to 
democracy programs, and one specifically that provides an exception if 
marking would ``compromise the intrinsic independence or neutrality of 
a program or materials where independence or neutrality is an inherent 
aspect of the program or materials, such as election monitoring or 
ballots, and voter information literature; political party support or 
public policy advocacy or reform; independent media, such as television 
and radio broadcasts, newspaper article and editorials; public service 
announcements or public opinion polls and surveys.''

                            USAID PERSONNEL

    Question. A number of key positions at USAID remain unfilled, 
including the Assistant Administrator for Management, the Assistant 
Administrator for Europe and Eurasia, and the Inspector General.
    Do you have a timeframe for when these positions may be filled?
    Answer. I share your concern. These positions are critical to the 
success of our new strategic framework. I expect that we will be able 
recommend nominees to the President's staff in the coming weeks.
    Donald Gambatesa was sworn in as Inspector General on January 17, 
2006.

                              CONTRACTORS

    Question. USAID relies on a number of institutional contractors at 
USAID who provide support services to bureaus and programs.
    Do you believe a conflict of interest exists for contractors 
working at USAID, and how do you ensure that they represent the 
interests of the Agency and not their employers?
    Answer. In the absence of appropriate safeguards and vigilance, 
there could be the potential for a conflict of interest. At USAID we 
take this issue very seriously and have worked to fully comply with the 
letter and spirit of the Federal Acquisition Regulation on 
Organizational and Consultant Conflicts of Interest (FAR 9.500) which 
limits certain activities that are vulnerable to such conflicts. Since 
1999 USAID has applied the FAR standards to organizations performing 
designs, evaluations and audits. When mitigation of a potential 
conflict is not feasible, USAID restricts follow-on work. These 
policies include solicitation and contract clauses as well as non-
disclosure agreements to assure contractors are aware of limitations. 
Contractors have a strong incentive to hew closely to the rules, as 
they are aware that any deviation could endanger their ability to 
compete on future contracts.
    Our best guard against these issues is awareness of the rules. We 
accomplish this through our annual ethics training as well as regular 
outreach trainings conducted by our General Counsel. While we expect 
our contractors to have corporate codes of conduct, our supplementary 
training helps sensitize contractor employees to unique vulnerabilities 
under Federal contracts. These include assuring that contractor 
employees are not privy to sensitive internal Government information.
    In addition to training and contract clauses, USAID Cognizant 
Technical Officers monitor vulnerabilities to conflicts of interest. 
The Ombudsman for USAID's Office of Acquisition and Assistance can 
address concerns raised by contractors and their employees. Finally, 
the Inspector General maintains a hotline that can be used if someone 
is concerned about an apparent conflict of interest.
                                 ______
                                 
              Questions Submitted by Senator Arlen Specter

                              TUBERCULOSIS

    Question. Tuberculosis [TB] is the leading cause of death among 
people who are HIV-positive, because of their weakened immune system. 
One-third of the more than 40 million people with HIV/AIDS are also 
infected with TB. In areas such as sub-Saharan Africa, up to half of 
AIDS related deaths are caused by TB.
    In fiscal year 2005, 1.8 percent of PEPFAR's funding was directed 
toward TB/HIV activities. In fiscal year 2006 this number grew to about 
2.5 percent of PEPFAR's budget. Given that TB is the leading cause of 
death of those infected by HIV/AIDS, do you plan to devote a larger 
portion of the PEPFAR budget towards programs designed to combat the 
threat caused by TB in the fiscal year 2007 budget?
    Answer. In fiscal year 2005, $19.3 million went to supporting TB-
related activities in the fifteen focus countries. That amount is 
planned to increase to $40.1 million in fiscal year 2006. In addition, 
$91.5 million in additional funds are planned to support other 
bilateral country programs in fiscal year 2006. Focus country funding 
is expected to increase in fiscal year 2007 as well. Fiscal year 2007 
Country Operational Plans are currently being produced and will be 
submitted for review in late 2006; these plans will set forth planned 
spending levels for TB/HIV activities in fiscal year 2007.
    The President's budget request also includes $91.3 million in 
fiscal year 2007 for support of TB activities in other bilateral 
countries. In addition, the U.S. Government is the largest donor to the 
Global Fund to Fight AIDS, Tuberculosis, and Malaria, contributing one-
third of the Fund's resources. The Global Fund finances essential HIV 
and TB programs in resource-limited settings. The Emergency Plan 
emphasizes TB care and treatment for co-infected patients be included 
in the country level plans, and it is considered and priority program 
area in guidance that has been provided to the countries in 
establishing their operational plans. The Emergency Plan supports 
programming that includes diagnosis of latent TB infection, treatment 
to prevent development of active disease, and general TB-related care. 
Because of the high rate of co-morbidity between TB and HIV/AIDS, we 
are also urging the counseling and testing facilities the United States 
supports to offer HIV testing to those who present with TB or other 
infectious diseases. The Emergency Plan has developed ``basic 
preventive care packages'' that include key support and preventive 
therapies. These packages include the tuberculosis treatment therapies 
mentioned above.
    The Emergency Plan will continue to work with its partner USG 
implementing agencies that have programs focusing on TB and malaria, 
coordinating those programs with the Emergency Plan efforts focusing on 
HIV/AIDS.

                              BLOOD SAFETY

    Question. Another problem facing in the developing world is the 
inability of medical providers to test blood to be used in blood 
transfusions for AIDS and other potentially deadly diseases. This 
problem is particularly acute in many sub-Saharan countries.
    PEPFAR is making tremendous efforts to address this problem in the 
program's fifteen focus countries. However, tainted blood is still a 
major problem in many non-focus countries in sub-Saharan Africa. What 
efforts do you propose to address this problem in non-focus countries, 
particularly those in sub-Saharan Africa?
    Answer. With the knowledge that turning the tide against global 
AIDS requires a global fight, the Emergency Plan supports HIV/AIDS 
programs in 108 countries in addition to the 15 focus countries. The 
Emergency Plan strategy is to develop lessons learned from the rapid 
scale-up of national integrated prevention, treatment, and care 
programs in the focus countries, and have the greatest impact possible 
in the countries most affected by HIV/AIDS. These lessons learned are 
being applied to non-focus countries, including those in sub-Saharan 
Africa, in an effort to put into practice the most successful and 
comprehensive programs.
    PEPFAR supports international blood safety organizations to partner 
with host countries in the development of comprehensive systems that 
include low-risk blood donor selection, blood banking, and blood safety 
training. The goal of these programs is to increase blood supply 
through donor recruitment. The programs also work to ensure blood 
safety through proper screening of donors and donated blood. Currently, 
the Emergency Plan supports:
  --National programs to improve the quality of blood supplies through 
        improved policies;
  --The establishment of laboratory facilities and commodity 
        procurement; and
  --Healthcare worker training and management for technicians needing 
        blood safety expertise.
    The Emergency Plan also provides technical assistance to support 
countries in implementing the foundational components of effective 
national blood transfusion services.

                          PERU COCA PRODUCTION

    Question. In April this year, I traveled to Latin America on a 
CODEL. While in Peru, I met with Susan Keogh, Director of Narcotics 
Affairs in Peru. Ms. Keogh informed me that approximately 400,000 acres 
are being deforested annually for the cultivation of coca and other 
plants. On average, there are approximately 40,000 to 100,000 coca 
plants per two acres, which require about two tons of chemicals to be 
used for their production.
    Since coca is very vulnerable to diseases, coca growers cover the 
coca with pesticides which are very deleterious to the environment. 
Some portions of these chemicals almost always find their way into 
rivers and streams, as coca must be cultivated close to a water supply.
    When I asked what efforts the Peruvian Government is taking to 
combat these problems, Ms. Keough remarked that the Peruvian government 
hardly focuses on this issue of cocaine and its effects on the 
environment.
    I noticed your fiscal year 2007 Budget Justification notes that, 
``Limited government presence in the highlands and jungle allows 
illegal coca cultivation . . . to flourish'' and that ``USAID 
strengthens state presence through programs to reduce coca 
cultivation.'' Could you elaborate on your efforts in Peru?
    Answer. As in so much of the South American region, the 
deforestation rates in Peru are abysmal, and while coca production does 
play a role in this, many analysts believe it is by far less a 
contributing factor than illegal logging and agriculture expansion. The 
relationship between coca cultivation and deforestation in Peru has 
declined rapidly in recent years as profitable legal crops have 
expanded the agricultural frontier. This has resulted in a legal 
agricultural market that dwarfs the illegal coca market in terms of 
total land use. Furthermore, according to the latest statistics, Peru's 
total coca crop, 120,000 acres, is declining.
    The primary threat of deforestation deriving from coca farmers, and 
other colonizers, is driven by poor agricultural practices that result 
in the complete loss of soil nutrients in just a few years. USAID/
Peru's Alternative Development Program directly addresses this threat, 
as described below in response to the last question. A lesser threat 
related to coca farming is posed by new farmers wishing to colonize new 
areas to grow coca. Nevertheless, compared to years past, the ``new 
colonizers'' are responsible for much less deforestation than 15 years 
ago. Andean Counterdrug Initiative [ACI] funding also addresses this 
issue by consolidating the Government of Peru's efforts to protect 
national parks and strengthen the sustainable forestry concession 
program as described below. Dissuading colonizers is also an important 
byproduct of programmed eradication and interdiction activities.
    Peru's coca production thrives in areas that present development 
obstacles and where the government has a very limited presence. In 
these neglected and generally impoverished areas, coca production and 
processing brings violence and lawlessness and provides a source of 
financing for remnants of terrorist groups that inhabit them. Given the 
charged and threatening atmosphere of narco-trafficking in coca-growing 
areas, traditional state services and development projects cannot rely 
on police presence which means that education, health, and private 
investment projects are very costly and difficult to implement. USAID 
strengthens state presence in these areas through a multi-pronged 
approach, supporting activities to reduce coca cultivation and promote 
licit alternatives, complemented by actions in local government 
strengthening, health, education, economic growth, and environment.
    A key component of the USG's comprehensive counter-narcotics 
strategy, USAID/Peru's Alternative Development Program operates in 
concert with other U.S. Government agencies, including the State 
Department's Narcotics Affairs Section and the U.S. Drug Enforcement 
Administration, as well as the Government of Peru [GOP], to reduce 
illegal coca production in Peru in a sustained manner. USAID pursues 
this goal principally through ``voluntary eradication,'' where coca-
growing communities sign an agreement with the GOP to pursue a licit 
lifestyle and destroy their own coca plantings. The GOP and USAID then 
support the community's transition to a licit lifestyle by providing 
development assistance based on the community's priorities. This 
assistance often takes the form of infrastructure (bridges, roads, 
schools, and health clinics). Many of the specific investments in 
communities are leveraging State presence where it did not exist 
previously. A school brings the Ministry of Education; a health center, 
the Ministry of Health; a bridge or a road forces the local governments 
to maintain the infrastructure. Alternative Development-supported 
projects provide an opening for government ministries to establish 
themselves in the communities and begin to provide traditional services 
to the local population.
    USAID interventions also assist coca producers in moving towards 
high-paying export crops like coffee, cacao, and palm oil production. 
These productive activities are catalyzing interest the private sector, 
making national and international businesses stakeholders in the 
Alternative Development Program. All activities are closely coordinated 
between local governments and community members, thereby reestablishing 
local governments' role as an effective and transparent governing body 
that addresses the needs of its constituencies. In addition, USAID 
interventions must pass an environmental review which works to mitigate 
any further degradation, and all USAID projects are required to use 
``best practices'' in land and agricultural management, as well as, 
minimize the use of pesticides. All forestry projects must be designed 
to be sustainable, to reduce future environmental problems.
    Question. What efforts is USAID involved in to combat not only 
coca, but the adverse impacts production of that illicit crop has on 
the environment?
    Answer. Fragile eco-systems are threatened by coca production and 
the rampant illegal logging in Peru. USAID promotes licit livelihoods 
through the reduction of poverty, the conservation of biodiversity and 
the implementation and enforcement of existing environmental legal 
frameworks in Peru. USAID interventions are also held to a strict 
standard including an environmental assessment before any projects 
begins and required environmental planning as the project is 
implemented. Most logging of Peru's precious timber stock is illegal 
and is often carried out in concert with narco-traffickers, as log 
trucks are often used to carry hidden stashes of drugs. Given that the 
forest sector is one of Peru's largest, untapped sources of jobs and 
export revenue, USAID's Environment Program is helping to formalize the 
forest sector. Activities include support to communities living in the 
coca growing areas to substitute coca cultivation with forest 
certification activities and increase their sales of licit certified 
wood products in Peru and the rest of the world. This includes efforts 
to not just protect forest land, but make it sustainable for the 
future.
    In nationally protected areas and parks, USAID programs work with 
local communities and the GOP to protect the eco-systems and develop 
natural resource management strategies that improve livelihoods while 
protecting these areas. Additionally, the program fosters greater GOP 
presence in protected areas by enabling municipal authorities to assume 
their roles in the implementation and enforcement of existing 
environmental legal frameworks that will prevent further expansion of 
coca into protected areas. USAID is also aware of the impacts to water 
quality that occur due to coca refinement. While the Mission does not 
have any programs in this area, it is aware of the Embassy in Bolivia's 
work to address it.
    Question. USAID's fiscal year 2007 request for Environment and 
Natural Resource funds for Peru is $3.070 million which is a 24.4 
percent decrease from fiscal year 2004. Further USAID's fiscal year 
2007 request for Alternative Development is down 14.5 percent over that 
same period. Can you explain this trend?
    Answer. Since 2001, overall development assistance to Latin America 
and the Caribbean has increased from $862,452,000 in fiscal year 2001 
to $1,696,841,000 in fiscal year 2007. The funding levels for the 
Andean Counterdrug Initiative have remained consistent between fiscal 
year 2004 through 2006. USAID recognizes the intrinsic relationship 
between the environment and coca production though and has therefore 
supplemented the environment programs with $2.8 million in fiscal year 
2005 and 2006 ACI funding.
    Question. I note that the Andean Counterdrug Initiative funds from 
Agriculture and Environment have increased from $2.9 million to $35.1 
million over this period of time--representing a 1,077 percent 
increase. Are any of these funds being used to mitigate the harm being 
done to the environment due to coca production?
    Answer. The appearance of the enormous increase in the agriculture 
and environment sectors with ACI is due to a definitional change in the 
funding codes during this last reporting period. Previously, we 
attributed the bulk of ACI funds to the economic growth sector under 
the ``other economic growth code''. A change in the code's definition 
last year made it necessary to attribute our ACI funds to the 
agriculture sector with the codes corresponding to ``Rural 
Development'' and ``Agriculture Production and Productivity.'' All ACI-
related activities remain the same.
    All of our agricultural and infrastructure activities follow strict 
standards designed to protect the environment and must undergo 
environmental impact assessments, including the use of integrated pest 
management techniques and organic production whenever possible. Farmers 
are taught to use sustainable agricultural practices that maintain the 
viability of their land and permit permanent cultivation, therefore 
eliminating the need to clear-cut jungle regions to access fertile 
land. The sustainable cultivation of long-term and profitable crops, 
combined with other social benefits, has been successful in preventing 
a return to coca cultivation and encourages these young and unstable 
communities (often they are `communities' in name only) to stay put and 
develop, linking up with local government rather than migrating deeper 
into the jungle and clear-cutting virgin forest for new coca fields.
    Over the last 4 years, ACI funding has helped prevent colonization 
by supporting sustainable forest management and park protection 
activities managed by USAID/Peru's Environment Program. These 
activities are specifically designed to prevent both illegal logging 
and coca colonization into delicate and still intact ecosystems in the 
upper and mid-Andean jungles where coca cultivation is focused.
                                 ______
                                 
               Questions Submitted by Senator Mike DeWine

                       WESTERN HEMISPHERE FUNDING

    Question. Mr. Administrator, how do you justify the dramatic 21.6 
percent cut in Development Assistance and Child Survival and Health 
funding from the fiscal year 2006 appropriated levels for the Western 
Hemisphere? Even if you compare fiscal year 2007 to the fiscal 2006 
request, it's still a cut of approximately 18 percent.
    Answer. Overall U.S. Government assistance levels for Latin America 
are not expected to decline in fiscal year 2007. Foreign assistance for 
the region has nearly doubled since the start of the administration, 
rising from $862 million in fiscal year 2001 to a planned $1.7 billion 
in fiscal year 2007. Reductions in the Development Assistance and Child 
Survival and Health requests are partially offset by increases in the 
request for ESF, which is $31 million more than the fiscal year 2006 
level. For additional consideration is the complete picture of U.S. 
Government resources going to the region. The Millennium Challenge 
Account will be providing significant resources, through Compact 
agreements, to Nicaragua ($175 million) and Honduras ($215 million), as 
well as through Threshold Country Program funding to Paraguay ($37 
million). The Millennium Challenge Account projects compliment our 
efforts by supporting economic growth, infrastructure, and other 
projects where USAID has been active in the past.

                    MILLENNIUM CHALLENGE CORPORATION

    Question. The President's request includes $3 billion for the 
Millennium Challenge Corporation [MCC]. While the MCC does not fall 
directly under the authority of the Director of Foreign Assistance, the 
MCC consults with your office and you sit on the board as 
Administrator. Please explain your strategy for determining levels of 
other assistance if a country is MCC eligible. For instance, if a 
country receives a compact for a major infrastructure project, will 
that country be eligible to receive the same amounts of Development 
Assistance they had before becoming MCC eligible? I've heard concerning 
rumors that a blanket policy would be applied and it seems to me you 
may want to look at these issues on a country by country basis.
    Answer. My role in relation to the Millennium Challenge Corporation 
[MCC] as Director of Foreign Assistance is to coordinate the work of 
the MCC with other U.S. agencies involved in foreign assistance. 
Millennium Challenge Corporation staff participate on the country core 
teams where their programs are active. These country teams are meeting 
now to review country allocation levels and establish priority program 
areas for each recipient country. MCC participation with these teams 
allows for collaboration between the work the MCC is doing and other 
U.S. Government agencies. Their participation aids in assuring that the 
work of U.S. Government agencies complements each other in helping to 
achieve the Secretary's transformational diplomacy goal of, ``Helping 
to build and sustain well governed states that will respond to the 
needs of their people and conduct themselves responsibly in the 
international system.'' The final allocation of State and USAID funding 
will take into account the work of the MCC to ensure that our programs 
complement one another in achieving the Secretary's goal. We have not 
set guidance to preclude or include considerations of funding from one 
account or another as the country teams allocate their budgets. Their 
guidance directs them to develop a plan that will help the country 
advance in achieving the Secretary's goal, taking into account all U.S. 
Government foreign assistance resources, including MCC funds.

                             HAITI FUNDING

    Question. As you may know, I worked to include $40 million in 
additional funding for Haiti in the Senate passed fiscal year 2006 
supplemental. The conference report includes $20 million. As Director 
of Foreign Assistance and USAID Administrator, what are your plans for 
Haiti in the short-term? Have you met with the USAID Mission Director 
or the Ambassador yet?
    Answer. The U.S. Government will use the supplemental funds to help 
Haiti reduce internal conflict and provide the basis to rebuild by 
addressing key sources of stress and conflict in social, economic, and 
political spheres, notably through increasing access to primary health 
services and basic education, creating employment and rebuilding assets 
for sustainable livelihoods, and fostering improved rule of law and 
responsive governance. All interventions will be undertaken to achieve 
short-term visible and measurable results while still developing the 
capacity of institutions to sustain results.
    I would look forward to any opportunities in the near future to 
meet with both our Ambassador and our Mission Director.

              INTERNATIONAL DISASTER AND FAMINE ASSISTANCE

    Question. The International Disaster and Famine Assistance Account 
request for fiscal year 2007 is cut by $62 million from the fiscal year 
2006 enacted levels (including the supplemental funds). As you know, 
these are the emergency funds that save lives. In addition, there is 
evidence that the use of these funds in emergencies are some of our 
best PR efforts overseas. For the past few years, we've been relying on 
supplemental funding for these core humanitarian activities. I believe 
doing so is dangerous fiscal planning that limits critical activities 
that respond to the large number of natural and man-made disasters. Do 
you believe $349 million is sufficient to address the emergencies we 
know about such as Sudan, northern Uganda, Congo, and Indonesia as well 
as the unforeseen emergencies to come in fiscal year 2007.
    Answer. We have confronted a series of major disasters over the 
past several years. Supplemental appropriations have been essential to 
an effective response. At this point, we believe the requested level 
will be adequate and will allow us to respond effectively.
                                 ______
                                 
              Question Submitted by Senator Sam Brownback

                        U.S.-UKRAINE FOUNDATION

    Question. Congress has iterated its support for programs 
administered by the U.S.-Ukraine foundation, but USAID's decisions 
regarding funding for these programs has not reflected Congress' 
support. Is this lack of targeted funding for these programs a 
reflection of the general draw down of ESF funds for Ukraine, or have 
USAID country officials made these decisions for other reasons?
    Answer. First, before I answer your question, let me state for the 
record that our programs in Ukraine are funded predominantly through 
the Freedom Support Act (FSA) and not through ESF funds.
    USAID has funded the U.S.-Ukraine Foundation [USUF] since July 
1997, when USUF was awarded a non-competitive grant. This grant has 
been extended several times and the total award amount has increased to 
its current level of $22,245,918. The final extension to this grant has 
been made, taking it to July 2007, in accordance with the 10-year limit 
on USAID assistance instruments. During the period of this grant, 
USAID's funding level in Ukraine has dropped four-fold, from $163 
million in 1997 to $41 million in 2006. Nevertheless, USUF's average 
funding level has remained fairly consistent at about $2.2 million per 
year.
    USAID recognizes the importance and value of Ukrainian Diaspora 
groups and we hope to continue benefiting from their participation in 
the USAID assistance program. Since there are currently many active and 
capable Diaspora groups, we expect to select a future program 
implementer via a competitive process.
                                 ______
                                 
             Question Submitted by Senator Patrick J. Leahy

                                 RUSSIA

    Question. In July, the United States and other nations will be 
meeting in St. Petersburg for the annual G8 summit. Increased attention 
has been paid to this year's summit because Russia is hosting it.
    The irony of this gathering of democratic nations in Russia is that 
Russia is becoming increasingly un-democratic. It has been 2 years 
since President Putin won reelection with no opposition. Since then, 
the Kremlin has opposed the democratic movement in Ukraine, supported a 
blatantly manipulated election in Belarus, rolled back democratic 
reforms in Russia, and continued its heavy handed policies in Chechnya.
    The latest crackdown on democracy is a law requiring civil society 
groups in Russia to re-register with the Justice Ministry in order to 
exert greater control of their activities and finances.
    The President proposes to cut aid to Russia from $80 million in 
fiscal year 2006 to $58 million in fiscal year 2007. Almost none of 
this goes to the government. Shouldn't we be doing more, not less, to 
support democracy in Russia through civil society and the media?
    Answer. We are doing a great deal to support the democratic process 
in Russia. U.S. assistance in Russia supports democracy programs that 
encourage volunteerism and civic responsibility through support to a 
wide variety of both Russian and American non-governmental 
organizations. Programs help Russian citizens, especially young people, 
better understand and apply democratic values and more proactively 
exercise their civic rights and responsibilities. In particular, the 
United States supports Russian human rights organizations, independent 
media outlets and good governance watchdogs. The proposed fiscal year 
2007 budget level for Russia reflect the impact of competing priorities 
in a resource constrained environment.
    Our relationship with Russia will always be important for the 
United States. In the coming years, we intend to use foreign assistance 
to further our strategic partnership with Russia on areas of common 
interest such as countering terrorist financing, mitigating conflict in 
the North Caucasus, advancing implementation of Russia's local self 
governance law and strengthening the Russian judiciary. We also intend 
to support Russian reformers to help the country complete its 
transformation to an open, democratic society.
                                 ______
                                 
            Questions Submitted by Senator Mary L. Landrieu

                  DISPLACED CHILDREN AND ORPHANS FUND

    Question. In fiscal year 2006, $3 million was appropriated for 
USAID in the State and Foreign Appropriations bill. The funds were to 
be used as a pilot project for orphans, displaced, and abandoned 
children. To date, I haven't seen any evidence the funds have been put 
to use.
    What has happened to these funds and please outline in detail what 
has been done with the funding for this very important project?
    Answer. It is the explicit mandate of USAID's Displaced Children 
and Orphans Fund [DCOF] to directly address the concerns outlined in 
the language of the State and Foreign Operations Appropriations Bill. 
This office is charged to prevent child abandonment, address the needs 
of orphans, displaced and abandoned children and provide permanent 
homes through family reunification, guardianship and domestic 
adoptions. USAID will meet or exceed the $3 million appropriated in 
fiscal year 2006.
    Of the earmarked $3 million, $1.5 million will be used to reduce 
the abandonment and separation of children in the Democratic Republic 
of the Congo. This program integrates two coordinated efforts that: (1) 
combine poverty alleviation, training of social workers, promotion and 
support of children's rights, and communications and outreach, and (2) 
ensure minimum care standards and increase the reinsertion of separated 
and abandoned children with their families through support and training 
to local non-governmental organizations (NGOs) and government 
institutions.
    The additional $1.5 million will be used to support programs in 
Ukraine and Georgia. The goal of the Ukraine program is to build a 
continuum of family care services for children who are at risk or 
outside of family care. This program includes activities designed to 
strengthen and develop systems of family preservation, foster care, and 
adoption. The DCOF program in Georgia is targeted to assist vulnerable 
families to improve their ability to care for their own children as 
well as strengthening and expanding local NGO and government capacities 
to promote the physical, cognitive, emotional and psychosocial well 
being of at-risk children.
    Question. In your new position, you will direct all foreign 
assistance. How will you use your position to advance the causes of 
orphans, displaced, and abandoned children in the developing world?
    Answer. Hundreds of thousands of children are separated from their 
families or are in danger of becoming combatants as a result of civil 
war. Millions of children work or live on the streets; and as many as 
40 million children will be orphaned in HIV/AIDS affected countries by 
2010.
  --I will work in the coming months with the Special Advisor on 
        Orphans and Vulnerable Children, who is located within USAID, 
        to implement a strategy that calls for a more effective and 
        coordinated U.S. Government response. Our initial findings will 
        be reported to the Congress in the next several months.
  --We need to collaborate closely with UNICEF and leading non-
        governmental organizations to formulate our response, and to 
        ensure that in countries that have completed National Plans of 
        Action for Orphans and Vulnerable Children, that resources are 
        made available and that results are monitored and documented.
  --The U.S. Government currently implements a number of effective 
        programs that make a huge difference in the lives of millions 
        of highly vulnerable children around the world. Programs are 
        located in Africa, Asia, Europe and Eurasia, and Latin America. 
        Activities include:
    --Expanding care and support programs for children affected by HIV/
            AIDS at the community level in countries hardest hit by the 
            epidemic;
    --Helping reintegrate child soldiers back into their families and 
            communities, and providing psychosocial support for these 
            children;
    --Providing vocational and educational opportunities for street 
            children and other displaced children;
    --Expanding effective community-level support for orphans;
    --Preventing increased disabilities through treating and preventing 
            blindness, and education and testing related to other 
            disabilities; and
    --Food from Public Law 480 and donations from the United States to 
            the World Food Program bring life-sustaining food to 
            millions of children annually.

                    CHILDREN IN CONFLICT AND CRISIS

    Question. What has happened to these funds and please outline in 
detail what has been done with the funding for this very important 
project?
    Answer. It is the explicit mandate of USAID's Displaced Children 
and Orphans Fund [DCOF] to directly address the concerns outlined in 
the language of the State and Foreign Operations Appropriations bill. 
This office is charged to prevent child abandonment, address the needs 
of orphans, displaced and abandoned children and provide permanent 
homes through family reunification, guardianship and domestic 
adoptions. USAID will meet or exceed the $3 million appropriated in 
fiscal year 2006.
    Of the earmarked $3 million, $1.5 million will be used to reduce 
the abandonment and separation of children in the Democratic Republic 
of the Congo. This program integrates two coordinated efforts that: (1) 
combine poverty alleviation, training of social workers, promotion and 
support of children's rights, and communications and outreach, and (2) 
ensure minimum care standards and increase the reinsertion of separated 
and abandoned children with their families through support and training 
to local non-governmental organizations [NGOs] and government 
institutions.
    The additional $1.5 million will be used to support programs in 
Ukraine and Georgia. The goal of the Ukraine program is to build a 
continuum of family care services for children who are at risk or 
outside of family care. This program includes activities designed to 
strengthen and develop systems of family preservation, foster care, and 
adoption. The DCOF program in Georgia is targeted to assist vulnerable 
families to improve their ability to care for their own children as 
well as strengthening and expanding local NGO and government capacities 
to promote the physical, cognitive, emotional and psychosocial well 
being of at-risk children.

                       MATERNAL AND CHILD HEALTH

    Question. Despite significant scientific advances, millions of 
children and their mothers still die from treatable and preventable 
causes in the developing world. Each year, more than 10 million 
children under age 5 die--40 percent of these deaths occur within the 
first month of life. More than half a million women die from pregnancy- 
and child birth-related causes each year. Although the United States 
has played a critical role in providing the funding and expertise that 
has saved lives in past, funding for low-cost, low-tech interventions 
has stagnated.
    Under your leadership, how would the U.S. Government address the 
millions of preventable deaths of children under 5 and their mothers?
    Answer. USAID will focus its efforts in countriesthat continue to 
have a high burden of preventable maternal and child mortality to 
maximize our impact on health. We will work with host country 
governments and partners to scale-up country-appropriate packages of 
high-impact interventions, such as childhood immunizations, oral 
rehydration therapy, household water disinfection, vitamin A, antenatal 
care, and active management of the third stage of labor. By 
coordinating closely with other USG initiatives, such as the 
President's Malaria Initiative, and with other donors, such as the 
United Nations Children's Fund [UNICEF] the Global Alliance for 
Vaccines and Immunizations [GAVI], and the Global Fund to Fight AIDS, 
Tuberculosis and Malaria, we will be able to complement other funding 
in such a way that maximizes impact on maternal and child survival, 
health and nutrition. Finally, we will concentrate our new investments 
in emerging areas, such as neonatal health, in order to accelerate the 
decline in infant and child mortality.

                         CONCLUSION OF HEARINGS

    Senator Brownback. Thank you very much. That concludes our 
hearings.
    [Whereupon, at 4:02 p.m., Thursday, June 8, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]

  STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR 
                            FISCAL YEAR 2007

                              ----------                              

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

                        NONDEPARTMENTAL WITNESS

    [Clerk's note.--The subcommittee was unable to hold a 
hearing on the nondepartmental witness. The following statement 
was submitted for the record:]

              Prepared Statement of The Nature Conservancy

    The Nature Conservancy (TNC) urges the Committee to continue its 
strong tradition of support to international conservation by 
appropriating, in fiscal year 2007, $165.5 million (the President's 
request) for conservation of biodiversity within the Development 
Assistance account of the U.S. Agency for International Development 
(USAID); $107.5 million for the Global Environment facility (GEF), the 
same level as in recent years; $20 million for the Tropical Forest 
Conservation Act (TFCA) debt-for-forest program (the same level as in 
recent years); and $8 million for international conservation programs 
within the International Organizations and Programs (IO&P) account at 
the Department of State. The Conservancy urges the Committee to provide 
firm legislative direction to USAID, to keep Parks in Peril funded and 
operating in fiscal year 2007 at its recent average level funding of $7 
million, while negotiations proceed to expand and enhance this valuable 
program.
    The mission of The Nature Conservancy is to preserve the plants, 
animals, and natural communities that represent the diversity of life 
on Earth, by protecting the lands and waters they need to survive. Our 
work in the United States and abroad is closely related. For example, 
it is not possible to protect migratory birds in their summer ranges, 
inside the United States, without also taking care of their winter 
ranges in Latin America and the Caribbean. A healthy natural 
environment is a key element in genuinely sustainable economic and 
social development around the world. Too often, short-term 
considerations drive bad choices, whose results can be catastrophic for 
both the natural world and for the people who live with and by means of 
that world. A healthy and sustainable environment promotes peace and 
security.
    We support local conservation groups in the developing world that 
work to raise the effective level of protection at parks and nature 
preserves established by the local governments. We work with local 
communities to increase the constituency for conservation. We support 
sustainable development projects to create jobs and improve the 
productivity and standard of living of rural people living in and near 
protected areas. We work cooperatively with landowners to promote 
conservation on private lands. We are a private, non-profit 
organization. Our last private capital fund campaign raised more than 
$1 billion, $120 million of that for our international work. We are 
planning a new private campaign, which will raise even larger sums for 
international conservation.
    About 83 percent of our operating budget is raised from non-
governmental sources, but government grants fill a critical need. For 
example, the assistance we receive through our cooperative relationship 
with USAID is vital to our international operations. It is difficult to 
raise private dollars for international operating (as distinct from 
capital) expenses. Without USAID's support, these programs would be 
damaged.
    Our Parks in Peril (PiP) program is widely regarded as among the 
most successful and respected in the tropical world. PiP has brought 
real protection to 45 major ``sites'' (parks and nature preserves) 
comprising more than 40 million acres, in 17 countries of Latin America 
and the Caribbean. The PiP methodologies have been applied at many 
other sites, and millions of additional acres, that never received 
USAID funding. In recent years, USAID has supported PiP with about $7 
million. The leverage on the U.S. investment in PiP is high--more than 
$400 million raised by us and by our local partners for conservation 
work at or near the PiP sites.
    Your Committee has praised Parks in Peril in its past reports. We 
urge you to do so again and to add language directing USAID to fund the 
program at $7 million in fiscal year 2007 while design continues for an 
enhanced and global version of this effort. If funding is allowed to 
lapse for even 1 year, some of the achievements of the program will be 
disrupted. Furthermore, such a lapse would waste funds; it would cost 
more money to restart the program from a complete stop, as compared to 
continuing it during the design phase for a global effort.
    The Tropical Forest Conservation Act (TFCA) is also funded within 
Foreign Operations. The Administration has included the TFCA in its 
request for broader debt relief, and has indicated that it anticipates 
spending $8 million on TFCA in fiscal year 2007. We recommend that TFCA 
be given a separate line item and funded at $20 million, the same level 
as in recent years. TFCA has shown good results and good leverage on 
the Federal investment. TNC alone has donated $5 million to TFCA deals. 
TNC is a donor to TFCA deals, not a financial beneficiary, but the 
cause of international conservation benefits greatly. TFCA deals are 
likely over the next year or two in Guatemala, Paraguay, Botswana, 
Belize, Jamaica, and Brazil.
    The Global Environment Facility (GEF) is the largest single source 
of environmental funds (including conservation) in the world. The U.S. 
Government contributes 22 percent, which is leveraged nearly 4 to 1 by 
other governmental donors, then further leveraged at least 2 to 1 by 
local ``match,'' so that ultimately every dollar of U.S. money is 
leveraged by at least 10 to 1, and sometimes up to 20 to 1, for on-the-
ground environmental projects. The Administration's request level for 
fiscal year 2007 is $56.25 million, barely half the pledge level of 
recent years. This request appears to assume that current talks within 
the GEF for administrative changes (favored by the U.S.) to enhance 
efficiency, will fail. We are concerned that the low request number 
will, if adopted, make failure nearly inevitable. We urge the Committee 
to instead appropriate at least the level of recent years--$107.5 
million--in fiscal year 2007. Some portion of that $107.5 million could 
be made conditional upon successful adoption of changes in the GEF 
acceptable to the U.S. delegation.
    Thank you for this opportunity to submit testimony.

       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page
Brownback, Senator Sam, U.S. Senator from Kansas, question 
  submitted by...................................................    88

Cochran, Senator Thad, U.S. Senator from Mississippi, question 
  submitted by...................................................    33

DeWine, Senator Mike, U.S. Senator from Ohio, questions submitted 
  by.............................................................    86
Durbin, Senator Richard J., U.S. Senator from Illinois, questions 
  submitted by...................................................    34

Landrieu, Senator Mary L., U.S. Senator from Louisiana, questions 
  submitted by...................................................    89
Leahy, Senator Patrick J., U.S. Senator from Vermont:
    Opening statements........................................... 2, 40
    Prepared statements.......................................... 3, 41
    Question submitted by........................................    88

McConnell, Senator Mitch, U.S. Senator from Kentucky:
    Opening statements........................................... 1, 39
    Questions submitted by.......................................    58

Rice, Hon. Condoleezza, Secretary, Office of the Secretary, 
  Department of State............................................     1
    Prepared statement...........................................     7
    Summary statement............................................     5

Specter, Senator Arlen, U.S. Senator from Pennsylvania, questions 
  submitted by...................................................    83

Tobias, Hon. Randall L., Administrator, United States Agency for 
  International Development......................................    39
    Prepared statement...........................................    44
    Summary statement............................................    42
The Nature Conservancy, prepared statement.......................    91

                             SUBJECT  INDEX

                              ----------                              

                          DEPARTMENT OF STATE

                        Office of the Secretary

                                                                   Page

Additional Subcommittee Questions................................    33
Advancing Liberty and Democracy..................................    10
Afghanistan......................................................    29
Aid to Africa....................................................    28
Belarus..........................................................    32
Building State Capacity..........................................    11
Burma............................................................    30
Defeating Terror.................................................     9
Empowering Transformational States...............................    12
Helping Developing States........................................    11
Iran.............................................................    25
Iraq.............................................................13, 22
Meeting Global Challenges........................................    11
Microenterprise..................................................    19
North Korea......................................................    27
Reforms in Ukraine...............................................    32
Special Court for Sierra Leone...................................    16
Sudan and Chad...................................................    26
Transformational Diplomacy.......................................     8
United Nations...................................................    20
Western Hemisphere Travel Initiative.............................    17

           UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT

Additional Committee Questions...................................    58
Afghanistan......................................................    49
Authority Over Other Government Agencies.........................    59
Blood Safety.....................................................    84
Branding.........................................................    82
Burma............................................................    47
Children in Conflict and Crisis..................................    89
Congressional Budget Justification...............................    60
Contractors......................................................    83
Coordination of Democracy Programs...............................    82
Countries Most Important to the U.S. in Africa...................    61
Democracy........................................................    62
    And Governance Programs in China.............................    82
    Fund.........................................................    82
Director of Foreign Assistance...................................    60
Displaced Children and Orphans Fund..............................    89
Enhancing the Impact of Foreign Assistance: Reducing 
  Inefficiencies and Incoherence.................................    45
Fiscal Year 2007 Budget..........................................    45
Foreign:
    Aid:
        Budget...................................................    51
        Coordination.............................................    54
    Assistance Reform............................................    58
Global Fund......................................................    62
Haiti Funding....................................................    87
Health Programs..................................................    47
International Disaster and Famine Assistance.....................    87
Iraq.............................................................    48
Maternal and Child Health........................................    90
Millennium Challenge Corporation.................................    87
Our Approach: We Will do Better..................................    45
Peru Coca Production.............................................    84
Regional Priorities..............................................    60
Russia...........................................................    88
State Department/USAID Definition of Democracy and Governance 
  Pro-grams......................................................    81
Strategic Framework for Foreign Assistance.......................    50
Transformational Diplomacy.......................................    60
    Initiative...................................................    50
Tuberculosis.....................................................    83
U.S.-Ukraine Foundation..........................................    88
USAID Personnel..................................................    83
Western Hemisphere Funding.......................................    86

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