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[Senate Hearing 111-928]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 111-928
 
                               NOMINATIONS

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

                                HEARING

                               BEFORE THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            JANUARY 22, 2009

                               __________

       Printed for the use of the Committee on Foreign Relations

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                COMMITTEE ON FOREIGN RELATIONS         

             JOHN F. KERRY, Massachusetts, Chairman        
CHRISTOPHER J. DODD, Connecticut     RICHARD G. LUGAR, Indiana
RUSSELL D. FEINGOLD, Wisconsin       Republican Leader designee
BARBARA BOXER, California            BOB CORKER, Tennessee
ROBERT MENENDEZ, New Jersey          JOHNNY ISAKSON, Georgia
BENJAMIN L. CARDIN, Maryland         JAMES E. RISCH, Idaho
ROBERT P. CASEY, Jr., Pennsylvania   JIM DeMINT, South Carolina
JIM WEBB, Virginia                   JOHN BARRASSO, Wyoming
JEANNE SHAHEEN, New Hampshire        ROGER F. WICKER, Mississippi
EDWARD E. KAUFMAN, Delaware
KIRSTEN E. GILLIBRAND, New York
                  David McKean, Staff Director        
        Kenneth A. Myers, Jr., Republican Staff Director        

                              (ii)        

  
?

                            C O N T E N T S

                              ----------                              
                                                                   Page

Dodd, Christopher J., U.S. Senator from Connecticut, prepared 
  statement......................................................    23
Hutchison, Hon. Kay Bailey, U.S. Senator from Texas, statement...     7
Kerry, Hon. John F., U.S. Senator from Massachusetts, opening 
  statement......................................................     1
Lew, Jacob J., Nominee to be Deputy Secretary of State for 
  Management and Resources.......................................    12
    Prepared statement...........................................    14
    Responses to questions submitted by the following Senators:
        Richard G. Lugar.........................................    62
        Robert Menendez..........................................    78
        Robert P. Casey, Jr......................................    83
        Jim DeMint...............................................    89
Lugar, Hon. Richard G., U.S. Senator from Indiana, opening 
  statement......................................................     5
Schumer, Hon. Charles E., U.S. Senator from New York, statement..     8
Steinberg, James B., Nominee to be Deputy Secretary of State.....     9
    Prepared statement...........................................    11
    Responses to questions submitted by the following Senators:
        Richard G. Lugar.........................................    55
        Robert Menendez..........................................    71
        Jim DeMint...............................................    85

              Additional Material Submitted for the Record

Kennedy, Hon. Edward M., U.S. Senator from Massachusetts, 
  prepared statements in support of:
    Nominee James B. Steinberg...................................     3
    Nominee Jacob J. Lew.........................................     4
Joint responses of Jacob J. Lew and James B. Steinberg to 
  questions submitted by Senator Russell D. Feingold.............    70

                                 (iii)

  

                              NOMINATIONS

                              ----------                              

                       THURSDAY, JANUARY 22, 2009

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.

James B. Steinberg to be Deputy Secretary of State
Jacob J. Lew to be Deputy Secretary of State for Management and 
            Resources
                              ----------                              

    The committee met, pursuant to notice, at 9:38 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. John F. Kerry 
(chairman of the committee) presiding.
    Present: Senators Kerry, Dodd, Feingold, Menendez, Cardin, 
Casey, Webb, Shaheen, Kaufman, Lugar, Corker, Isakson, and 
Barrasso.

            OPENING STATEMENT OF HON. JOHN F. KERRY,
                U.S. SENATOR FROM MASSACHUSETTS

    The Chairman. The hearing will come to order, please.
    Thank you.
    Well, we're pleased to welcome our two nominees here today, 
and our colleagues in the Senate who will be introducing them, 
Senator Hutchison and Senator Schumer. Senator Schumer was just 
bragging to me about how many New York Cabinet people he's been 
introducing--and who was it that you announced, the--oh, yes, 
Eric Holder actually comes from New York, though he isn't there 
now. So, if you count him, you've got five Cabinet members. 
We're delighted to have you here, and I know that Jack Lew is 
delighted to have you, too.
    Let me just say a few words to start off, and then Senator 
Lugar will, and then we'll give each of you a chance to make 
your introductions. And I know you have busy schedules.
    Each of our nominees today bring to the table, as is 
appropriate, very strong public-service credentials, an 
impressive track record for both of them, of knowing how to get 
things done. And I think that is what particularly qualifies 
them for these two positions.
    Let me just ask you if either of you have family members 
here today. We'd be delighted if you'd introduce them to the 
committee. I see we've got some young members here. Yes. Go 
ahead, Jim.
    Mr. Steinberg. Thank you, Senator. It's a pleasure to be 
here. I'll say more in just a minute, but I would like to 
introduce--I have quite a number of members of my family here. 
My wife, Sherry Abbott, and my two daughters, Jenna, right 
there, and Emma, in her lap; my mother, Charlotte Steinberg; 
and my sister, there, Margo Lebowitz.
    The Chairman. Welcome. Who has--who do you have in your lap 
over there? OK, she's ready to speak up for herself. 
[Laughter.]
    Mr. Steinberg. She's ready to go, Senator.
    The Chairman. There you go. Well, we're delighted to have 
you here, and we know you're very proud of your daddy.
    And, Jack.
    Mr. Lew. Senator, thank you. I'd like to introduce my wife, 
Ruth Schwartz, who's with me, and my daughter, Shoshanna. And 
my son, Danny, couldn't be here today, but is with us in 
spirit.
    The Chairman. Great. Well, we really welcome you. We're 
delighted to have all of you here, and we know that this 
requires a little bit of sacrifice from all of you, too, 
because the hours are long and sometimes with travel involved 
and everything. There's a lot of giving by the families, so we 
appreciate that.
    I think both of you, obviously, know the challenges that we 
face ahead of us. And the President's Inaugural Address was a 
fresh and stark reminder that this is a moment of multiple 
crises--two ongoing wars, the Middle East on fire, a 
nonproliferation regime, facing dire challenges, a changing 
climate headed toward a point of no return, not to mention a 
financial crisis and the full global implications of which are 
still unfolding.
    These challenges and others demand, and the President has 
promised, nothing less than a bold new era of American 
diplomacy. That much is clear. The question for all of us is, 
``What's the most effective way to get there?'' a question 
which, in many cases, will be at the center of the work of the 
two nominees here today.
    To be effective, we understand that a surge in diplomacy 
must be accompanied by a surge in the capacity of our civilian 
institutions to meet a new and far more ambitious agenda. And 
that will not happen unless we match our rhetorical commitment 
to a more powerful State Department with a serious new 
commitment of resources.
    Jim Steinberg, the deputy tasked with policy, has a well-
earned reputation for incisive analysis. He has thought a great 
deal about Presidential transitions, the challenges of making 
national security decisions in the first days of a new 
administration. He's a master of policy detail and, famously, a 
tireless worker. In short, he is more than well equipped to hit 
the ground running in this job.
    I'm also heartened by the decision to appoint Jack Lew as 
Deputy Secretary of State for Resources and Management. I've 
worked closely with Jack on environmental issues, and know him 
to be both extraordinarily competent and a pleasure to work 
with. As the administration considers how to strengthen the 
civilian aspects of our foreign policy, he is going to be a 
powerful advocate for the State Department within the 
administration and before the Congress.
    While the second deputy position has existed in statute for 
nearly a decade, it's never been filled. The Obama 
administration's selection of someone with stature and deep 
knowledge of management issues and the budgetary process is a 
welcome sign of the commitment to deliver on the nuts and bolts 
that will empower robust diplomacy.
    The goal of increased diplomatic and civilian capacity-
building is fully embraced by this committee, and we recognize 
the Secretary of Defense's warnings of the ``creeping 
militarization of American foreign policy,'' and welcome his 
demand for increased resources for the State Department to take 
on new missions.
    Getting this right is going to require significant 
resources. I expect to see Jack Lew fighting for every dollar 
he can get for the State Department, and this committee looks 
forward to helping him to spend it as constructively as 
possible.
    Money alone, though, we all understand, is not going to be 
enough. With greater budgetary resources come increasing 
management challenges. I enthusiastically support the goal. 
It's long overdue. President Obama has committed to increasing 
our Foreign Service officer corps by 25 percent. And when our 
Foreign Service officers are stretched too thin and constantly 
working their rotations at full capacity, we end up 
shortchanging the kinds of training that we'd like our 
diplomats to have. With more officers, and more staffing to 
support them, we can supply our diplomatic corps with new kinds 
of expertise in the cultures, languages, places, and issues 
where we'd like to see greatest focus in the years ahead. And I 
might add, significantly, that the public diplomacy component 
of America's efforts in the last years has been significantly 
undermanned, underconceptualized, underimplemented; and nothing 
is more important to our success with respect to 
counterinsurgency and counterterrorism.
    We also need to reexamine the laws that guide civilian 
programs, from acquisition to actual funding. And I'm committed 
to working with the new administration to explore whether the 
Foreign Assistance Act can be strengthened. And we believe, 
obviously, that it can be.
    Finally, as a member of the Massachusetts delegation, and 
privileged now to be chairman, I'm very pleased to note that 
Jack Lew served as an aide to Tip O'Neill, and Jim Steinberg 
worked for my good friend and colleague Ted Kennedy on the 
Armed Services Committee. So, while their accomplishments since 
then have been remarkable, I can assure you they began their 
journeys with the best in the business.
    Senator Kennedy has asked me to submit statements for the 
record with respect to both of your nominations, and I am 
pleased to do that.
    [The statements of Senator Kennedy follow:]

     Prepared Statement of Senator Edward M. Kennedy in Support of
                       Nominee James B. Steinberg

    Mr. Chairman, Senator Lugar and members of the committee, I 
strongly support the nomination of Jim Steinberg to be Deputy Secretary 
of State.
    We know the extraordinary interest across the globe for the change 
in America that is about to take place. We must act with a sense of 
urgency to meet the challenges before us. Never before has the need for 
America's leadership and respect in the world been more important, more 
necessary, and more desired than it is today.
    We've learned harsh lessons from past decisions to ``go it alone.'' 
Now, we have an opportunity--and a responsibility--to see that our role 
in the world reflects the values and aspirations of the American 
people.
    For too long, America has been misunderstood and misrepresented. We 
must restore the promise of America and regain our respect in the 
world. We must honor our many international obligations and contribute 
to the world as only America can so generously do.
    Jim Steinberg is an excellent choice to help lead us in meeting 
these challenges as Deputy Secretary of State. Jim is well known and 
well respected by many of us in the Senate. His extraordinary talent, 
ability, and expertise have prepared him well to serve in this very 
important position.
    I've known Jim for many years, dating back to 1981 when he joined 
my staff as minority counsel on the Labor and Human Resources Committee 
and went on to assist me when I joined the Armed Services Committee in 
1983. His potential was clear. Time and again, whether the issue was 
nuclear arms control, the conflict in Lebanon or a crisis in Central 
America, I relied on Jim for excellent advice and a thorough analysis 
of the issues. I remember fondly a trip with Jim to Germany on arms 
control issues in 1985, and I also have Jim to thank for the warm 
relationship I developed with Senator Barry Goldwater on the 
Conventional Forces Subcommittee of the Armed Services Committee.
    Jim has impressive experience both in and out of government. He has 
held a range of important positions in the executive branch: at the 
National Security Council, the State Department, and as President 
Clinton's personal representative at the 1998 and 1999 G8 summits. He 
also has an excellent understanding of the challenges confronting our 
intelligence community, having served as Deputy Assistant Secretary for 
Analysis in the Bureau of Intelligence and Research at the State 
Department in 1993.
    Jim is a prolific writer and respected scholar in foreign policy. 
During his years at the Brookings Institution from 2001 to 2005, I 
often asked his counsel on the wars in Iraq and Afghanistan. He was 
always a step ahead, offering forthright insights that gave new 
perspectives to these complex and troubling issues.
    Jim will not hesitate to go against conventional thinking, and he's 
a pleasure to work with. His views are always innovative and thoughtful 
about what America needs to do. I have great respect for the many 
contributions he has made to public affairs issues, and to mentoring 
the next generation of public policy leaders in his current position at 
the Lyndon B. Johnson School of Public Affairs at the University of 
Texas.
    Jim's an avid runner and fly fisherman. I know from experience what 
a strong backhand he has, and how gracious he can be on the tennis 
court in never failing to let the boss win! I know he'll go the 
distance for the State Department and for our country.
    Jim hails from Boston, where he grew up. He attended Harvard as an 
undergraduate and received a law degree from Yale in 1978. Jim's wife, 
Sherburne Abbott, is an environmental scientist and director of the 
Center for Science and Practice at the University of Texas at Austin. 
They have two young daughters, Jenna who is age 7, and, Emma who is 4, 
and I know how proud they are of their father today.
    I'm delighted the administration has nominated such a talented and 
dedicated public servant to represent us. Jim clearly has the skill, 
long-term vision, and creative thinking essential to meet and master 
the challenges facing our Nation and our interdependent world.
    Mr. Chairman, I strongly support Jim Steinberg's nomination to be 
the Deputy Secretary of State, and I urge the committee and the Senate 
to approve the nomination.
                                 ______
                                 

     Prepared Statement of Senator Edward M. Kennedy in Support of
                          Nominee Jacob J. Lew

    I'm delighted that President Obama has nominated Jack Lew to serve 
as Deputy Secretary of State for Management and Resources.
    Jack is an extraordinarily talented leader who has brought vision 
and leadership to every job he has held, and he'll bring those same 
qualities to the vital task of managing the State Department and our 
foreign assistance programs at this critical time.
    I first met Jack when he served as a young aide to House Speaker 
Tip O'Neill of Massachusetts. He quickly rose to positions of major 
responsibility in the Speaker's office, and he hasn't slowed down 
since.
    I also had the privilege of working closely with Jack when he 
served in the Clinton administration--first when he was a special 
assistant to the President and later when he became Director of the 
Office of Management and Budget. I found him always to be thoughtful, 
open and innovative in assessing new ways for improving the lives of 
Americans. Whether the issue was new investment in education, aid to 
sub-Saharan Africa or assistance to distressed fishermen in 
Massachusetts, Jack's door was always open.
    A statement by Jack from that period tells a great deal about the 
values he will bring to this new responsibility at the State 
Department. He said, ``Budgets aren't books of numbers. They're a 
tapestry, the fabric, of what we believe. The numbers tell a story, a 
self-portrait of what we are as a country.''
    Our Nation faces enormous challenges, and the State Department's 
role in advancing America's interests will continue to be paramount. 
Jack Lew is especially well qualified to make sure that our resources 
are used efficiently and effectively to promote America's interests 
abroad, and I urge the Foreign Relations Committee and the Senate to 
support his nomination.

    The Chairman. In sum, Jim Steinberg and Jack Lew are first-
rate public servants, with the intelligence, experience, and 
savvy to help make an historic contribution to the State 
Department and to the country. We wish them the best of luck 
and look forward to hearing from them this morning as to how 
they intend to help America accomplish the daunting task of 
revitalizing the State Department and restoring our reach and 
our reputation across the globe.
    Senator Lugar.

          OPENING STATEMENT OF HON. RICHARD G. LUGAR,
                   U.S. SENATOR FROM INDIANA

    Senator Lugar. Thank you very much, Mr. Chairman.
    As a point of personal privilege, I want to mention that, 
on the Republican side, we'll have a meeting at 11:30 in S-116, 
as a part of our party rules, to nominate and elect the ranking 
member of the committee. Now, Members may come, either in 
person or by proxy, cast secret ballots on that occasion. 
They----
    The Chairman. Am I allowed to nominate?
    Senator Lugar. No. No, no. No. [Laughter.]
    In a word.
    But, Dave Schiappa, representing our leader, Senator 
McConnell, will be present to administer the proceedings.
    Now, I want to also mention that we have two new Republican 
members, Senator Wicker and Senator Risch, to be joining our 
committee. They have just been announced yesterday by the 
resolution, and we look forward to having them with us very 
soon.
    And it's a delight to see Senator Kaufman here this 
morning. He's well acquainted with the committee through long 
association with the Vice President, and we appreciate that.
    And, of course, Senator Shaheen, we're delighted as a part 
of----
    The Chairman. Senator Kaufman had a slightly more 
advantageous seat, but less powerful than previously.
    Senator Lugar. I see. [Laughter.]
    Mr. Chairman, I join you in welcoming our distinguished 
nominees. And I also congratulate you on the success of the 
committee yesterday with the nomination and final word of the 
Senate on our Secretary of State and the committee work on the 
Ambassador to the United Nations, Susan Rice.
    We appreciate the impressive experience and talents that 
these nominees bring. During Secretary Clinton's recent hearing 
before this committee, there was much discussion of the 
reinvigoration of a diplomatic option relative to the use of 
military force. And this was a prominent issue in the 
presidential campaign, as well. The debate on when to pursue 
diplomacy, and, by implication, when to pursue military force, 
is a logical one to have arisen, given the wars in Iraq and 
Afghanistan, but I would offer a slightly different emphasis 
today, in advance of our discussion with the Deputy Secretary 
nominees.
    I share the view that it's necessary to shift resources 
toward diplomatic tools, or so-called ``smart power,'' as some 
have called it. But, to be effective in the long run, we must 
do more than demilitarize our foreign policy, we have to make 
it less reactive. Too often in the post-cold-war era, the 
United States foreign policy, whether based on diplomatic or 
military action, has been a crisis-response exercise. Often, 
these crises have been associated with a specific country, be 
it Iran, North Korea, Iraq, Russia, Cuba, Venezuela, and 
others. Sometimes, protecting national security does come down 
to a crisis response. But, if most U.S. foreign policy 
attention is devoted to problems fomented by hostile regimes, 
we are ceding the initiative to our rivals and reducing our 
capacity to lead the world in ways that are more likely to 
affect our future.
    I'm not suggesting the United States can ignore states like 
North Korea and Iran, I am suggesting we cannot afford to allow 
our concern with such regimes to shorten our strategic horizon 
unjustifiably, concentrate our resources, or rob us of our 
foreign policy initiatives.
    If the United States is to remain secure and prosperous, it 
must seek to shape the diplomatic and economic conditions in 
the world. We should be asking, How do we change the rules of 
the game in ways that benefit stability? How do we raise costs 
for those pursuing a course inimical to our interests? And how 
do we avoid repeatedly being confronted with nothing but bad 
options, one of which usually is military force?
    We have a tendency to glamorize the dramatic milestones of 
foreign policy, military operations, summits, diplomatic 
crises, groundbreaking speeches. In most administrations, the 
Secretary of State's time is consumed by such events. But, the 
long-term effectiveness of our policy usually depends on how 
diligently we've attended to the fundamental building blocks of 
United States foreign policy, especially alliances, trade 
relationships, well-functioning embassies, reliable 
intelligence, humanitarian contexts, effective treaty regimes, 
and a positive reputation abroad. If this preparation has been 
neglected, no amount of charisma, bravado, or diplomatic skill 
by the Commander in Chief and the national security team will 
make up the deficit.
    I offer these reflections at this hearing because improving 
the capabilities of the State Department and developing long-
term strategic plans often fall to the Deputy Secretaries. To 
illustrate what is at stake, I would cite the gradual loss of 
our strategic advantages in Europe, Central Asia, and the 
Caucasus as Russia strengthens its energy-supply position and 
the Atlantic alliance experiences intensifying divisions. The 
conflicts in Georgia and Russia's recent natural-gas delivery 
suspensions may seem to some like distant crises, but they are 
more accurately perceived as manifestations of the failure of 
the United States and Europe working together to coalesce 
behind a strategic diversification of energy supplies.
    In the coming years, we'll be faced with numerous problems. 
They'll be more acute if we fail now to employ strategic 
initiatives. How will we deal diplomatically with the prospect 
of declining oil production worldwide? Even as we attempt to 
mitigate greenhouse gases, we will help other regimes adapt to 
the specific changes in the global climate that many scientists 
are predicting. Do we have a plan to double, or even triple, 
global food yields to accommodate the expected surge in demand 
for food? How will we reinforce the nonproliferation regime 
worldwide at a time when interest in nuclear power is 
increasing rapidly? And can we preserve and expand an arms-
control regime that is at risk of deterioration? What is our 
plan for managing our economic security relations with rapidly 
growing nations, particularly China and India?
    Now, like most Secretaries of State, Secretary Clinton may 
have little choice but to keep her vision fixed on the crisis 
or negotiations of the moment, but I am hopeful that both of 
our nominees today will be advocates for long-term strategic 
vision within the State Department and the Obama 
administration.
    As you support the Secretary's efforts, I would urge both 
of you to consider, every day, what can be done to build the 
capacity of the Department, prepare for the likely 
circumstances we'll face in coming years, and change strategic 
circumstances in ways that increase our diplomatic options and 
leverage in the future.
    I thank the chairman, and I look forward to our testimony 
and discussion.
    The Chairman. Thank you very much, Senator Lugar, for 
those, as usual, important observations, and we appreciate 
them.
    Senator Hutchison, would you please lead off with an 
introduction?

            STATEMENT OF HON. KAY BAILEY HUTCHISON,
                    U.S. SENATOR FROM TEXAS

    Senator Hutchison. Thank you very much.
    Let me just note that I heard Senator Schumer bragging 
about introducing five Cabinet officers. I just want to say 
that I used to brag like that, too. [Laughter.]
    Mr. Chairman----
    The Chairman. And you're still a Texan. That's----
    [Laughter.]
    Senator Hutchison [continuing]. And Senator Lugar, I am 
very pleased to be here on one of my few nominations that I get 
to introduce now, and I'm really glad that it is Dean James 
Steinberg to be Deputy Secretary of State. I have worked with 
the Dean in his time at the LBJ School, and it has been 
wonderful. He is a visionary. Obviously, he's bright. And his 
resume in foreign policy is absolutely the best. He is clearly 
the best qualified person for this job.
    He has been dean of the LBJ School since 2006. Before that, 
he was the vice president and director of foreign policy 
studies at Brookings Institution. From December 1996 to August 
of 2000, he was deputy national security advisor to Bill 
Clinton--President Bill Clinton--and served as the President's 
personal representative to the 1998 and 1999 G8 summits. Before 
that, he was Chief of Staff at the U.S. State Department, 
Director of the State Department's Policy Planning Staff, and 
Deputy Assistant Secretary for Analysis at the Bureau of 
Intelligence and Research. He's also been a senior analyst at 
RAND and a senior fellow at the U.S. Strategic Policy--at the 
International Institute for Strategic Studies in London.
    He also is an author and contributor to many books and 
articles, including ``Difficult Transitions: Foreign Policy 
Troubles at the Outset of Power,'' ``Protecting the Homeland 
2006 and 2007,'' and ``An Ever Closer Union: European 
Integration and Its Implications for the Future of U.S.-
European Relations.''
    I think we can see that he has such a depth of foreign 
policy experience that I know he will be able to hit the ground 
running
at the State Department to help the Secretary of State, Hillary 
Clinton.
    He received his BA from Harvard in 1973 and his juris 
doctorate from Yale Law School in 1978. I'm very pleased to 
wholeheartedly endorse his nomination, and I hope that we can 
have a swift confirmation so that there is a seamless 
transition at the State Department.
    Thank you, Mr. Chairman.
    The Chairman. Thank you so much, Senator Hutchison. We 
really appreciate that. And I want you to know you elicited the 
first major blush I've ever witnessed from Senator Schumer. 
[Laughter.]
    Senator Schumer.

             STATEMENT OF HON. CHARLES E. SCHUMER,
                   U.S. SENATOR FROM NEW YORK

    Senator Schumer. Thank you, Mr.----
    The Chairman. Delighted to have you here.
    Senator Schumer. Thank you, Mr. Chairman. It's great to be 
back. And I do want to congratulate Jim Steinberg, before I 
introduce my good friend Jack Lew. He is a brilliant person, 
far-reaching knowledge, and he also now increases the claim of 
diversity in the State Department.
    Anyway, it's great to be here, and to be here with Jack 
Lew. I have known Jack since 1981, when I came, as a young 
Member of Congress, and he was a senior staffer for Tip 
O'Neill, and we became friends then. He taught me a lot then, 
and continues to. He comes from the Queens part of my 
congressional district, and his wife comes from the Brooklyn 
part of my congressional district. So, we're old friends; I 
know him well, and I endorse him, without qualification, 
unequivocally, and with a great deal of pride that someone of 
his talent has been nominated.
    Jack's an accomplished manager, great public servant, 
brings a wealth of experiences in government, business, and 
academia to this. As I mentioned, he was a capable staffer in 
the House of Representatives and in the Clinton White House. 
After working in the White House on the administration's budget 
and fiscal policy, he rose through the ranks of OMB, spending 
the last 3 of his 8 years as Director of OMB, which gives him 
broad knowledge of the Government and of the State Department, 
as well.
    When Jack headed up the administration's budget, the 
country saw sound management and even sounder budget surpluses. 
In addition to his work in the government, he's been an adept 
manager in the private sector. He has also developed an 
impressive CV in the academic world, having taught at both 
Georgetown and NYU.
    He's a member of the Council on Foreign Relations, sits on 
the advisory board of the Hamilton Project at Brookings, which 
aims to extend the benefits of economic growth to more 
Americans. He's a capable administrator and accomplished public 
servant. And, Mr. Chairman, wherever Jack goes, he leaves with, 
just, respect from just about everybody, regardless of their 
political affiliation. He's a class-act, will be a great 
addition to the State Department, and I want to congratulate 
Jack on this nomination, and hope that we'll move, I know, 
under your leadership, Mr. Chairman, swiftly through the 
committee.
    The Chairman. Thank you very much, Senator Schumer.
    We thank you both. I know you have busy schedules, so we'll 
excuse you at this point in time.
    And now I'd like to ask each of the nominees if they would 
make a summary statement; the full statement will be placed in 
the record as if read in full. And then we'll have a question 
period.
    Dr. Steinberg, do you want to begin?

                STATEMENT OF JAMES B. STEINBERG,
            NOMINEE TO BE DEPUTY SECRETARY OF STATE

    Mr. Steinberg. Well, thank you very much, Mr. Chairman, 
Senator Lugar, and all the members of the committee. I'm 
humbled and grateful for the kind words of Senator Hutchison 
and Senator Schumer, and also the remarks that Senator Kennedy 
has forwarded. As you observed, Mr. Chairman, I learned, at the 
feet of a master, about the Senate and about government and 
about public service, and I'm glad to hear he's doing better. 
And I know he's in all of our prayers.
    I've been privileged, over the last several years, to be 
part of a historic Boston-Austin connection, and I hope to do 
justice to both traditions of public service, if the committee 
is--and the Senate--is so good as to confirm me for this 
nomination.
    I'm honored by the trust that President Obama and Secretary 
Clinton have shown in me by asking me to serve with them, and I 
can think of no greater privilege than the opportunity, once 
again, to serve our country.
    I also want to thank my family for their unfailing love and 
support. I'm so glad that they can all be here today.
    I'm also pleased to be here with my good friend and 
colleague Jack Lew, with whom I look forward to building a 
unique and productive partnership that will strengthen the 
State Department's ability to contribute to our national 
security and foreign policy goals in the coming years.
    As you observed, Mr. Chairman, and as the committee knows, 
I had the honor of working as a staff member in the Senate for 
nearly 5 years in the early 1980s, so I know and respect the 
central role that the Congress plays in helping for formulate 
our national security strategy and the unique responsibility 
and justifiably proud tradition of this committee in helping to 
assure a sustained and sustainable American foreign policy that 
bridges both parties and both ends of Pennsylvania Avenue.
    I want to congratulate you, Mr. Chairman, my other home 
State Senator, for taking on the great responsibilities of 
leading this committee, and Senator Lugar, who has been a 
counselor to me for many years and a remarkable global leader, 
as well as the new members of the committee. I look forward to 
your advice and guidance, and to working closely with all of 
you, and the members of your staffs, to meet the challenges and 
opportunities that we face as a nation.
    As the dean of a school of public affairs, I've had the 
pleasure of spending the last 3 years with young men and women 
who feel a compelling call to public service, and I'm 
particularly pleased that a number of them are here this 
morning, though a big apprehensive about what grade they will 
give me after the hearing is over.
    I'm constantly struck by their idealism and their 
commitment to dedicating their lives to fulfilling the dreams 
and aspirations of our Nation's founders that America should be 
a beacon to the world.
    As the first generation of the age of globalization, my 
students know that America thrives best when all those around 
the world who share our dreams and our values have an 
opportunity to seek the blessings we have fought so hard to 
secure. They also know that America is strongest when we work 
together with those who share our interests and our values to 
meet challenges like terrorism, nuclear proliferation, climate 
change, and poverty that no nation, even ours, can successfully 
address alone. This is the vision that President Obama and 
Secretary Clinton have offered to the Nation and to you, and 
one that I enthusiastically share.
    As Secretary Clinton stressed so eloquently in her 
testimony before this committee, for America to succeed in 
meeting the coming challenges, we must harness all the tools of 
American power and influence, what she and others have called 
``smart power.'' The State Department has a crucial role to 
play in underpinning U.S. global leadership. And as a veteran 
of the Department from an earlier time, I want to pay tribute 
to the dedication of the many men and women in the Foreign and 
Civil Service and the locally employed staff who so ably serve 
our country, and look forward to working with them again.
    But, no one agency or part of government could be effective 
unless it collaborates seamlessly with all of the components of 
our national security community, at the Pentagon, the uniformed 
military, the White House, the intelligence community, the new 
Department of Homeland Security, and, increasingly, with our 
economic agencies and those concerned with our Nation's health. 
So, I also look forward to working with President Obama's 
entire team to build a national security strategy that is 
comprehensive and forward-looking, one that not only addresses 
the urgent crises of today, but sets us on a path to master the 
challenges of tomorrow, as Senator Lugar so eloquently 
addressed in his opening remarks.
    I have no doubt that, working together, we can help assure 
that America's future will remain bright, something we owe to 
our children and generations to come.
    I'm also excited to reach out to the best minds and 
demonstrated experience of so many of our people in the private 
sector, in NGOs, and, of course, in our universities and think 
tanks, to make sure that we are innovative and creative as we 
can possibly be in meeting the new challenges of the 21st 
century.
    There is enormous talent and commitment across our Nation, 
and we must find imaginative ways to bring those perspectives 
and experience to the working of our government. This is the 
best way I know how to assure that the 21st century will be a 
century of hope and opportunity for America.
    I've had the opportunity to closely study your hearings 
with both Secretary Clinton and Ambassador-designate Rice, so I 
am familiar with a number of issues that concern you all. 
Having served, in the past, as a deputy, you won't be surprised 
if I tell you that I concur wholeheartedly in their responses, 
but would be happy to try to amplify them wherever possible.
    Thank you for the courtesy that you've shown to me, and I 
look forward to your questions.
    [The prepared statement of Mr. Steinberg follows:]

                Prepared Statement of James B. Steinberg

    Mr. Chairman, Senator Lugar, members of the committee, I am 
grateful for the kind words of Senator Kennedy and Senator Hutchison. 
I've been privileged to be part of the historic Boston-Austin 
connection and hope to do justice to both traditions of public service.
    I am honored by the trust that President Obama and Secretary 
Clinton have shown in me by asking me to serve with them. I can think 
of no greater privilege than the opportunity once again to serve our 
country. I also want to thank my family for their unfailing love and 
support. And I'm also pleased to be here today with my good friend and 
colleague, Jack Lew, with whom I look forward to building a unique and 
productive partnership that will strengthen the State Department's 
ability to contribute to our national security and foreign policy goals 
in the coming years.
    As the committee knows, I had the honor of working as a staff 
member in the Senate for nearly 5 years in the early 1980s. I know and 
respect the central role that the Congress plays in helping to 
formulate our national security strategy, and the unique responsibility 
and justifiably proud tradition of the Foreign Relations Committee in 
helping to assure a sustained and sustainable American foreign policy 
that bridges both parties and both ends of Pennsylvania Avenue. I want 
to congratulate Senator Kerry, my other home State Senator, for taking 
on the great responsibilities of leading this committee, and Senator 
Lugar, who has been a counselor to me for many years and a remarkable 
global leader. I look forward to your advice and guidance and to 
working closely with you and all the members of the committee and your 
staffs to meet the challenges and opportunities that we face as a 
nation.
    As the dean of a school of public affairs, I have had the pleasure 
of spending the last 3 years with young men and women who feel a 
compelling call to public service. I am constantly struck by their 
idealism and their commitment to dedicating their lives to fulfilling 
the dreams and aspirations of our Nation's founders--that America 
should be a beacon to the world. As the first generation of the age of 
globalization, my students know that America thrives best when all 
those around the world who share our dreams and our values have an 
opportunity to seek the blessings we have fought so hard to secure. 
They also know that America is strongest when we work together with 
those who share our interests and values, to meet challenges like 
terrorism, nuclear proliferation, and climate change that no nation, 
not even ours, can successfully address alone. This is the vision that 
President Obama and Secretary Clinton have offered to the Nation and to 
you, and one that I enthusiastically share.
    As Secretary Clinton stressed so eloquently in her testimony, for 
America to succeed in meeting the coming challenges, we must harness 
all the tools of American power and influence--what she and others have 
called ``smart power.'' The State Department has a crucial role to play 
in underpinning U.S. global leadership, and as a veteran of the 
Department from an earlier time, I want to pay tribute to the 
dedication of the many men and women in the Foreign and Civil Service 
who so ably serve their country, and look forward to working with them 
again. But no one agency or part of government can be effective unless 
it collaborates seamlessly with all of the components of our national 
security community--at the Pentagon, the uniformed military, the White 
House, the intelligence community, the Department of Homeland Security, 
and increasingly with our economic agencies and those concerned with 
our Nation's health--so I also look forward to working with President 
Obama's entire team to build a national security strategy that is 
comprehensive and forward looking, one that not only addresses the 
urgent crises of today, but sets us on a path to master the challenges 
of tomorrow. I have no doubt that working together, we can help assure 
that America's future will remain bright--something we owe to our 
children and generations to come.
    I am also excited to reach out to the best minds and demonstrated 
experience of so many of our people--in the private sector, in NGOs, 
and, of course, in our universities and think tanks--to make sure that 
we are innovative and creative as we can possibly be in meeting the new 
challenges of the 21st century. There is enormous talent and commitment 
across our Nation, and we must find imaginative ways to bring those 
perspectives and experience to the working of our government. This is 
the best way I know to assure that the 21st century will be a century 
of hope and opportunity for America.
    I have had the opportunity to study closely your hearings with both 
Secretary Clinton and Ambassador-designate Rice, so I am familiar with 
a number of the issues that concern you all. Having served in the past 
as a deputy, you won't be surprised if I tell you that I concur 
wholeheartedly with their responses, but would be happy to try to 
amplify them where possible. Thank you for the courtesy you have shown 
to me and I look forward to your questions.

    The Chairman. Mr. Lew.

 STATEMENT OF JACOB J. LEW, NOMINEE TO BE DEPUTY SECRETARY OF 
               STATE FOR MANAGEMENT AND RESOURCES

    Mr. Lew. Thank you, Mr. Chairman, and thank you, Senator 
Lugar. And I'd like to thank Senator Schumer for the very 
gracious introduction, and Senator Kennedy for the kind words 
he introduced into the record. With Jim, my thoughts and 
prayers are with him, and I'm very glad to hear that he's 
feeling better today.
    It is really my privilege and honor to testify before the 
distinguished members of this committee. To echo Secretary 
Clinton, I hope this is only the beginning of a close and 
collaborative relationship.
    I'm delighted that my wife, Ruth, and my daughter, 
Shoshanna, are with me today. Together with my son, Danny, who 
could not be in Washington today, my family has always 
supported my effort to participate in public affairs. As we all 
know, the sacrifices of public service often fall on those 
closest to us on whom we rely so heavily. I'm always grateful 
to be blessed with a family that appreciates the importance of 
this work and bears the burdens with good cheer, support, and 
enthusiasm.
    I also want to thank President Obama and Secretary Clinton 
for their confidence in me to take on this new role at this 
challenging moment for our Nation. I look forward to working 
closely with my friend and colleague, Jim Steinberg, as we form 
a team to advance the foreign policy of the United States.
    With me in spirit are people who were not able to be here 
today; in particular, my parents, Irving and Ruth Lew, who 
taught me the importance of participating in public life, and 
the late Speaker, Thomas P. O'Neill, Jr., who, for 8 years 
earlier in my career, was both my boss and mentor as I gained 
invaluable experience in the policy and legislative process.
    Growing up on the Hill, I developed enormous respect for 
the institution of Congress and the Members of the Senate and 
House who fulfill its mission. Mr. O'Neill lived by simple 
maxims, none more important than ``politics stops at the 
water's edge,'' that bipartisan consultation and cooperation 
are vital to our foreign policy. My commitment to both is deep, 
and will be sustained.
    In the Speaker's office and at the Office of Management and 
Budget, I had the privilege to participate from a vantage point 
that cut across the entire Federal Government. From that 
perspective, I have a strong view that we owe the American 
people performance that focuses on getting the job done, that 
resolves questions of policy, procedure, and jurisdiction in 
the interests of that goal. If confirmed, I will focus on 
getting the job done, making sure that the Department is well 
coordinated internally and collaborating effectively with other 
agencies and organizations, spending smarter as we build the 
capacity to achieve our objectives and deliver results.
    In her testimony, Secretary Clinton laid out the 
opportunities for leadership that America faces, and strategies 
to pursue those opportunities. She described smart power, using 
all the tools at our disposal--diplomatic, economic, military, 
political, legal, and cultural--to protect our security, 
advance our interests, and promote our values in the world.
    Diplomacy is the first choice, which is why the President 
is committed to a foreign policy with diplomacy at the 
vanguard. If confirmed, I will concentrate on making sure that 
the President and the Secretary have the tools that they need 
to pursue and accomplish our foreign policy goals. I pledge to 
work collaboratively to augment the Department's capacities to 
meet the challenges we face today.
    As you all know, this will not be simple, it will require 
internal coordination in close cooperation with other 
Departments, particularly the Defense Department, and with the 
relevant committees of the Congress.
    Both Secretary Clinton and Defense Secretary Gates have 
said clearly that we must enhance and expand our civilian 
capacity to do results-oriented, sophisticated, hands-on 
diplomatic and development work. In Iraq, Pakistan, and 
Afghanistan, our Foreign Service and USAID professionals work 
on the ground to support stable, responsible governance. 
Civilian response capacity can lessen the burden on our 
military, and effective development in diplomatic work can 
reduce the need for military engagement down the road, 
protecting our interests and saving dollars and lives.
    I know that foreign assistance is especially important to 
this committee, as it is to the President and the Secretary, 
who have pledged to increase our aid. Our support for 
development and good governance, and our role in defending 
human rights and alleviating suffering in the world, reflects 
our values and advances our interests.
    With limited resources and tremendous need, we must ensure 
that the return on our investment is strong. Across our foreign 
assistance programs, we must use our resources effectively and 
efficiently. We need to reduce overlap between programs and 
departments, articulate clear objectives, and leverage 
resources of international organizations, allies, the private 
sector foundations, and NGOs to maximize our impact. We must 
learn from efforts that do succeed--as well as those that do 
not succeed--and bolster those that work.
    To achieve our foreign policy goals, we must use our 
resources well, but we will also need additional resources. It 
is not possible to have the international presence that we 
need, at current funding levels. There are simply not enough 
people or dollars to achieve our objectives. I pledge to work 
with the Congress to demonstrate that resources are being used 
effectively and to make the case that additional resources are 
needed.
    I look forward to joining the dedicated and talented 
professionals of the State Department who do the difficult work 
of conducting America's foreign policy, often enduring personal 
hardship and great risk. If confirmed, I will be honored to 
join their ranks.
    Every day, thousands of Foreign Service, civil service, and 
locally engaged staff work hard to protect our interests. I 
will work, in my post, to further enable them in their service 
to our country.
    The President, the Secretary, and the other members of the 
foreign policy team have laid forth an ambitious mandate. I am 
confident that, with the right strategies, resources, training, 
and tools, we will build the capacity to deliver on that 
mandate. We face a broad array of challenges in the months and 
years ahead. President Obama and Secretary Clinton have a clear 
commitment to building a strong foundation for a successful 
foreign policy. I am grateful for their confidence and trust, 
and eager to get to work.
    Thank you very much, and I look forward to answering your 
questions.
    [The prepared statement of Mr. Lew follows:]

                   Prepared Statement of Jacob J. Lew

    Thank you very much. It is my privilege and honor to testify before 
the distinguished members of this committee. To echo Secretary 
Clinton's sentiment, I hope this is only the beginning of what will be 
a close and collaborative relationship.
    I am delighted that joining me today are my wife, Ruth, and my 
daughter, Shoshana. Together with my son, Danny, who could not be in 
Washington today, my family has always supported my involvement in 
public affairs. The sacrifices of public service often fall on the 
people closest to us, on whom we rely so heavily. I am always grateful 
to be blessed with a family that appreciates the importance of this 
work and bears the burdens with good cheer, support, and enthusiasm.
    I also want to express my appreciation to President Obama and 
Secretary Clinton for their confidence in my ability to take on this 
new and challenging role at this new and challenging moment for our 
Nation. If confirmed, I look forward to working closely with my friend 
and colleague, Jim Steinberg, and I am eager and excited to be part of 
this team that will work to advance the foreign policy of the United 
States in the coming years.
    With me in spirit are the people who are not able to be here 
today--in particular my parents, Irving and Ruth Lew, who taught me the 
importance of being involved in public affairs--and the late Speaker 
Thomas P. O'Neill, Jr., who for 8 years was both my boss and mentor as 
I gained invaluable experience in the policy and legislative process.
    Growing up on the Hill I developed enormous respect for the 
institution of Congress and the Members of the Senate and House who 
fulfill its purpose. Mr. O'Neill lived by simple maxims, none more 
important than ``politics stop at the water's edge''--that bipartisan 
consultation and cooperation are vital to our foreign policy. My 
commitment to both is sincere and it will be sustained.
    In my work in the Speaker's Office, and then at the Office of 
Management and Budget, I had the opportunity to participate from a 
vantage point that cut across the entire Federal Government. In part 
because of that perspective, I have a strong view that we owe the 
American people performance that focuses on getting the job done, and 
that resolves questions--policy, procedural, and jurisdictional 
issues--in the interest of that goal.
    So, if confirmed for this position, I will focus on getting the job 
done: on making sure the Department is well-coordinated internally and 
is collaborating effectively with other agencies and organizations, on 
spending smarter as we build capacity to execute against our 
objectives, and on delivering results.
    In her statement and testimony for this committee, Secretary 
Clinton laid out the opportunities for leadership that America faces, 
and the strategies that this administration intends to employ in 
pursuit of those opportunities. The Secretary described ``smart power'' 
which uses the full range of tools at our disposal--diplomatic, 
economic, military, political, legal, and cultural--so that we can 
effectively protect our security, advance our interests, and promote 
our values in the world.
    Diplomacy is the first choice--which is why the President has 
committed to a foreign policy with diplomacy at the vanguard. If 
confirmed, I will concentrate on making sure that the President and 
Secretary of State have the tools that they need to pursue and 
accomplish our foreign policy objectives.
    I pledge to work collaboratively to augment the Department's 
capacities so that it can fully meet today's challenges. This will not 
be simple and will require internal coordination, as well as close 
cooperation with the Department of Defense and the relevant committees 
on the Hill. But both Secretary Clinton and Secretary Gates have made 
it clear that we must enhance and expand our civilian capacity to do 
results-oriented, sophisticated, hands-on, diplomatic and development 
work. In Iraq, Pakistan, and Afghanistan, our Foreign Service and USAID 
professionals work on the ground to achieve our goals of supporting 
stable, responsible governance. Our civilian response capacity can 
lessen the burden on our military; and effective development and 
diplomatic work can avert the need for military engagement down the 
road, while protecting our interests.
    I know that foreign assistance is of particular interest to this 
committee, as it is to the President and Secretary, who have pledged to 
increase our aid. Our support for development and good governance, and 
our role in defending human rights and alleviating suffering in the 
world, reflect our values and advance our interests. With limited 
resources and tremendous need, we must ensure that the return on our 
investment is significant and real. Across our foreign assistance 
programs we must use our resources effectively and efficiently; work 
collaboratively within and across agencies to reduce any overlap and to 
ensure that we have clear objectives for each initiative; and leverage 
the resources of international organizations, allies, corporations, 
foundations, and NGOs to maximize our impact. We must learn from 
efforts that have not succeeded, while bolstering those that are 
delivering results.
    To achieve our foreign policy goals, we must focus on using our 
resources well. But we will also need additional resources. It is not 
possible to have the foreign presence that we need at current funding 
levels. There are not enough people or enough dollars to achieve our 
objectives. I pledge to work with the Congress to demonstrate that 
resources are used effectively, and to make the case for the additional 
resources needed to ensure success.
    I look forward to joining the dedicated, talented professionals of 
the State Department who do the difficult work of conducting America's 
foreign policy, often enduring hardship and great risk. I will be 
honored to be a part of their team. I recognize that every day, 
thousands of Foreign Service, Civil Service, and locally engaged staff 
work hard to advance our interests, so I will work hard in my post to 
further enable and empower them and their service to our country. The 
President, the Secretary, and the other members of the foreign policy 
team have laid out an ambitious mandate. I am confident that with the 
right strategies, resources, training, and tools, we will build the 
capacity to deliver on that mandate.
    We will face a broad array of challenges in the months and years 
ahead. The decision to fill the Deputy role for which I have been 
nominated demonstrates President Obama and Secretary Clinton's 
commitment to build a strong foundation for a successful foreign 
policy. I am grateful for their trust, and eager to get to work.
    Thank you very much for the chance to speak with you today, I look 
forward to answering your questions.

    The Chairman. Thank you very much, both of you. We 
appreciate your openings.
    And let me just say, to the members of the committee, that 
we have a hearing next week. It'll be the first substantive 
hearing of the committee, and I'm pleased to say that former 
Vice President Gore will be here. He will be the only witness, 
and we will have an introduction, if you will, for this 
committee on the subject and the urgencies with respect to 
global climate change leading up to the Copenhagen meetings in 
December. And so, I thought it would be important to establish 
a baseline on the road to Copenhagen. We look forward to that 
hearing. We'll try to do the business meeting before that, so 
that we will resolve all the subcommittees and the full 
organization of the committee itself. I think we'll be in a 
position to do that. And possibly on the budget. It depends on 
the leadership. But, we'll certainly get the other pieces done. 
And I want to be able to consult with Senator Lugar on the 
subcommittee issue. I think we'll be in a position to go 
forward.
    We'll do a 10-minute round. My hope is that we may be able 
to do this in one round. And I'm confident our nominees would 
be delighted if we did that. Let's see where we are. But, if 
people have other questions, we will do a second round, so I 
don't want anybody to feel constrained.
    Let me begin the first round, if I can. Mr. Lew, the 
position of Deputy for Management and Resources has statutorily 
existed now since 2000. Secretary Powell chose not to fill it, 
believing that the Deputy and Under Secretary structure, Under 
Secretary for Management, allowed him to have a sufficient 
chain of command to effect what he needed to. I happen to 
support the filling of the position, and I think it's 
appropriate to be here, but I'd like to make sure that the 
reasons for doing it are the same as the reasons that the 
committee supports the position, and also understand how the 
relationship will work between the two deputies now, and the 
division of those responsibilities. So, perhaps you can share 
that with us.
    Mr. Lew. Certainly, Senator, and thank you.
    Senator Lugar actually made the case for this position 
quite eloquently in his opening remarks. The Department of 
State, historically, for very understandable reasons, has been 
pulled to deal with the crisis of the moment, and we, 
unfortunately, live in a world with many crises. One of the 
challenges of the State Department, historically, has been to 
concentrate on the institution-building and on coordinating the 
programs that really project the strength of our foreign 
policy. And the notion behind creating the second deputy 
position was to have somebody at the very highest levels of the 
Department for whom that's a full-time job.
    Secretary Clinton has made the case, at this committee in 
her hearing, and certainly she's made it privately to me, that 
she views the building of the institution of the State 
Department as a paramount responsibility. The past number of 
years have been difficult years for the State Department, and 
there's a lot of work to do.
    In terms of working as a team, Jim Steinberg and I have 
been colleagues and friends for more years than either of us 
care to remember, and I think that, first, there's more than 
enough work to do, and, second, the nature of the management 
team that Senator--now-Secretary--Clinton has put together will 
be a team; it will be in constant communication with one 
another; there will be no blurring of lines of responsibility; 
and that we'll bring all resources to bear and reach deep into 
the Department to accomplish the foreign policy goals of the 
President.
    The Chairman. Well, I appreciate that, and I think those 
are strong reasons for doing it. Will you be responsible for 
actually formulating the budget, in essence, in----
    Mr. Lew. My understanding is that, should I be confirmed, 
my responsibilities will include managing both the fiscal and 
the human resources of the State Department, and coordinating 
programmatic activities across the different areas.
    The Chairman. And will there also be an Under Secretary for 
Management, as well?
    Mr. Lew. Yes, there will.
    The Chairman. OK. And your relationship will be, that 
person reporting directly to you?
    Mr. Lew. That's my understanding.
    The Chairman. All right.
    Mr. Steinberg, let me turn to a specific policy area, if I 
can for a moment, and ask you about Afghanistan. I raised that 
issue in the final comments with the Secretary. Many of us are 
troubled that our policy is not as clear and as structured as 
it ought to be with respect to the real mission in country, and 
that there has been some mission creep, conceptual creep. And I 
wonder if you'd share with us, as you begin this journey, your 
view of exactly what that mission is and how you think the 
current strategy needs to be changed in order to meet it, if 
indeed it does.
    Mr. Steinberg. Well, thank you, Mr. Chairman. I think 
you've, obviously, identified one of the most important and 
urgent questions the President and Secretary and the entire 
administration is going to be facing. I think President Obama 
has made clear that he thinks that the issue of Afghanistan is 
central to our national security, but that it must be seen in a 
much broader context, that to see Afghanistan in isolation from 
its relationship with Pakistan and the broader regional 
challenges is to miss both the opportunities and the risks that 
are present in this particular area.
    I think he's also been clear, as he was throughout the 
campaign, that we need to have a clear definition of our 
objectives there, that there has been uncertainty about that, 
in terms of exactly what we're trying to accomplish, what our 
priorities are, and how we communicate that to the people of 
the region, to our partners in NATO, and to the American 
people, frankly. There have been a number----
    The Chairman. Yes, so I was just going to say, can you 
specify that a little bit?
    Mr. Steinberg. Well, as you'll appreciate, Mr. Chairman, 
since--what I was going to say is that, although the Bush 
administration has conducted a number of reviews, I think 
President Obama has already made clear that he wants to take a 
fresh look for himself, and that he wants to make sure that we 
have achievable and sustainable goals there, that there are 
lots of things that may be aspirational, but we need to 
understand what we can achieve. It's my understanding that 
there is an expectation of a very quick policy review, to be 
undertaken at the President's direction, to really define those 
objectives. And I think it would be important to give the 
President and the Secretary the opportunity to go through that 
exercise. But, I know they want to go through it with alacrity 
and be able to report back to you and to others just how 
they've decided to prioritize and how they're going to match 
resources to that.
    I think, without taking a fresh look--frankly, without the 
opportunity, now in office, to actually have the kinds of 
dialogue and conversations that are not possible until you come 
into office, that it may be premature to try to overspecify, at 
this point. But, I think the need to establish those 
priorities, to discuss them with the Congress, to establish an 
agreed blueprint, and to match the resources to it, bringing 
together all the tools of our national power, not just the 
military, but particularly the civilian, the economic, and the 
like, and diplomacy, I think, are quite important.
    The Chairman. Well, I agree with that, and I'm delighted to 
hear that you're going to--I've urged both the Secretary and 
the President to conduct their own baseline analysis, because I 
think that is absolutely critical. You've got 30,000 additional 
troops going in there now; I think it's really important to 
understand--to know, with clarity, how their deployment may 
raise the stakes, or change them, as the case may be. And I 
think it's very important for this administration to have that 
clarity about how those troops are going to be used before they 
even begin to get on the ground.
    The narcotics issue--I was just over there recently, and 
Helmand province, one province alone, is providing almost 90 
percent of the opium use in the world. It is Taliban-
controlled, fundamentally, and there's going to be a major 
decision that has to be made about whether or not that 
underpinning of all of the insurgency of the region is 
important enough to take on, and, can American troops do it? 
And what will the strategy be? So, obviously, those are all, I 
know, parts of your consideration.
    Similarly, on Gaza and the current situation, I think every 
member here is greatly sympathetic to Israel's need to defend 
itself against years of rocketing that was seemingly unending. 
But, at the same time, the consequences have been to strengthen 
Hamas, weaken Abu Mazen, Fatah, and provide us with another 
difficult choice about the potential of a unity government or 
an isolation policy. Can you share with us whether that sort of 
essential decision may or may not have yet been made, as you 
folks now assume the mantle here?
    Mr. Steinberg. Thank you, Mr. Chairman. I think, as you 
know--and I think Secretary Clinton talked about this at some 
length with the committee--getting engaged in the Middle East 
is a very high priority for the Obama administration. This is 
something that President Obama emphasized during the campaign, 
the need for an active and, from the start, engagement from the 
United States, because there are so many risks for us there, 
and for our friends in the region, from the current situation. 
We've seen a bad deterioration, over recent years, which 
threatens Israel's security and threatens our own interests, in 
terms of a stable Middle East. I think we're all encouraged by 
the fact of the cease-fire, but recognize that, one, the cease-
fire is fragile, and, two, without a broader framework, it's 
going to be very difficult to maintain a stability there that 
is in both the interests of Israel's security and the 
humanitarian situation.
    I anticipate, Mr. Chairman, that the President and the 
Secretary are going to have something to say about this very 
soon, in terms of our strategy for going forward and our method 
of engaging. You'll understand that I don't want to, kind of, 
steal the lead on this one, but I think that it--you will hear 
very quickly about how important they see this as an 
opportunity now for the United States to show its intention to 
reengage, to recognize that we have a lot to contribute to 
dealing with the situation, and this is a vital moment. There 
is an opportunity, as a result of the cease-fire and the 
situation that's now emerging, to try to strengthen the forces 
of moderation there, to try to make clear that the efforts of 
Hamas and others to try to destabilize the situation are not 
going to succeed, to work with Israel and the moderate 
governments of the Arab States in the region to really get this 
back on track. And this will be a top priority for the 
President and the Secretary.
    The Chairman. Well, I know the President and the 
Secretary--I think an announcement's going to be made today, 
even, with respect to it, and I won't steal the thunder on it, 
but, I think--we're delighted that that is going to begin, from 
the beginning. Now. I think it's really important that that 
happen.
    Also, is your Under Secretary, on proliferation issues, 
going to deal with START? Are you going to have a special 
negotiator who's going to be appointed with respect to START? 
Do you know, at this point?
    Mr. Steinberg. Mr. Chairman, we've had some discussions 
about that. I think, because we haven't got a nominee up before 
you yet, I think I'd want to be a little bit careful about 
that. But, I can say, more generally on START, that we see a 
real opportunity there, that this is something--first of all, 
there's a time urgency about this. The agreement is expiring. 
And so, we need to address that. But, more importantly, as you 
and Senator Lugar identified, dealing with this issue of arms 
control and nonproliferation is of critical importance, it's an 
area that has been neglected in recent years. Our commitment to 
arms control as an element of overall U.S. strategy has not 
been, to say the least, at the forefront. And I think you will 
see, in the appointees that the President and the Secretary are 
coming forward with, people with demonstrated experience and 
commitment on these things, and seeing not only as an 
opportunity to reinvigorate this agenda, but also, frankly, as 
an opportunity to try to think about new ways of engaging with 
Russia in a more constructive way to deal with some of these 
problems. So, I think, again, without trying to see exactly 
whose portfolio it is, I think there'll be no doubt that you'll 
see that we understand the need to move very quickly on this. 
And, if confirmed, I intend to be part of it, but we will have 
a number of officials who have specific mandates to take that 
on.
    The Chairman. Well, my time has expired, and I want to 
honor the times here, but let me just make two quick comments.
    One, I'm delighted to hear that there will be increased 
focus--and we serve you notice that this committee is going to 
be intensely focused on this issue. We've spoken about the 
possibility of getting down to 1,000 warheads. I think our 
leadership on this is critical to our bona fides with respect 
to Iran, North Korea, and the rest of the world. If we can 
change those dynamics in a very public way, I think we have a 
much better chance of being successful in achieving the goals 
we want. So, we're going to work with you. And those will be 
early hearings of this committee, because, of course, the START 
process needs to start.
    Second, just one caution. With the added layers of Under 
Secretary, Deputy Secretary, et cetera, one of the things, I 
know, that matters over there, and makes a difference to the 
morale and the effectiveness of the State Department, is not to 
have a walled-off 7th floor. And I urge you to work as hard as 
possible to make sure that people are included and that junior 
officers somehow are brought into a process. I think Secretary 
Powell was effective at that, and I think it flows down so that 
the work product, overall of the Department, strengthens as a 
result.
    Senator Lugar.
    Senator Lugar. Thank you very much, Mr. Chairman.
    Mr. Steinberg, I echo the chairman's thoughts that it's 
reassuring that you're on top of the START treaty negotiations, 
the timeframe, the relationship with Russia. I would just say, 
parenthetically, as we discussed this with Secretary Clinton 
during the hearing, during my travels to Russia in December, I 
was impressed with the fact that this is an opportunity. And 
Prime Minister Putin's congratulations to President Obama were 
interesting, in that this was the first point that he took up 
as to how there might be more communication. I think that in 
President Obama's speech at the inaugural, in which he talked 
about, sometimes, authoritarian troubled regimes and so forth, 
the opportunities to find those touch-points were important, 
and this is one of them.
    I want to start, however, by asking you about media reports 
that the Obama administration is considering a number of 
special envoys to international issues and disputes. And that 
is probably a good idea, but will you and the Secretary commit 
to keeping this committee apprised of the work of the special 
envoys, including having those envoys testify before our 
committee in appropriate cases?
    Mr. Steinberg. Senator, as I observed with the chairman, 
we'll obviously hear a little bit more, I think as early as 
today, from the President and the Secretary on the specifics of 
these positions. And the Secretary understands how important it 
is to keep that line of communication open with this committee. 
I think that, in terms of the specific modalities, we want to 
work with you and the committee, but I think there is a very 
strong commitment to make sure that you're fully apprised, that 
you're fully briefed on these activities, and there is an 
opportunity for good interchange there. We'll certainly work 
with the committee to find what those modalities ought to be.
    Senator Lugar. Well, that would be very helpful, I think, 
in terms of our success in working together and following 
through on some of the ideas the envoys may bring back that 
need action.
    Mr. Lew, broad question, but do you believe the State 
Department currently has sufficient personnel, with appropriate 
training, skill sets, resources, to effect the necessary work 
of advancing our interests around the globe as you perceive 
that? And, in the event that you do not, are you able--or will 
you be able to identify specific areas of urgent concern? In 
other words, as you hit the ground running, there may be at 
least three or half a dozen situations in which it's imperative 
that something happen, and you may need our assistance, and 
vice versa.
    Mr. Lew. Senator, as I've gone through conversations in 
preparation for this hearing, I've developed a very strong 
sense that the Department does not have the resources that it 
needs. And it goes back a number of years; it's not just in the 
last 1 or 2.
    I want to begin by saying that I start out most impressed 
by the quality of the people that we have in the Foreign 
Service and in the civil service, and in the locally engaged 
staff. So, we may not have enough people, but we have a lot of 
very good people.
    I think we owe it to them to give them the resources that 
they need so that we don't ask, for example, 1,000 AID Foreign 
Service officers to cover the whole world at a time when some 
regions, like Iraq and Afghanistan, have enormous demands. 
We're spreading a very small group of people very, very thin. 
They're dedicated, they work hard, but it's just not realistic 
to think that they can be everywhere at every time.
    We're going to need to grow the Foreign Service and the 
civil service over time. It's not a 1-year decision that we go 
from where we are to where we need to be. I look forward to 
working with this committee to identifying the areas where the 
needs are greatest, where we can work collaboratively to get 
the resources. I am very cognizant of the difficult financial 
times we're in. There are probably few people more sensitive 
than I am to what it means to face the current deficit. But I 
would argue that it is very shortsighted if we don't look at 
the challenge we have, in terms of pursuing our foreign policy 
interests, and notwithstanding the fiscal conditions, invest in 
building the foreign policy institutions that this country 
needs, and the new President and the Secretary need, to 
effectively implement that foreign policy.
    If we look at some of the areas where you've taken a 
leadership role, in terms of civilian response, I've been very 
impressed at the thought that's gone into developing an 
approach to a civilian response capacity. I look at the 
numbers, and I look at the world, and the two don't match. 
They're just not big enough. We have to have a broader 
imagination if we're really going to successfully shift 
responsibilities back to the civilian side.
    Senator Lugar. Well, I appreciate your comments. This is 
something in which, literally in a bipartisan team effort 
between our committee and our counterparts in the House and 
Secretary Clinton and you, we're going to have to move to 
correct. We had a celebration, at one point in the last 
administration, when Secretary Powell announced the Foreign 
Service exam would be given again. It had been stopped, 
unbelievably, for years, with nobody coming in. And you face 
that problem now, just in terms of the age, types, and so 
forth, as you move through the personnel of the Department. So, 
we finally started taking in some people for Foreign Service, 
and we've been moving glacially.
    But, I would just say, parenthetically, one time Secretary 
Albright called me to ask if I had a word with former President 
Clinton, it would be very helpful for him to have his own OMB, 
sort of up the ante, because, she said, ``It'll be sliced as 
soon as it comes over to the Congress, sliced again in the 
second House and in conference. If it doesn't start big, why, 
woe for me.'' And, nevertheless, we go through this each time. 
But, it's critically important, because people don't understand 
the capacity that is there, how big the world is, how many--150 
countries we have to deal with.
    Let me just ask, specifically, in one particular thing. We 
succeeded, in this Congress, or last Congress, at the Energy 
Independence Security Act, requiring the creation of a 
Department of State Coordinator for International Energy 
Affairs, that I touched upon in my opening remarks. Rather than 
appointing a full-time coordinator, per our expectations, the 
administration chose a dual hat under the Under Secretary of 
State for Economic Energy and Business Affairs. And thus, the 
person dealing with energy issues remains the level of office 
director.
    Now, hopefully we will do better. Either energy is 
important or is not. If, in fact, it is down in the bowels of 
the Department somewhere, not to appear very frequently, we are 
not going to make an impact in the State Department on the 
issue. Now, maybe somebody else will. But, once again, sort of 
back to some of the basic issues. What is your general feeling 
about that position?
    Mr. Lew. Senator, we've looked at the organization of the 
State Department, and if confirmed, take office, we'll get 
deeply into the specifics of each of the positions. But looking 
at the organization of the Department's resources to deal with 
economic issues, energy issues, climate-change issues, would 
clearly be a matter of high importance to the administration. 
These issues are very significant issues for the United States 
and the world.
    I would ask my colleague perhaps to comment specifically on 
this, as well.
    But the Department is organized, in general, in a way that 
things are separated that often should be brought together 
through a team that talks across the Department. As much as the 
level at which things are situated, in terms of the personnel, 
we have to make sure that the right issues are elevated to the 
very top of the Department for collaborative discussion and 
action.
    Senator Lugar. Let me just elaborate for a second before I 
ask you for your comment.
    Last summer, I traced a path around Europe looking for the 
Nabucco Pipeline. This is not the first time in which Europeans 
have thought about the fact that they would be hit if the 
Russians cut off the gas. Now, this is a question that could 
bring about, not disintegration of NATO, but already has been 
visited in Brussels. There were great divisions between the 
Baltic States--Poland, Hungary, for example--and Germany, and 
France, on these issues, and no possibility of a grid or a way 
to trying to solve this problem.
    I had the feeling America was more interested in the 
European situations than most European governments, guarding 
their sovereignty and in their rivalries. Now, this is so 
divisive with regard to NATO and the EU, it was perfectly 
apparent. Boyden Gray was finally sent as a special emissary. I 
met with him as I traveled along at various points, trying to 
get the Turks interested in the situation, quite apart from the 
Azeris that have the gas.
    Now, these are critical issues. This is not a subordinate 
issue somewhere down the chain. This is why I sort of press 
this energy coordinator. You don't need an Under Secretary of 
Energy, but maybe it would be helpful if it finally elevates 
the fact this is absolutely vital to the success of our 
alliances, as well as to the security of our friends there.
    But, with all of that, now, do you have a further comment?
    Mr. Steinberg. Thank you, Senator Lugar. I think you have--
and for a long time--have really drawn the attention of the 
country to these issues. And they really are central.
    President Obama talked a lot about this in the campaign. 
There is an opportunity here--as chairman, I applaud your 
efforts to bring the climate-change issue to the forefront, but 
there is a synergy between these energy security and climate 
issues, which, again, offers a great opportunity for us. And I 
think these are very much at the center of what the President 
and the Secretary hope to do.
    I would say, parenthetically, that when I teach courses in 
policymaking, I like to use the pipelines as an example of how 
these different elements intersect, and how economic and 
security and other issues all come together and develop an 
integrated strategy that understands all these different 
elements.
    I had the privilege, during the Clinton administration, to 
work very extensively on the Baku-Ceyhan Pipeline issue----
    Senator Lugar. Yes.
    Mr. Steinberg [continuing]. Which was another example of 
our trying to see, in a more strategic way, how energy not only 
meets the narrow economic needs--but, I do think we have a 
critical need to engage better with our European allies, in 
particular, to develop an integrated strategy, because if we 
don't, this could become, not only very divisive, but could 
have very serious consequences for the alliance.
    Senator Lugar. Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Lugar.
    Senator Dodd.
    Senator Dodd. Well, thank you very much, Mr. Chairman.
    And my apologies to the committee and to the witnesses for 
not being here at the outset of your testimony.
    Let me also take advantage of the moment to welcome Jeanne 
Shaheen as a member of the committee, and Ted Kaufman, who I've 
always felt has been a member of this committee for the last 25 
years, in a sense----
    [Laughter.]
    Senator Dodd [continuing]. He's not moved up in the 
seniority seats very well, though. And Roger Wicker and Jim 
Risch, as well, from Idaho, has joined our committee. So, we're 
delighted to have them as new members of the committee.
    And I know these comments were made by the chairman and 
Senator Lugar and others; we're very fortunate, indeed, to have 
two people of extreme ability and talent joining this 
administration, who have been involved, as, Jack, you pointed 
out, for many years, going back to the days of Tip O'Neill on 
the House side. A long history of solid experience on these 
issues are tremendous, and several of them, the major ones, 
have been discussed by the chairman and Senator Lugar.
    I'll ask consent, Mr. Chairman, to have some opening 
comments put in the record.
    The Chairman. Absolutely.
    [The prepared statement of Senator Dodd follows:]

            Prepared Statement of Hon. Christopher J. Dodd,
                     U.S. Senator From Connecticut

    Thank you, Mr. Chairman. I would like to join my colleagues in 
congratulating both of you on your nominations. I have no doubt you 
both will do a remarkable job.
    As President Obama stated in his inaugural address, we are 
currently facing some of the biggest international challenges the 
United States has seen in over 50 years. We are waging simultaneous 
wars overseas. The global economic downturn has inflicted serious and 
wide-reaching damage, from which no nation is immune. Our own prestige, 
influence, and elements of our ``soft power'' have been questioned. As 
we discussed in some detail during Secretary Clinton's hearing last 
week, the recent violence in Gaza, the threat of terrorism and the 
proliferation of weapons of mass destruction continue to cast a dark 
shadow over global security.
    The term ``smart diplomacy'' is now nearing cliche, but it 
accurately captures what I believe we need to do. We can find 
opportunity in the daunting challenges we face in the coming years if 
we assume a global leadership role centered on smart and strategic 
diplomacy. In fact, it is essential to fully meeting the threats we 
face as a nation. And I'm excited to have a President who shares this 
view.
    I believe the question is not whether we will meet these 
challenges--no one should doubt for a second our commitment to our 
interests and ideals, our strength, and our resilience--but rather how 
we do so.
    That starts, in my view, with getting our own house in order--and 
that must start with ensuring that the State Department steps up to the 
challenges. We need a State Department that it is committed, empowered, 
and resourced to do the job. It also means that if we hope to re-orient 
and refocus American foreign policy, we must recognize and draw upon 
one of the greatest assets we have: the dedicated Foreign and Civil 
Service personnel who make up our diplomatic corps and lead our foreign 
policy apparatus.
    Revitalizing the State Department is no small task. It is an 
extremely important, and I am pleased to see that President Obama has 
seen fit to nominate a candidate of your extraordinary experience, Mr. 
Lew, to serve as Deputy Secretary of State for Management and Budget. 
Every element of your massive portfolio is vital to the effective 
deployment of the Department's precious resources, continued 
improvement of personnel, and overall modernization.
    I am also delighted, Dr. Steinberg, that the President has 
nominated a man of your extraordinary intellect and vision to play the 
crucial role in policy formulation and implementation of the Deputy 
Secretary. The State Department's keen awareness of our national 
interests, of the policy options we have for protecting and promoting 
them, and of the appropriate U.S. leadership around the world depends 
on the exactly kind of sharp intellect that you have demonstrated 
throughout your career.
    As I've discussed with Secretary Clinton, I believe that, we need 
to rebuild our friendships and alliances, to develop a coherent and 
comprehensive strategy in Afghanistan, and better engage with Russia 
and China, as well as bringing the full weight of the State Department 
behind upholding human rights and the rule of law through the world. I 
also believe that we must take advantage of a historic opportunity for 
the United States to fundamentally change the tone and nature of its 
relationship with Latin America, including a better partnership with 
major players in the region such as Mexico and Brazil, and a serious 
reevaluation of our policy toward Cuba. I look forward to working with 
you on these and other important international issues.
    I would like to congratulate both of you again on your nominations, 
and I thank you for your testimony today. I look forward to our 
conversation and to working together in the future.

    Senator Dodd. But, the point that you made, and I think 
Senator Lugar was talking about it, is the personnel issues. 
When we go down the long list, obviously, Gaza and Afghanistan, 
Pakistan, arms-controls these issues are dominant. But, in my 
view, in the end it all comes down to personnel--good people 
who are willing to reach out and listen to people up here, as 
well as others, and framing policy positions that will advance 
the interests of our country. So I'm particularly pleased 
you're focusing on this issue.
    And, with that in mind, let me raise with you, Jack, the 
issue of contracting, because I think it goes to the core of 
some of the issues that have been raised by Senator Lugar and 
Senator Kerry, the chairman. There has been an extraordinary 
jump in contracting out, and filling gaps all at great cost. It 
is not uncommon to find civil servants leaving the Department 
and then coming right back, at a substantially higher cost to 
the American taxpayer, through contracting. I wonder if you 
might comment on that policy and what ideas you bring to that 
debate or that discussion.
    Mr. Lew. Senator, I think across the Government, and in the 
State Department, the movement toward contracting out has kind 
of gone to an extreme that needs to be pulled back. There are 
some functions that are core governmental functions that 
shouldn't be contracted out, there are others that are 
appropriate to contract out, but only with supervision by full-
time government employees.
    The ratio now of full-time State Department personnel to 
contractors doesn't permit that to be properly done. We need to 
now evaluate which of the categories are appropriate to 
continue contracting in, which are not. And where it's 
appropriate to continue contracting, we have to make sure that 
there's appropriate supervision within the Department. And I 
view that as a high priority.
    Senator Dodd. I'm assuming you'll keep us posted on that. I 
think it goes to the heart of these other questions. And I'm 
not suggesting contracting ought to be banned in any way at 
all; obviously, it can be a very valuable way of attracting 
people, on a temporary basis, to fill gaps. But, the point that 
Senator Lugar has made--and Senator Kerry has made--if we're 
going to do this job, we can't sit here and wish this problem 
away. So, I'll be very interested in how we proceed, as one 
member of this committee.
    Let me also raise with you another matter. A bipartisan 
policy advisory group convened by our committee last year 
analyzed and briefed Senator Lugar and myself on a series of 
recommendations on how our aid programs could be improved. They 
were very, very worthwhile meetings. They covered how foreign 
aid can be made more efficient, better integrated with 
strategic objectives, better deconflicted among foreign aid 
agencies and the like. I must say, I was very, very impressed 
with these conversations, discussions, and recommendations.
    And, Mr. Chairman, if there's no objection, I'd like to 
recommend that the committee staff brief Jack Lew on those 
meetings--they were very worthwhile, I think Senator Lugar 
would agree, on a range of proposals the advisory group 
discussed.
    I wonder, in the meantime, if you might share with us some 
of your ideas on how aid programs could be improved. This is a 
critical component, in my view, in the world in which we live 
today. And I know you've given it some thought, but any 
additional ideas you could share with us at this moment.
    Mr. Lew. Senator Dodd, I share the commitment that 
President Obama and Senator Clinton bring to the aid programs, 
and to the development programs in general. And I look at the 
array of programs that we have, and I see a crying need for 
more analysis and more coordination.
    I've had some familiarity with the report that you refer 
to, and I've seen a number of other serious studies that were 
done in recent years. I think we need to make a very first 
order of business to look across the development programs and 
ask questions about what's working and what's not working, and 
use the authorities that we have and the resources that are 
available to begin to coordinate them to make them more 
effective.
    A lot of these programs are different at their core, but 
they overlap on the margins. We've made an enormous amount of 
progress dealing with HIV and malaria through the PEPFAR 
program. But, at the edge of the PEPFAR program we are building 
the same institutions for local health care, basic health care, 
and basic economic development that are at the core of our AID 
program. I start out with a very simple notion, that each of 
these programs is important, it has an identity that we have to 
respect, but, ultimately, we go overseas and we represent the 
people of the United States, the Government of the United 
States, we have one flag, and we ought to be working together, 
as much as possible.
    I don't think we'll get to a place--or should get to a 
place--where we eliminate the lines between programs that are 
very effective. What we need to do is find the points of 
cooperation and collaboration where we can to do things more 
effectively, more efficiently, and if we're in the same place, 
with common supervision, but it may not be possible in many 
cases. When you're in a remote location, you can't be tied to 
somebody at an urban embassy or consulate, but we have to ask 
those questions, and we have to demonstrate that we're doing 
things as efficiently as possible.
    I have a very strong view that the investment in aid 
programs and development programs, in the long run, is the way 
that we leave a mark on the world about what America's values 
are, what our aspirations are, and the kind of partners we can 
be. We need to put very, very serious attention into doing as 
much as we can with the resources that now exist, while working 
together to increase the resources so that we can perform more 
of those functions effectively.
    Senator Dodd. I appreciate that very much. I don't know if 
Senator Lugar remembers as well as I do that someone showed us 
in that briefing an organizational chart that was so confusing, 
it was the kind of thing that, you take one look at it, and 
it's just startling to you. It looked like someone had dropped 
linguini or spaghetti over the chart. [Laughter.]
    There were also many lines that just were terribly 
confusing. And your point, that obviously this could be made 
far more efficient, far more effective, and, I think, do us 
all--and the countries and people we're trying to help--a 
substantial amount of good.
    Let me shift and just mention, in the context of personnel 
issues, language. Paul Simon, who we served with here, or some 
of us did, years ago, wrote a book called ``The Tongue-tied 
Americans,'' talking about our lack of language ability. And to 
me, this is inexcusable in the 21st century.
    Mr. Lew. Absolutely.
    Senator Dodd. There are much better ways in which people 
can learn language skills. And the idea that the United States 
cannot send people abroad to serve our interests, and can 
become familiar with a language, has just got to stop. As long 
as I live, I'll never forget our public advertisements for 
Arabic speakers immediately after 9/11; the idea that we 
couldn't even talk or listen effectively is just disgraceful. 
So, I hope, whatever else the differences are, that we really 
do recruit, train, and aggressively pursue, and insist that 
people like Ernie Duncan, the new Secretary of Education, begin 
talking about language training in our elementary schools in 
this country.
    Mr. Lew. I couldn't agree with you more, Senator Dodd. And 
I remember, quite a number of years ago, when Jim and I were 
both members of the Deputies Committee at the National Security 
Council, being shocked at the numbers, when I saw what the 
shortfalls were, in terms of foreign-language speakers that we 
needed to perform, minimally, the functions that we already had 
identified. That was over 10 years ago, and we have not made 
enough progress. And I think you're exactly right, you can't 
start with 20-year-olds, you have to start at the elementary 
school level, and we have to have enough imagination to staff 
not only for today, but to think about tomorrow and the future, 
and to work collaboratively across the government to try and 
really address this problem.
    Senator Dodd. Well, I thank you.
    Dr. Steinberg, quickly let me raise a strong interest of 
mine over the years, Latin America. I've spent a lot of time on 
these issues. And while it is not as dominant a set of issues, 
obviously, as we face elsewhere, it's still tremendously 
important. This is our neighborhood; this is not our backyard. 
I resist that language entirely. It's offensive to the people 
of this hemisphere to be considered the backyard of this 
country. They're our neighbors. The MERIDA program in Mexico is 
tremendously important. This last year alone, Mexico lost 5,376 
people to the drug wars, out of which 505 were law enforcement 
and military personnel. Nearly 6,000 people. Imagine if that 
occurred in this country, the reaction we'd have. Bob Corker 
and I were there together, only a few months ago, and this was 
the subject matter all weekend, especially how we could improve 
the program.
    The Chavez problem is an issue, and how we're going to 
address this in the region, is critically important. Also 
changes are coming in Cuba. And some of these subject matters 
are becoming so politically charged, we can't even have a 
healthy conversation about them. That's got to change, in my 
view, if we're going to speak, I think, to the vast majority of 
people in the hemisphere who would like to see us reassert 
responsible leadership in the region. There are wonderful new 
leaders emerging in Latin America who we need to pay as much 
attention to as those with whom we have significant 
disagreements.
    I wonder if you might just take a minute or so and give a 
general kind of view of how we're going to work in this region 
differently than has been the case over the last several years.
    Mr. Steinberg. Thank you, Senator. And I think everyone 
recognizes the leadership that you've shown on these issues 
over the years, and the commitment that you've made. And I do 
think there's an enormous opportunity here. I think that there 
is a sense that there are potential partners here, which we've 
long seen, going back to the Alliance for Progress and then--
during the Clinton administration, the creation of the Summit 
of the Americas--as a way of developing a new kind of 
partnership with a very mature and very dynamic region that 
offers great possibilities as a partner for the United States 
on political issues, on security issues, on economic issues, on 
dealing with problems of terrorism and national security, as 
well. So, there are--great potential there. And yet, without 
tending, this is not going to happen. And we see others trying 
to compete with us, spending a lot of time there, not only 
leaders like President Chavez in Venezuela, but from outside 
the region, and the attention that China, for example, has 
showered on the leadership there, and spending the time, 
including the very senior leaders. So, if we're going got have 
an effect and build this partnership, we have to be present, 
and we have to be present at the highest levels, we have to be 
present with an imaginative and positive agenda, rather than 
just attacking those we disagree with, but really offering 
something better. I think there's an opportunity, as early as 
this spring, with the next meeting, the next hemispheric 
summit----
    Senator Dodd. Right.
    Mr. Steinberg [continuing]. I think we can present a new 
image there. I think it was significant that the President, 
while he was still President-elect, chose to meet with 
President Calderon to recognize the importance of that 
relationship. As a resident of a border State, I really 
appreciate how profound our stakes are in his success and the 
Mexican people's success in dealing with this terrible wave of 
violence linked to the drug trade. But, if we--we can't see 
this in isolation; we have to build a broadbased partnership 
with Mexico, with the other leading countries in the region, 
which look to the United States to provide this alternative 
vision.
    So, I think there is a sense of yearning for new 
partnership of new engagement. I think it's incumbent upon us 
to find imaginative ways to do that, both by demonstrating that 
it matters at the highest levels and also for creative ideas 
about how to build that partnership on economic issues, on 
narcotics issues, on immigration, and all the issues that go 
into building a rich relationship for the hemisphere.
    Senator Dodd. I thank you for that. My time is up, but let 
me mention something. Obviously, Mexico is terribly important. 
But Brazil is as important. And it's very important that we, 
early on, establish this important relationship. President Lula 
has been a very, very good supporter of the United States in 
many areas. That shouldn't be forgotten; I'm sure you haven't.
    And last, in the same sort of context, I hope that we're 
looking at people or, ambassadorial posts and other positions 
who really are knowledgeable about the region. It'll be very, 
very important that those signals get sent, that we don't just 
rhetorically care about this part of the world, but that we're 
sending our best people, who can bring a level of understanding 
and knowledge to the region, as well. And I thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Dodd.
    Let me just quickly make one point, following up on Senator 
Dodd. For the 25 years I've been on this committee, I have 
heard Senator Dodd, other Senators, raise this issue of 
language. And we have heard former Secretaries, Assistant 
Secretaries, Deputies, et cetera, sit here and say, ``Yes, we 
need to do something.'' I've heard this in the HELP Committee 
and elsewhere, people have talked about language. I hope, 
finally, we're really going to do something about it, because 
it's just--it's stunning, really, the--almost--it's a kind of 
arrogance, maybe, or something, on our part, that we don't 
think we have to--but, we just don't know countries or 
understand them as well and do as well unless we can show a 
greater respect and have a greater language capacity. So, I 
think Senator Dodd has raised a very, very important point. 
We'd urge you to do that.
    Several of us are going to be going to Brazil during the 
February break, precisely to make the point that Senator Dodd 
has just made, about how important it is to renew that 
engagement in that part of the world.
    Senator Corker.
    Senator Corker. Mr. Chairman, thank you.
    And I think the line of questioning and comments has been 
very good. And certainly I welcome the two of you here. It's 
great to see two young, bright people, if you will, getting 
ready to lead this Department in the way that you are, that 
actually like each other. And I hope that's the case 4 years 
from now, that you continue. [Laughter.]
    You know, to follow on the questioning regarding foreign 
assistance, the seeds of me being here probably began years ago 
with a mission trip. And I do think the things you have said 
about our foreign assistance representing the values of this 
country, and the importance of that, all are exactly dead-on. I 
also have seen, on this committee, a situation where, you know, 
every trip that's taken, someone comes back with a great idea 
on how to authorize foreign assistance. And what really happens 
is, we authorize numerous things, and then the Appropriations 
Committee, in essence, decides. And I think that makes us much 
less effective as a committee, because, in essence, we have 
this plethora of things that somebody else really decides as to 
whether it's important or not.
    But, Senator Clinton, when she was here--now Secretary--
mentioned that she was willing, during the first 6 months of 
her time, to really look at foreign assistance, to look at this 
spaghetti that's been talked about, and really narrow it down 
in a way that makes what we do much more focused. And I don't 
know if you heard her say that, but I hope that you'll be 
committed to that same thing, and actually come back to us and 
really help us to understand what you believe is the most 
effective way for our foreign assistance to be given.
    Mr. Lew. Senator, I did hear Secretary Clinton's remarks, 
and agree with them, as I think you would expect, 100 percent. 
I would actually make the following pledge to this committee. I 
would like to work closely with you--we would like to work 
closely with you--and with the appropriators, and we would like 
for this effort to look across all of the development programs, 
to be one that's a bipartisan conversation between us. And, in 
the end, hopefully we'll be able to perhaps move away from a 
world where committees of the Congress and Members of the 
Congress don't feel as connected to some of the decisions and 
programs that are made at the State Department.
    There's not enough money for it to be heavily designated in 
advance and still to have enormous flexibility in running the 
program. So, I think it's just incumbent on us to have that 
conversation be an effective one so that we can use the money 
as effectively as possible.
    Senator Corker. And I think that may even include some 
deauthorizing, to really get a little bit more focused.
    One of the things that I've seen recently in Africa is, 
PEPFAR obviously--that's where the money is today, let's face 
it. And, like anything--you mentioned some of the USAID 
efforts--how some of those overlap. I've seen efforts by good 
people, for good reason, because that's where the money is, to 
basically take our PEPFAR program and--because poverty and lots 
of things create the whole epidemic of AIDS, if you will, then 
all of a sudden microloans and all kinds of things come under 
the PEPFAR umbrella. And I hope that--and I understand why 
people would pursue that, because, again, that's where the 
money is, but I hope that you will help restore integrity, if 
you will, so that, look, if we need moneys for microloans or 
whatever, then moneys are there, that we're not really playing 
games with the programs that we have underway. And I think--you 
understand what I'm saying, don't you?
    Mr. Lew. Senator, I understand what you're saying. The 
PEPFAR program has made enormous strides dealing with the 
critical problems of addressing HIV and malaria. There are 
obviously aspects of dealing with that problem that go beyond 
providing retroviral drugs. And I think it's important that, as 
we look at these programs, we continue, as I indicated earlier, 
to ask the question, Are we putting our resources against the 
problems that are most urgent? I must confess that it matters 
less to me whether a dollar is spent in a program that's called 
A or B than that the dollar go for the purpose that we all 
agree is most essential. And I think working with the 
authorities that we have, our challenge is to get the dollars 
to the places where they can be used best and direct it to the 
problems that are most urgent. And that's why I think we need 
to coordinate across all the programs.
    Senator Corker. And I think what you've said is exactly 
dead-on, and I appreciate that.
    One of the things that--you know, most Americans look at 
what we do here, and they think there's--for good reason--a lot 
of politics involved in appropriations, and, you know, much of 
that bothers them. What doesn't really meet the eye, unless 
they focus on it is, candidly, a lot of our foreign relations 
efforts are hampered sometimes by various interest groups here 
in Washington that basically keep us from doing things that 
make common sense, if you will, in foreign relations. I'm 
obviously intelligent enough not to identify those today at the 
podium. But, just as--you know, as Assistant Secretary of 
State, Deputy, working with someone who obviously has the 
political antenna, and someone that I support heavily--I think 
she will do an excellent job--how do you balance putting forth 
a good policy, if you will, to the Secretary, knowing that we 
have these issues that sometimes keep us from doing what is in 
our own self-interest because of special-interest groups?
    Mr. Steinberg. Senator, I think it's--obviously, the 
constituencies that we have in this country--and, in some 
respects, they're a strength, because they care about American 
foreign policy; they give a level of engagement, which is quite 
important. And I think it is--it is important to have that 
conversation so that the American people understand why we care 
so much about what happens abroad, and sometimes these 
constituencies really do have ties and information and access. 
So, I think they are an important part of the process. We need 
to have a dialogue about it. And I think we need to be open 
about different ways of achieving these objectives so that we 
can make sure that we understand and we're responsive to the 
various people in our constituencies and our polities about 
what's important to them, and frame that in terms of a broader 
national interests. I think that is the obligation of both the 
executive branch and the Congress, to try to find ways to both 
be responsive to our constituencies, but also to be educators, 
as it were, to talk about what the national interest is, to try 
to frame that in that way, and to advance the conversation.
    I think there is a bully-pulpit side that elected officials 
and appointed officials have to undertake. And I think one of 
the great strengths of both our President and our now-Secretary 
of State is that they are going to be effective in 
communicating, not only to foreign constituencies, but to the 
American people, about how to have that broader framework and 
how to embed these particular interests in a broader set of 
conceptions.
    Senator Corker. Let me step down from that and--we--Senator 
Lugar spoke to the long-term issues that you will be focused 
on, and I could not agree more with the comments that he made. 
I look at the issue of food aid around the world, and, 
candidly, you know--and we have a farm lobby in our State, too, 
but I look at what we do in that regard, and, in essence, 
including expensive transport--we ship foods all across the 
world, when, in essence, if we would help, on the ground, 
people in those countries provide their own food, and learn how 
to grow it and do the things that they need to do, we'd be much 
better off, longer term, as it relates to those countries 
having stability and strength. And yet, that does not occur. I 
wonder if you might speak to that.
    Mr. Steinberg. Maybe I can speak briefly, and then Jack 
probably wants to comment, as well.
    I think the food security issue is really one of the most 
critical issues we're facing now. I think we've learned, in 
just this recent crisis that we experienced just a few months 
ago, that we've, I think, come to take for granted too much 
the--sort of, the benefits that were achieved with the Green 
Revolution, generations ago, and recognize that there is great 
fragility. It also relates very much, as the chairman knows 
well, to the whole question of climate change, which could have 
a potentially disastrous impact on food security in many of the 
most vulnerable parts of the world. So, this is something we 
can't take for granted.
    There's an important meeting going on in Madrid, I think as 
we speak--I'm not sure of the exact dates now--but there's an 
opportunity to have a better global strategy to deal with the 
problem of food security. And the United States has a critical 
role to play in that. It's important, in terms of our being 
able to help countries develop a long-term strategy that isn't 
just the humanitarian and crisis-related strategy, but, rather, 
one that deals with some of these long-term issues, some that 
has to do with basic research and science to develop new crops, 
new techniques to take advantage of that, some of it is a 
better global partnership, to work with other countries to do 
this. And if we don't see this in this broader framework, 
beyond simply responding to the crisis of the moment, then 
we're going to miss both more effective ways to solve the 
problem, but also, frankly, we're going to find that a lot of 
countries that we care about are going to be subject to a lot 
of instability, it can cause problems for us in the political 
and the security side, with terrorism and the like, and 
conflict which comes as a result of food scarcity. So, I do 
think we need a broader and more urgent framework that looks, 
over the long term, that identifies where these vulnerabilities 
are, and has a strategy that's not going from immediate 
humanitarian crisis, from famine to famine, but, rather, looks 
at how we develop a more sustainable approach.
    Senator Corker. I thought Senator Lugar's comments about 
energy were dead-on. And I just came from Russia and Ukraine 
and Azerbaijan, and it is amazing to me that the European Union 
seems to care less about their energy security than we do. It's 
an amazing thing to witness. And obviously, the whole issue of 
pipelines going into Europe would be beneficial to us. OK? I 
think, very beneficial to them. At the same time, there is this 
sort of pull. You know, you don't want to irritate Russia, and 
that's obviously what the European Union has been opposed to 
do.
    Just as a question--I know my time is up, but--should our 
emphasis be on working on these major pipelines, from countries 
that were formerly part of the Soviet bloc that, in many ways, 
have embraced democracy and are really trying to cause 
themselves to be much stronger, independent countries, or 
should it be through engaging Russia, in causing them to be 
``better actors,'' if you will, as it relates to energy itself?
    Mr. Steinberg. Senator, you probably won't be surprised to 
hear that I think probably there's the element of both to the 
overall strategy. That is to say, it would be advantageous to 
have a relationship with Russia, where it felt a stake with 
others. There are benefits to interdependence, as well as 
costs. And I think the strategy is, one the one hand, to 
provide Russia with reasons to be a more constructive actor, to 
understand that, by acting more constructively, it advances 
their interests. They have a tremendous economic stake in their 
energy resources. And if they behave badly, then people are 
going to diversify away from them. And, in the long term, that 
will hurt Russia and Russia's own economic development.
    So, I think we have to have choices. As I said, having 
worked on Baku-Ceyhan, it's been something that I personally 
have felt very strongly about, that as a part of a global 
strategy, quite separate from Russia, we need to, if not have 
independence, which is a very difficult challenge, at least to 
have enough diversity so that we're not vulnerable to 
disruptions, not only in oil, but also in gas. But also, to 
encourage all of the countries, the producing countries, to 
understand that it's in their sake to be seen as reliable rule-
of-law suppliers, and who can then become partners for us. So, 
I think we have to work on both ends of that equation.
    Senator Corker. Mr. Chairman, thank you. And I look forward 
to working with both of you.
    Thank you very much.
    The Chairman. Thank you, Senator Corker.
    Senator Feingold.
    Senator Feingold. Thank you very much, Mr. Chairman.
    Let me start off by saying that, as this new administration 
begins to reassert our diplomatic strength and restore 
America's leadership abroad, I think it's clear that the 
nominations of James Steinberg and Jacob Lew are critical to 
that effort.
    I expect Mr. Steinberg and Mr. Lew, if confirmed, will work 
closely--and with Secretary Clinton--to help rebuild the State 
Department so it can once again assume its role as our lead 
agency on the international stage. And developing smart, 
interagency policies, while also ensuring that the Department 
is adequately resources is critical to our national security.
    As we've seen over the last 8 years, without properly 
resourcing the State Department, gaps emerge that lead to 
fragmented and often ineffective policies. I'm pleased that 
President Obama and Secretary Clinton have decided to fill the 
Deputy Secretary position mandated to focus on resources and 
management. It sends a strong message about the central role of 
the State Department under the Obama administration. And, as I 
said, I'm very happy to be working with both of you on this.
    And I understand that there has been conversation already 
about the lack of adequate personnel in this area, and I want 
to follow on that.
    In 2006, then-Secretary Rice gave a speech at Georgetown 
University noting that, among the many goals of President 
Bush's transitional diplomacy initiative was the need to ``hire 
and train new staff, move our diplomatic presence out of 
foreign capitals and spread it more widely across countries, 
working on the front lines of domestic reform, as well as in 
the backrooms of foreign ministries.'' And, while there was 
some programs on this initiative under the Bush administration, 
much more needs to be done to enhance the U.S. presence in 
places where threats to our national security exists or may 
emerge.
    So, Mr. Steinberg, I'm interested, first, to hear your 
thoughts on how, if confirmed, you'd seek to bolster, shift, or 
expand U.S. diplomatic presence abroad. And, Mr. Lew, how will 
you seek to support this effort, in terms of distribution of 
resources?
    Mr. Steinberg. Thank you, Senator.
    I think you've put your finger on something that is really 
critical for us, because I think if we're going to be effective 
in this move toward smart power, then we have to understand how 
we reprioritize our resources to be able to achieve that. And I 
think that there are elements that the committee and a number 
of your colleagues have been talking about already, about both 
the need to respond to crises, but also the long-term strategy, 
and that this redeployment and refocusing is very much part of 
that long-term strategy. If we only think about the crisis of 
the moment, then we're not prepared as new challenges emerge. 
And we've seen this, time and time again, that issues that were 
not immediately on the radar screen don't get the attention 
they deserve.
    I know of your interest in East Africa and Somalia and the 
like. During my previous service, I was the Deputy Assistant 
Secretary in the Bureau of Intelligence Research during the 
challenge we faced in Somalia at that time. And when I came 
to--I recognized that we had very, very little knowledge and 
presence in that Bureau and in the Department about Somalia. 
And yet, it turned out to be a place where we had great 
challenges and we needed to think about that.
    So, the idea of looking forward and trying to out, over a 
long term, where our priorities need to be, how do we 
anticipate some of these challenges, and then judge how we sort 
of assigned resources to take care of, not only those urgent 
current needs, but also those long-term challenges. I think 
that would be very important and part of a strategic planning 
strategy that I think the President and the Secretary are very 
committed to. And if confirmed, I look forward to being part of 
that.
    Senator Feingold. Thank you.
    Mr. Lew.
    Mr. Lew. Senator Feingold, I believe strongly that 
resources have to follow priorities. The decision of where we 
need to be and what kinds of skills we need have to fit into a 
comprehensive strategy. We were talking, just a few minutes 
earlier, about food assistance and about foreign languages. 
These are just a few examples of areas where we know we don't 
have the resources that we ought to be putting out into the 
embassies, into the nonurban areas. We need to train people to 
do things, like basic agricultural assistance, if they're not 
there. We need to work with our other Cabinet/agency partners. 
There are 20 government agencies that have resources that work 
in or through our embassies. We don't need to recreate the 
wheel, we need to cooperate with each other and make sure that 
we have enough Foreign Service, civil service, and locally 
engaged staff so that we can effectively coordinate the efforts 
that the United States puts on the ground.
    It all begins with a strategic planning process. If we 
don't have a clear vision of what we need and what we want, 
we're not going to be able to make the right resource 
allocation decisions.
    And we have to be able to look beyond this week, next week, 
or even next year. Some of these skills take longer to get out 
there, and to recruit the people, to deploy them effectively. 
We need to take a long view, and it doesn't mean we put off 
until tomorrow beginning to take action. There are some steps 
we'll need to take right away, but we have to pay attention to 
where we need to be 18 months and 2 years from now, as well.
    Senator Feingold. Well, my next question really relates 
very much to what you just said, and that's the--I think, our 
expansion of our U.S. diplomatic presence abroad actually 
serves a second purpose that is at least important as 
diplomacy. And the more I work on these issues, the more I 
travel different places, I realize it. And that is that more 
State Department officers in more parts of the world, and 
particularly outside of the capitals, increases our capacity to 
gather information that can be critical to our national 
security and is necessary to inform our foreign policy 
decisionmaking. And, of course, here I'm talking not just about 
intelligence, I'm talking about a much broader category of 
information.
    Mr. Steinberg and Mr. Lew, what steps would you do to 
ensure that the State Department has the reach and the 
resources to increase diplomatic reporting, analysis, and 
relevant dissemination?
    Mr. Lew. At a very fundamental level, we need to reach, not 
just into the building, but all the way into the field and make 
it clear that we have every intention of bringing the resources 
of the State Department to bear as we deal with these kinds of 
problems and challenges abroad, that we have knowledge in our 
embassies, in our consulates, about a range of issues, not just 
political issues--economic issues, scientific issues, cultural 
issues--that give us the broadest understanding of what's going 
on in an increasingly global world.
    Earlier, we were talking about the need to reach in and 
have junior officers be involved. That's something that I think 
we're all committed to, that we reach into the career Foreign 
Service, civil service, and involve people, when it's 
appropriate.
    When I was OMB Director, I had the most junior policy 
analyst in a meeting with me, if they were the one who had the 
most information. I didn't do it to go around their branch 
chief or their division chief; I had them in the room also--but 
I always wanted the person along who knew the most. I found it 
sent a powerful signal in the organization, that we respected 
the work that people did, and I think it motivated people to 
work even harder, if it was possible, than they already did.
    Senator Feingold. Mr. Steinberg.
    Mr. Steinberg. Senator, I think that one of the--again, 
from my experience at INR, one of the things that I found was 
that, although we have a very strong intelligence community, 
that there is a tremendous resource of people who have lived 
and worked out in the countries that we're dealing with, and 
that, for a variety of reasons, the intelligence community is 
not always the best equipped to do that; they bring their own 
special skills. But, the Foreign Service officers, and also 
people from outside the government, are enormous sources of 
information and value, and we need to find better ways, in my 
judgment, to have more contact with people in the private 
sector, from the NGOs, from the business community, from 
universities, and the like, as part of our being able to touch 
and feel what's going on, on the ground.
    I think we have to--we have--so many of the young people 
that I've been teaching at the LBJ School have lived and worked 
in these countries, and then they come into school; they bring 
a kind of experience and a ground truth which is often lacking 
from more formal channels. And so, I think we have to find 
ways, both with the resources we have, and creative ways of 
having more movement back and forth between government service 
and other experiences, to get that benefit.
    Senator Feingold. Let me follow, more specifically. One 
gaping hole in this process is the lack of strategies to 
integrate all the overt ways in which our government gets 
national security information, particularly from diplomatic 
reporting or that collected by the intelligence community. I 
feel very strongly about the role of the intelligence 
community. I'm a member of the Intelligence Committee, for 
several years, and that's, of course, incredibly important. 
But, until we fill this hole and identify who is best suited, 
across our government, to obtain the information we need to 
inform our policies and protect our Nation, we'll never be able 
to use our resources wisely or effectively. And that's why, in 
the last Congress, the Senate Intelligence Committee passed 
legislation, by myself and Senator Hagel, to create an 
independent commission to recommend ways to fix this 
longstanding systematic problem, and why a broad range of 
former officials, including national security advisors from 
both parties, have endorsed this legislation.
    I'd like to ask both of you whether you'd support the 
establishment of an independent commission to recommend how the 
U.S. Government as a whole can more effectively collect and 
analyze all the information we need.
    Mr. Steinberg.
    Mr. Steinberg. Senator, as I said, I certainly believe that 
the mission that you've identified is a really important one. 
I'd like to take a look at the specific proposal, and obviously 
work with my colleagues, both at the State Department and 
others, to talk to you about what the best way forward is. But, 
I think it is a mission and an objective and a concern that 
you've raised which deserves our serious attention.
    Senator Feingold. I realize you might not be able to 
endorse legislation right now, but it would be very useful to 
find out soon, if you can, because this has passed the 
Intelligence Committee, on a bipartisan basis. I think it has a 
lot of support. So, the earlier we could move in that 
direction, the better.
    Mr. Lew.
    Mr. Lew. I think this is an area where, in principle, we 
all agree in coordination to the greatest extent possible, and 
if confirmed, we have to take a look at the details of it and 
get back to you.
    Senator Feingold. Thank you, Mr. Chairman.
    Senator Dodd [presiding]. Thank you very much.
    Senator Isakson.
    Senator Isakson. Thank you very much, Senator Dodd.
    Mr. Steinberg, I was very impressed with our meeting last 
week. You are better than your resume, in person, and, in 
particular, I want to reiterate one thing we discussed. I think 
Senator Clinton brings--now-Secretary Clinton--brings exactly 
the good-quality experience that's going to make her a good 
Secretary of State of the United States. But, one of the things 
that was so clear was experience. And I questioned here, when 
she was here about how during the campaign, the issue of 
preconditions and negotiations, and particularly as it involved 
the Middle East. I was very impressed with your response on 
that subject in my office, but I hope with this newfound 
leverage that we have right now, and particularly in the Middle 
East, with the desire of the President to engage, and the 
critical issues following the Gaza incidents over the last 
month, I hope we will put meaningful preconditions that will 
put a stop to some of the root problems of the continuing 
violence.
    Example: The Philadelphia Corridor out of Egypt into Gaza, 
where so much of the materiel has evidently flowed in and out 
of Gaza. So, I think preconditions, like insisting on the 
Palestinian Authority, or whomever else we may be negotiating 
with, stopping the root problems of violence from their side 
can help us get people to a meaningful negotiating table for a 
meaningful peace for both sides.
    Mr. Steinberg. Thank you, Senator. I certainly enjoyed our 
conversation, too, and thank you for the kind words.
    I think, as you and I discussed, that, while President 
Obama has made clear that, with respect to trying to engage 
governments around the world, that there are circumstances in 
which he does not believe we ought to have preconditions. He 
made very clear that he does not think an engagement with Hamas 
is appropriate, because of their support for terrorism and the 
like. And I think it's very clear, as you identified, that, if 
we're going to deal with the problem of Gaza, that there is a 
need to deal with this problem of smuggling, that this is a 
problem which will continue to exist if we don't find a way to 
get at the root causes.
    And I think that the President and the Secretary are very 
eager to engage with the key countries in the region who can 
play a constructive role in helping to do this, to provide a 
broader framework that deals with these underlying problems 
that have caused the most recent crisis.
    I think it's an opportunity now for us to use dialogue and 
diplomacy, where we can, to take that forward, but also to make 
clear that there are circumstances that do threaten, not only 
the security of Israel, but matter to us, as well.
    Senator Isakson. Thank you very much for that answer.
    Mr. Lew, you're the first person to fill this position, am 
I right? It's been vacant for 10 years, since it was created?
    Mr. Lew. That's correct.
    Senator Isakson. I was reading a little bit about the 
description of the position, and I was thinking back to 
President Obama's admonition to go by the budget, line by line, 
and find efficiencies where we can and priorities, where they 
need to be established. It sounds like, from the description in 
my briefing papers, that's going to fall under your 
responsibility, am I right?
    Mr. Lew. Senator, I'm going to be responsible for taking a 
very detailed look at the budget of the State Department and 
for asking the tough questions about how well the resources are 
being used. I can't say that I start out with preconceptions 
about that, except the admiration of a lot of people in the 
agency who have been working very hard and very well. But we're 
going to ask tough questions, and learn from what's worked and 
what hasn't worked.
    Senator Isakson. Well, having been Director of OMB and 
currently working for Citibank investments, you're probably the 
prime person to have done that. You've got the background for 
it. And I think that's something we need to do in every 
department of the Federal Government.
    Mr. Lew. Well, Senator, when I was Director of OMB, I 
prided myself on not just paying attention to the very large 
programs; I thought that the example that you set in that 
position was how much attention you paid, in some cases, to the 
smaller issues, but where there were real principles at stake. 
We have to treat the public resources that we spend as a sacred 
trust. The American people work very hard, and we have to work 
as hard to spend the resources, and allocate the resources, 
carefully and effectively.
    Senator Isakson. I notice, in your resume, that you're the 
chief operating officer of alternative investments for 
Citibank. Is that correct?
    Mr. Lew. Well, I was. I----
    Senator Isakson. Oh, were--you were.
    Mr. Lew. I have concluded that.
    Senator Isakson. That's your most immediate----
    Mr. Lew. Yes.
    Senator Isakson [continuing]. Past.
    Mr. Lew. My most immediate past.
    Senator Isakson. Tell me what kind of alternative 
investments those were.
    Mr. Lew. It ranged from private-equity investments to real 
estate investments and various forms of fixed-income 
investments.
    Senator Isakson. So, not much of international security 
trading----
    Mr. Lew. No; not directly. Some of the investment funds had 
international elements; there was an international fixed-income 
fund, and an international private-equity fund, but they were 
really managed offshore.
    Senator Isakson. The reason I asked the question is, we've 
talked about energy security, we've talked about food security, 
we've talked about climate security. I think economic security 
is the pending next thing to affect international relations, 
because of the gravity of the worldwide economic conditions. 
So, your information and your knowledge in that should be very 
helpful to the Department.
    Mr. Lew. I bring with me the 25 years of experience in 
economic policy, and only 2 years in the financial services 
sector. So, I would say that it's been an eye-opening 
experience to me, the 2 years that I've been in the private 
sector. The bulk of my experience has been dealing with 
macroeconomic policy, fiscal policy. And I must say that if 
confirmed, I will come back into government with a renewed 
respect for the quality of analysis that goes into the public 
policy decisions that we all make.
    Senator Isakson. Mr. Steinberg--my last question before I 
have to leave--on talking about foreign aid, you and I had also 
had some conversation about a return to the American people on 
the investment of foreign aid. And I think there's probably no 
better example of that than the continent of Africa, which I 
think, in the 21st century, is going to be the continent of 
focus, certainly in the first 50 years. Most of our foreign aid 
flows through NGOs, contractors in those countries who deliver 
educational or agricultural or other services. Do you think we 
can better leverage our foreign aid in developing countries on 
the continent of Africa, to have it have a payback or a 
dividend, in terms of friendship back to the United States of 
America? Do you think that's something we ought to focus on and 
make an important point on?
    Mr. Steinberg. Senator, I think, as you and I discussed it, 
this can happen on two levels, which is--one, I think there is 
an enormous benefit to the United States when we were seen not 
only advancing our own interests, but being concerned about 
others. In my opening statement, I indicated that I believe 
very strongly that we're going to live in a better and safer 
world for our own interests when everybody who shares our 
values and interests are benefiting from the kind of prosperity 
and opportunity that we believe in.
    More practically, again as you and I discussed, the success 
of these countries--in Africa, in particular--means new 
opportunities for us for trade, for investment, and the like. 
So, this is a win-win situation in which we can build new 
friendships, be seen as being responsive to the needs of these 
countries, and creating an environment which is good for our 
business, and opportunities for us for our firms and our 
workers. So, this is something where, if we want to succeed--
and globalization can be very much to the benefit of the United 
States--we have tremendous advantages, competitive advantages, 
in a globalized world, but we can't do it if we're the only 
ones who are succeeding. So, that kind of partnership is 
important.
    And one of the things we've learned very much is that, 
while there is a place for dealing with government-to-
government, I think we get enormous benefit from working at the 
grassroots level with the NGOs. They understand the local 
conditions there. They're responsive. We're able to reach down 
to the people. And so, while it may be appropriate, in some 
cases, to work with governments, I think one of the lessons 
we've learned, with Millennium Challenge Corporation and 
others, is that there are great partnerships to be had out 
there, that not only lead to more successful programs on the 
ground, but also create substantial goodwill for the United 
States.
    Senator Isakson. Well, I just feel like, on that continent, 
it's important for us to win the hearts of those people before 
other people with bad intentions win their hearts. And a lot of 
the al-Qaeda-type mentality is to win people over by feeding 
them, clothing them, and housing them, and then use them, 
politically, much to their detriment. So, one thing our State 
Department can do on the Horn of Africa and other places where 
you have a lot of poverty like that is to really make an 
investment in those people, in their lives, their health, their 
well-being, and their food.
    Thank you, Mr. Chairman.
    Senator Dodd. Thank you, Senator, very much.
    Senator Cardin.
    Senator Cardin. Well, thank you, Mr. Chairman.
    And let me first thank both Mr. Lew and Mr. Steinberg for 
your willingness to serve during these extremely difficult 
times. We very much appreciate your public service. I want to 
particularly thank your families for putting up with the 
sacrifices that'll be necessary. So we really do appreciate it. 
We need you.
    You've already indicated that you're very familiar with the 
questioning during Secretary Clinton's confirmation hearings. I 
just want to echo the point that some of my colleagues have 
made about the Middle East and Israel, how urgent that issue is 
today for all of our attention.
    I want to underscore Darfur and Sudan. The Secretary 
indicated the need to make sure that the personnel commitments 
are made to that region to stop the human rights violations and 
genocide. I want to just add one other part to that, which is 
war crimes. It is clear that war crimes have been committed. I 
think we need to pursue that. We have not yet completed our 
commitments to the International Tribunal for the former 
Yugoslavia and there are those who were indicted, but have not 
yet been apprehended. I just want your commitment that we will 
pursue these issues and you will work very closely with this 
committee as to how we complete our responsibility to make sure 
those who have committed war crimes are held accountable, both 
in Sudan and in the former Yugoslavia.
    Mr. Steinberg. Senator Cardin, thank you for that. Again, 
during the Clinton administration, I had the opportunity to 
work very closely on the question of the Balkans, and know the 
powerful and, I think, extremely important role that the 
International Tribunal played with respect to the former 
Yugoslavia. I think it was really transformative to that 
overall effort, that we establish very clearly what the 
international rules were, and the international consensus 
against the terrible war crimes that took place there.
    And we've seen, now, in Africa, the extension of that, 
which I think is very important. And both President Obama and 
Secretary Clinton have made clear that this is something that 
they see as part of American--more leadership to support these 
efforts. And so, if confirmed, I look forward to working with 
you and the Secretary to look for ways to make sure that we 
keep the committee informed, and that this remains a central 
element of our overall approach, both to the problems in Sudan 
and elsewhere.
    Senator Cardin. Thank you, appreciate that.
    Let me move on to international organizations. I've talked 
to the Secretary about our participation in international 
organizations. I think they're very important. I also think we 
need to look at reforms to meet the needs of the 21st century. 
And by ``reforms,'' I'm referring, not only to reforms within 
the organization, but how the United States participates within 
the organizations.
    I'm very familiar with the OSCE. I'm honored to chair the 
Helsinki Commission for the next 2 years. I think that's a very 
important organization. But for all of our participations in 
international organizations, we have the inherent issues and 
challenges of working with our mission that's delegated to the 
organization, the career people at State Department, and the 
Congress.
    In OSCE we have the Helsinki Commission, which makes it a 
little bit easier because there is legislative/executive 
participation there. The Helsinki Commission has been very 
helpful in moving forward issues that are important to the 
United States, whether it's fighting the trafficking of young 
girls, anti-Semitism, dealing with election monitoring, and 
field missions. There are a lot of issues that we have moved 
forward.
    I would like to have your commitment to work with us as to 
how we can be more effective within these organizations. I 
think OSCE could play a critical role in dealing with Russia, 
because Russia is a participating state and I think they feel 
that they have a better opportunity within OSCE than perhaps 
some of the other organizations. I think we could enhance our 
objectives with our relationship with Russia, making it more 
effective. I think it could be very helpful in dealing with 
refugee issues, which is an area that the United States really 
needs to play a more aggressive international role.
    So, let me start with Mr. Lew, if I might. We had a 
conversation about this. You mentioned in your opening 
statement here, that you want to coordinate a lot of the roles. 
Now, here you have a problem, sometimes between the career 
people at State Department, the mission that we have in Vienna, 
and the politics of Congress. It's a challenge that I hope you 
will undertake.
    Mr. Lew. Senator Cardin, the challenge of dealing with 
international organizations is obviously a very significant 
one. We have to look at our participation, we have to pay our 
bills, we have to be involved early and in a sustained way, and 
I think we have to keep our eye on whether they are focused on 
dealing with the challenges of today? With OSCE, I remember 
working together when you were in the House, when the issues 
were human rights, and the Helsinki Commission played a vital 
role in keeping those issues on the public agenda and on the 
international diplomatic agenda. As the issues have changed, as 
we were talking the other day, energy issues are perhaps more 
prominent than some of the human rights issues, though the 
trafficking of women is certainly a human rights issue, as 
well. I think we have to treat our involvement in international 
organizations very seriously, and we have to use it as another 
arena in which we can demonstrate both our partnership and our 
advocacy for the principles that are most important to us.
    Senator Cardin. I would just underscore the point. The 
involvement of the Deputy Secretary will make a huge difference 
in trying to be as most effective as we can in promoting U.S. 
policies by use of these organizations. There is a bureaucracy 
that has been established and although well intended, includes 
the bureaucracy of the organization itself. I think the 
attention of the Deputy Secretary can make a huge difference 
and I would just urge your personal involvement.
    Mr. Lew. Thank you. And frankly, the fact that we now have 
two deputies will free us up to be in more places, and we will, 
if confirmed, with the Secretary's direction, be on the field 
in as many places as we humanly can.
    Senator Cardin. I appreciate that.
    Let me move, if I might, to energy, and ask both of you. I 
talked to the Secretary about the problem of extractive 
industries. We have a transparency initiative with countries 
that are mineral rich, but relatively poor--in some cases, very 
poor--to ensure the mineral wealth is getting to the people. We 
give some of these countries foreign aid. We're giving U.S. 
foreign aid and they're mineral wealthy. The lack of 
transparency in dealing with their mineral wealth is 
complicating the progress that the United States would like to 
see in that particular country. There is an international 
initiative for transparency and I would just like to get your 
views as to how important you see this initiative in dealing 
with the energy issue, in dealing with poverty in dealing with 
U.S. objectives in foreign assistance, and whether you will 
make this a priority, if you are confirmed.
    Mr. Steinberg.
    Mr. Steinberg. Senator, I think you've--this is an issue I 
know you've been long concerned about, and it's one which I 
think is--it's pretty clear, right now, that the danger of 
these various resources curses are a big challenge, because 
they, theoretically, offer a great opportunity to help lift 
people out of poverty and create opportunity, but have often 
proved a source of corruption, a source of lack of transparency 
issues, and, indeed, of conflict. And we've seen, in many 
cases, where the failure to have transparency has led to 
corruption and conflict in critical regions throughout the 
world. We need to find effective ways to work with these 
countries to provide positive incentives for them to move in a 
more effective way, that allows them to conserve their 
resources, to use them effectively, to make sure that they are 
applied for the well-being of others, and to work with their 
leaders to make clear that this is, in the long run, in their 
own interest to develop these more effective strategies.
    So, I think transparency is at the heart of it, because 
once we have transparency, then there's an opportunity to 
really sort of see what the implications of policy are and 
allow the voices within those countries to play a more 
effective role, because the international community has an 
important role to play to help set standards, but ultimately 
what we really want to do is empower the people within those 
countries to have an effective voice in how the decisions are 
made about the use of those resources.
    Senator Cardin. Thank you. There is the extractive 
industries transparency initiative that the U.S. participates 
in. I would welcome your thoughts, if you've had a moment--
after you're confirmed--to decide whether that is the most 
effective way for us to proceed, whether the United States 
should be more actively involved in that initiative, or whether 
there are other opportunities that you see, in dealing with the 
transparency issue. I would welcome your thoughts, as you 
review a strategy for moving forward on what you've said. I 
agree precisely with what you said. I think it's exactly what 
we need to do. The question is whether this initiative is the 
right one or not. The United States participates, but is not 
overly active in it. Or we should be pursuing other courses. If 
you could get back to us on that, I would appreciate it.
    Mr. Steinberg. Be happy to do so, Senator.
    Senator Cardin. Thank you, Mr. Chairman.
    The Chairman [presiding]. Senator Cardin, thank you very 
much.
    Just for the benefit of Senator Shaheen and Senator 
Kaufman, I think there's going to be a vote starting soon. We 
should be able to get both of you in, in that time.
    And so, we'll turn to you, Senator Shaheen, right away. 
Thanks.
    Senator Shaheen. Thank you very much, Mr. Chairman.
    Welcome, Mr. Steinberg and Mr. Lew. I would like to add my 
congratulations and thanks for your willingness to come back 
into government service, given your experience and knowledge. 
And I, too, appreciate the sacrifices that you and your 
families make. And so, I very much appreciate your willingness 
to do this.
    There have been a number of references to our foreign 
policies and its impact on international economic issues. And I 
think we have--particularly are seeing, right now, how 
globalization is affecting the international economy, and the 
need to have--to be able to address that, and its impact on our 
policies in other areas. And so, would you talk a little bit 
more about how you see the role of the State Department, 
particularly in interacting with Commerce and--the Departments 
of Commerce and Treasury, which have traditionally taken the 
lead on those economic issues?
    Mr. Steinberg. Senator, perhaps we could both talk to this, 
because I know my colleague has thought a lot about this, as 
well.
    I think it's critical that the State Department play a 
central role in this, and I think it's something that Secretary 
Clinton talked about when she appeared before the committee; 
that is, there are obviously a lot of resources and capacity 
across the Federal Government, but we need a more integrated 
approach to these issues, that understands all the different 
dimensions of our engagement abroad, not only in terms of 
relationships with key countries and key allies, but the effect 
on the global trading system and on the opportunities for 
Americans, and the impact on Americans. If you don't have an 
integrated approach, then you end up with a lot of different, 
sort of, stovepiped efforts, where different agencies are 
pursuing different efforts.
    I think, as we move forward, President Obama has set up 
various mechanisms, on an interagency level, but he has made a 
commitment to Secretary Clinton that the State Department will 
play an active role, not only in the traditional NSC world, but 
also in the NEC world. And so, the fact that the State 
Department will play an active role and will have officials who 
have a deep concern and interest in these issues, engage them, 
I think, is going to be a clear indication of how important she 
sees the economic issues as part of it, and the need to connect 
it to what we're doing in the other parts of the State 
Department.
    Mr. Lew. I would only add to that that, in our experience 
in the Clinton administration, it was not always the case that 
the State Department and the diplomatic resources were as 
actively involved in international economic issues as they 
might have been. There were occasions when we didn't 
necessarily reach down into the deepest levels of knowledge in 
the Government, sometimes during times of crisis, and sometimes 
just during more normal times. What Jim has described is the 
enhanced participation of the State Department in the National 
Economic Council process is critical, because if you're not 
sitting around the table, you're not in the discussion, you 
don't know what to go back and bring in to benefit the entire 
administration view.
    There can't be a line between our international economic 
policy and our foreign policy. They're really one and the same.
    Senator Shaheen. And are you also comfortable that there's 
a real commitment on the part of this administration to 
encourage that kind of cooperative effort and coordination 
among the various Departments responsible?
    Mr. Lew. Absolutely. Secretary Clinton has spoken with both 
the President and with the head of the National Economic 
Council. I've spoken with the head of the National Economic 
Council.
    The commitment is deep. Everyone is going to have to learn 
their way around the new process, and we're no exception to 
that. But the commitment is deep and the need is great.
    And I know, having spoken at length with members of the 
economic team, as I was on the economic team, I bring, perhaps, 
a perspective that's a little different than people who grew up 
in the foreign policy world. There's a real desire, on the part 
of the people who make economic policy, to have access to the 
depth of knowledge that exists at State. And that's really the 
comparative advantage that the State Department brings. It's 
incumbent on us to make sure that we can, as we were talking 
about earlier, reach into the State Department to the areas 
where there is knowledge that isn't held elsewhere in the 
Federal Government, and bring it to bear when we have economic 
policy discussions. I'm convinced we can do it. It's an 
organizational challenge, but as a policy matter, it's 
critical.
    Senator Shaheen. Thank you.
    I would----
    The Chairman. Let me just interrupt for one second.
    Senator Kaufman, I suggest you and I go vote. And, Senator 
Casey, you'll be next, when she completes, and then you go 
vote. Or you can judge your questioning accordingly, and then 
we'll get back here to finish up.
    Senator Shaheen. I'll be quick.
    There's been a fair amount of discussion about energy 
security. I was struck by both the confirmation hearing for 
Senator Clinton, as well as Senator Salazar and now Secretary 
Chu, as they were talking about energy and the importance of 
energy to our national security and to what's happening in 
Europe and the rest of the world. But, I want to ask you about 
climate change and the role that the State Department ought to 
be playing with respect to climate change, and how we address 
that. Obviously, energy security is a piece of that, but it 
seems to me we've got to coordinate with both of them if we're 
going to be successful.
    Mr. Steinberg. Senator, I certainly agree with that, and I 
think President Obama and Secretary Clinton would share that 
view. The administration will be in the process of making some 
announcements, I think, in the near future, about the precise 
roles and appointments that are going to be responsible for 
climate policy. But, given my familiarity thus far with the 
discussions, I think I can assure you that it is something that 
is front and center for the State Department, that there's a 
recognition that, historically, the State Department has played 
the lead diplomatic role, that if we're going to be effective 
in achieving our objectives in these climate-change 
negotiations, as the chairman indicated, that we are going to--
it's going to require an extraordinary diplomatic effort to 
meet the tremendous complexity that will go into the Copenhagen 
meeting and any future international agreements. So, we need to 
have the resources and the perspective of the State Department 
there.
    I think we can only be effective if we really understand 
how we can be both a leader at home in dealing with those 
issues and working with other countries abroad. And it has to 
be integrated with other aspects of our national strategy, 
because if we're going to bring key countries into the mix--and 
we must, because we're not going to be successful in dealing 
with climate unless both we take steps, here in the United 
States, but also key developing countries, in particular, 
undertake the appropriate steps to help us meet this challenge. 
And I think the State Department is uniquely well positioned to 
help make that take place.
    As I say, historically, we've had the lead. We are looking 
now and--at the question of how best to organize ourselves to 
do that. But, I know that Secretary Clinton puts a very high 
priority on this, because it does affect so many different 
aspects of our policy and the interconnections between climate 
and food security and energy and all the things that we've been 
talking about today. It really is a focal point, as well as an 
urgency, in its own right, and I know we'll look forward, if 
confirmed, to coming back and discussing with you how we're 
going to proceed to do that, and how that will relate to the 
efforts, more broadly, in the administration.
    Senator Shaheen. Thank you. Thank you all.
    Senator Casey [presiding]. Thanks very much. I'll be rather 
brief, due to the vote. And you may even have a break between 
now and when Senator Kerry gets back.
    But, I wanted to, first of all, thank both of you for your 
service already, the service you've rendered to the American 
people to date, but also the service that I anticipate you'll 
be providing to the American people at a time of maximum danger 
and difficulty, but also at a time when we have great 
opportunities. So, we're grateful for that.
    There's a lot to cover--and I'll submit a number of 
questions for the record.
    But, I wanted to start, in the limited time we have, just 
with regard to Pakistan. I had the opportunity, in May, to 
visit the region, met with then-party leader Zardari before he 
was the President, with General Kayani, with the Prime Minister 
Galani, and others, and had a general sense, then, about their 
approach to the concern that we have about the cross-border 
incursions from Pakistan into Afghanistan and the concern we 
have about their own stability. But, I wanted to get your 
sense, Mr. Steinberg, first of all, what your approach will be. 
We've spoken to then-Senator Clinton about this. We want to 
spend some more time talking to her. But, just the general 
approach you'll take to Pakistan and kind of the short-term or 
near-term steps we've got to take to make sure that we're 
focused on the question of stability, the question of reminding 
them over and over again about the problem of terrorists in the 
region between Afghanistan and Pakistan, but also just the 
general threat that terrorism poses to the world emanating from 
that country.
    Mr. Steinberg. Thank you, Senator. As I indicated before, I 
think fairly shortly we're going to hear a little bit more from 
the President and the Secretary about their approach to this, 
and I think they will address, quite specifically, the kinds of 
concerns and how we're going to try to engage with this very 
integrated problem, because I think one of the things that both 
President Obama and Secretary Clinton have really emphasized is 
that you can't look at Afghanistan in isolation, and you have 
to understand the deep connections--political, economic, and 
the like--that create this challenge for us. And we have to 
have a strategy that integrates all the different parts of our 
power, and really looks at it from a regional perspective. I 
think that's something they're going to highlight when they 
come to speak about this again.
    I think, in particular, as you and I discussed, we have a 
situation here where it's quite important that, in the long 
run, we develop the kind of partnership with the government, 
the democratic Government of Pakistan, that allows us to take 
on these complicated challenges. I think there is a 
recognition--and I hope a growing on there--that this is not 
something that is just a problem for us, the presence of 
extremists and terrorists in the border areas on both sides, 
but one that actually threatens the Government of Pakistan 
itself. And we've seen, from the recent bombings in Pakistan, 
that this really is a shared problem. And, I think, building 
that sense of how we cooperate together in dealing with it, and 
working with the government in Afghanistan to develop long-term 
strategies to really undermine the extremists, is quite 
important. And that democratic governance opportunity in 
Pakistan, I think, is part of a long-term solution.
    So, we have to see this as one where we both have a shared 
interest. We have to understand that, for us, it's obviously 
critical that this be addressed; it is a direct and immediate 
threat to us, as the President and the Secretary have said. 
But, again, it's not something that is being done, you know, 
for us and disconnected from the very substantial interests 
that President Zardari and the Prime Minister themselves face.
    So, I think it's important that we have a direct engagement 
there, that we work at this as much as we can as partners while 
addressing the very real threat that we face to our national 
security.
    Senator Casey. Thank you.
    And because of the interests of time, we're going to take a 
break, but, Mr. Lew, thank you, as well, for coming to see us 
and to spend some time talking about the management questions 
that I know both of you have responsibilities there. But, I was 
particularly impressed by Secretary of State Clinton's 
understanding of, and appreciation for, managing a big, big 
government agency, and we will submit questions for the record 
that focus on that, as well as some of the substantive 
challenges.
    So, at this point, we'll take a break until other members 
return from the vote.
    Thank you very much.
    [Recess.]
    The Chairman [presiding]. Thanks for your patience.
    Senator Kaufman.
    Senator Kaufman. Thank you, Mr. Chairman. And I mean, thank 
you.
    I can't tell you how pleased I am to see the two of you 
sitting here. I thank Secretary Clinton, in placing the two of 
you by her side; I just feel so comfortable as we move into 
such a difficult area. I really--the professionalism that the 
two of you bring, your experience, the breadth of experience, 
the unanimity of support--anyway, I just feel good about 
things. And I just had a few short questions.
    One is, I've seen a lot of survey data in Afghanistan, and 
the survey data I've seen says people don't like the Taliban, 
by and large, but they like the war even less. And we're 
beginning to get the case where people that don't like the 
Taliban say, ``If I have to--a choice between the Taliban and 
the war, I'll take the Taliban.'' Especially you, Mr. 
Steinberg, what are your thoughts about how we deal with that?
    Mr. Steinberg. Thank you, Senator. And congratulations to 
you. It's----
    Senator Kaufman. Thank you.
    Mr. Steinberg [continuing]. It's just a tremendous personal 
pleasure for me to see you there.
    Senator Kaufman. Thank you.
    Mr. Steinberg. I think it's very wonderful.
    You know, I think, as you put your finger on, and the 
chairman and others, we have a big challenge there, which is to 
say that, I think, by every assessment, including the outgoing 
administration's own assessment, we are not on the right track 
in Afghanistan. And this is--and because it's so consequential, 
this really matters a lot. There is--by almost every metric, 
this is a situation which is not totally lost, but is clearly 
going in the wrong direction. And if we cannot convince the 
people of Afghanistan that the efforts that we're undertaking 
are in their interest, as well as ours, we're not going to be 
successful.
    As I mentioned, there are--there were policy reviews 
underway--one conducted by a General Lute--for the outgoing 
administration. General Petraeus is doing some work on this. We 
need to pull this all together and really look at how we got 
off track, and understand that this is something where we have 
a big stake and we can't simply walk away from it, but we also 
need to find a more effective strategy to work with the people 
there, for them to see this as being in their interest, and to 
make sure this is not just a--something that we're carrying the 
water and they see it as not something that concerns them, 
because I don't think we can be successful, in the long term, 
unless it's seen that way. We need to be creative about how we 
bring all the elements of our strategy to bear. There's a role 
for the military. The President indicated he thought that we 
needed additional military forces there. But, that is not going 
to be a solution, by itself. And if the war is simply seen as a 
military exercise, it's not going to be successful.
    So, that engagement with, not only the Government of 
Afghanistan, but the people of Afghanistan, I think is going to 
be critical to our long-term success, and it is going to be a 
focus of the policy review that the administration intends to 
undertake.
    Senator Kaufman. And the other question on Afghanistan is, 
clearly, you know, we need more troops there, and State 
Department is going to be the lead, in terms of making sure 
that, while we add more troops, our NATO allies don't reduce 
their troops, and, that they do in fact increase their troops. 
What are your thoughts about that?
    Mr. Steinberg. There's no question that the engagement of 
our allies is a critical part of this effort and that this is 
something that President Obama talked a lot about during the 
Presidential campaign. We have an opportunity, as you know, 
with a number of important NATO meetings coming up over the 
next several months. We have both--well, we have a NATO Defense 
Ministers meeting, a NATO Foreign Ministers meeting, and then, 
finally, the NATO summit in April. And there's no question in 
my mind--and I would have every expectation for both the 
President and the two Secretaries--Secretary Clinton and 
Secretary Gates--that this is going to be a major focus there. 
But, I think, in order to be effective with our allies, we have 
to have our own strategy in order. I mean, that's why I think 
it is a matter of high priority for us to help, as the chairman 
asked us to do, to identify our objectives and a strategy 
there, and to make clear to our allies that this is not just 
about us, they have a great stake there, too.
    We've seen that this is an area which has been the source 
of terrorist attacks, not just--it's not just affecting the 
United States, but directly affecting our NATO allies. So, it 
is a common interest, and we need to be effective in both 
conveying that and having a strategy that makes clear that this 
is part of our partnership, to work this together, not just 
because it affects the United States, but because it affects 
our NATO allies, as well.
    Senator Kaufman. Great, thanks.
    Could both of you comment on both the structural and policy 
relationship between the Department of State and the 
Broadcasting Board of Governors?
    Mr. Lew. There was a change in the structural relationship 
a number of years ago, and the question is, Where will we go 
from here? We must ensure that we have the right level of 
independence, but also, attention to public diplomacy and 
communications. It's a broader question than the, kind of, 
institutional structure of the Board of Governors--how we have 
an effective program to communicate throughout the world--it's 
something that we think is very important, both in terms of the 
Broadcast Board of Governors, but also in terms of the 
personnel we have doing public diplomacy and communications in 
the embassies and consulates around the world. We need to have 
an effective voice for the ideas and ideals that we carry. If 
confirmed, that's one of the areas we're going to pay a lot of 
attention to.
    Senator Kaufman. But, there's kind of a conflict between, 
kind of, the broadcasting part of public diplomacy and the 
nonbroadcasting part. The nonbroadcasting part has to be 
structured as strategies, goals, objectives----
    Mr. Lew. Right.
    Senator Kaufman [continuing]. Made at the highest level of 
government; whereas, broadcasting primarily is a news and 
information organization, and the only reason we've been 
successful has been because of the independence of our 
journalists. We've found that when the government gets involved 
in actually what's going on the air, that is not successful, 
people just turn off their radios and televisions and the 
Internet and the rest of it. So, I'm concerned that, under any 
restructuring, that we would maintain the independence of the 
journalists and make sure there's a firewall between them and 
the rest of government. Is that something----
    Mr. Lew. We share the concern that there be independent, 
credible broadcast standards going back to the halcyon days of 
international broadcasting. It's a long time since Edward R. 
Murrow was there, but we all know what the standard is.
    Senator Kaufman. Good. And what are your thoughts about 
Zimbabwe?
    Mr. Steinberg. Senator, I think this is--the tragedy is one 
that I think is palpable, at this point. We not only have a 
situation where there are serious violations of human and 
political rights, but now, because of the neglect and 
malfeasance of the government there, a true health catastrophe.
    I think there's a clear situation where the will of the 
people are not being reflected by the decisions of the 
government, that there has been a good-faith effort to try to 
find a compromise solution to bring the opposition into it, and 
to work with Mr. Mugabe to try to find a way forward, and we're 
not seeing that kind of cooperation. So, while the 
administration is now just forming, and I can't presume 
precisely what the policies are going to be, I think there's no 
doubt that this is an urgent matter, and that it's important, 
not only for the United States, but for the countries of the 
region, to really address the fact that, even the more--most 
recent agreements and understandings are not being observed and 
respected.
    Senator Kaufman. Good.
    You know, when you look around the world, freedom of the 
press, which was very much on the ascendency not too many years 
ago, has definitely gone the other way. And, I mean, just 
everywhere you look, no matter what continent you're on. What 
are your thoughts about how the Department of State can help 
deal with this freedom-of-the-press decline around the world?
    Mr. Steinberg. I think, as you heard from the President in 
his Inaugural Address, that these values and principles are 
critical to him, the ability to speak out, the ability to 
protect dissent and the like, are sort of at the core of what 
he articulated as his vision. I think it was very powerful 
statement, and I think it was heard around the world. And I 
think there's nothing more important at the beginning, than to 
have that clear sense of commitment from the United States from 
our President about the fact that this is something that he 
cares deeply about and puts at the center of our foreign policy 
and national security.
    And I think that that very fact, that he has put it so 
central to his approach, puts other countries on notice that, 
in terms of developing a relationship with the United States, 
that this is not a marginal concern, this is a central concern. 
I think we need to find ways to be effective in integrating 
that into our operational strategy, to take that very strong 
statement of principle to make clear that this is something 
that we do care about, that it is something that is not 
peripheral to national interests, but really is a lot about who 
we are in the world.
    Senator Kaufman. And it's the same problem with freedom of 
religion. And the problem is that, having been involved in some 
of this, there are so many priorities, but I'd just say one 
thing, and that is, when you don't mention these things when 
you meet with people that are not promoting it, it gives them 
the distinct feeling--I know this from firsthand experience--it 
gives them the distinct feeling that it's OK. And I also know, 
when the agenda gets set up for these meetings, there's a 
million things, but freedom of the press and freedom of 
religion are so basic to our society and so basic to what our 
President brings to the office--I'm just saying, try to fit it 
in there, because there is a price to be paid. When it's left 
off, I know the perpetrators just feel free to move ahead.
    I think Bosnia is the final area. And, you know, it looks 
like we're faced with a political crisis there. What are your 
thoughts about Bosnia?
    Mr. Steinberg. Senator, as I mentioned before, this is an 
area that I had an opportunity to work with----
    Senator Kaufman. Yes, I know.
    Mr. Steinberg [continuing]. Quite a bit during the Clinton 
administration, and I do think it is a matter of concern that 
it has kind of slipped a bit off the radar screen. This has 
never been a perfect solution in Bosnia. The political 
arrangements there were, I think, the appropriate ones at the 
time to bring an end to a bloody and violent conflict. It 
created an opportunity to move forward. But, for a variety of 
reasons, some of which have to do with U.S. efforts and some 
with Europe and others, we have certainly not, kind of, gotten 
over the divisions and the difficulties of the structure of the 
government there to really make real progress. I think it is 
critical that we take a serious look at this and that we 
elevate this, because, as we were talking about earlier, if we 
wait until this--the crisis erupts, then it's going to be even 
harder to deal with.
    And so, while I think all of us recognize that there are a 
lot of challenges on the plate, sometimes I think it's 
incumbent upon us to make sure that we have the tools within 
the State Department, through the government, that we can do 
multiple challenges at one time, and, if confirmed, because of 
my own background and interests, I have a particular concern to 
make sure that we don't lose what progress was made, and that 
we find ways for the United States--working with Europe, 
frankly, because they are a critical part of this--to try to 
see if we can reverse some of the deterioration.
    Senator Kaufman. Great. Good luck. Thank you.
    And thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    And may I remark that I think you may be sitting way down 
at the end there, but it's obvious by your questions the value 
you bring to the committee immediately from your years here. We 
appreciate it very, very much.
    Senator Kaufman. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Menendez.
    Senator Menendez. Thank you, Mr. Chairman.
    Let me welcome you both. And I'm sorry that the Treasury 
Secretary's nomination didn't have me here for a lot of your 
questions and answers, but I did read your testimony, and I had 
the privilege of sitting with both of you, so I have a pretty 
good sense.
    One of the things that I care about deeply in this 
committee, and have for the 16 years that I've been in the 
Congress, is Latin America. We spend a lot of time talking 
about Chavez, but Chavez only has success because we have had a 
vacuum. And it is, in my mind, more important about what we do 
than what he does, at the end of the day. But, the one place in 
the world in which overall development assistance has been cut 
for 3 consecutive years in a row has been Latin America and the 
Caribbean. This is not in the national interests or security 
interests of the United States.
    If you want to stem the tide of undocumented immigration 
into the country, have people have economic opportunities in 
their homeland. They only leave for one of two reasons: 
economics--dire economic necessity or civil unrest. If you want 
to help us in the issue of global warming, then diversity of 
the rain forests in the Amazon is incredibly important. If it 
is destroyed, we increasingly pollute our collective 
environment. How we deal with credits and other efforts to 
ensure that doesn't happen. Diseases that we have largely 
eradicated that are resurfacing along the border with the 
United States, like tuberculosis--again, health issues know no 
boundaries. If you want narcotics trafficking to cease, one is 
you have to reduce demand at the same time that you are 
reducing cultivation, and you have to give a poor coca farmer 
some sustainable development alternative. And the list goes on 
and on.
    This is not about just simply being a good neighbor; this 
is about policies that are in the national interest and 
security of the United States.
    So, I'd like to get, Mr. Steinberg, a sense from you about 
where you see our policy moving forward in Latin America under 
this new administration, and from you, Mr. Lew, about what you 
see as the overall--the, you know, development assistance. How 
important is Latin America going to rate in this process?
    Particularly in--I'd like to call your attention to 
something that passed this committee in the last year, 
bipartisan approach, ran out of time on the floor--Social 
Economic Development Investment Fund of the Americas. It sends 
a very strong message to the Americas that we are engaging with 
them in very significant ways, that we have a broad agenda, not 
just simply trade, which is important, and narcotics 
interdiction, which is important. That's all we've talked, 
largely, to these countries about. I think it's a fundamental 
mistake. So, give me a little sense about where we're headed in 
that respect, from your perspective.
    Mr. Steinberg. Well, thank you, Senator. And your 
leadership, obviously, has played a critical role on keeping 
our attention focused on the hemisphere.
    I think you put it just perfectly, in talking about the 
problem of a vacuum, that we've had a policy which has tended 
to react to provocation rather than really reaching out and 
having our own strategy. And I think if we had that, as you 
suggested, these provocations would both be ineffective and 
would be beside the point. We need to restore that sense of 
leadership and sense of partnership with the hemisphere, and 
there is an opportunity, I think, that people have seen that 
the kind of examples that Chavez and others offer is not 
leading to a better life or more success for their people. And 
so, we need to revalidate the strong, friendly partnerships 
that we have, and that we care about their well-being, for the 
reasons that you said. This is a--we're so deeply 
interconnected and interdependent with this hemisphere that we 
can't succeed in meeting these important issues for us unless 
our partners in the hemisphere are doing it.
    There--we have an opportunity--I mentioned this earlier--
with the coming hemispheric summit, to really have a chance for 
the President and the Secretary to engage with the leaders 
there, to present their vision of a different approach, and to 
begin to lay out some of the specific policies. We've got a lot 
of hard work to do, and, if confirmed, between now and that 
summit, to really have something to say. And I think the 
President----
    Senator Menendez. You have less than 100 days.
    Mr. Steinberg. That's exactly right.
    Senator Menendez. It's either going to be the summit that 
we inherited from the previous administration or a summit that 
we fashion in our own view.
    Mr. Steinberg. Well, and I think--for precisely the reasons 
that you suggest, I think that the President is eager, and it's 
certainly his wont to move quickly to change the tone. This is 
about change. And I think he--again, talking about what he had 
to say on Tuesday, that he really made clear about how 
dramatically he wants the change the orientation of U.S. 
foreign policy in this respect. And we have some very critical 
opportunities all through the spring. We talked about the NATO 
Summit, there's the G20 meeting, there is the hemispheric 
summit. And these are tremendous opportunities, because the 
President does reflect such a different approach. And with the 
President and the Secretary there, and, if confirmed, Jack and 
I are going to be working with the Department and the 
interagency to make sure that we have something more than just 
rhetoric to say to make clear that we do have a different 
approach.
    Mr. Lew. Senator Menendez, the question of resources for 
development is a central one. Dealing with the root causes of 
unrest and threats to democracy means addressing the problems 
of poverty around the world, and economic development is 
ultimately the way to do that.
    Over the last few years, the development assistance budgets 
have been terribly constrained, the demands for assistance in 
reconstruction flowing from our involvement in Iraq and 
Afghanistan has been enormous. If confirmed, we're going to 
have to quickly look at where the development assistance budget 
is going, and fairly quickly reach a determination on what we 
would do with the resources that are there, and how much 
additional assistance we need in order to be the kind of 
partner that we should be in parts of the world where our 
absence or our diminished presence is really very shortsighted.
    So, I can't sit here today, not having been there, and 
telling you that I start with a notion of the exact dollars or 
percentages, but ultimately, what Jim was just talking about, 
and what the President and the Secretary have been talking 
about, only has meaning if we put resources behind it. We can't 
go to these meetings empty-handed, and we're going to have to 
work quickly, if confirmed, to come up with an agenda.
    Senator Menendez. I appreciate that, because the Chinese 
are quite engaged in the hemisphere with resources. Obviously, 
Chavez is quite engaged in the hemisphere with resources. Even 
the Russians have begun to focus a little bit on the 
hemisphere. So, there's got to be a reason they're all here.
    Mr. Lew. Yes.
    Senator Menendez. Got to be a reason that they're all here.
    Let me--before I just move to foreign assistance, very 
quickly--and I've heard a lot of the discussion on this; I just 
want to concentrate on one specific thing that we've been 
focusing on as I have had the privilege to be the subcommittee 
chair in that field, and did a lot of hearings over the last 2 
years. But, I listened to the President's inaugural speech, and 
he had a line in there that I think is very pertinent, and I 
just want to mention it here, because it is a very passionate 
issue for me. He said, ``We are willing to open our hands and 
offer you a hand in friendship if you are willing to unlock 
your clenched fist,'' which I took, you know, very meaningfully 
in that speech.
    And I think about Cuba. We have tried, at different times 
in different ways through different administrations, to sort of 
offer an open hand, but we have seen, still, a clenched fist. 
More people are still languishing in Castro's jails today. 
Human rights activists, political dissidents, independent 
journalists, independent economists are jailed simply because 
of their thoughts and their views, their attempts to try to 
create a civil society. Millions of Europeans, Latin Americans, 
Canadians, Mexicans, and others who have traveled to Cuba have 
not created one iota of change. The regime has become more 
oppressive.
    The famous mantra of the President during the election: 
change. We sent into Cuba a very simple plastic white bracelet, 
which Cuban youth wore throughout Cuba. It had one word on it. 
It was the word ``cambio,'' which in Spanish means ``change.'' 
And they were arrested simply for having a simple bracelet that 
says ``change.'' We just rejoiced in that mantra of change here 
in this country that led to an incredible victory. In Cuba, 
young people who just have a simple white bracelet that says 
``cambio'' get arrested for wearing it. Now, that is the 
realities of Castro's Cuba.
    And so, I look forward to how we're going to move forward 
to try to help Cuban people achieve the freedom of democracy we 
enjoy here. Hopefully, there will be an opening of the clenched 
fist, something that we have not seen for over four decades.
    Let me, finally, ask you--Mr. Lew, you and I have had long 
conversations about the foreign assistance. Incredibly 
important. I believe, one of the most powerful tools of 
peaceful diplomacy, and something that has really suffered body 
blows during the last several years, and also a transfer to the 
Department of Defense in a way that I don't think even the 
Department of Defense, to the Secretary's credit, has said, 
``We really need the State Department to be beefed up.'' So, I 
hope that those same views prevail and that resources will 
flow, however they may flow. But, who is going to control 
foreign assistance at the Department? Who will have budget 
authority over USAID? What's going to happen to the F Bureau 
and the F process at State? How do you envision that moving 
forward?
    Mr. Lew. As we discussed the other day, we're going to take 
a careful look at the F Bureau and the F process. If confirmed, 
it will be one of my responsibilities to look across the 
Department, including at AID and all of the other foreign 
assistance programs, to play that coordinating role.
    We're going to take the process that was developed for F 
and actually broaden it, because that process didn't take into 
account MCC and PEPFAR the same way that we think all of the 
programs ought to be looked at, which is horizontally.
    We will have to make some judgments about the 
organizational structure once we're there and knowledgeable 
enough to do it in an informed way. The opening view is that a 
lot of progress was made in taking a look across the foreign 
assistance programs, but not enough. We need to make more 
progress so that we really embrace all of the foreign 
assistance efforts and evaluate them and come to the Congress 
with recommendations that are well coordinated.
    Senator Menendez. Well, Mr. Chairman, if I may, one last 
moment.
    We need--and I've expressed this to you privately, and I 
hope I can get your commitment here publicly--a strong 
advocate--I mean, you will have, you know, a horizontal 
responsibility, and, as we discussed, you will be responsible 
for--with the Secretary, with the overall budget process. And 
so, that has challenges. You know, it's a little bit of what we 
said in the Banking Committee about having credit-rating 
agencies be both the referee and the coach. That doesn't quite 
work. At the same time, being the one responsible for figuring 
out the priorities of budget-cutting in the overall element of 
the Department's needs, and then being the advocate for foreign 
assistance. We need a strong advocate for foreign assistance. 
You know, if you do PEPFAR and you do MCC, and you don't raise 
the overall amount, you've got less and less for the core 
development assistance programs.
    I think PEPFAR is great. I think MCC has a lot of merits to 
it. But, at the end of the day, the MCC was supposed to be 
additive, not in replacement, and PEPFAR is very important, but 
if those categories continue to rise, then your overall 
function is decimated. So, we need an honest discussion of 
that, and we need a strong advocate.
    Mr. Lew. As I indicated to you privately that I have every 
intention, if confirmed, of being a strong advocate for 
development assistance, for foreign assistance. I couldn't 
agree with you more that we can't have the new programs grow 
within the current totals without decimating the old 
approaches. And that's one of the reasons that we need more 
resources.
    A lot of good that has been accomplished in PEPFAR. MCC is 
getting off the ground and making real progress. But if we have 
increases in those programs within the existing totals that are 
available for foreign assistance, the little bit that's left in 
the traditional AID and foreign assistance programs just won't 
be there anymore. So, the totals have to grow. I give you my 
commitment to be an advocate to run the programs well, but also 
to come into this committee, and before Congress generally, as 
an advocate to size appropriately the resources that we put 
into this vital area.
    Senator Menendez. Well, I look forward to supporting both 
of you.
    Mr. Chairman, your first chairmanship was the nomination 
hearing of Secretary Clinton, and I just think you did a 
fantastic job on the floor, but I want to say I look forward to 
working with you under your leadership now of the committee, 
and I appreciate some of your initial instincts of where to 
travel. It's going to be a powerful statement to parts of the 
hemisphere that are going to be incredibly important, and it's 
going to be a very powerful statement.
    The Chairman. Well, thank you----
    Senator Menendez. I look forward to working with you.
    The Chairman [continuing]. Senator Menendez. I'm delighted 
you're going to join me on that trip--Senator Menendez and 
Senator Graham--Lindsey Graham--and we look forward very, very 
much to sending exactly that message.
    We also look forward to working really closely with you 
folks. I hope you sense that from the committee. I'm confident 
we will.
    I need to ask you just a couple of pro forma questions. 
One, Do either of you have any issue from which you will need 
to recuse yourself?
    Mr. Steinberg.
    Mr. Steinberg. Any matter affecting the University of 
Texas.
    The Chairman. Fair enough.
    Mr. Steinberg. I'll be on----
    The Chairman. That's sort of a foreign----
    Mr. Steinberg. It's--I'll probably decline any comment on 
that one, but I--since I'll be on leave from the University as 
a professor, just----
    The Chairman. I understand.
    Mr. Steinberg [continuing]. Anything specifically----
    The Chairman. Well, I'm glad you state that specifically, 
and we appreciate it.
    Mr. Lew.
    Mr. Lew. As my letters indicate, I will need to not 
participate in matters that have particular impact on 
Citigroup.
    The Chairman. Fair enough.
    And do either of you have any matter with which you have 
been advised by counsel or that you know you have a conflict of 
interest at this point in time?
    Mr. Steinberg. No, sir.
    Mr. Lew. No, sir.
    The Chairman. Fine. Thank you very much.
    Well, here's what we're going to do. We're going to try to 
expedite this process. We will leave the record open for 1 
hour. There are, I think, a couple of additional questions. We 
ought to be able to get them done early in the afternoon. And 
then our hope will be to discharge from this committee as 
rapidly as possible and conceivably move on the floor even 
today. I know it's very, very important to get both of you in 
place as rapidly as possible. We want to do that. And so, I 
assure you we'll do everything possible to try to get that 
done.
    On that note, again, we really congratulate you, and I just 
want to emphasize how much we look forward to working with both 
of you. Congratulations to you, and thank you for today. And 
your daughters were unbelievably well behaved. [Laughter.]
    How did Daddy do? OK? Did he do well? [Laughter.]
    Yes.
    And I don't know, your students, I think, abandoned you. 
Are they here, still? Did they give you a grade?
    Mr. Steinberg. Sir, if I could just add this to the 
record----
    [Laughter.]
    Mr. Steinberg [continuing]. This note says, ``Thank you, 
Senator Kerry,'' signed Jenna Steinberg. [Laughter.]
    The Chairman. Oh, well, we're going to speed this up, then, 
even more. [Laughter.]
    So, thank you all very, very much. Glad to have you all 
here from the University of Texas. We appreciate it. And we do 
want to keep the Boston-Austin connection going, big-time.
    We stand adjourned.
    [Whereupon, at 12:20 p.m., the hearing was adjourned.]
                              ----------                              

       Additional Questions and Answers Submitted for the Record

 Responses of Deputy Secretary-Designate James Steinberg to Questions 
                 Submitted by Senator Richard G. Lugar

                              NORTH KOREA

    Question. A Republic of Korea Government delegation is reportedly 
traveling to North Korea this week to discuss purchasing unused fuel 
rods. What is your perspective on this issue, and would the Obama 
administration support such an initiative by South Korea?

    Answer. Disposal of fresh fuel rods by North Korea is one of the 11 
disablement steps North Korea agreed to undertake pursuant to the 
October 2007 Second Phase Agreement of the six-party talks. North Korea 
has agreed to either sell or bend these fresh fuel rods so that they 
can no longer be used in a North Korean reactor. We expect North Korea 
to complete the 11 disablement steps. The Republic of Korea is an 
important ally of the United States and a key partner in addressing the 
North Korean nuclear program. The new administration will immediately 
review their initiative. We share our ally's goal of trying to 
facilitate completion of this step.

                         NORTH KOREA AND CHINA

    Question. Thousands of North Korean refugees have departed that 
country in search of a better life in South Korea or elsewhere. Chinese 
officials do not allow the United Nations High Commissioner for 
Refugees to establish a presence within China, to facilitate the care 
and transfer of North Korean refugees to another country. Likewise, 
North Korean refugees are often incarcerated or returned to North 
Korea, once intercepted by Chinese officials. How will you recommend 
that this issue be considered within the larger context of U.S. 
policies toward North Korea and China?

    Answer. We are greatly concerned about the status of refugees from 
North Korea who have fled that repressive regime. If confirmed, I am 
committed to working with relevant international organizations, our 
regional partners, and countries like China to ensure that refugees 
from North Korea are treated humanely and in ways consistent with 
international law.

                                 CHINA

    Question. As you are aware, many questions continue regarding 
China's record on human rights and religious freedom. How do you 
envision these issues being incorporated into the Obama 
administration's establishment of priorities in dealing with China?

    Answer. Standing up for human rights is a core element of U.S. 
foreign policy and is central to what we stand for as a nation. While 
we have many areas of shared interests with China, and have an 
opportunity to build on these interests to enhance our cooperation, we 
also have differences with China, including on human rights and 
religious freedom, and progress on these issues is an important element 
in how the relationship between our two countries develops. The Obama 
administration will discuss these issues candidly and openly with 
China's leaders and work to support movement toward greater human 
rights and religious freedom in China.

                                 TAIWAN

    Question. In recent years, the U.S. Government has generally 
subscribed to the ``one-China'' policy related to Taiwan and China. How 
do you interpret the ``one-China'' policy presently in place? Will you 
be recommending any changes to the ``one-China'' policy followed by the 
Bush administration?

    Answer. The ``one-China'' principle has been the basis for the U.S. 
approach to China and Taiwan for 30 years and has proved successful in 
maintaining peace and stability across the Taiwan strait while allowing 
for the development of a vibrant democracy in Taiwan. The new 
administration's policy will be to support the peaceful resolution of 
Taiwan and China's differences while making clear that any unilateral 
change in the status quo is unacceptable. The new administration will 
maintain our ``one China'' policy, our adherence to the three U.S.-PRC 
Joint Communiques concerning Taiwan, and observance of the Taiwan 
Relations Act, which lays out the legal basis for our relationship.

    Question. For several years, Taiwan has attempted to obtain 
observer status at the annual meeting of the World Health Assembly. A 
Memorandum of Understanding (MOU) between the World Health Organization 
(WHO) and China appears to preclude the opportunity for continual and 
direct communication between the WHO and officials of Taiwan on health-
related issues. Unfortunately, this arrangement may prevent Taiwan 
officials from receiving necessary and urgent health and disease 
notifications in a timely way. How will you work to ensure that the 
citizens of Taiwan receive full benefit from information available 
through the WHO? Will you encourage the Department of State and the 
Obama administration to support Taiwan obtaining observer status at the 
World Health Assembly?

    Answer. Like Secretary-Designate Clinton, I sincerely hope that 
Taiwan and China will continue the progress they've made, because the 
United States gains from peaceful, stable cross-strait relations. In 
this context, and consistent with the ``one China'' policy, it is 
appropriate for the United States to support Taiwan's efforts to play 
an appropriate role in international organizations, such as observer 
status at the World Health Assembly. It is in Beijing's interest to 
demonstrate to the people of Taiwan that the practical and 
nonconfrontational approach taken by President Ma toward the mainland 
can achieve positive results. As Taiwan's continued exclusion from 
appropriate participation in the World Health Organization has serious 
public health consequences not just for Taiwan, but for the PRC and the 
world as a whole, and we agree that the United States should work with 
Taiwan to see that situation rectified.

                                 ASEAN

    Question. In your speech on U.S. National Security and Foreign 
Policy at the ASEAN-U.S. Symposium in Singapore, in October 2007, you 
outlined international economic strategy options related to East and 
Southeast Asia. What in your view are the specific and necessary 
components of a comprehensive U.S. economic strategy pertaining to 
ASEAN?

    Answer. ASEAN has attached great importance to regional and global 
cooperation and to strengthening the institutions that support it, 
particularly on economic issues. The United States has a vital stake in 
maintaining strong economic ties with dynamic economies of this region. 
You have notably supported U.S. cooperation with ASEAN to build these 
institutions, including ASEAN's planned Economic Community. The new 
administration believes it will be necessary to deepen our cooperation 
programs with ASEAN to advance our mutual interest in regional economic 
integration, as well as trade programs like the Trade and Investment 
Framework Arrangement (TIFA), which expands our economic ties with this 
growing region, as well as to strengthen our broader regional 
cooperation through APEC.

                                BELARUS

    Question. The Government of Belarus has detained an American 
citizen named Emanuel Zeltser. My office has been contacted by 
representatives of Mr. Zeltser's family. They report that he is gravely 
ill and that an American doctor who examined him 2 weeks ago concluded 
``there is a clear and high risk of sudden death from heart attack 
unless the patient is immediately transferred to a U.S. hospital with 
the proper equipment and facilities.'' The doctor went on to say that 
because Mr. Zeltser has been denied prescribed diabetes medication, his 
left foot may need to be amputated. Amnesty International has concluded 
he suffers from ``torture and further ill treatment.''
    I commend the State Department for its efforts to bring Mr. 
Zeltser's case to the forefront of United States-Belarusian relations. 
I was pleased that on December 10, the Office of the State Department 
Spokesman called for ``the Belarusian authorities to release Mr. 
Zeltser on humanitarian grounds before this situation takes an 
irrevocable turn.''
    What additional steps or opportunities are available to the 
Department of State in this case? What can we do to ensure that Mr. 
Zeltser receives the medical attention he deserves?

    Answer. The protection of American citizens abroad will remain a 
top priority for the Secretary and for me, should I be confirmed. In 
the interest of Mr. Zeltser's welfare and his need for urgent medical 
care, we will continue to strongly urge the Belarusian authorities to 
release Mr. Zeltser on humanitarian grounds. We will remain in constant 
communication with the Belarusian authorities on Mr. Zeltser's 
situation. I understand that the Department has met frequently with 
senior Belarusian officials in both Minsk and Washington to press for 
Mr. Zeltser's release on humanitarian grounds and to urge the 
Government of Belarus to provide appropriate medical care. The 
Department should continue to raise Mr. Zeltser's case at every 
opportunity, and provide full consular services to Emanuel Zeltser as 
long as he remains imprisoned in Belarus.

                               VENEZUELA

    Question. What are your views on increasing the level and frequency 
of dialogue with Venezuelan Government officials regarding attempts to 
restart cooperative programs between the United States Drug Enforcement 
Administration (DEA) and Venezuelan counterpart authorities?

    Answer. Our friends and partners in Latin America are looking to 
the United States to provide strong and sustained leadership in the 
region, as a counterweight to governments like those currently in power 
in Venezuela and Bolivia which pursue policies which do not serve the 
interests of their people or the region. Our relationship with 
Venezuela should be designed to serve our national interest, which 
means to speak out clearly on issues of concern to the United States, 
while seeking cooperation where it is important to our interest, as is 
the case in fighting the increasing flow of illegal drugs.

    Question. In your view, have actions undertaken by the Government 
of Venezuela undermined the success of United States counternarcotics 
assistance to Colombia (Plan Colombia)? What are the potential 
implications of Venezuelan drug policy for the effectiveness of the 
Merida Initiative its Central American counterpart and the Andean 
Counterdrug Initiative?

    Answer. Venezuela is one of the principal drug-transit countries in 
the Western Hemisphere. Counternarcotics successes in Colombia have 
forced traffickers to shift routes through neighboring Venezuela, whose 
geography, rampant corruption, weak judicial system, and lack of 
international counternarcotics cooperation make it vulnerable to 
illicit drug transshipments. The increasing preference of drug 
traffickers to transship cocaine through Venezuela undermines the 
overall counternarcotics effort. The new administration supports both 
assistance to Colombia through the Andean Counterdrug Initiative (while 
updating it to meet evolving challenges) and a well-designed and 
implemented Merida Initiative. More effective counternarcotics 
cooperation by Venezuela is critical to address the drug problem and to 
improve Venezuela's relationship with its neighbors and the United 
States.

    Question. Given what is known of President Chavez's support of the 
Revolutionary Armed Forces of Colombia (FARC) and the alleged 
relationships between senior Venezuelan National Guard officials and 
narcotraffickers, does the administration intend to pursue direct talks 
with President Chavez?

    Answer. The Obama administration intends to pursue clear-eyed 
diplomacy with Venezuela including direct contacts when they serve our 
national interests. Those interests include ending Venezuela's ties to 
the FARC and cooperating on counternarcotics. For too long, we have 
ceded the playing field to Chavez whose actions and vision for the 
region do not serve his citizens or people throughout Latin America. We 
intend to play a more active role in Latin America with a positive 
approach that avoids giving undue prominence to President Chavez' 
theatrical attempts to dominant the regional agenda
    It remains to be seen whether there is any tangible sign that 
Venezuela actually wants an improved relationship with the United 
States. No decision has been taken with regard to the appropriate 
manner and level at which to engage with the Venezuelan Government.

                         U.N. SECURITY COUNCIL

    Question. In a 2008 article in The Washington Quarterly entitled 
``Real Leaders Do Soft Power: Learning the Lessons of Iraq,'' you wrote 
``The time has come to bite the bullet on U.N. Security Council reform 
and accept that the greater legitimacy offered by a more representative 
Security Council justifies the risk that action in an enlarged and more 
diverse council will be more cumbersome or less to Washington's 
liking.'' What factors do you believe most important in evaluating 
proposals for changes to the size or structure of the Security Council? 
Does the Obama administration intend to make such proposals? How do you 
believe U.S. interests would be affected by the expansion of the 
Council's size or by the addition of more permanent members?

    Answer. I agree with the President and the Secretary that the 
Security Council was created decades ago at a time when there were very 
different global realities. The new administration will make a serious, 
deliberate effort, consulting with key allies and capitals, to find a 
way forward that enhances the ability of the Security Council to carry 
out its mandate and effectively meet the challenges of the new century. 
A Security Council reformed along these lines will serve the national 
security interests of the United States and the collective security 
interests of the international community. Obviously, this will not 
happen overnight. We will support reforms that would not impede the 
Security Council's effectiveness and its efficiency. We will also 
consider how to enhance the standing of the Council in the eyes of 
those nations that seek a greater voice in international fora.

                            COUNTERTERRORISM

    Question. You have indicated that ``one of the most serious flaws 
of U.S. counterterrorism strategy is its bifurcation into domestic and 
foreign components.'' How do you believe this flaw should be addressed? 
What steps do you believe the Obama administration should take to 
better integrate domestic and foreign counterterrorism policy? What 
role do you believe the State Department should play in this regard?

    Answer. The Obama administration is reviewing the structures of 
interagency coordination on national security, counterterrorism and 
homeland security to assure that we have a highly focused, well-
designed and well-implemented approach to this central challenge. 
President Obama has selected John Brennan to serve as Homeland Security 
Advisor and Deputy National Security Advisor for Counterterrorism, 
which is an important step to assure close integration of the domestic 
and international dimensions of our counterterrorism strategy. At the 
State Department, Secretary Clinton and I look forward to working 
closely with our colleagues across the U.S. Government to further that 
effort to assure a comprehensive and integrated approach.

    Question. In writings, you have been critical of policy choices the 
Bush administration made in the Middle East, and with respect to Iraq 
in particular. In a spring 2008 Washington Quarterly article, you 
wrote: ``the policy actually strengthened the forces that brought about 
those attacks. The intervention in Iraq enhanced the terrorists' 
operational capabilities through live training against U.S. forces 
deployed in Iraq; fostered a broadened reservoir of support for the 
terrorists among those who already felt grievances against the United 
States and the West; and undermined global public confidence in U.S. 
leadership, threatening the United States ability to sustain the 
cooperation necessary to take on the terrorists' challenge to U.S. 
security.''
    What do you believe are the essential elements of an effective 
counterterrorism policy going forward? Much of the focus of overseas 
counterterrorism efforts has been from the Department of Defense, and 
``kinetic'' methods. Do you think that is appropriate? What role do you 
expect to play as Deputy Secretary on counterterrorism issues?

    Answer. I agree with the Secretary and the President that our 
ability to contain and diminish the threat of international terrorism 
depends heavily on our ability to build partnerships among nations and 
deepen cooperation across a range of areas, including law enforcement, 
intelligence-sharing, border controls, safeguarding of hazardous 
materials, and military action. The State Department has historically 
played a central role in this area. Keeping terrorists on the 
defensive, reducing their room for maneuver and preventing them from 
striking at us and our allies will require that the Department act 
energetically to build the international cooperation that is essential 
for confronting a transnational threat that no one country can 
successfully fight alone. At the same time, our long-term success 
against the terrorist threat depends on the active engagement of the 
United States with moderate forces around the world to build a more 
hopeful, optimistic vision to counter the terrorists doctrine of hate 
and destruction, a vision which is at the heart of President Obama and 
Secretary Clinton's approach to U.S. strategy. As Deputy, I look 
forward to helping lead the State Department's effort on this vital 
national security priority.

    Question. The Department of State's Counterterrorism Coordinator 
reports directly to the Secretary and is an ``Ambassador at Large'' 
created by Congress in 1994, but given very few resources. Do you 
believe that construct is appropriate for today's challenges?

    Answer. We certainly have been examining and will continue to 
review the structure of the Department, to ensure it's organized most 
effectively to meet today's counterterrorism challenges. The State 
Department has a crucial role to play in crafting the United States 
overall counterterrorism strategy, and if confirmed, we look forward to 
working with the committee as we do that, particularly since the 
Congress was instrumental in establishing this office.

    Question. As you wrote in your 2008 Washington Quarterly article, 
one of the grievances cited by Osama bin Laden in his Declaration of 
War, and often heard around the Muslim world is the presence or 
occupation of Muslim lands by U.S. troops. What is your view of the 
current manpower presence of the United States throughout the Middle 
East? Are we still, as you say, ``playing into al-Qaeda's narrative''?

    Answer. The United States has important security partnerships with 
a number of key countries around the world, including in the Middle 
East. This presence serves to reassure our partners and deter current 
or potential adversaries from taking steps that threaten our friends' 
and our interests. Our presence is based on mutual respect and 
cooperation. It is important that the United States strengthens our 
ability to ``tell our side of the story''--the reality--to counter the 
propaganda of our adversaries.

    Question. In a speech last July,\1\ Secretary of Defense Gates said 
that the populations of many important countries--and especially Muslim 
countries--have come to have low regard for the United States. He said 
that this loss of esteem ``is important because much of our national 
security strategy depends upon securing the cooperation of other 
nations, which will depend heavily upon the extent to which our efforts 
abroad are viewed as legitimate by their publics.'' Secretary Gates 
went on to say that ``the solution is not to be found in some slick PR 
campaign or by trying to out-propagandize al-Qaeda, but rather through 
the steady accumulation of actions and results that build trust and 
credibility over time.''
---------------------------------------------------------------------------
    \1\ Robert M. Gates, ``Remarks by Secretary of Defense Robert M. 
Gates at USGLC Tribute Dinner,'' U.S. Global Leadership Campaign, 
www.usgloballeadership.org (July 15, 2008), p. 3.
---------------------------------------------------------------------------
    Do you agree with Secretary Gates? If so, what new policy 
directions do you plan to pursue at the Department of State? What role 
do you see for educational and cultural programs in this regard? What 
is your view of the utility of American Universities abroad or joint 
campuses with foreign institutions? Should they be expanded? If so, 
what can the Department of State do to facilitate that?

    Answer. I agree with the Secretary Gates. The President has made 
clear that to restore America's leadership and confront the threat of 
violent extremism in Muslim countries, we must offer a positive agenda 
of hope through policies and actions that show our commitment to work 
for the improvement of the lives of people around the world, and to 
stand up with those who share our values. Over the years, our 
educational and cultural programs have been among the most effective 
ways of communicating to the world about who are as a people and what 
we stand for. In recent years this aspect of public diplomacy has not 
received the attention it deserves and we will review the role of 
educational and cultural programs--including the role of American 
Universities and joint campuses abroad--to see how we can do better. I 
look forward to working with the Secretary and consulting this 
committee on these issues should I be confirmed.

                 STATE DEPARTMENT PLANNING/ORGANIZATION

    Question. The planning capacities of the Department of Defense are 
vast. In addition to in-house planning directorates, undergraduate 
academies, postgraduate schools, service and national war colleges, DOD 
has National Laboratories and Federally Funded Research and Development 
Corporations. Energy, HHS, Homeland Security, NASA, NSF, NRA, 
Transportation, and Treasury also have FFRDCs. As a former director of 
the State Department's Policy Planning Staff, you would likely bring 
insights about the importance of such planning to your new position.
    Do you believe that the Department of State currently has adequate 
capacity to conduct strategic planning and policy planning with respect 
to particular countries and regions? If not, how will you propose to 
address this? Do you believe the Department would benefit by having an 
FFRDC arrangement?

    Answer. If the U.S. Government is to meet the long-term challenges 
to our security and prosperity, we must have an effective ability to 
develop a comprehensive strategy that ties together all the elements of 
national capability. Each component of the government needs to have 
strong planning capabilities to contribute to that effort, and the 
State Department's policy planning staff, since the days of George 
Kennan and Paul Nitze, has often proved the model for others. The 
Secretary-Designate and I are committed to assure that we sustain and 
build on that tradition, using not only the internal skills and 
capabilities that reside within the State Department, but also by 
closer ties with universities, think tanks, NGOs and the private 
sector, and will be reviewing what resources and structures can best 
contribute to the that goals.

    Question. In the military, combatant commanders are able to address 
issues abroad on a regional basis, and often enjoy great influence in 
the regions in which they operate. Some have proposed the idea of the 
State Department having regional ``super ambassadors'' who would be 
able to play a similar role. What are your views of this idea? Could 
such an approach be made to complement the existing roles of regional 
assistant secretaries and ambassadors to individual countries?

    Answer. The President-elect and the Secretary-Designate have made 
clear that an enhanced, more vigorous and engaged diplomatic strategy 
is needed for the United States to meet the global challenges we 
confront. If confirmed, we plan to review the best way to achieve this 
more effective approach to projecting ``smart power'' and to working 
with the committee to help build the capacity and resources to make it 
possible.

                    EXTRACTIVE INDUSTRY TRANSPARENCY

    Question. The Senate Foreign Relations Committee report, initiated 
by Senator Lugar, entitled ``The Petroleum and Poverty Paradox: 
Assessing U.S. and International Community Efforts to Fight the 
Resource Curse'' recommends that the Secretary of State exercise more 
effort on transparency issues and build on international momentum for 
extractive industry transparency at the United Nations, at the 
Extractive Industry Transparency Initiative (EITI) Secretariat and 
through our embassies. The report's recommendations include that the 
Secretary elevate U.S. representation at EITI to the Under Secretary 
level; that the Under Secretary lead coordination meetings on 
extractive industry transparency; that the U.S. bolster support to EITI 
through the Multi-Donor Trust Fund; and inform embassies of the 
importance of transparency efforts and vigorously support them in 
international fora. What is your assessment of these recommendations? 
Would you implement them at the State Department?

    Answer. Over the years, we have seen the profound consequences that 
policy choices can have on the prosperity and well-being of people in 
countries endowed with abundant natural resources, and the critical 
role the international community can play in promoting human rights and 
sound economic opportunity in these countries. Like the Secretary-
Designate, I support a lead role for the State Department in advancing 
resource transparency at the United Nations, and through our leadership 
role in the EITI process. Our embassies continue to play an active part 
in promoting resource transparency and good governance in their host 
countries. If confirmed, I look forward to reviewing these specific 
recommendations, and I will work with the Secretary and consult with 
this committee on them.

                              OTHER ISSUES

    Question. In a 2004 article in the Financial Times entitled ``New 
Rules on When To Go To War,'' you advocated ``a concerted effort to 
forge a new international consensus on force and legitimacy'' that 
would supplant the approach reflected in the U.N. Charter. Does the 
Obama administration intend to pursue such a new international 
consensus on rules governing the use of force? Would such an effort 
require amending the U.N. Charter? What elements do you believe such a 
new international consensus should consist of? What do you believe to 
be the prospects for gaining international agreement on new rules 
governing the use of force?

    Answer. There are many ways in which new international thinking can 
emerge on contemporary challenges involving emerging threats like 
terrorism, nonproliferation and genocide. The United States should 
provide leadership in helping to generate global support for approaches 
that protect our interests and our values, rather than cede the field 
to others; but the Obama administration has made any specific proposals 
in this regard.

    Question. In a 2006 article in the Austin American-Statesman 
entitled ``The U.S.-India Nuclear Deal Was an Opportunity Missed'' you 
called for a ``reconceptualization of the Nuclear Nonproliferation 
Treaty'' aimed at achieving broader international control over the 
production of fissile material. Does the Obama administration intend to 
seek changes to the NPT along these lines? If so, what specific 
proposals does the Obama administration intend to make?

    Answer. The Obama administration will place great importance on 
strengthening the NPT and the nonproliferation regime in general. It 
will encourage all states to support more rigorous IAEA verification 
measures, tighter restrictions on transfers of sensitive technologies, 
and stronger means of enforcing compliance. There is no greater threat 
to our security that the spread of nuclear material and capability into 
dangerous hands.

    Question. In a 2008 article in Newsweek entitled ``How To Lead the 
World: To Restore America's Greatness, Start By Listening to Others and 
Tending Matters at Home,'' you offered the following advice to the next 
President: ``don't hesitate to stand up for our values: democracy, the 
rule of law and human rights. But remember that the best way to get 
others to share them is by example, not coercion. Close Guantanamo. 
Join the International Criminal Court.'' Is it the position of the 
Obama administration that the United States should become a party to 
the Rome Statute of the International Criminal Court?

    Answer. President Obama has repeatedly stated his intention to 
close the detention facilities in Guantanamo. With respect to the 
International Criminal Court, the Obama administration intends to 
consult thoroughly with our military commanders and other experts, as 
well as this committee and the Congress. It will examine the full 
record of the ICC before reaching any decisions. If confirmed, I look 
forward to working with the Secretary and consulting closely with this 
committee as we consider our approach. Whether the new administration 
works toward joining or not, it will end hostility toward the ICC and 
look for opportunities to encourage effective action in the ICC in ways 
that promote our interests by bringing war criminals to justice.
                                 ______
                                 

        Responses of Deputy Secretary-Designate Jacob J. Lew to
            Questions Submitted by Senator Richard G. Lugar

               LOW RANKING OF DEPARTMENT OF STATE BY OMB

    Question. According to the most recent update of the Web site 
maintained by OMB which ranks 25 federal agencies and departments, 
http://www.fido.gov/mts/cfo/public/200811/Indicators-200811-00.htm,I 
was pleased to see that the State Department ranked fourth on the Fund 
Balance chart (Green rating) for the period August to November 2008, 
but was dismayed to see that State rankings dropped significantly (Red 
rating) for virtually all the remaining indicators:

   Amount in Suspense--Greater than 60 days (Third from Last).
   Delinquent Accounts Receivable--over 180 days (Sixth from 
        Last).
   Electronic Payments (Last).
   Percentage of Invoices Paid on Time (Last).
   Interest Penalties Paid (Last for August, September, and 
        October).
   Travel Card Delinquency Rates (11th from the bottom--Yellow 
        and Red for August-September).

    Answer. This matter was first raised with the State Department 12 
months ago when the Department's rankings were similarly dismal.

    Question. Please explain why there has been virtually no overall 
improvement since then and what difficulties the Department may have 
encountered in the intervening time period.

    Answer. I have not had an opportunity to review the details of the 
OMB ratings of the State Department. If confirmed will work with the 
financial management offices responsible in each of these areas to 
assess what steps could be taken to achieve better performance levels. 
These criteria are government-wide metrics of back office 
administrative functions and it is important that they work 
efficiently. At the same time, if confirmed, I would hope that the 
State Department will be able to work with OMB to reach a common 
understanding of the most appropriate metrics to evaluate the 
performance of the unique programs of the State Department. I recall 
from my years at OMB that this was a challenging undertaking and will 
work to advance the overall approach to performance evaluation, which 
is critical to our goal of reaching a high level of efficiency and 
effectiveness.

                        RESOURCES FOR DIPLOMACY.

    Last year. then-Chairman Biden and I convened a small policy 
advisory group on soft power. In this forum, we invited recognized 
experts to discuss the role of diplomacy and development to U.S. global 
engagement. One of the outcomes of this process was a very strong 
consensus on the need to strengthen the capacity of our civilian 
agencies after decades of neglect and underfunding. To not do so would 
simply further weaken our ability provide global leadership. and to 
effectively and coherently manage U.S. resources.
    The lack of resources has had a number of negative consequences. 
Civilian agencies are unable to be full partners in promoting. U.S. 
national security interests. Instead, some diplomatic and development 
functions have migrated to other agencies, and new foreign affairs 
agencies and platforms have been created with little regard for 
producing coordinated and coherent strategies, policies, and programs. 
The role and scope of Defense Department activities of a diplomacy and 
development nature have grown. U.S. foreign assistance programs are 
considered fragmented among a plethora of government agencies. There is 
a recognition of a decline in expertise of diplomatic staff and a lack 
of capacity for expeditionary diplomacy. These problems contribute to 
problems recruiting qualified professionals.
    An American Academy of Diplomacy/Stimson Center report, ``A Foreign 
Affairs Budget for the Future,'' echoed the findings of the Biden-Lugar 
policy advisory group in highlighting the current state of U.S. 
diplomacy and urging that the first order of business should be to 
address shortages of trained personnel. There was a strong consensus 
that without strengthening capacity other proposals to improve the use 
of soft power will not succeed.

    Question. Do you believe the State Department currently has 
sufficient numbers of personnel, with appropriate training, skill sets, 
and resources to effectively perform the necessary work of advancing 
U.S. interests around the globe? Where does securing a robust budget 
for the State Department fall on your list of priorities as Deputy 
Secretary of State for Resources'?

    Answer. America's national security interests require a vigorous 
and well-funded State Department. We are concerned that the 
Department's funding is insufficient to the task. President Obama, the 
Secretary and I believe that our diplomacy needs to be more robust. In 
keeping with that goal, he has called for a 25-percent increase in 
Foreign Service staffing, opening more consulates, and a doubling of 
our foreign assistance levels during his first term in office. We 
clearly also need to invest urgently in the Department's technological 
and other infrastructure platform, so that our diplomacy can be both 
efficient and effective. If confirmed, I will vigorously advocate for a 
robust FY 2010 budget request. And, if confirmed, I look forward to 
working closely with you and your colleagues to ensure that the 
Department is funded to achieve its goals on behalf of the American 
people.

    Question. Strengthening the capacity of the State Department 
involves more than increasing its diplomatic ranks. It also requires 
that professionals have the opportunity to develop subject expertise 
and to master difficult languages.

   What are your plans to strengthen expertise and language 
        skills?

    Answer. We are committed to enhancing our employees' skills, 
particularly in foreign languages. In recent years, with staffing 
numbers failing to keep up with an expanded mission, the Department has 
at times had to make difficult choices--leave a position vacant or 
provide training. There simply have not been enough people to meet all 
of the demands. The President's call for a 25-percent increase in 
Foreign Service staffing will help us provide both. In fact, the 
Department's request includes positions so that we can provide expanded 
opportunities for employee training--including long-term instruction in 
critical needs languages and expanded interagency rotations--while 
avoiding detrimental staffing gaps at our posts throughout the world. 
We also intend to move forward with ongoing efforts to increase 
capacity in language training and to improve the Department's training 
in the ``super-hard'' languages (Arabic, Chinese, Japanese, and 
Korean), languages that generally require 2 years of training to meet 
professional proficiency standards.

    Question. To what extent can the Department hire mid-level 
professionals rather than rely exclusively on hiring junior officers?

    Answer. If confirmed, I look forward to closely reviewing this 
issue carefully and consulting with both the Secretary and this 
committee. It is my understanding that the Department has used mid-
level hiring programs in the past, but with mixed results.

    Question. Since the end of the cold war and in a post 9/11 
environment, the complexity of international security challenges has 
increased, pointing to a need for whole-of-government approaches. The 
Biden-Lugar policy advisory group concluded that State Department 
personnel would benefit from greater interagency experience, and that 
interagency rotations should be encouraged and rewarded.

   To what extent is it reasonable to incorporate a wider 
        breadth of experience in the career paths of diplomatic 
        personnel?

    Answer. Although we are well aware of the challenges posed by 
staffing deficits and the Department's growing mission, the Department 
must remain committed to ensuring that its diplomats have broad 
experience, and we will work to expand interagency rotations, 
exchanges, details, and training opportunities. The additional 
resources that were requested in the FY 2009 budget and those under 
discussion for the FY 2010 budget would significantly increase making 
this a reality.

    Question. To what extent can personnel from other U.S. agencies 
assist the State Department in overcoming its capacity problems?

    Answer. First and foremost, the Department needs additional Foreign 
Service staffing to ensure that U.S. diplomacy remains strong and can 
effectively execute its role in protecting and defending the U.S. and 
its citizens. We also need additional civil service staffing to bolster 
our Washington base. But as the world has changed and the need for 
reconstruction and stabilization has grown, the Department has also 
taken on new roles. The Department's diplomatic corps does not 
generally include veterinarians, city planners, or agricultural 
experts--skills needed by Provincial Reconstruction Teams (PRTs) in 
Iraq and Afghanistan, for example. Many of those skills can be found in 
interagency partners and I understand that the Department has turned to 
them to assign personnel to staff the PRTs. Interagency partners are 
active participants in developing and staffing the active and standby 
components of the Civilian Response Corps which, when fully staffed, 
will significantly enhance our ability to respond to emergencies in a 
timely manner. With congressional support, the Department will remain 
prepared to develop a Civilian Reserve Corps, similar to the military 
reserves, that would be able to provide an even broader range of needed 
skills.

                      STATE DEPARTMENT MANAGEMENT

    Question. The position of Deputy Secretary of State for Management 
and Resources has never been filled.

   What do you see as the priorities issues that you must 
        address in the first year? What do you hope to accomplish?

    Answer. Among my first priorities, if confirmed, will be developing 
a persuasive case for the additional resources that are needed to 
advance our foreign policy and diplomatic efforts; developing a 
strategy for enhancing civilian capabilities so that the State 
Department will be prepared to undertake responsibilities best handled 
by civilian rather than military personnel; and achieving better 
coordination across--and more effective delivery by--our foreign 
assistance programs.

    Question. The Department already has an Under Secretary for 
Management position with jurisdiction over personnel, facilities, 
security, and consular affairs. What will be the relationship between 
the Deputy Secretary's and Under Secretary's portfolios? Given that the 
Under Secretary for Management reports to you, how will your position 
not turn into simply another layer of bureaucracy?

    Answer. The Secretary and the President both believe that a Deputy 
Secretary of State for Management and Resources will be an integral 
part of our efforts to strengthen the Department, and to secure the 
resources we need to restore the power of our diplomacy. Ensuring that 
our State Department is functioning at its best is not only a top 
priority of ours, but also of the President's. He believes strongly 
that we need to invest in our civilian capacity to conduct effective 
diplomacy, provide effective foreign assistance, and operate capably 
alongside our military. As the Secretary has said, smart power means 
not only using the right tool for the right situation, but also 
recognizing that in many cases, the effectiveness of our military will 
be enhanced by the capabilities of our diplomats, and vice versa. The 
State Department will need to develop new tools--and sharpen old ones--
to deal with complex challenges in Iraq and Afghanistan, the global 
financial crisis, and a variety of issues elsewhere. President Ohama 
has emphasized that the State Department must be fully empowered and 
funded to confront these challenges. Secretary Gates has echoed this 
call. This will be one of the Secretary's core commitments, and it will 
be one of my core missions if I am confirmed.

    Question. The Bush administration requested Overseas Comparability 
Pay linked to Pay-for-Performance. Does the Obama administration 
support either of these initiatives? Does the Obama administration 
believe the two should be linked?

    Answer. Rectifying this pay disparity will indeed be a high 
priority. At bottom, this is an issue of fairness. As you have noted, 
Foreign Service personnel are required to spend significant portions of 
their careers abroad. The loss of salary income they incur is grossly 
unfair, all the more so given that they are compensated less than 
colleagues at other agencies with whom they work side by side in 
service to our country. We cannot expect to retain the best talent in 
these conditions. I know that this issue has been put before the 
Congress in previous years. If confirmed, I hope that we can work 
together to redress this matter on a priority basis.

    Question. What steps do you intend to take to ensure that the civil 
and Foreign Service personnel systems focus on the goal of greater 
diversity in the workplace?

    Answer. I understand that the Department strategically recruits to 
increase diversity so that our employees represent the best talent from 
a variety of backgrounds and perspectives. The Department uses a 
variety of programs, including the highly competitive Pickering and 
Rangel Fellowships (ROTC-like pipelines), the Serrano Fellowship, and 
our internship programs, to help us build a diverse talent pool within 
both the Foreign Service and civil service. But I also know that more 
must be done. If confirmed, I will be committed--as the Secretary is--
to ensuring that diversity remains an important priority of the 
Department's recruitment strategy, and we will work to expand and 
enhance the tools and outlets we use to reach and recruit talented 
people from all backgrounds.

    Question. What is the status of the Foreign Service officer exam: 
In 2008 how many took the exam this year; how many passed the written 
exam; and how many passed the oral exams? Of the latter, how many were 
offered positions in the Foreign Service? What was the average length 
of a security clearance for those who accepted a position; how does 
this compare with prior years?

    Answer. The following represents my best understanding, based on a 
request to the Department. Of the four iterations of the Foreign 
Service Officer Test that were administered in CY 2008, 8,889 
candidates took the written exam; of these, 4,080 passed. Files of 
candidates who pass the written test and essay are then considered by 
the Qualifications Evaluation Panel (QEP). The QEP, composed of trained 
members of the Board of Examiners, evaluate all aspects of each 
candidate's file: (1) educational and work background; (2) responses to 
the Personal Narrative questions written by each candidate; (3) skills 
and abilities, including self-evaluated and Foreign Service Institute 
tested language scores; and (4) the written exam scores. Only the most 
qualified candidates are invited to participate in the Foreign Service 
Oral Assessment.
    Of the 2,660 individuals invited to participate in the FSOA in 
2008, 1,027 passed and were placed on the eligible list of hires. 
Offers of employment were extended to 354 individuals.
    On average, the Bureau of Diplomatic Security completed a security 
clearance investigation in 69 days in 2008. While this figure is up 
from 67 days in 2007, it still falls well under the OMB goal of 105 
days and is among the best in the entire U.S. Government.

                           FOREIGN ASSISTANCE

    Question. The Bush administration elevated development as a third 
pillar of U.S. national security, with defense and diplomacy. Secretary 
Rice created the Bureau and the position of Director of Foreign 
Assistance and dual-hatted it with the Administrator of the U.S. Agency 
for International Development. The DFA was also designated as Deputy 
Secretary of State. Secretary-designate Clinton indicated to the 
committee that a full review of foreign assistance programs and 
organization would soon be undertaken.

   Assuming, that you will have a leading role in this review 
        process, please describe its objectives and parameters. Will 
        the review be limited to State Department programs or will it 
        go further to encompass USAID and other agencies that manage 
        some type of foreign assistance programs?

    Answer. The review will extend to all of the foreign assistance 
programs that fall under the authority of the Secretary of State, 
including USAID.

    Question. What are the plans of the Obama administration with 
regard to the F Bureau and the DFA position? Will it be maintained? If 
so, will it maintain its Deputy Secretary rank, as well as be dual-
hatted with the USAID Administrator? What, if any changes will you 
institute with regard to the role and mission of the position of 
Director of Foreign Assistance.

    Answer. If confirmed, I intend to closely review this question soon 
after taking office.

    Question. The F Bureau has made progress in achieving some 
consolidation of budget reporting. In what way will this achievement be 
maintained and improved?

    Answer. Like Secretary Clinton, I understand that the creation of 
the F Bureau has led to an improvement in the reporting of budget data 
to Department management and to Congress. And I agree with her that 
under any circumstance, these improvements must be maintained.

    Question. If the DFA position is maintained, what will be the 
nature of the relationship between the Deputy Secretary for Management 
and Resources and the DFA? What will be your role or responsibilities 
with regard to foreign assistance programs?

    Answer. If confirmed, I intend to closely review this question soon 
after taking office.

    Question. Do you believe the current budget for the State 
Department's foreign assistance programs provides adequate resources 
for these programs? Do you intend to advocate for increased resources 
for the Department's foreign assistance programs?

    Answer. I believe that the State Department's foreign assistance 
programs should receive more resources and I intend to work with the 
Secretary and the administration to vigorously advocate for them. 
Throughout the campaign, President Obama stated many times the 
importance of development assistance to America's foreign policy and 
national security. And he pledged to double foreign assistance. I hope 
that the Congress will work with the new administration in meeting this 
goal, and I can assure you that the State Department will stand ready 
to implement these programs and more fully integrate development as one 
of three pillars to a new security strategy, with defense and diplomacy 
standing as the other two pillars. Considering the importance of the 
work ahead, we cannot fail simply for a lack of will or resources.

    Question. Given the expected constraints of a growing federal 
budget deficit, a global financial crisis, continued commitments to 
conflict and crises overseas, what priorities will you establish in 
assistance areas to guide difficult tradeoff decisions?

    Answer. Without question, funding will be a major challenge, not 
only for fiscal year 2010 but for the next several years. If confirmed, 
I will work with the Secretary, the President and this Congress to 
evaluate every spending priority based on what works and what doesn't, 
and what fits best with America's national security and economic 
interests. Working in partnership, Congress and the Obama 
administration will have to make smart, strategic budget choices that 
deal with our problems here at home while also continuing to support 
effective initiatives that save lives, strengthen our security, and 
restore America's position in the world.

                      INTERNATIONAL AFFAIRS BUDGET

    Question. The President's annual budget submission to Congress is 
organized by agency rather than by purpose. The International Affairs, 
or Function 150, budget does not reflect the significant resources for 
international programs that are managed by a large number of domestic 
agencies. The process for developing the budget often produces a result 
that tends to reflect individual agency equities and concerns rather 
than a whole-of-government picture of foreign affairs spending. Some 
experts have advocated for a national security budget, or a more 
comprehensive international affairs budget presentation in order to 
provide a better understanding of the varied tools available to advance 
U.S. objectives and to assist in the better coordination of resources. 
Such a document could provide an integrated overview of how different 
agencies, programs, and activities are charged to meet overarching 
objectives of the administration. It would also allow Congress to 
review more conceptual strategic planning across agencies and would 
more clearly demonstrate the budgetary tradeoffs of different programs.

    Question. Do you agree that the current budget-writing process 
presents a fragmented view of the international affairs budget?

    Answer. The current budget-writing process aligns with the 
appropriation accounts and the agencies responsible for managing the 
appropriation accounts. I agree with the need to analyze and review the 
entire range of international programs in the U.S. Government--and to 
improve the budget presentation. A cross-cutting review of the 
international affairs budget would be a very useful way to evaluate 
whether we are best marshalling resources to meet our foreign policy 
priorities. If confirmed, I am committed to doing this carefully and in 
full consultation with Congress.

    Question. Currently, total spending on government-wide official 
development assistance is not gathered until more than 1 year after the 
fact when the United States sends the data to the Development 
Assistance Committee of the OECD. Under your leadership, will there be 
an effort made to systematically collect data on spending by the 26-
some agencies that manage foreign affairs programs?

    Answer. I understand that timeliness of expenditure data in a given 
calendar year is limited. If confirmed, I will review how we might 
improve the timeliness and the breadth of this information.

    Question. In your view, what are the advantages and disadvantages 
to writing a comprehensive foreign affairs budget presentation? What 
would be the role of the F Bureau in such an exercise?

    Answer. As previously stated, the administration anticipates 
reviewing how the entire range of foreign assistance is conducted, and 
how it is funded and managed. During this review, if confirmed, I would 
welcome the opportunity to discuss with you my views on the relative 
advantages and disadvantages of changing the foreign affairs budget 
presentation. Since the current budget-writing process aligns with the 
appropriation accounts, changes would need to be considered carefully 
and in full consultation with Congress. The review process now 
conducted by F will he a crucial part of our efforts.

                       ROLE OF DEFENSE DEPARTMENT

    Question. There has been a recent migration of State Department 
authorities to the Department of Defense. Some were approved by 
Congress as temporary measures, such as the responsibility for training 
and equipping police forces in Iraq and Afghanistan. Other authorities, 
such as section 1206 and 1207 of the Defense Authorization Act, appear 
intended to become permanent. Some have argued that some authorities, 
particularly those to train and equip foreign militaries, are a 
function traditionally performed by the State Department under 
longstanding authorities in the Foreign Assistance Act. The Secretary 
of State has been given a role in the coordination of programs under 
these authorities and many funding decisions are made jointly by DOD 
and State Department teams.

   How do you assess the relationship between the two 
        Departments in managing section 1206 and 1207 authorities?

    Answer. I believe the State Department should continue to have the 
lead role within the U.S. Government in implementing U.S. security 
assistance programs. If confirmed, the Secretary and I will be 
reviewing the current authorities and resources for security assistance 
and look forward to consulting with Congress on insuring that 
theappropriate level of resources is allocated for security assistance 
programs.

    Question. To what extent will you play a role in the coordination 
of resources between the two Departments? Will there be an attempt to 
rationalize the programs of the two Departments to achieve both 
efficiencies in the use of resources and furtherance of U.S. national 
security objectives?

    Answer. If confirmed, I plan to consult with my counterpart at the 
Department of Defense--while the Secretary consults with Secretary 
Gates and other members of the President's national security team--to 
develop the optimum structure for security assistance programs. In this 
constrained budget environment, it is an imprudent use of taxpayer 
resources to duplicate assistance structures throughout the government.

                    STABILIZATION AND RECONSTRUCTION

    Question. The United States will continue to encounter challenges 
and need to respond to crises around the world that arise from failed 
or failing states. Ongoing U.S. efforts with other international 
partners in Afghanistan and Iraq as well as remnant efforts in Liberia, 
the Balkans, Haiti and elsewhere, require continued cooperation and 
coherence between USG agencies and U.S. policy. I have worked with 
Senator Biden and the Foreign Relations Committee and the 
administration to prioritize the capacity of our civilian agencies, led 
by the State Department, to effectively engage to prevent or to respond 
to failed states. The Bush administration recognized the necessity of 
an effective civilian capacity to respond, including the critical 
capacity to be an effective partner to our military where necessary, by 
requesting $248.6 million in the FY09 budget request for the Civilian 
Stabilization Initiative. Now established in law, the Coordinators 
Office is establishing the Civilian Response Corps that will be the 
heart of this capacity. Secretary Gates has also prominently 
highlighted the value of such a capacity for U.S. efforts overseas. 
Coordination among many civilian agencies and within the State 
Department itself requires appropriate resources and senior leadership 
position.

   How does the Obama administration intend to sustain the 
        nascent coordination effort established within the State Office 
        of the Coordinator for Reconstruction and Stabilization? What 
        level of seniority do you believe the Coordinator should have 
        to effectively engage counterparts within the Department and 
        Inter-Agency to best align USG efforts in the field?

    Answer. The administration strongly supports the mission of the 
Office of the Coordinator for Reconstruction and Stabilization (S/CRS) 
and intend to fully resource it, as well as regularize its position 
within the Department with consideration of making it a bureau or 
equivalent. Consistent with existing legislation, the administration 
believes the Coordinator can effectively engage counterparts within the 
Department and Inter-Agency at an appropriate level.

    Question. Does the Obama administration support the full FY09 
budget request for the Civilian Stabilization Initiative of $248.6 
million'?

    Answer. Yes, the administration fully supports the FY09 budget 
request of $238.6 million for the Civilian Stabilization Initiative.

    Question. How will you ensure the State Department further builds 
its capacity to respond to emerging state failure or failed state 
situations, including the ability to deploy civilian personnel through 
the Civilian Response Corps?

    Answer. As the committee knows, the Office of the Coordinator of 
Reconstruction and Stabilization was created several years ago, and its 
functions were codified last year by legislation sponsored by Senator 
Lugar and then-Senator Biden. Their legislation is consistent with the 
President's goal to build civilian capacity that can be deployed on 
short notice to help stabilize countries in urgent need. Stabilization 
and reconstruction is a mission that is of growing importance to our 
national security, and it is also important that the State Department 
have the resources and authorities to carry out this function 
effectively. An effective stabilization and reconstruction function 
within State will both reduce the burden on our Armed Forces and lead 
to better coordination among our civilian agencies and with the 
Pentagon to act effectively to stabilize and rebuild societies at risk 
of, or emerging from, conflict. I believe that the Office of the 
Coordinator for Reconstruction and Stabilization at the State 
Department has made a lot of progress despite a number of challenges it 
faced in implementing its mandate. If confirmed, I look forward to 
enhancing its capacity and to working closely with the committee to 
ensure the State Department has the means and the organization to carry 
out these important duties effectively.

    Question. How will you develop two critically deficient 
capabilities of the State Department: Planning and foreign policy 
lessons learned?

    Answer. This is a vitally important question, and will be at the 
heart of our review. We look forward to engaging with you on these 
issues as we move forward.

    Question. USAID has the operational experience on the ground in 
development and humanitarian response that is essential. What senior 
role will USAID play in building an effective and meaningful diplomatic 
and reconstruction partner?

    Answer. USAID, led by the Democracy, Conflict and Humanitarian 
Assistance Bureau (DCHA), is and must be the lead USG organization that 
provides humanitarian assistance to people in developing and rebuilding 
countries. Further, from Kosovo to Lebanon, Afghanistan and Sudan, 
USAID remains at the forefront of our government's efforts to provide 
critical reconstruction assistance in areas such as the rehabilitation 
of infrastructure, rule of law, host country capacity-building, 
economic growth and good governance. USAID must remain a strong partner 
with the State Department Coordinator for Reconstruction and 
Stabilization (S/CRS) in carrying out the Civilian Stabilization 
Initiative and the whole-of-government Civilian Response Corps (CRC).

                            PUBLIC DIPLOMACY

    Question. In 1999, the U.S. Information Agency was folded into the 
State Department. Recent studies have pointed to the deterioration in 
U.S. public diplomacy with marked decreases in the resources devoted to 
such efforts. Instead, the Department of Defense has raised its profile 
of ``strategic communication.'' The Stimson Center and the American 
Academy of Diplomacy's report ``Fixing the Crisis in Diplomatic 
Readiness'' observes that staffing cuts limit the State Department's 
ability to engage with foreign populations.

    Question. To what extent do you agree with the assessment of the 
Stimson Center report?

    Answer. I agree that the Department's public diplomacy efforts are 
under-resourced. The President intends to launch a coordinated, 
multiagency program of public diplomacy and is committed to restoring 
the strength and vision of the State Department's public diplomacy 
mission. As President Obama has noted, this is not a peripheral 
enterprise, disconnected from the rest of our foreign policy. It is an 
important component of our overall counterterrorism strategy, and it is 
a vital part of our effort to restore American leadership and reassert 
American values.

    Question. As the manager of State Department resources, what steps 
will you take to revitalize U.S. public diplomacy? What is the 
appropriate level of resources to recreate a robust public diplomacy 
corps?

    Answer. If confirmed, I look forward to working with the Secretary 
to ensure that the State Department's mission of public diplomacy is 
matched by the personnel, resources, and organizational structure we 
need to carry out this critical mission. USIA was an effective, single 
purpose agency in many ways, but it is more practical, efficient, and 
effective to improve the functioning of the public diplomacy in the 
Department than to recreate an independent entity. The administration 
looks forward to a full assessment of public diplomacy at the State 
Department and will look to this committee and the Congress for its 
counsel as we consider how to make improvements.

    Question. To what extent does the security requirement for 
colocation of our public diplomacy inside our new Embassy compounds 
affect the ability of foreign audiences to seek information from our 
libraries? Do we have any statistical evidence to suggest that the 
Information Resource Centers situated inside embassies draw fewer 
visitors than those located outside? And if so, what does the evidence 
suggest?

    Answer. Ensuring the security and safety of U.S. Government 
employees overseas is very important to President Obama. If confirmed 
by the Senate, we intend to work closely with the professionals in the 
Bureau of Diplomatic Security to review colocation issues for public 
diplomacy. Another alternative is expanding the use of binational 
commissions to create welcoming and secure spaces for public diplomacy. 
The administration will certainly keep you abreast of these actions as 
we move forward.

                         EXTRACTIVE INDUSTRIES

    Question. The Senate Foreign Relations Committee report entitled 
``The Petroleum and Poverty Paradox: Assessing U.S. and International 
Community Efforts to Fight the Resource Curse'' recommends that the 
Secretary of State review personnel capabilities at embassies in 
natural resource rich states and fill current lapses in embassy 
staffing with the goal of exercising more effort on transparency issues 
in relevant countries.

   What is your view of this recommendation and would you 
        implement it?

    Answer. If confirmed, I will support a lead role for the State 
Department in advancing resource transparency. I understand our 
embassies play an active part in promoting resource transparency and 
good governance in their host countries, including through assistance 
programs addressing rule of law and governance reforms, public sector 
capacity, and strengthening of independent media and civil society 
checks and balances. The Department is continually reviewing Embassy 
staffing in light of the full range of policy priorities.

    Question. Your Public Financial Disclosure Report lists salary and 
discretionary cash compensation from Citi in the amount of 
$1,099,999.99. What time period does this compensation correspond to? 
What portion of this amount is salary, and what portion is 
discretionary cash compensation?

    Answer. This entire amount was cash compensation. Base compensation 
was $300,000 and the balance was discretionary. The time period for the 
payments was calendar year 2008, and reflects base pay ($300,000) for 
2008 and the balance of the compensation was discretionary based upon 
work performed in 2007, but actually paid in February 2008.

    Question. Published reports indicate that a number of senior 
Citigroup executives are receiving no bonuses or substantially reduced 
bonuses for work performed in 2008 in light of economic conditions. 
Citigroup's financial performance, and Citigroup's receipt of U.S. 
Government funds under the Troubled Asset Relief Program. What was the 
amount of the discretionary compensation you received from Citigroup 
based on work you performed in 2007 and how does it compare to the 
discretionary compensation you will receive for work performed in 2008?

    Answer. A comparison of compensation earned in 2007 and 2008 would 
require attribution of discretionary payments to the year in which they 
were earned rather than the year in which they were paid, including 
both deferred and cash awards. The stock I was awarded as deferred 
compensation is listed on the disclosure form as an asset (i.e., 
unvested Citi stock), The following compares total compensation awarded 
by the year earned:

------------------------------------------------------------------------
                                                    2007         2008
------------------------------------------------------------------------
Base Compensation.............................     $300,000     $300,000
Discretionary Cash Compensation...............      812,500      800,000
Deferred Compensation.........................      437,500            O
------------------------------------------------------------------------

    Question. In a December 31, 2008, memorandum to Citigroup 
employees, Citigroup Chief Executive Vikram Pandit announced that 
Citigroup had ``instituted a policy under which we can recoup executive 
compensation that over time proves to be based on inaccurate financial 
or other information.'' Is it your understanding that executive 
compensation you received during your employment with Citigroup will be 
subject to this policy?

    Answer. I have been informed by Citigroup personnel that the policy 
covers the Senior Leadership Committee and I am not a member of that 
committee. Accordingly, to the best of my knowledge, my executive 
compensation will not be subject to this policy.

    Question. Mr. Pandit's memo also stated that Citigroup has ``placed 
significant new limitations on the amount of severance compensation 
that can be awarded to executives.'' Is it your understanding that the 
severance compensation you will receive from Citigroup reflects the 
``new significant limitations'' referred to in Mr. Pandit's memo?

    Answer. I have been informed by Citigroup personnel that they cover 
the Senior Leadership Committee and I am not a member of that 
committee. Accordingly, to the best of my know ledge, my severance 
compensation will not be subject to these limitations.
                                 ______
                                 

Responses of Deputy Secretary-Designates Jacob Lew and James Steinberg 
         to Questions Submitted by Senator Russell D. Feingold

                           CITIZEN DIPLOMACY

    Question. Citizen diplomacy--individual Americans working and 
volunteering overseas--is an incredibly important tool to build 
relationships and improve our image abroad. There are already some 
great programs that support citizen diplomacy, but more can be done at 
the federal level. Where does this type of diplomacy fit in your 
overall view of U.S. diplomatic efforts and how can the State 
Department more actively encourage and support individuals seeking to 
engage in citizen diplomacy?

    Answer. The support of individual American citizens is critical to 
the success of ECA's programs. For example, high school students on 
USG-funded programs are hosted by American families during their 
academic year programs and thousands of Americans volunteer through the 
National Council of International Visitors to support the International 
Visitor Leadership Program. The Office of Citizen Exchanges also 
supports a broad range of exchange activities that offer Americans the 
opportunity to share their expertise and experience with their 
counterparts throughout the world.
    Public diplomacy, or engaging foreign publics as opposed to foreign 
officials, is focused on supporting Americans to build and improve our 
image and influence abroad. One particular way to continually promote 
this idea is to promulgate the use of public-private partnerships. This 
allows U.S. companies, individuals, and organizations to partner with 
the Department on initiatives that target a specific overseas audience 
and bring private sector ``credible voices'' to bear in regions of the 
world where these partners are well respected, thus giving the U.S. the 
leverage it needs to bolster its image.

    Question. Last May, Secretary Gates mentioned Iran specifically as 
a case where people-to-people exchanges--Iranians visiting the United 
States and Americans visiting Iran--could create opportunities for 
improved diplomatic relationships. Do you agree with this assessment?

    Answer. Yes. The United States reestablished educational, 
professional, athletic and cultural exchange programs with Iran in 
2006, after a hiatus of nearly three decades. These exchanges, which 
have had strong congressional backing, promote mutual understanding and 
allow Iranians and Americans to share knowledge and expertise.
    Since the resumption of people-to-people exchanges with Iran, the 
Department has brought hundreds of Iranian professionals to the United 
States to participate in programs on a wide range of topics, including 
public health, education, disaster relief, rule of law, Farsi language 
teaching, art, agriculture, and sports.
    The fact that these programs have taken place indicates interest 
and responsiveness from many sectors of Iranian society. Unfortunately, 
in recent months, Iranian authorities have exhibited troubling behavior 
with regard to participation in exchange programs and contact with the 
West. Former exchange participants have even been jailed and branded as 
agents of the United States.
    The only goal of the Department's people-to-people programs is to 
generate mutual respect and good will and help lay the groundwork for 
better overall relations.

                  HUMAN RIGHTS AND SECURITY ASSISTANCE

    Question. The Bush administration did not give sufficient attention 
to the long-term risks of providing military and financial assistance 
to foreign security forces known to be engaged in political repression 
or serious violations of human rights. Supporting local security forces 
can play an important role in combating terrorism and preventing 
instability, but can entail serious risks if the United States is seen 
by local populations as collaborating with or supporting repressive 
regimes. As you both know, there are restrictions on foreign military 
assistance that are supposed to guard against these risks--section 502B 
of the Foreign Assistance Act and the Leahy law--but it is not clear 
that the Bush administration treated these restrictions as binding law 
or that State even had the lead in making these determinations. Can you 
provide assurances that all U.S. Embassies will be directed to take the 
necessary steps to ensure these laws are vigorously implemented through 
a robust analysis of human rights conditions and ample consideration of 
how security assistance fits within our long-term foreign policy goals?

    Answer. Yes. I can assure you that the Department takes seriously 
the human rights objectives and implementation responsibilities of 
section 502B of the Foreign Assistance Act and the Leahy law in order 
to ensure that our foreign assistance programs involving foreign 
security forces are respectful of fundamental human rights standards.
    Diplomatic posts overseas are fully aware of the legislation and 
conduct human rights vetting of foreign security forces proposed to 
receive U.S. training and assistance. They are also required to monitor 
and report to the Department all credible information on possible gross 
violations of human rights by host nations' security forces.
    If confirmed, I can assure you that the Department will carry out 
its foreign assistance programs, particularly security assistance 
programs involving foreign security force units, in a manner that is 
credible and that ensures respect for fundamental human rights 
standards.

    Question. Furthermore, how can State work to encourage the 
protection of human rights and an end to impunity in countries we 
consider our allies and which we support with military assistance, such 
as Ethiopia or Indonesia?

    Answer. If confirmed, I will work to ensure that the Department 
continues to pay close attention to the protection of human rights and 
the rule of law in countries with which we have close relations, 
including those we support with military assistance. We will continue 
to monitor the status of human rights through our annual reports, to 
engage bilaterally on this issue, and to advance rule of law and human 
rights through our democracy assistance programs. This includes 
bilateral engagement with military assistance recipients to promote 
respect for human rights and an end to impunity by promoting 
accountability in the behavior of the armed forces.
    Human rights training is a key component of the Department's 
military assistance programs. U.S. military-to-military partnerships 
must be based on a respect for human rights. U.S. training of foreign 
security forces must also be consistent with section 502B, and Leahy 
law, which prohibit assistance to foreign security units where there is 
credible evidence of gross human rights violations.
    If confirmed, I will strengthen coordination between the Department 
and our missions overseas on these important issues and strengthen our 
capacity to carry out the vetting needed to identify violators, to 
encourage accountability, and to ensure that human rights are 
protected. To this end, using FY 2008 FOAA funding, the Department is 
currently developing a new worldwide human rights vetting database. 
This database will centralize the Department's human rights vetting 
records and expedite processing.
                                 ______
                                 

 Responses of Deputy Secretary-Designate James Steinberg to Questions 
                  Submitted by Senator Robert Menendez

    Question. You have a fairly unique perspective from having served 
in both the State Department and the National Security Council during 
the Clinton administration. If confirmed as Deputy Secretary, what do 
you expect your role will be in formulating foreign policy options for 
Secretary Clinton and President Obama? How do you view the respective 
roles of the State Department and the National Security Council in 
advising the President?

    Answer. The Deputy Secretary of State plays a number of important 
roles in the policy development process. Within the State Department 
itself, the Deputy helps to bring together the different tools of 
diplomacy and statecraft across the different elements of the 
Department (Political, Economic, Security, Public Diplomacy, etc) to 
present integrated options to the Secretary. On the interagency level, 
the Deputy Secretary is a core member of the NSC Deputies Committee, 
which is responsible for identifying key issues for decision by the NSC 
and the President, and for preparing the detailed policy analysis to 
inform the ``principals'' in their policy deliberations. As a former 
director of the State Department's policy planning staff as well as 
Deputy National Security Advisor, I am particularly sensitive to the 
importance of bringing the full range of perspectives to the attention 
of the President. The State Department has a particularly important 
role with its strong professional tradition and the broad base of 
knowledge and experience of its personnel at home and abroad, both in 
formulating and implementing policy once made. But facing today's 
multidisciplinary problems, where the lines between foreign and 
domestic issues are increasingly blurred, the NSC plays a complementary 
role in making sure that the President has access to the full range of 
tools and analysis necessary for decisions.

    Question. It has been reported that the Obama administration is 
considering appointing special envoys to coordinate our diplomatic 
efforts in certain countries or regions, such as a special envoy for 
the Americas.

   What is your view on the appointment of special envoys?
   Is the administration considering appointing a special envoy 
        for the Americas? If so, what would the role of that person be?
   How might the appointment of special envoys risk 
        undercutting the role of assistant secretaries and ambassadors 
        in that region? What do you see as the division of labor?

    Answer. Past experience shows that special envoys have helped to 
resolve some of our country's most pressing national security 
challenges and some of the world's most intractable conflicts, from 
Bosnia to northern Ireland. The President and Secretary Clinton have 
long recognized that select challenges we face in the international 
arena merit special attention. We expect our special envoys to play a 
key role in developing effective policy strategies and to increase 
engagement with our key friends and allies to protect and advance 
America's interests.
    On January 22, the President, Vice President, and Secretary Clinton 
announced the appointments of Special Envoy for the Middle East George 
Mitchell and Special Representative for Pakistan and Afghanistan 
Ambassador Richard Holbrooke. As Secretary Clinton stated in her 
comments that day, Special Envoy Mitchell will ``lead our efforts to 
reinvigorate the process for achieving peace between Israel and its 
neighbors. He will help us to develop an integrated strategy that 
defends the security of Israel, works to bring an end to the Israeli-
Palestinian conflict that will result in two states living side by side 
in peace and security, and to achieve further agreements to promote 
peace and security between Israel and its Arab neighbors.'' Secretary 
Clinton stated that Ambassador Holbrooke would ``coordinate across the 
entire [U.S.] Government an effort to achieve strategic goals in the 
region. . . . It has become clear that dealing with the situation in 
Afghanistan requires an integrated strategy that works with both 
Afghanistan and Pakistan as a whole, as well as engaging NATO, and 
other key friends, allies, and those around the world who are 
interested in supporting these efforts.''
    These special envoys will complement the efforts of our Assistant 
Secretaries and Ambassadors. The pressing challenges of our day require 
new thinking and enhanced engagement, which I am confident our new 
special envoys will help to provide working together with our 
Ambassadors, Assistant Secretaries, and other senior members of the 
President's national security team.
    While the administration has made no decision on whether to appoint 
a special envoy for the Americas, we are continuing to review our 
approach to today's national security challenges, and we will keep 
Congress fully informed as that process evolves.
    On January 26, Secretary Clinton announced the appointment of Todd 
Stern as Special Envoy for Climate Change. Secretary Clinton noted: 
``We are sending an unequivocal message that the United States will be 
energetic, focused, strategic, and serious about addressing global 
climate change and the corollary issue of clean energy. . . . The 
special envoy will serve as a principal advisor on international 
climate policy and strategy. He will be the administration's chief 
climate negotiator. He will be leading our efforts with United Nations 
negotiations and processes involving a smaller set of countries and 
bilateral sessions.''
    On February 20, Secretary Clinton announced the appointment of 
Stephen Bosworth as Special Representative for North Korea Policy. 
Ambassador Bosworth will report to the Secretary of State as well as to 
the President. In her announcement, Secretary Clinton said, ``I have 
asked Ambassador Bosworth to oversee U.S. efforts in the Six-Party 
Talks to achieve the verifiable denuclearization of the Korean 
Peninsula in a peaceful manner. He will serve as our senior emissary 
for U.S. engagement with North Korea, in close consultation with our 
allies and partners.''

    Question. As you know, I have long been an advocate for greater 
engagement in our hemisphere. My bill titled ``The Social and Economic 
Investment Act for the Americas,'' introduced during the last session 
of Congress, calls specifically for such increased engagement. I will 
be introducing the bill in this session as well and look forward to 
working with you in this area.

   What are your ideas on how the U.S. can increase its 
        engagement with our neighbors in Latin America?
   How can we utilize the upcoming Summit of the Americas to 
        set the tone for greater engagement in the region?

    Answer. One of the most significant aspects of our relationship 
with the Western Hemisphere is how multifaceted it is and how 
interconnected the United States is today with our neighbors in North, 
South, and Central America, and the Caribbean. I think it is important 
to recognize that our links are first and foremost human connections--
involving shared cultures, languages, values, and aspirations. These 
are often ties between families, and civil society, that transcend 
borders. We have vitally important economic, energy, and trade links, 
that have grown enormously over the last two decades, as well as unique 
geographic ties that give us all a special stake in each other's well-
being.
    All of this underscores the huge opportunities, and 
responsibilities, we have today to build stronger and more effective 
partnerships with our neighbors on the issues that matter most to all 
our peoples. The most important of these priorities are widely shared--
they include social and economic opportunity, access to quality 
education, citizen safety, public health, and protecting the 
environment.
    Good, pragmatic partnerships that work also have to be founded on 
mutual respect, a real sense of shared responsibility, and the 
imagination to move beyond old ways of looking at each other. They also 
need to be able to marshal all the tools and resources we have, 
collectively, at our disposal--for truly common efforts that can 
achieve big results.
    This is the approach we want to bring to our engagement in the 
region. It will order how we organize ourselves internally for that 
task, how we seek to allocate our resources, and how we reach out to 
our partners in the region.It will also shape the priority we give to 
initiatives that use new media, and people-to-people exchanges, to 
strengthen further the ties between our societies. This is especially 
important in the area of science, where more exchanges and sharing of 
expertise can help all of us build capabilities that will better enable 
us to tackle big common challenges.
    Because the summit will take place less than 90 days after the 
Inauguration, it offers a golden opportunity to help set the tone for 
our engagement with the region. It is an opportunity to demonstrate the 
strong and bipartisan commitment that our country has to security, 
prosperity, and democracy in the Americas.
    The summit will be a chance for the administration to convey 
directly to the people of the region, and its democratically elected 
leaders, our commitment to working together to address serious 
challenges that are on everyone's minds--starting with the 
international financial crisis, and the pressing need to develop 
renewable energy alternatives and clean energy technologies.
    The President and Secretary will both travel to Mexico before the 
summit to meet with their Mexican counterparts to discuss issues of 
importance to the bilateral relationship, but also regional matters. 
The Secretary will visit Mexico March 25-26. The President plans to 
travel in April before the summit.

    Question. The Merida Initiative is a program I helped shape, and I 
believe it is in our national security interests to engage with Mexico 
and Central America on these issues. I discussed the initiative 
recently in a meeting with Mexican President Felipe Calderon. As is 
true of many of my colleagues, I am greatly concerned about the rising 
tide of violence tied to the drug trade in Mexico.
    We need to make sure that our engagement with Mexico and the 
countries of Central America is done in a smart way, and that our 
cooperation helps attack the root causes of criminality and instability 
in the region.

   What are your views on the Merida Initiative?
   What steps can we take to help Mexico combat its drug-
        related violence--murders, kidnappings, etc?

    Answer. The Merida Initiative has given the United States and 
Mexico an opportunity to forge an effective, enduring partnership to 
combat powerful transnational criminal organizations sowing misery, 
corruption, and violence in both our countries. President Calderon is 
determined to destroy these criminal organizations, and his aggressive 
law enforcement campaign is putting great pressure on them. Supporting 
President Calderon's efforts to dismantle these criminal organizations 
and to strengthen the rule of law in his country will be one of our 
most important foreign policy priorities.
    The Merida Initiative was designed as an ambitious, but short-term, 
effort to provide equipment and training to take Mexico's law 
enforcement capacity to the next level as rapidly as possible. We want 
to help the Calderon administration give confidence to the Mexican 
people that the government will prevail against the criminal 
organizations. The more quickly Mexico's civilian law enforcement 
authorities are capable of surmounting this challenge, the sooner 
Mexico's Armed Forces may withdraw from the nontraditional law 
enforcement role they are now facing. Delaying the delivery of critical 
equipment and training will undermine President Calderon's ability to 
arrest, convict, and incarcerate these drug trafficking leaders who are 
challenging the Mexican state.
    We are also working closely with President Calderon and many 
Mexican state governments to help them strengthen respect for judicial 
institutions because we, and they, recognize that this battle can not 
be won by force alone. The Mexican people must be our partners. 
Similarly, we are cooperating with Mexican nongovernmental 
organizations to shape our efforts.
    Finally, the United States Government must take vigorous measures 
to interdict the smuggling of illegal weapons from our country to 
Mexico. The overwhelming bulk of the arms being utilized by the 
criminal organizations in Mexico are illegally purchased in the United 
States.
    The President and Secretary Clinton will both travel to Mexico in 
anticipation of the Summit of the Americas. The Secretary will visit 
Mexico March 25-26. The President plans to travel in April before the 
summit.

    Question. What steps are you taking to support negotiations on 
Cyprus?

    Answer. If confirmed, I will support the ongoing Cypriot-led 
negotiations that began under U.N. auspices September 3, 2008, which 
aim to reunify the island under a bi-zonal, bi-communal federation. 
This support is based on a continuation of longstanding United States 
policy toward Cyprus founded on recognition of only one government on 
the island--the Republic of Cyprus. This policy is also consistent with 
U.N. Security Council resolutions.
    Since the beginning of talks on September 3, 2008, until January 
22, 2009, the leaders have met 16 times, completing a review of the 
first of the six key issues: governance and power sharing. Special 
Representative to the Secretary General Taye-Brook Zerihoun noted that 
they had ``reached full agreement on the issue of harmonization and 
cooperation between the Federal Government and the constituent states 
of federal units.'' The leaders are set to begin discussing property on 
January 28. Remaining issues include EU matters, economy, territory, 
and security and guarantees. Both leaders are to be commended for 
embarking on the negotiations. If confirmed, I will work to support 
these efforts through our Embassies in Cyprus, Greece, and Turkey as 
well as our mission to the United Nations. I will remain prepared, if 
confirmed to continue to support the process in any way that helps see 
a resolution of this problem that has gone on for far too long

    Question. Will you call for the removal of the Turkish troops from 
Cyprus?

    Answer. This issue will be an important part of any comprehensive 
settlement, which I will work assiduously to support if I am confirmed. 
In this regard, I will support the current Cypriot-led negotiations 
under U.N. auspices if confirmed.

    Question. During most of last administration and the Clinton 
administration, a great deal of effort was focused on bringing an end 
to the Israel-Palestinian conflict. In spite of these efforts, the 
attacks of Hamas on Israel, its control of Gaza, and its continued 
refusal to recognize Israel's right to exist indicate that the two 
sides a long way from making a deal. Indeed, the circumstances on the 
ground make it difficult for Israel and the Palestinians to even engage 
in meaningful negotiations. Israel is getting ready to elect a new 
government, and leadership of the Palestinians remains divided between 
Hamas and Fatah.

   With Palestinian elections for the Presidency taking place 
        sometime in the coming year, there is the possibility that 
        Hamas will win and take full control of the Palestinian 
        Authority. What do you anticipate the Obama administration 
        policy would be, if Abbas were to lose a Presidential election 
        and the Palestinian Authority is wholly controlled by Hamas?
   Are there any circumstances in which the U.S. would 
        encourage direct negotiations between Israel and Hamas?

    Answer. One of the key elements to a successful peace process is 
the development of effective state institution by the Palestinian 
Authority--security, economic, judicial, social services. With U.S. 
assistance, some progress has been made, particularly in the training 
and equipping of PA security forces in the West Bank. However, much 
more needs to be done to develop the capacity of legitimate Palestinian 
security forces to seek out and stop terrorist groups that wish to 
attack Israel.

   What are your plans in that regard, and how can U.S. 
        assistance be successfully used to achieve those goals?

    Answer. The U.S., as a member of the Quartet, has been clear about 
its conditions for engagement with the Palestinian Authority and 
Hamas--recognition of Israel, renunciation of violence, and adherence 
to PLO-Israel agreements. President Abbas's government has met these 
conditions and Hamas has not. If Hamas were to win control of both the 
PA Presidency and Parliament, we would expect the same conditions to 
apply. Israel would, of course, have to make its own determination on 
whether and under what conditions to engage with Hamas.
    In the meantime, we intend to continue our training, equipping, and 
garrisoning of the PA Security Forces through a program led by the 
State Department's Bureau of International Narcotics and Law 
Enforcement and conducted by the office of the U.S. Security 
Coordinator, LTG Keith Dayton. The 4th National Security Forces Special 
Battalion--the third NSF battalion trained under this program--will go 
to Jordan for training in early February. There are plans to train a 
total of seven special battalions--five for the West Bank and two for 
Gaza as conditions permit. Additionally, the State Department's Bureau 
of Diplomatic Security's Antiterrorism Assistance program has trained 
limited numbers of Presidential Guardsmen in VIP and facilities 
protection. Already-trained battalions have received positive reviews 
from the Government of Israel for their professionalism and ability, 
including some limited action against Hamas and Palestine Islamic 
Jihad. We are confident that as more troops are trained, the better the 
PA will be at confronting terrorist groups.
    At the March 2 donor's conference in Sharm al-Sheikh, the 
international community expressed strong political support for the 
Palestinian Authority as the legitimate authority for all Palestinians 
in the West Bank and Gaza. Donors endorsed the centrality of the PA's 
plan for the early recovery of Gaza and pledged more than $4.4 billion 
in assistance for the PA and the Palestinian people. Secretary Clinton 
announced our intention to support the Palestinian Authority and Gaza 
recovery with up to $900 million in assistance. This pledge, designed 
in coordination with the Palestinian Authority and to be submitted to 
the U.S. Congress, will deliver assistance to the people of Gaza and 
the West Bank. To date, the United States has contributed more than $66 
million for food, potable water, medicine, and emergency shelter needs 
for Gaza.
    The U.S. pledge accounted for approximately 20 percent of total 
pledged assistance--Arabs pledged over $2 billion; Europe $1.3 billion 
through multilateral and bilateral channels. Arab States, while stating 
their intention to establish a separate GCC mechanism to channel 
assistance for Gaza recovery and reconstruction, indicated their 
willingness to work in coordination with the international community 
and the PA.
    The Egyptian-sponsored Palestinian reconciliation talks have 
stalled in large measure because President Abbas has demanded that any 
Palestinian Government accept the previous commitments of the PLO, 
which include renunciation of violence and recognition of Israel. These 
commitments are the essential basis for pursuing negotiations toward 
the two-state solution and realizing the Palestinian people's 
legitimate aspirations for an independent state. In discussions with 
Egypt and other Arab allies, as well as European partners, the 
administration continues to emphasize the importance of the Quartet 
principles.

    Question. President-elect Obama has talked about direct and tough 
diplomacy with Iran.

   What initial steps do you expect the administration to take 
        regarding Iran?
   Will you reach out to our allies and seek to establish with 
        them a timeline for talks with Iran?
   Should it become clear that the Iranian Government is 
        unwilling to engage in talks, or such talks should fail, what 
        steps should be taken to put a sanctions regime in place that 
        can deter Iran's nuclear ambitions?

    Answer. We are still reviewing policy and consulting on our initial 
steps on Iran, so I do not yet have specific answers to all of your 
questions. However, the President has publicly stated that he supports 
tough and direct diplomacy with Iran without preconditions. Now is the 
time to use the power of American diplomacy to pressure Iran to fully 
meet its UNSC, NPT and IAEA obligations on its nuclear program, end 
support for terrorism, and cease threats toward Israel. President Obama 
and Vice President Biden will offer the Iranian regime a choice. If 
Iran addresses the international community's serious concerns about its 
nuclear program and ends support for terrorism, we will offer 
incentives like membership in the World Trade Organization, economic 
investment, and a move toward normal diplomatic relations. If Iran 
continues its troubling behavior, we will step up our economic pressure 
and political isolation. In carrying out this diplomacy, we will 
coordinate closely with our allies and proceed with careful 
preparation.
    President Obama has stated that we are willing to commit to direct 
diplomacy with Iran, but this does not mean Iran's violations of its 
international nuclear obligations and support for terrorism cease to 
have consequences. We remain committed to the P5+1 process and will 
continue to consult with our P5+1 partners on next steps. The P5+1 
Political Directors last met February 4 in Wiesbaden, Germany, to 
discuss our shared concerns with Iran's nuclear program. We also engage 
regularly with all of our allies in the Arab world on a range of 
issues, including Iran, and we have reassured them that our commitment 
to peace and stability in the Middle East is unwavering, and engagement 
with Iran does not undermine security in the region.

    Question. What concrete actions should the U.S. take to help bring 
an end to the conflict in Darfur?

    Answer. The United States approach to the situation in Darfur has 
been marked by solid intentions, but has not produced a significant 
improvement in security or a political solution capable of ending the 
conflict. We have not found the right combination of ``carrots and 
sticks'' to produce a genuine change of attitude to end the conflict or 
to bring the disparate rebel groups to a coherent and unified 
negotiating position. While our humanitarian efforts there have been 
substantial, civilian protection remains elusive even within internally 
displaced persons camps. We must learn from these lessons and adjust 
our approach accordingly.
    Secretary Clinton has been a strong advocate for resolving the 
situation in Darfur and brings that dedication with her to the 
Department of State. As mentioned in the Secretary's confirmation 
testimony, we are examining options that include expanding our already 
comprehensive sanctions regime against Sudan, as well as reviewing the 
prospect of a no-fly zone and other options in this war torn region. In 
reviewing these options we are considering the possible impacts on 
humanitarian operations. We consider full deployment of the U.N./
African Union Mission in Darfur (UNAMID) a necessity and a goal that we 
must reach as soon as possible. We will share more on these options 
with you as appropriate.
    The utility--and necessity--of ``Smart Power'' is starkly evident 
in the situation in Darfur. It is imperative that the United States 
maintain its leadership through the exercise of every tool necessary, 
whether diplomatic, economic, or security related, to achieve an 
acceptable outcome. We will continue to push for and support the 
deployment of U.N./African Union Mission in Darfur (UNAMID) troops, a 
successful Darfur peace process, and sustained humanitarian support.
    We recognize that the Darfur peace process is regaining momentum 
under the leadership of U.N./African Union Joint Chief Mediator Djibril 
Bassole. We will continue to work closely with his team to end the 
suffering of the people in Darfur.
    Since my last testimony on January 22, there have been significant 
developments in Sudan, and the USG has responded. We condemned the 
Sudanese Armed Forces bombing campaign in North and South Darfur, as 
well as the incursion by the Justice and Equality Movement (JEM) into 
Muhajeria and other areas of South Darfur, which resulted in an 
increase of violence since January 22. The bombing campaigns in 
particular were a violation of the Darfur Peace Agreement, of the 
Government of Sudan-initiated cease-fire, and of United Nations 
Security Council resolutions on Darfur. We demanded that all parties to 
the conflict, including rebel movements, cease all violence and 
provocations and commit to the peace process under the leadership of 
Joint Chief Mediator Bassole. This process culminated in the February 
17 signing of an Agreement of Goodwill and Confidence-Building for the 
Settlement of the Problem in Darfur between the Government of National 
Unity and the JEM. We are working hard to ensure that this vulnerable 
peace process is not negatively impacted by March 4 International 
Criminal Court (ICC) arrest warrant for President Bashir and the GNU's 
March 4 decision to expel 13 international humanitarian organizations 
and to close three national agencies. We condemned the GNU expulsion 
decision and are working to seek a reversal or mitigation of it so that 
these organizations can resume unobstructed the critical humanitarian 
assistance they provide to millions of Sudanese.

    Question. You were serving in the State Department at the time of 
the genocide in Rwanda. What lessons did you draw from that experience 
that you would apply in the position of deputy secretary of State?

    Answer. The overarching lessons learned from Rwanda are that we 
must act more aggressively to put an end to genocide that is in 
progress, and that there is no substitute for prevention when it comes 
to conflict areas and genocide. We must more actively engage with other 
countries to stop mass killings and other human rights abuses, and we 
will need to continue developing more nimble bureaucratic structures to 
avoid delays amid crises. We also better need to understand the 
elements of instability that lead to violence and to prevent them from 
escalating. As Deputy Secretary of State, I will ensure that sufficient 
diplomatic resources are deployed to address conflict areas in order to 
better anticipate the actions of foreign counterparts, and to cooperate 
with partners more effectively, both to facilitate more rapid decision 
making and a more effective response to humanitarian emergency.
    Prevention also extends to the United Nations and to other 
multilateral and regional organizations. In the case of Darfur, for 
example, we must continue to do all we can to reach the full deployment 
of the U.N.-African Union Mission (UNAMID) in order to avoid the break-
down of capacities seen in the case of UNAMIR when the time came for it 
to act.
    I have learned that there is no ``quick fix'' to seemingly 
intractable situations like what we have seen in Darfur, but I have 
also learned that the painstaking process of taking early action is 
necessary to prevent such situations from becoming larger and more 
unmanageable crises that can lead to greater loss of life and 
suffering.

    Question. What are the steps that the Department will take to 
facilitate a mutually acceptable solution on the name issue, which will 
pave the way for the country's accession to EU and NATO?

    Answer. Supporting Macedonia's integration into NATO and the EU 
remains a vital element in our efforts to promote peace and stability 
in the Balkan region. It has been longstanding U.S. policy to urge 
Macedonia and Greece to pursue a mutually acceptable solution to their 
differences over Macedonia's name through the ongoing U.N. mediation 
process, led by Ambassador Matthew Nimetz. To this end, we will 
continue to actively encourage dialogue between Athens and Skopje and 
engagement in the Nimetz process. We have and will continue to make 
clear repeatedly in our private, diplomatic communications and public 
comments that the United States strongly supports the U.N. effort to 
settle the issue in the near term and that we will embrace any mutually 
acceptable solution that emerges from the negotiations. We will 
continue to encourage our European colleagues to do the same. We also 
will continue to urge both sides to refrain from any provocative acts 
or statements that could make resolution of this issue more difficult 
or undermine progress and stability in the region. We look to the two 
sides to intensify their efforts to find a solution after election 
cycles in Macedonia and Greece are completed in April and in June, 
respectively.

    Question. The Americas are likely to get a short shrift in the 
coming years. I understand we have a lot of competing priorities, but 
we cannot let down our engagement with Latin America. In fact, I 
believe we need to step it up--in terms of diplomacy, foreign 
assistance, and security assistance. The Summit of the Americas in 
Trinidad and Tobago in April is one venue for such a launch. I want to 
help make sure this Summit is a success, and that Chavez does not 
succeed in upstaging the Summit to advance his views.

   What steps should the Department take to ensure that the 
        maximum benefit possible is realized from the Summit of the 
        Americas?

    Answer. We are committed to returning to a policy of vigorous 
engagement throughout the region, seeking deeper understanding and 
broader engagement with nations from the Caribbean to Central and South 
America. During her confirmation hearing, then Secretary-designate 
Clinton noted the unique potential of summit and our desire to build a 
new energy partnership, by saying ``Throughout our hemisphere, we have 
opportunities to enhance cooperation to meet common economic, security, 
and environmental objectives that affect us all. . . . We are looking 
forward to working on many issues during the Summit of the Americas in 
April and taking up the President-Elect's call for a new energy 
partnership of the Americas built around shared technology and new 
investments in renewable energy.''
    The Summit of the Americas process is not perfect. Like any 
multilateral forum, it is often messy and frustrating. But we are 
working to improve it, particularly by working with like-minded 
governments to focus on achieving realistic, concrete, and measurable 
objectives and by ensuring that all stakeholders are engaged and 
consulted both in the summit process beforehand and to help bring 
greater focus to implementation afterward.
    The summit process has made significant strides in its 15 years to 
improve the daily lives of people throughout the hemisphere, including 
strengthening the role of a free and independent media, improving 
teacher education, expanding AIDS treatment programs, and reducing the 
costs of remittances. Building on these accomplishments, our 
administration can use the summit to set a positive tone for more 
vigorous regional engagement.
                                 ______
                                 

    Responses of Deputy Secretary-Designate Jacob Lew to Questions 
                  Submitted by Senator Robert Menendez

                          INSTITUTION-BUILDING

    Question. I supported President Bush's PEPFAR and Millennium 
Challenge Corporation (MCC) initiatives. However, I was concerned that 
funding for those initiatives would come at the expense of long-term 
development programs that, at their core, focus on building up the 
institutions of governance overseas that will ultimately need to take 
over and provide basic services to their people.
    In many cases, this is exactly what happened.

   If confirmed, how would you prioritize long-term development 
        programs in the context of initiatives like PEPFAR and the MCC 
        to make sure that we are still investing in long-run 
        institution-building overseas?

    Answer. Throughout the campaign, President Obama stated many times 
the importance of development assistance to America's foreign policy 
and national security. And he and Secretary Clinton have stated that 
they want to double foreign assistance. The totals have to grow.
    Clearly, PEPFAR has experienced much success. MCC represents a 
worthy new approach to poverty reduction and combating corruption. As 
you note, however, increases in those programs within the existing 
totals for foreign assistance impact the resources available for 
traditional development and foreign assistance programs. We must, 
therefore increase assistance resources. At the same time, we must 
ensure that all foreign assistance programs work together to maximize 
their effectiveness.
    As for the prioritization of long-term development programs, the 
Obama administration, with close consultation and cooperation with 
Congress, will evaluate every spending priority based on what works and 
what doesn't, and what impacts America's national security and economic 
interests. We know, however, that long-term development programs play a 
vital role in our national security and we want to reinforce that 
linkage.
    If confirmed, I will work to ensure that these programs are 
efficient and effective, but also be an advocate for the appropriate 
level of resources for foreign assistance programs, both within the 
administration and to the Congress.

    Question. Millennium Challenge Corporation (MCC): The MCC has had 
some real problems getting started--the goals were too ambitious, 
disbursements were slow, the money was not ``additive'' as promised. 
However, the MCC has started an important conversation regarding how we 
engage overseas, and I believe this conversation needs to continue. I 
think the MCC may very well turn out to be an effective component of 
our overall foreign assistance toolkit, and should by no means be 
``scrapped.''

   Under your leadership, what would be the future of the 
        Millennium Challenge Corporation (MCC)? How might it change 
        from what we currently see?

    Answer. Under the Secretary's leadership, the State Department will 
continue to support MCC and its underlying principle of greater 
accountability in our foreign assistance programs. MCC's mission of 
sustainable poverty reduction through long-term development is an 
important asset in America's smart power toolbox, and its focus on 
country ownership and accountability has helped build local capacity, 
encourage broad civil society consultation, and advance policy reform. 
MCC focuses on working in countries where the policy climate is most 
fertile for using assistance to generate sustainable results. This 
focus is yielding meaningful poverty reduction and strengthening good 
governance, economic freedom, and investments in people. As I review 
our development assistance framework and goals, I will consider how 
best to build on the promise of MCC within the administration's overall 
development assistance strategy.

                       MILITARY/CIVILIAN BALANCE

    Question. I know you are very familiar with the concerns that DOD 
is taking too large a role, particularly in Iraq and Afghanistan but in 
other countries as well, in programs that are better managed by our 
civilian agencies like USAID and the State Department. I know that the 
weakened condition of USAID is one major reason for this.

   How do you intend to build up our civilian agencies so they 
        can win the interagency battles on foreign assistance-related 
        policy, strategy, and implementation?

    Answer. President Obama and Secretary Clinton have stated that we 
cannot counter insurgent and terrorist threats without civilian 
counterparts who can carry out economic and political reconstruction 
missions. They have pledged to strengthen these civilian capacities, 
recruiting our best and brightest to take on this challenge, and to 
increase both the numbers and capabilities of our diplomats, 
development experts, and other civilians who can work alongside our 
military. This increased capacity is important in the implementation of 
programs, but also, as you note, in policy and strategy discussions and 
decisionmaking.
    We will need to invest additional resources in the Department and 
USAID. The 25-percent increase in Foreign Service staffing that 
President Obama has called for would do much to address these needs for 
the State Department. In addition, USAID also needs additional capacity 
and with the support of Congress, has started to increase its Foreign 
Service ranks. I look forward to working closely with Congress in order 
to obtain the funding needed to realize these personnel increases as a 
high priority.

   What is your view on the 1206 train and equip authority, 
        which has enabled the Department of Defense to direct a great 
        deal of our military and security assistance, rather than 
        civilian agencies?

    Answer. Our view of section 1206 and other Department of Defense 
authorities that enable DOD to provide foreign assistance is informed 
by our concern that, as Secretary Clinton noted, our foreign policy has 
gotten out of balance and getting it back into equilibrium will be good 
for our government and for the image of our country. We, of course, 
appreciate the good work that has been done under the authority 
provided in section 1206 to use DOD resources to support valuable 
programs that have been developed jointly by the Departments of Defense 
and State. We appreciate the prior administration's view that section 
1206 was a useful means of rapidly addressing evolving security 
challenges posed by, among other things, terrorist threats, as long as 
Secretary of State (and in some cases the relevant Chief of Mission) 
concurrence was a requirement of execution and provision was made for 
programs being jointly formulated. Clearly, State and the Department of 
Defense need to operate as one team in their service to the American 
people in creating a stable and secure international environment that 
is hospitable to American interests and values.
    As the Secretary stated, we need to be able to justify our 
investment in foreign assistance to the American people and we want to 
get measurable results. I believe that the State Department should 
continue to have the lead role within the U.S. Government in carrying 
out foreign assistance, including U.S. security assistance programs. If 
confirmed, the Secretary and I will be reviewing the current programs 
and resources for assistance (including security assistance) and look 
forward to consulting with Congress on ensuring that the appropriate 
level of resources is allocated for such programs.

             DEVELOPMENT OBJECTIVE VIS-A-VIS FOREIGN POLICY
                    AND NATIONAL SECURITY OBJECTIVES

    Question. How will you balance the distribution of resources 
between: (1) development assistance, and (2) assistance aimed at 
security/foreign policy objectives other than development?
    How will you decide what proportion of funding goes to global 
issues/sectors versus recipient country-led development?

    Answer. President Obama identified key priorities for development 
programs in his administration, including: fighting extreme global 
poverty; achieving the Millennium Development Goals; fighting 
corruption; eliminating the global education deficit; enhancing U.S. 
leadership in the effort to combat HIV/AIDS, malaria, and tuberculosis 
and improving global health infrastructure; providing sustainable debt 
relief to developing countries; expanding prosperity through training, 
partnerships, and expanded opportunities for small and medium 
enterprises; supporting developing countries in adapting to the 
challenges of a changing climate; reforming the International Monetary 
Fund and World Bank; and supporting effective, accountable, democratic 
institutions and governments. Secretary Clinton stressed that we have 
to get our arms around what is thought of as traditional foreign aid: 
health, education, economic empowerment and the like, plus what is now 
becoming increasingly important: reconstruction, stability, conflict 
resolution and peacekeeping challenges.
    I believe strongly that resources have to follow priorities and 
that funding decisions need to fit into a comprehensive strategy and 
vision and be linked also to our foreign policy priorities. As 
Secretary Clinton described at her hearing, she will ask me to review 
how the entire range of foreign assistance is conducted, and how it is 
funded and managed. As Secretary Clinton stated, we want a system that 
maximizes coordination and minimizes redundancies across the entire 
spectrum of foreign assistance. If confirmed, I look forward to working 
with Congress as we seek to obtain adequate resources to achieve the 
wide range of key foreign assistance priorities.
                     foreign assistance act rewrite
    Question. Many have called for a rewrite of the Foreign Assistance 
Act to help make our programs more effective and streamline authorities 
and help improve Congressional oversight.

   What is your view of current Foreign Assistance legislation 
        as it relates to the ability of the administration to carry out 
        programs in the most efficient and effective way possible? In 
        short, does it help or hinder?
   What is your sense of the need for foreign assistance 
        reform? What is working well, what needs more work? Do you feel 
        that a wholesale rewrite of the Foreign Assistance Act of 1961 
        is needed? If Congress decides to rewrite the Foreign 
        Assistance Act, what do you see as priorities to be addressed 
        in new foreign assistance legislation?

    Answer. Our foreign assistance infrastructure must be able to meet 
the challenges we face today while anticipating those in the months and 
years ahead. We should look at areas which can be better coordinated 
and streamlined, and would look forward to engaging with this committee 
and the Congress on ideas for reform. The President has stressed the 
need for clearer leadership and coordination in Washington. Similarly, 
we should look at those areas that have proved effective and build upon 
those successes.
    President Obama has committed to coordinate and consolidate 
programs currently housed in more than 20 executive agencies so as to 
enhance effectiveness and accountability. If confirmed, I look forward 
to working closely with the Congress as we review what programs can be 
consolidated and other new ways to elevate the importance of 
development and the full range of foreign assistance in our overall 
foreign policy, and improve budget planning, coordination, and 
execution, while seeking greater resources to be used with maximum 
flexibility. No decision has been made about whether there is any need 
for specific legislative reforms. I look forward to consulting with the 
committee, and the Congress, on these issues as we move forward.

    Question. A study released in October 2008 by the American Academy 
of Diplomacy, entitled ``A Foreign Affairs Budget for the Future: 
Fixing the Crisis in Diplomatic Readiness'' called for a 43-percent 
increase in State Department staffing over the next 5 years.

   In your view, how many new State and USAID Foreign Service 
        officers are needed?

    Answer. We will need to invest additional resources in the 
Department and USAID. The 25-percent increase in Foreign Service 
staffing that President Obama has called for would do much to address 
these needs for the State Department. USAID has been severely 
understaffed for the better part of the last decade. This has been 
recognized by the Congress which provided funding for USAID's 
Development Leadership Initiative (DLI). As a result of this and future 
funding for the DLI, USAID is in the process of doubling its career 
Foreign Service from approximately 1,100 to 2,200 over the next several 
years. Given the increased focus on development as one of the three 
``D's'' (Defense, Diplomacy, and Development) and the need for the 
United States to significantly enhance this third ``leg'' throughout 
the world, particularly in the Middle East and South Asia, USAID is 
considering a further, possibly significant expansion in the next 5 to 
7 years.

    Question. There have been suggestions that USAID needs to put in 
place more flexible hiring procedures, so that it can attract and 
retain a wide range of highly qualified professionals including 
technical experts, subject matter experts, contracting professionals, 
and ``top-notch'' project managers.

   What changes do you believe are needed in USAID hiring 
        policies and procedures? And in State Department Foreign 
        Service hiring policies and procedures?

    Answer. When USAID is in a hiring mode, it has consistently been 
successful in recruiting highly qualified candidates for the Foreign 
Service, including technical experts, subject matter experts, project 
managers, and individuals responsible for management functions; e.g., 
contracting, financial management, and administration. However, USAID 
is constrained in hiring the same kinds of individuals for its civil 
service in that it must follow all civil service rules and regulations. 
The competition for many of these skills in both the private and public 
sectors is strong. We will be reviewing ways of addressing this to 
improve USAID hiring.
    In regard to State Department Foreign Service hiring policies and 
procedures, the Department took a hard look at our hiring procedures 
and instituted a streamlined process for FSO selection process in 
September 2007. The testing process, now online and offered several 
times per year, is followed by a Qualifications Panel review that 
incorporates a ``Total Candidate'' approach that enables the Department 
to consider the quality of candidates' education, work history, and 
experiences in addition to the results of the test. Successful 
candidates are then invited to our oral assessment, considered an 
industry ``best practice.'' These changes have resulted in a process 
that not only continues to deliver high quality hires for our 
diplomatic service, but delivers them more quickly. The Department 
continually reviews the hiring policies and procedures in search of 
improvement.

                       RESOURCES FOR DEVELOPMENT

    Question. At her confirmation hearing, Secretary Clinton referenced 
a quote from Secretary of Defense Gates, who stated, ``Our civilian 
institutions of diplomacy and development have been chronically 
undermanned and underfunded for far too long.'' In strongly agreeing 
with that assessment, Secretary Clinton said, ``I think that the State 
Department has a very big responsibility to improve its capacity with 
respect to both diplomacy and development, because without those two 
elements of our power projection and our policy being as effective as 
they can be, we're not going to have the agile, comprehensive foreign 
policy we should look forward to.'' She went on to say, ``I don't think 
there is any substitute for having seasoned professionals and experts 
leading our efforts on diplomacy and development.''

   How will you ensure adequate and appropriate resource levels 
        for both the Department of State and USAID, given the emphasis 
        Secretary Clinton has placed on rebuilding development 
        expertise in civilian agencies?
   Will this priority be reflected in the President's upcoming 
        FY 2010 International Affairs Budget request?

    Answer. We will need to invest additional resources in the 
Department and USAID. This is clear and a high priority of President 
Obama and Secretary Clinton. Without question, funding will continue to 
be a major challenge for the next several years due to the impact of 
the current economic crisis on the Federal budget. The Obama 
administration and this Congress will evaluate every spending priority 
based on what works and what doesn't, and what impacts America's 
national security and economic interests. We know, however, that we 
cannot counter insurgent and terrorist threats without civilian 
counterparts who can carry out economic and political reconstruction 
missions. We must strengthen these civilian capacities--the 25-percent 
increase in Foreign Service staffing that President Obama has called 
for would do much to address these needs, as will increased capacity 
for USAID.
    Likewise, our assistance programs are vital to our national 
security. It has become clear that the problems of human deprivation 
around the globe, such as extreme poverty, lack of opportunity, and 
rampant disease, pose tangible threats to American interests. U.S. 
foreign assistance, through its many forms, is a critical tool for 
confronting these pressing problems. Working in partnership, Congress 
and the Obama administration will have to make smart, strategic budget 
choices that deal with our problems here at home while also continuing 
and where appropriate increasing support for effective programs that 
save lives, strengthen our security, and restore America's position in 
the world.
    The Obama administration plans to put forward a robust FY 2010 
budget request. I look forward to working closely with Congress in 
order to obtain the funding needed to realize these increases as a high 
priority.

                      FOREIGN AID SPENDING LEVELS

    Question. Given our current economic problems, it seems inevitable 
that efforts will be made to keep foreign assistance spending at 
current levels, or to reduce foreign assistance. I want to make sure 
that our foreign assistance programs are set up so that we are getting 
the biggest ``bang for the buck.''

   In your view, what level of funding is needed to ensure that 
        international development is a reliable pillar in our national 
        security strategy?
   If you are confirmed, how will you and the Secretary ``push 
        back'' against efforts to maintain foreign aid spending at 
        current levels, or to cut back on foreign aid spending?

    Answer. I agree that we need to ensure that we are getting the 
biggest ``bang for the buck.'' That is why Secretary Clinton has asked 
me, if confirmed, to ensure that we maximize coordination and minimize 
redundancies across the entire spectrum of foreign assistance. Both 
President Obama and Secretary Clinton have stated that they want to 
double foreign assistance. After the onset of the economic crisis, the 
President said it could take longer to phase in this increase by the 
end of his first term due to budgetary restrictions created by the need 
to confront the economic crisis. However, we remain committed to this 
goal.
    I hope that Congress will work with the new administration in 
meeting the goal of doubling foreign assistance, and fully fund the 
President's budget request. They will be invested wisely with strong 
accountability measures and to ensure they are directed toward 
strategic goals.

                        CIVILIAN RESPONSE CORPS

    Question. In 2004, then-Secretary of State Powell established the 
Office of the Coordinator for Reconstruction and Stabilization (S/CRS) 
to ``lead, coordinate, and institutionalize U.S. Government civilian 
capacity to prevent or prepare for post-conflict situations, and to 
help stabilize and reconstruct societies in transition from conflict or 
civil strife.'' Last year, this office was formally authorized and is 
likely to receive significant funding when Congress votes on FY09 
appropriations bills.
    The State Department has started hiring for the Civilian Response 
Corps, which will be comprised of legal experts, economists, 
agronomists, police trainers, health professionals and educators. This 
civilian corps would be sent to help rebuild war-torn societies and 
shore up fragile states, tasks which the military is currently 
shouldering because we do not yet have the civilian capacities we need. 
President Obama and Secretary of State Clinton have spoken in favor of 
the civilian corps; in fact, President Obama has spoken of the need to 
expand the corps beyond President Bush's vision of 5,000 individuals.

   What are your views on the mission of S/CRS and the Civilian 
        Response Corps?

    Answer. President Obama and Secretary Clinton strongly support the 
mission of the Office of the Coordinator for Reconstruction and 
Stabilization (S/CRS) and the Civilian Response Corps.

   What resources do you believe are needed in the years ahead 
        to ensure the success of S/CRS and the Civilian Response Corps?

    Answer. The State Department will need the financial resources 
necessary to fully stand up, train, manage and deploy the Civilian 
Response Corps. The FY09 President's budget request for the Civilian 
Stabilization Initiative, which includes the Civilian Response Corps, 
was $248.6 million. The Department will also need to fund a contingency 
or crisis response fund to ensure that the Department has the resources 
needed to response immediately to countries in crisis or in transition 
from crisis.

   What challenges do you see for the State Department in 
        standing up and deploying the response corps? How can Congress 
        and specifically this committee help reduce the obstacles to 
        success?

    Answer. The primary challenge is one of financial resources, and, 
if confirmed, I look forward to working closely with the Congress to 
meet this challenge.

    Question. Funding for Conflict Prevention: For the past few years, 
under section 1207 of the Defense Authorization bill, the Defense 
Department has transferred funds to the State Department for 
reconstruction and stabilization work. This money has become a 
principal source of funding for programs run through the Office of the 
Coordinator for Reconstruction and Stabilization in places like 
Afghanistan, Iraq, Liberia, Chad, and Sudan.
    During the confirmation hearing for Secretary of State Clinton, 
there was discussion on the need to return civilian functions to 
civilians, and to increase the resources of the State Department to 
engage in diplomacy and respond to crises.
    In addition, the Genocide Prevention Task Force, chaired by 
Madeline Albright and Bill Cohen, recently urged Congress to allocate 
$250 million annually to finance initiatives to prevent mass atrocities 
and genocide. Such an amount could save billions of dollars by helping 
us avoid costly military interventions.

   Given that reconstruction, stabilization, and development 
        work has traditionally been the domain of civilians, should the 
        State Department have a permanent fund dedicated to conflict 
        prevention, response, and post-conflict peacebuilding, and not 
        be required to rely on a yearly transfer of funding from DOD?
   [if yes] How would you assure skeptical Members of Congress 
        that the State Department can effectively manage and account 
        for such a fund?

    Answer. The State Department should have financial resources 
dedicated to conflict prevention, conflict response, and post-conflict 
reconstruction and stabilization rather than rely on DOD under the 
section 1207 program.
    The Secretary is committed to effectively managing all U.S. foreign 
assistance. If confirmed, I will work to ensure that we maximize 
coordination and minimize redundancies across the full spectrum of 
foreign assistance. I hope that the Congress will work with the new 
administration in meeting the goal of doubling foreign assistance, 
including providing resources for reconstruction and stabilization.

    Question. During her confirmation hearing last week to be U.S. 
permanent representative to the U.N., Dr. Rice commented that ``To lead 
from a position of strength, the United States must consistently act as 
a responsible, fully-engaged partner in New York . . . In the past, our 
failure to pay all of our dues and to pay them on a timely basis has 
constrained the U.N.'s performance and deprived us of the ability to 
use our influence most effectively to promote reform. President-elect 
Obama believes the U.S. should pay our dues to the U.N. in full and on 
time.''

   If confirmed, what priority would you place on the U.S. 
        meeting its financial obligations at the U.N.?
   Should we condition payment of our U.N. financial 
        obligations on management reforms at the U.N.?

    Answer. If confirmed, I will consider it a priority for the U.S. to 
meet its financial obligations at the U.N. Our inability to pay our 
assessed contributions to the U.N. in full and on time is inconsistent 
with U.S. treaty obligations and undermines U.S. credibility, 
particularly on management and budgetary issues. Consistent with this 
view, we generally do not support withholding U.S. assessed 
contributions. In addition, we do not believe that withholding has been 
shown to be an effective means of influencing the policies of U.N. 
organizations.
    That said, the United States is committed to making further 
improvements in U.N. management, accountability, and transparency, and 
will continue to engage closely with Secretary General Ban and other 
U.N. members on approaches to improving the U.N.'s effectiveness, 
efficiency, and transparency.
                                 ______
                                 

     Responses of Deputy Secretary-Designate Jacob Lew to Questions
               Submitted by Senator Robert P. Casey, Jr.

           GAY AND LESBIAN EMPLOYEES AT THE STATE DEPARTMENT

    The Department takes commendable efforts to ensure the safety and 
well-being of the families of Foreign Service officers who serve their 
country abroad at regular intervals. However, it denies to partners of 
gay and lesbian Foreign Service officers the language, area studies, 
and other types of training that spouses receive. Partners aren't 
allowed the same access to embassy medical services that spouses 
receive, even in countries with poor medical care, and often aren't 
allowed even access to embassy facilities.
    Unlike spouses, partners aren't guaranteed evacuation in the event 
of political instability or danger. They can't compete for embassy 
jobs, even if they might be best qualified to do the work our embassies 
need. And though the Department will pay to transport even a pet to an 
employee's overseas post, it won't pay the air ticket of a life 
partner.

    Question. As the Deputy Secretary of State for Management and 
Resources, how do you plan to approach the issue of what benefits and 
training should be provided to domestic partners of Foreign Service 
officers?

    Answer. The Department hires, recruits, assigns, and promotes 
employees without regard to sexual orientation. Unmarried partners of 
U.S. Government employees assigned abroad--same-sex and opposite-sex--
are treated in an equivalent manner. Unmarried partners fall under the 
Members of Household (MOH) category and are afforded certain benefits, 
as set forth within the personnel section of the Foreign Affairs 
Manual. These benefits include assistance in obtaining appropriate 
residency permits and travel visas in accordance with local law, 
ability to obtain mission ID badges, consideration for mission 
employment if legal requirements are met, inclusion in the mission 
warden system and mission phone book, and inclusion on the same basis 
as spouses in events sanctioned by missions.
    The Department allows family members and MOHs, including unmarried 
partners, to enroll in the Security Overseas Seminar, a 2-day course at 
the Foreign Service Institute that is mandatory for all employees prior 
to their first overseas assignment. The Department's ``Iraq 
Predeployment Workshop'' and any equivalent future classes are 
available to the MOHs of employees assigned to Iraq, an unaccompanied 
post. In addition to security-related training, the Department has 
extended access for MOHs to the Foreign Service Institute's distance 
learning and familiarization and short-term (FAST) language courses, on 
a space-available basis; i.e., on a par with Eligible Family Member 
spouses. With ability in the local language, individuals can be less 
conspicuous in dangerous circumstances, more alert to possible dangers, 
and better able to converse with first responders.
    I will ask the Department's Bureau of Human Resources and the 
Office of the Legal Adviser to advise me whether any further steps to 
provide benefits and training to MOHs are appropriate and legally 
available.

              POLITICAL APPOINTEES AT THE STATE DEPARTMENT

    It is important not only to fully staff and fund the State 
Department, but also to ensure that our career diplomats have the 
ability to fill senior positions within the Department. I was pleased 
to hear that the Secretary-Designate plans to retain Ambassador Bill 
Burns, our most distinguished career Foreign Service officer, as the 
Under Secretary for Political Affairs. However, some reports have 
circulated that Secretary Clinton plans to staff most, if not all, 
Assistant Secretary and Deputy Assistant Secretary positions, with 
political appointees, even in regional bureaus traditionally headed by 
career diplomats.

    Question. Do you have any insight into the Secretary's plans to 
staff the front offices of the various regional and functional bureaus? 
Are you concerned that naming political appointees, as highly competent 
as they may be, to the majority of the Department's senior positions 
could send the wrong signal to our Nation's career diplomats?

    Answer. The Secretary is reviewing options for staffing the most 
senior positions in the Department's regional and functional bureaus. 
Throughout this process, the Secretary is looking for the people--
whether political appointees or career diplomats--who will best carry 
out the President's Foreign Policy agenda and further U.S. interests 
abroad.
    arms control/nonproliferation functions at the state department
    In 1999, the Arms Control and Disarmament Agency (ACDA), which had 
responsibility for arms control and nonproliferation issues, was 
abolished and its functions were consolidated into the Department of 
State. Today, some analysts believe that the 1999 consolidation of the 
functions into the Department of State was a mistake and are concerned 
over reduced emphasis on arms control and nonproliferation policy, 
especially following the further 2004 reorganization of the ``T 
family'' that led to the departure of some long-serving State 
Department experts.

    Question. What is your response to those who advocate that arms 
control and nonproliferation functions be taken out of the State 
Department and assigned to independent agencies? Do you think the 
current structure in the State Department and its culture provides 
sufficient emphasis to promote these functions?

    Answer. Arms control and nonproliferation are central elements of 
our foreign policy and core functions of the Department of State. 
Success in negotiating a successor to the START Treaty and promoting, 
developing, and securing consensus and progress on WMD proliferation 
requires bilateral and multilateral diplomacy, drawing on all the 
resources of the Department and led by the Secretary, who has made 
clear the priority she assigns to these issues. These functions should 
be integrated into the Department rather than be assigned to 
independent agencies. The Department's capabilities to carry out these 
functions will be revitalized to support this effort.

    Question. Secretary Clinton spoke at her confirmation hearing of a 
desire to revitalize the arms control and nonproliferation bureaucracy 
in the Department and bring back some institutional expertise. Can you 
elaborate further on her plans?

    Answer. The Secretary and her senior staff are considering how best 
to revitalize the capabilities of the Department of State to negotiate 
arms control agreements and achieve our nonproliferation goals.

 COORDINATION OF NEW DEPUTY POSITION WITH UNDERSECRETARY FOR MANAGEMENT

    While I am encouraged by your nomination by President Obama and 
Secretary Clinton, it remains unclear to me how your job 
responsibilities will fit into the existing Department organization, 
whereby an Under Secretary has traditionally handled management and 
resource issues.

    Question. How will your responsibilities be coordinated with those 
of the Under Secretary of State for Management, a position in which I 
understand Pat Kennedy will continue, the senior official traditionally 
tasked with budgetary and administrative functions for the Department?

    Answer. By statute and the Secretary's desire, I coordinate all 
management and resource issues. As the Secretary has said, there is 
more than enough work in this arena. The Under Secretary for Management 
remains responsible for managing the operating budget and the 
operations of the Department of State under my direction.
                                 ______
                                 

     Responses of Deputy Secretary-Designate James B. Steinberg to
               Questions Submitted by Senator Jim DeMint

                                GENERAL

    Question. Under her Transformational Diplomacy policy, Former 
Secretary of State Condoleezza Rice began a major initiative, the 
Global Diplomatic Repositioning program, which proposed rebalancing the 
number of Foreign Service officers overseas by moving them from places 
like Washington, DC, and Europe to places where they are needed most, 
such as China, India, Brazil, Egypt, etc., and also to potentially 
hostile areas such as Afghanistan and Iraq. Will the administration 
continue to develop and execute this program? What do you see as the 
major successes and weaknesses of this program? What changes would you 
suggest be made to this initiative.

    Answer. President Obama and Secretary Clinton are committed to 
assuring that our diplomatic resources are targeted on the areas of 
highest priority and importance to U.S. national interests. The Global 
Diplomatic Repositioning program reflected that basic approach, and if 
confirmed, Deputy Secretary Jack Lew and I will work with Secretary 
Clinton to assure that this effort is carried forward in a way that 
reflects emerging needs.

    Question. There are several Department of Defense core competencies 
that are critical to the success of State Department operations; rapid 
global mobility (airlift operations), provincial reconstruction teams, 
and DOD's massive logistics system (rapidly distribute humanitarian 
relief via land, air, and sea). How do you foresee the State Department 
partnering with the DOD to increase collaboration and increase 
utilization of these areas of expertise? Do you support the Global 
Peace Operations Initiative (GPOI)? If so, how can the capabilities of 
the State Depart and DOD be more effectively merged?

    Answer. Secretary of State Gates has made clear that he supports an 
enhanced partnership with State Department to make sure that all the 
elements of U.S. power can be deployed in support of U.S. national 
interests. If confirmed, I look forward to working with my counterparts 
in the Defense Department to assure that the civilian activities can be 
supported to the maximum extent possible consistent with the law, and 
to consulting with the committee and Congress should changes be 
desirable. In this context, the administration will review the Global 
Peace Operations Initiative and consult with the committee on how the 
administration plans to take it forward.

    Question. What steps will you take to make sure that the State 
Department combats violations of religious freedom and related human 
rights worldwide as required by U.S. legislation? Former Secretary of 
State Madeline Albright wrote that the State Department routinely 
ignores the ``religious factor'' in achieving U.S. global objectives. 
Some studies indicate that the robust promotion of freedom of religion 
or belief by the U.S. will aid in fostering durabledemocratic 
societies, insuring sustainable local economic development, and 
fighting extremism. Do you agree with these views?

    Answer. President Obama and Secretary Clinton have highlighted the 
importance of a foreign policy that reflects our values, including our 
commitment to freedom of conscience. In his Inaugural Address, 
President Obama sent a clear message to those who deny the rights of 
their citizens, including the freedom to worship: ``To those who cling 
to power through corruption and deceit and the silencing of dissent, 
know that you are on the wrong side of history, but that we will extend 
a hand if you are willing to unclench your fist.'' And Secretary 
Clinton addressed this issue with clarity and passion in her testimony 
before this committee: ``[Rieligious persecution . . . is anathema to 
Americans. [W]e believe in the freedom to worship. . . . I believe that 
that is an area that we want to talk more about, that we want to raise, 
because of the significance. You point out rightly that . . . we have 
given a lot of aid and . . . we have given a lot of blood on behalf of 
certain countries that--that persecute not just Christians but people 
of other religious beliefs, even interfaith beliefs within the same 
denomination or particular view of religion.'' And I wholeheartedly 
concur in all of those comments.

                              USE OF FORCE

    Question. In your 2005 LA Times article you advocated that 
``preventive military force has a role in managing today's security 
challenges.'' Further you wrote ``understanding that role is step one; 
establishing agreed standards for its use is step two; and implanting 
these standards in an effective institution is the third step.'' What 
role do you see for the State Department in step two, establishing 
agreed standards? What diplomatic criteria do you believe needs to be 
met prior to preventive action? How does one implant these standards in 
an effective institution?

    Answer. The State Department has vital role in working with our 
friends and allies, as well as within international institutions, to 
articulate basic principles that all states should accept, governing 
the use of force to protect national security interests, in response to 
emerging national security threats such as terrorism, nuclear 
proliferation and genocide. Sometimes these rules may be formally 
adopted by organizations such as NATO in documents such as the NATO 
strategic concept; sometimes they may be better suited for informal 
agreement.

                            FAMILY PLANNING

    Question. For more than 30 years the Hyde amendments, which 
prohibit federal funding for domestic abortion services, have been 
supported by Republican and Democrat administrations and Congresses. 
Unfortunately, while this is the domestic policy of the United States, 
President Obama has vowed to reverse our foreign policy by repealing 
the Mexico City policy and use federal taxpayer dollars to fund 
abortion services overseas. Do you support President Obama's efforts to 
lift the Mexico City restrictions? Do you believe our foreign policy 
should contradict long-held domestic policies?

    Answer. President Obama has supported repeal of the Mexico City 
policy, as has Secretary Clinton. Longstanding law, authored by Senator 
Jesse Helms, expressly prohibits the use of U.S. funds for abortion. 
The Mexico City policy is an unnecessary restriction that, if applied 
to organizations based in this country, would be an unconstitutional 
limitation on free speech.

    Question. How will the ``ABC Method'' under the PEPFAR program be 
utilized in the formation and/or reevaluation of administration policy 
as applied to foreign aid? Specifically will the administration 
continue to support the ``A'' and ``B'' Components of PEPFAR?

    Answer. The President has applauded President Bush's efforts to 
combat HIV/AIDS. He is committed to fully implementing the President's 
Emergency Plan for AIDS Relief and to ensuring that best practices 
drive funding. We will review PEPFAR options and consult with the 
committee as we move forward.

                                 ISRAEL

    Question. The United States and Israel have signed a memorandum of 
understanding laying out expectations for U.S. military assistance to 
Israel for the next 10 years. This aid enables Israel to maintain its 
qualitative military edge (QME)--effectively its ability to defend 
itself against all possible conventional threats.

   Are you and the administration supportive of the 10-year 
        U.S.-Israel aid agreement?

    Answer. Yes.

   Do you intend to send to Congress a request for $2.775 
        billion for fiscal year 2010?

    Answer. The State Department will be working with OMB on the 
President's budget request for FY 2010, so it is premature for me to 
comment on issues involving budgetary support.

                U.S.-ISRAEL MEMORANDUM OF UNDERSTANDING

    Question. Just last week, the U.S. and Israel signed a Memorandum 
of Understanding that restated America's ``steadfast commitment'' to 
Israel's security, ``including secure, defensible borders, and to 
preserve and strengthen Israel's capability to deter and defend itself 
. . .'' The agreement reaffirmed a high level of security, military and 
intelligence cooperation as well as U.S. assistance to Israel. 
Specifically, the MOU discussed the many things the U.S. and our allies 
should do to ensure that smuggling to Gaza is prevented in order to 
deprive Hamas the ability to rearm.

   The agreement was signed by former Secretary of State Rice 
        but, I'm told, reflects the thinking of the Obama 
        Administration as well.
   Does it, in fact, reflect current administration thinking? 
        Could you explain the details; go into a little detail about 
        the MOU?
   What particular steps is the Obama administration willing to 
        take in order to help prevent the smuggling of weapons into 
        Gaza?

    Answer. The Obama administration supports actions necessary to 
ensure a sustainable cease-fire. It is strongly committed to working 
with the Government of Israel and other partners in the region, 
including Egypt, to end the smuggling of weapons and other contraband 
into Gaza, which has fueled the recent conflict. Generally speaking, 
international agreements convey from one administration to a next in 
order to ensure some continuity of relations and that is particularly 
so with close allies like Israel. The administration is prepared to 
provide appropriate officials to brief the committee further on the 
particulars.

                   ISRAELI-PALESTINIAN PEACE PROCESS

    Question. Historically, the United States has played an important 
role in working to bring about an end to the Israeli-Palestinian 
conflict. Generally, the U.S. policy has reflecting the understanding 
that: (1) ultimately, peace must be negotiated in a bilateral fashion 
between Israel and the Palestinians; (2) our desire for peace is not 
sufficient to create a willingness on the part of the Arab States and 
Palestinians to reach an agreement; (3) conditions must be right on the 
ground; (4) though the U.S. plays a very important role, there should 
be no imposed solutions; and, (5) as far as international involvement 
is concerned, the U.S. should maintain a primary position.

   How would you define the proper and most effective U.S. role 
        in support of Israel-Palestinian peace?

    Answer. The specific role the administration would play in helping 
Israel and the Palestinians reach agreements, including on final status 
issues, would very much be determined as an outgrowth of consultations 
with the parties. We have just begun those consultations and will be 
making this a top priority.

   How will the new Secretary structure U.S. involvement in the 
        peace process? How involved will you be? Will there be a 
        special envoy? How do you imagine the work being divided among 
        various State Department entities, the White House, and the 
        NSC?

    Answer. The Secretary is committed to having a special envoy for 
North Korean human rights and a policy coordinator and special envoy 
for Burma as required by law. We will ensure that these envoys have 
appropriate access to the Secretary and to me, and we will keep the 
committee fully informed as we move forward.

                                  IRAN

    Question. What is President Obama's starting point with the 
situation in Iran as it approaches the capability to produce a nuclear 
weapon while also testing medium- and long-range ballistic missile 
technology?

    Answer. The new administration will present the Iranian regime with 
a clear choice: abandon your nuclear weapons program, support for 
terror and threats to Israel and there will be meaningful incentives; 
refuse, and we will ratchet up the pressure, with stronger unilateral 
sanctions; stronger multilateral sanctions in the Security Council; and 
sustained action outside the U.N. to isolate the Iranian regime. A 
nuclear-armed Iran is unacceptable, and all elements of American power 
are on the table to prevent Iran from obtaining a nuclear weapon--that 
must begin with the power of aggressive American diplomacy.

                              NORTH KOREA

    Question. 11. Senator Clinton testified that the administration 
would consider new restrictions against North Korea for their uranium 
enrichment activities. What specific options would you propose the 
Obama administration consider following enactment of previously lifted 
sanctions on North Korea?

    Answer. The new administration will pursue direct diplomacy 
bilaterally and within the six-party talks to achieve the complete and 
verifiable elimination of North Korea's nuclear weapons programs, and 
an accounting for North Korea's past plutonium production, uranium 
enrichment activities, and proliferation activities. Sanctions should 
only be lifted based on North Korean performance. If the North Koreans 
do not meet their obligations, we should move quickly to re-impose 
sanctions that have been waived, and consider new restrictions going 
forward.

    Question. The Bush administration appointed special envoys for 
North Korean Human Rights and Burma, though these special envoys never 
were able to impact the setting of U.S. policy direction or priorities. 
Will you continue to appoint special envoy's for these two countries 
and how would you make sure that their advice is included when setting 
policy and diplomatic priorities?

    Answer. The Secretary will appoint a special envoy for North Korean 
Human Rights as required by law. We will ensure that these envoys have 
appropriate access to me and the Secretary.

                                 CHINA

    Question. Chinese aid and economic expansion in Africa has outpaced 
any other nation and it is estimated that by 2010 they will exceed the 
U.S. as the No. 1 exporter to the continent. Please explain the State 
Department's strategy with regards to aid and also building partner 
capacity with U.S. companies to lessen any further loss of influence in 
the region.

    Answer. In Africa, the foreign policy objectives of the Obama 
administration are rooted in security, political, economic, and 
humanitarian interests, including: combating al-Qaeda's efforts to seek 
safe havens in failed states in the Horn of Africa; helping African 
nations to conserve their natural resources and reap fair benefits from 
them; stopping war in Congo; ending autocracy in Zimbabwe and human 
devastation in Darfur; supporting African democracies like South Africa 
and Ghana--which just had its second change of power in democratic 
elections; and working aggressively to reach the Millennium Development 
Goals in health, education, and economic opportunity.
    As my colleague, Jack Lew, said today, we have to leverage the 
resources of international organizations, allies, corporations, 
foundations, and NGOs to maximize our impact. We must learn from 
efforts that have not succeeded, while bolstering those that are 
delivering results. We will review the most effective ways to build 
partner capacity with the private sector to achieve our objectives.

                              MIDDLE EAST

    Question. President-elect Obama has said that among his foreign 
policy priorities will be to rebuild and revitalize our relationship 
with the European Union. One opportunity of mutual concern may be to 
work together on religious freedom problems in Saud Arabia.
    The head of the EU Parliament visited Saudi Arabia at the end of 
December and raised religious freedom concerns with every high-level 
Saudi official he met, specifically requesting that non-Muslim places 
of worship be permitted in the Kingdom in the same way that mosques are 
allowed to be built in Europe. Given that Saudi Arabia is the only Gulf 
State that prohibits non-Muslim places of worship, would you be willing 
to stand with the EU by publicly urging the Saudi Government to more 
actively address their dismal religious freedom and human rights record 
and to permit non-Muslim places of worship?

   What priority would you give to getting genuine confirmation 
        of previous Saudi promises to reform educational textbooks that 
        promote anti-Semitism and hatred toward non-Wahabi Muslims, 
        Christians, and other faith groups?
   How would you work to end religious repression of 
        nonconforming and minority Muslims, such as Shia and Ismailis, 
        and the millions of Muslim and non-Muslim expatriate workers in 
        Saudi Arabia?

    Answer. Saudi Arabia has a key role to play in nearly all of the 
major challenges we face in the region. We have cooperated closely with 
the Saudis, but also had major points of disagreement on the treatment 
of women and religious minorities, as well as the export and support of 
Islamic extremism. The President will place a high priority on engaging 
the Saudis in a comprehensive dialogue on all of these issues. We need 
to lay out for them a clear regional strategy that addresses our 
priorities and what we expect from our partners.
                                 ______
                                 

        Responses of Deputy Secretary-Designate Jacob J. Lew to
               Questions Submitted by Senator Jim DeMint

              STATE DEPARTMENT MANAGEMENT, ACCOUNTABILITY,
                      AND ORGANIZATIONAL STRUCTURE

    Question. President Obama has nominated two Deputy Secretaries 
which is a departure from the past organizational structure of the 
State Department. What will the new management and operational 
organizational structure be? How will duties and responsibilities be 
divided or shared? Who will be accountable for which decisions, 
actions, and results?

    Answer. The Secretary and the President seek to use both Deputy 
positions that are available in law--to manage the overall foreign 
policy agenda and to manage the operations and resources needed for 
success. Jim Steinberg, if confirmed, will be responsible for assisting 
the Secretary in the formulation and conduct of our foreign policy; if 
confirmed, I will be responsible for assisting the Secretary in the 
management of the operations and resources of the Department including 
the coordination of foreign assistance and global programs.

                           FOREIGN AID REFORM

    Question. Senator Clinton committed President Obama to ``enhancing 
our foreign assistance architecture to make it more nimble, innovative, 
and effective.'' In your position, you will play a key role in shaping 
and implementing reforms. What specific ideas and actions do you 
believe are necessary to achieve these goals?

    Answer. Among my first priorities, if confirmed, will be developing 
a persuasive case for the additional resources that are needed to 
advance our foreign policy and diplomatic efforts; developing a 
strategy for enhancing civilian capabilities so that the State 
Department will be prepared to undertake responsibilities best handled 
by civilian rather than military personnel; and achieving better 
coordination across--and more effective delivery by--our foreign 
assistance programs.

                        STATE DEPARTMENT CULTURE

    Question. Senator Clinton did not answer my question with regards 
to a need for an increase to the number of Foreign Service officers or 
addressing problems with the State Department's Corporate Culture. 
Please specifically explain how you intend to reform the Foreign 
Service to meet 2lst century needs.

    Answer. America's national security interests require a vigorous 
and well-funded State Department. We are concerned that the 
Department's funding is insufficient to the task. We clearly also need 
to invest urgently in the Department's technological and other 
infrastructure platforms, so that our diplomacy can be both efficient 
and effective. If confirmed, I will vigorously advocate for a robust FY 
2010 budget request. And, if confirmed, I look forward to working 
closely with you and your colleagues to ensure that the Department is 
funded to achieve its goals on behalf of the American people.

                               RESOURCES

    Question. Senator Clinton incorrectly stated that there are more 
members of military bands than Foreign Service officers--a statement 
borrowed from Secretary Gates--which was then and still is factually 
incorrect. While there are roughly 1,000 active duty members in DOD 
bands, there are approximately 6,500 Foreign Service officers and 5,000 
Foreign Service specialists. Regardless, many acknowledge a need for 
more Foreign Service officers. How many more officers do you think the 
State Department needs to accomplish its mission, how would you 
implement additional personnel?

    Answer. President-elect Obama, the Secretary, and I believe that 
our diplomacy needs to be more robust. In keeping with that goal, he 
has called for a 25-percent increase in Foreign Service staffing, 
opening more consulates, and a doubling of our foreign assistance 
levels.

    Question. In our current economy wouldn't it be more economical to 
deploy more of the Foreign Service's 11,500 experienced personnel it 
currently has assigned rather than adding a flood of new and 
inexperienced personnel?

    Answer. I have not yet had the opportunity to review in detail the 
deployment of Foreign Service personnel. If confirmed I will make such 
a review a high priority and would be happy to consult with you at that 
time.

                                METRICS

    Question. Senator Clinton failed to answer my question with regards 
to what metrics should the U.S. Government use to gauge the success of 
U.S. Foreign Assistance Programs. In addition to what metrics we should 
use to gauge success, what criteria should the government use to 
determine elimination or reduction of foreign assistance programs?

    Answer. While our foreign policy goals are clear, it is difficult 
to measure the performance of individual programs and initiatives. It 
is important that the Department develop metrics that help with the 
assessment of program performance, and if confirmed I will work both 
with the Department and the Congress on an approach that will 
contribute to better policy and program implementation.

                                  
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