U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

19–006

" HOUSE OF REPRESENTATIVES ! 108TH CONGRESS

1st Session 

REPT. 108–105

2003

Part 3

FOREIGN RELATIONS AUTHORIZATION ACT, 

FISCAL YEARS 2004 AND 2005

R E P O R T

OF THE

COMMITTEE ON ARMED SERVICES 

HOUSE OF REPRESENTATIVES

ON

H.R. 1950

together with

ADDITIONAL AND DISSENTING VIEWS

[Including cost estimate of the Congressional Budget Office]

JUNE 30, 2003.—Committed to the Committee of the Whole House on 

the State of the Union and ordered to be printed 


congress.#13
(II)

HOUSE COMMITTEE ON ARMED SERVICES 

ONE HUNDRED EIGHTH CONGRESS

DUNCAN HUNTER, California, Chairman 

CURT WELDON, Pennsylvania 

JOEL HEFLEY, Colorado 

JIM SAXTON, New Jersey 

JOHN M. MCHUGH, New York 

TERRY EVERETT, Alabama 

ROSCOE G. BARTLETT, Maryland 

HOWARD P. ‘‘BUCK’’ MCKEON, California 

MAC THORNBERRY, Texas 

JOHN N. HOSTETTLER, Indiana 

WALTER B. JONES, North Carolina 

JIM RYUN, Kansas 

JIM GIBBONS, Nevada 

ROBIN HAYES, North Carolina 

HEATHER WILSON, New Mexico 

KEN CALVERT, California 

ROB SIMMONS, Connecticut 

JO ANN DAVIS, Virginia 

ED SCHROCK, Virginia 

W. TODD AKIN, Missouri 

J. RANDY FORBES, Virginia 

JEFF MILLER, Florida 

JOE WILSON, South Carolina 

FRANK A. LOBIONDO, New Jersey 

TOM COLE, Oklahoma 

JEB BRADLEY, New Hampshire 

ROB BISHOP, Utah 

MICHAEL TURNER, Ohio 

JOHN KLINE, Minnesota 

CANDICE S. MILLER, Michigan 

PHIL GINGREY, Georgia 

MIKE ROGERS, Alabama 

TRENT FRANKS, Arizona 

IKE SKELTON, Missouri 

JOHN SPRATT, South Carolina 

SOLOMON P. ORTIZ, Texas 

LANE EVANS, Illinois 

GENE TAYLOR, Mississippi 

NEIL ABERCROMBIE, Hawaii 

MARTY MEEHAN, Massachusetts 

SILVESTRE REYES, Texas 

VIC SNYDER, Arkansas 

JIM TURNER, Texas 

ADAM SMITH, Washington 

LORETTA SANCHEZ, California 

MIKE MCINTYRE, North Carolina 

CIRO D. RODRIGUEZ, Texas 

ELLEN O. TAUSCHER, California 

ROBERT A. BRADY, Pennsylvania 

BARON P. HILL, Indiana 

JOHN B. LARSON, Connecticut 

SUSAN A. DAVIS, California 

JAMES R. LANGEVIN, Rhode Island 

STEVE ISRAEL, New York 

RICK LARSEN, Washington 

JIM COOPER, Tennessee 

JIM MARSHALL, Georgia 

KENDRICK B. MEEK, Florida 

MADELEINE Z. BORDALLO, Guam 

RODNEY ALEXANDER, Louisiana 

TIM RYAN, Ohio 

ROBERT S. RANGEL, Staff Director 

ERIC R. STERNER, Professional Staff Member 

ERIN C. CONATON, Professional Staff Member 

(III)

C O N T E N T S 

Page

Purpose and Background ........................................................................................ 3

Legislative History .................................................................................................. 5

Section-by-Section Analysis .................................................................................... 5

Section 224—Reimbursement Rate for Airlift Services Provided to the Department of State ............................................................................................. 5 

Section 227—Security Capital Cost Sharing ................................................... 6

Section 701—Reports on Benchmarks for Bosnia ........................................... 6

Section 1501—Export Controls on Satellites and Related Items ..................... 6 

Section 1502—Mandatory Review by Department of State .............................. 6 

Section 1503—Export Restrictions Not Affected ............................................... 6

Section 1504—Definitions ................................................................................... 6

Committee Position ................................................................................................. 6

Fiscal Data ............................................................................................................... 6

Congressional Budget Office Estimate ............................................................... 7

Committee Cost Estimate .................................................................................... 15

Oversight Findings .................................................................................................. 15

Constitutional Authority Statement ...................................................................... 15

Statement of Federal Mandates ............................................................................. 16

Changes in Existing Law Made by the Bill, as Reported ..................................... 16

Additional views of Vic Snyder ............................................................................... 18

Dissenting views of Ellen O. Tauscher .................................................................. 20

108TH CONGRESS REPT. 108–105 " HOUSE OF REPRESENTATIVES ! 1st Session Part 3

FOREIGN RELATIONS AUTHORIZATION ACT, FISCAL YEARS 

2004 AND 2005

JUNE 30, 2003.—Ordered to be printed 

Mr. HUNTER, from the Committee on Armed Services, 

submitted the following 

R E P O R T 

together with 

ADDITIONAL AND DISSENTING VIEWS 

[To accompany H.R. 1950] 

[Including cost estimate of the Congressional Budget Office]

The Committee on Armed Services, to whom was referred the bill 

(H.R. 1950) to authorize appropriations for the Department of State 

for the fiscal years 2004 and 2005, to authorize appropriations 

under the Arms Export Control Act and the Foreign Assistance Act 

of 1961 for security assistance for fiscal years 2004 and 2005, and 

for other purposes, having considered the same, report favorably 

thereon with amendments and recommend that the bill as amended do pass. 

The amendments (stated in terms of the provisions of the amendment in the nature of a substitute reported by the Committee on 

International Relations) are as follows:

Strike section 224 and insert the following:

SEC. 224. REIMBURSEMENT RATE FOR CERTAIN AIRLIFT 

SERVICES PROVIDED BY THE DEPARTMENT OF 

DEFENSE TO THE DEPARTMENT OF STATE. 

(a) AUTHORITY.—Subsection (a) of section 2642 of title 

10, United States Code, is amended— (1) by striking ‘‘provided by a component of the Department of Defense to the’’ and inserting ‘‘provided by 

a component of the Department of Defense as follows: 

‘‘(1) To the’’; and 

(2) by adding at the end the following new paragraph: 

2

‘‘(2) To the Department of State for the transportation of armored motor vehicles to a foreign country 

to meet unfulfilled requirements of the Department of 

State for armored motor vehicles in that foreign country.’’. 

(b) CONFORMING AND CLERICAL AMENDMENTS.—(1) The 

heading for such section is amended to read as follows: 

‘‘§ 2642. Airlift services provided to Central Intelligence Agency and Department of State: 

reimbursement rate’’. 

(2) The item relating to such section in the table of sections at the beginning of chapter 157 of such title is 

amended to read as follows:

‘‘2642. Airlift services provided to Central Intelligence Agency and Department of State: reimbursement rate.’’.

Strike section 227, relating to security capital cost sharing, and 

insert the following new section 227:

SEC. 227. GAO ASSESSMENT OF SECURITY CAPITAL COST 

SHARING. 

(a) IN GENERAL.—Not later than 120 days after the date 

of the enactment of this Act, the Comptroller General of 

the United States shall submit to the Congress a report on 

plans for security capital cost sharing between the Department of State and other Federal agencies with personnel 

assigned to United States diplomatic facilities under the 

authority of a chief of mission pursuant to section 207 of 

the Foreign Service Act of 1980 (22 U.S.C. 3927). 

(b) REPORT ELEMENTS.—In addition to such other information as the Comptroller General considers appropriate, 

the report described in subsection (a) shall address and 

make recommendations regarding the following: 

(1) The anticipated projected costs that the Department of State proposes to be paid through an interagency security capital cost sharing program. 

(2) The mechanism the Department of State proposes to use in allocating assessments under such a 

program and any alternatives the General Accounting 

Office suggests be considered. 

(3) Factors that should be incorporated into any 

process for implementing such a program and a financial assessment of such factors, including the cost of 

services provided to the Department of State by other 

Federal agencies. 

(4) The means of ensuring transparency in the cost 

assessment process of such a program. 

(5) Mechanisms for adjudicating disagreements 

among Federal agencies regarding assessed fees under 

such a program.

Strike section 701, relating to reports on benchmarks for Bosnia.

Strike title XV, relating to export controls on satellites and related items.

3

Redesignate sections and titles accordingly and conform the table 

of contents.

PURPOSE AND BACKGROUND

The purpose of H.R. 1950, the Foreign Relations Authorization 

Act, Fiscal Years 2004 and 2005, as amended, is to authorize activities of the Department of State in pursuit of U.S. foreign policy 

and national interests in fiscal years 2004 and 2005. The Committee on Armed Services met to consider those portions of the bill 

within its jurisdiction and that directly affected the authority and 

responsibilities of the Secretary of Defense and the armed forces of 

the United States and national security controls on certain exports. 

The committee adopted two amendments that would preserve or 

enhance U.S. national security in several areas. 

First, as amended by the committee, the bill would preserve existing national security controls on communication satellite exports. 

Title XV of H.R. 1950, as reported by the Committee on International Relations, contained a provision that would permit the 

President to determine what, if any, regulatory regime would be 

used to control the export of communication satellites to NATO and 

non-NATO major allies. In effect, title XV would nullify the national security controls on satellite exports adopted in the Strom 

Thurmond National Defense Authorization Act for Fiscal Year 1999 

(Public Law 105–261) and the National Defense Authorization Act 

for Fiscal Year 2000 (Public Law 106–65). The satellite export provisions in both acts were adopted in response to revelations that 

the People’s Republic of China (PRC) had exploited the export of 

U.S. commercial satellites to the PRC to improve the performance 

of its space launch vehicle and ballistic missile capabilities. Concerned that key aspects of our current military superiority depend 

on maintaining a technical advantage in space capabilities, the 

committee adopted an amendment that would strike title XV from 

H.R. 1950 in order to maintain existing national security controls 

on U.S. satellite exports. 

Second, the committee recommends limiting the applicability of 

a provision in H.R. 1950 that would have transferred the financial 

costs of Department of State airlift requirements to the Department of Defense (DOD). Under current law, the Department of Defense may provide airlift services to other departments and agencies at cost. Section 224 of H.R. 1950 would have authorized the 

Secretary of Defense to provide such services to the Department of 

State below cost, charging the same rate that the United States 

Transportation Command (TRANSCOM) charges internal DOD 

customers. Because air transport is funded through a working capital fund under section 2208 of title 10, United States Code, which 

mandates full recovery of costs, section 224 would force other elements within DOD to pay higher rates in order to make up for any 

discounts provided to the Department of State. After consultation 

with the Committee on International Relations, the Committee on 

Armed Services adopted an amendment to section 224 so that the 

Department of State could only receive discounted airlift rates for 

the transport of armored motor vehicles. The committee understands that the Department of State would only seek such reduced 

rates in conjunction with the overseas travel of the Secretary of 

State himself. The amendment enables the Department of Defense 

4

to support limited Department of State needs, which cannot otherwise be met through routine Department of State procurement of 

commercial air transportation services. In doing so, the provision 

would ensure that limited military airlift resources remain available for military missions. 

Third, the committee recommends striking section 227 of H.R. 

1950, which would establish a security capital cost sharing fund 

controlled by the Department of State but funded, in part, by other 

departments and agencies with an overseas presence. As reported 

by the Committee on International Relations, section 227 would authorize the Secretary of State to assess and collect mandatory fees 

from all federal departments based on their total overseas presence. The Secretary of State would then use those funds to accelerate the construction or modernization of roughly 150 embassies 

and address security limitations at overseas facilities. 

The provision raised several concerns. First, although the Department of State developed the concept as part of the President’s ‘‘freedom to manage’’ initiative, the security capital cost sharing 

program fund has not been completely vetted, adopted, or endorsed 

in the interagency process or by the President. The committee understands that the Department of Defense has registerd concerns 

over the proposal with the Office of Management and Budget. 

Moreover, section 227 would not begin the cost sharing program 

until fiscal year 2005. Thus, it appears premature. Second, responsibility for security at its embassies is, ultimately, the responsibility of the Department of State, which is fully capable of seeking 

specific authority and funding from Congress for any construction 

or security improvements it deems necessary through the normal 

authorization and appropriations processes. Section 227 would negate the normal legislative process and, by arbitrarily moving 

funds from multiple departments to the Department of State, undermine Congressional responsibility for authorizing and appropriating funds for the activities of the federal government. Third, 

section 227 contained no ceiling on fees that the Secretary of State 

might impose on other government agencies and gave those agencies no authority over expenditure of funds appropriated to them 

but remitted to the Department of State. As a result, section 227 

contained no incentive for the Department of State to exercise due 

diligence in management of the security capital cost sharing fund; 

it simply moved responsibility for financing Department of State 

activities into the budgets of other departments and agencies. At 

a time when the Department of Defense is assessing how to reduce 

spending on its own overseas facilities, the committee believes it is 

inappropriate for the defense budget to take responsibility for the 

financing of embassy construction. Finally, the provision does not 

offset fees based on the value of goods and services that other departments and agencies provide to the Department of State. Defense attaches, for example, routinely report the results of their 

discussions with foreign military services to ambassadors and country desk officers at the Department of State, improving their ability 

to perform diplomatic missions. Similarly, the Department of Defense provides secure courier services to the Department of State 

at no cost. For these reasons, the Committee on Armed Services 

recommends striking section 227. However, because committee 

members agreed with the importance of improving security at DeVerDate Jan 31 2003 01:36 Jul 03, 2003 Jkt 019006 PO 00000 Frm 00008 Fmt 6659 Sfmt 6602 E:\HR\OC\HR105P3.XXX HR105P3
5

partment of State facilities, the committee adopted an amendment 

by Mr. Skelton directing the General Accounting Office to review 

the Department of State’s cost-sharing proposal and identify means 

by which the Department of State’s needs might be met. 

Section 701 of H.R. 1950, as reported by the Committee on International Relations would repeal reporting requirements related to 

the U.S. military presence in Bosnia established by the 1998 Supplemental Appropriations and Rescissions Act and the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999. 

Those laws required the Departments of State and Defense to report regularly to Congress on progress made in developing a sustainable peace process in Bosnia, giving Congress a means of continually gauging the need for U.S. military deployments in Bosnia 

and encouraging the Executive Branch to continue its diplomatic 

efforts to reduce the need for those deployments. In considering 

and passing H.R. 1588, the National Defense Authorization Act for 

Fiscal Year 2004, the committee recommended repealing 65 reports 

required by existing law. It did not recommend repealing the Bosnia benchmarks report. Therefore, Section 701 of H.R. 1950 would 

essentially reverse considered decisions by Congress to require 

those reports in the first place, and the position of the Committee 

on Armed Services and House of Representatives in deciding not to 

repeal them as part of the fiscal year 2004 defense authorization 

bill. Therefore, after consultation with the Committee on International Relations, the Committee on Armed Services adopted an 

amendment that would strike section 701 from the bill. 

LEGISLATIVE HISTORY

H.R. 1950 was introduced on May 5, 2003 and was referred to 

the Committee on International Relations. The bill was reported 

(amended) May 16, 2003 by the Committee on International Relations (H. Rept. 108–105, Part I). The bill was also referred jointly 

and sequentially to the Committee on Armed Services, the Committee on Energy and Commerce, and the Committee on the Judiciary on May 16, 2003. 

On June 26, 2003, the Committee on Armed Services held a 

markup session to consider H.R. 1950 as amended by the Committee on International Relations. The committee adopted the 

amended bill with amendments and reported the same favorably by 

a voice vote. 

SECTION-BY-SECTION ANALYSIS

The following is a section-by-section analysis of those sections of 

H.R. 1950 amended by the Armed Services Committee. 

Section 224.—Reimbursement rate for airlift services provided to the 

Department of State 

Changes to this section would preserve the Defense Department’s 

authority to charge the State Department below-cost reimbursement rates in providing certain air transportation services to the 

Department of State. As amended, this section would not require 

the Secretary of Defense to provide services to the Department of 

State at below-cost reimbursement rates, but would limit the provision of such services to the State Department to those instances 

6

when transport of armored motor vehicles was required. The committee understands that the Department of State would only seek 

those lower rates in conjunction with travel by the Secretary of 

State himself. 

Section 227.—Security capital cost sharing 

As proposed in H.R. 1950, this provision would establish a security capital cost sharing funds program under the control of the 

Secretary of State, but funded through mandatory fees assessed on 

other departments and agencies. The committee amendment would 

delete this section. 

Section 701.—Reports on benchmarks for Bosnia 

As proposed in H.R. 1950, this section would repeal reports on 

progress in achieving a sustainable peace in Bosnia required by the 

Strom Thurmond National Defense Authorization Act for Fiscal 

Year 1999. The committee amendment would delete this section. 

Section 1501.—Export controls on satellites and related items 

Section 1501 would let the President determine whether and how 

satellite exports to NATO or major non-NATO allies should be regulated, ‘‘notwithstanding any other provision of law.’’ The committee amendment would delete this section, thus retaining current 

law with respect to satellite export controls. 

Section 1502.—Mandatory review by Department of State 

As contained in H.R. 1950, this section would establish a process 

for increased State Department scrutiny of satellite launches by 

the People’s Republic of China for U.S. persons. The provision also 

contains Congressional reporting requirements. The committee 

amendment would delete this section. 

Section 1503.—Export restrictions not affected 

This section would direct that nothing in Title XV shall be ‘‘construed’’ to modify other provisions of law relating to restrictions of 

exports, including provisions contained in the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 and the National Defense Authorization Act for Fiscal Year 2000. The committee amendment would delete this section. 

Section 1504.—Definitions 

This section would define those defense services that required increased State Department scrutiny if provided to the People’s Republic of China (PRC) in conjunction with the PRC’s launch of a 

satellite. The committee amendment would delete this section. 

COMMITTEE POSITION

On March 6, 2002, the Committee on Armed Services ordered 

H.R. 2581, as amended, reported to the House with a favorable recommendation by a vote of 44–6, a quorum being present. 

FISCAL DATA

Pursuant to clause 3(d)(2)(A) of rule XIII of the Rules of the 

House of Representatives, the committee attempted to ascertain 

7

annual outlays resulting from the bill during fiscal year 2004 and 

the four following fiscal years. The results of such efforts are reflected in the cost estimate prepared by the Director of the Congressional Budget Office under section 402 of the Congressional 

Budget Act of 1974, which is included in this report pursuant to 

clause 3(c)(3) of rule XIII of the Rules of the House. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the cost estimate prepared by the Congressional Budget Office and submitted pursuant to section 402(a) 

of the Congressional Budget Act of 1974 is as follows:

JUNE 30, 2003. 

Hon. DUNCAN HUNTER, 

Chairman, Committee on Armed Services, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 1950, the Foreign Relations Authorization Act, Fiscal Years 2004 and 2005. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Sunita D’Monte. 

Sincerely, 

DOUGLAS HOLTZ-EAKIN, Director. 

H.R. 1950—Foreign Relations Authorization Act, Fiscal Years 2004 

and 2005 

CBO estimates that H.R. 1950 would authorize appropriations of $32.2 billion for the Department of State and related agencies, and 

for various security and economic assistance programs. Implementing the bill would result in additional discretionary spending 

of $30.5 billion over the 2004–2008 period, assuming appropriation 

of the authorized amounts, CBO estimates. The bill also contains 

several provisions that would affect direct spending and revenues. 

CBO estimates that enacting those provisions would increase direct 

spending by $25 million over the 2006–2008 period and have an insignificant effect on revenues. 

H.R. 1950 also would affect trade in defense articles and services. 

It would give the President authority to control transfers within 

the United States of defense articles and defense services to foreign 

persons. It would lower the standard for violation of arms-export 

regulations and increase certain fines for violations of export controls. In addition, the bill would call for stringent control and scrutiny of the export of missile technology and would authorize the 

President to sanction any foreign governmental entity that the 

President determines has facilitated violations of export controls of 

missile equipment or technology. CBO estimates the trade-related 

provisions would not significantly affect federal spending. 

H.R. 1950 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would impose no costs on state, local, or tribal governments. 

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 1950 is shown in Table 1. For this estimate, 

CBO assumes that the authorized amounts will be appropriated by 

8

the start of each fiscal year and that outlays will follow historical 

spending patterns for existing programs, except as otherwise described. The costs of this legislation fall within budget functions 

050 (national defense), 150 (international affairs), 300 (natural resources and environment), and 800 (general government).

TABLE 1.—BUDGETARY IMPACT OF H.R. 1950, THE FOREIGN RELATIONS AUTHORIZATION ACT, 

FISCAL YEARS 2004 AND 2005 

By fiscal year, in millions of dollars— 

2003 2004 2005 2006 2007 2008 

SPENDING SUBJECT TO APPROPRIATION

Spending Under Current Law for the State Department, 

Related Agencies, and Various Assistance Programs: 

Authorization Level 1, 2 ............................................ 17,937 900 0 0 0 0

Estimated Outlays ................................................... 17,650 7,067 3,117 1,773 995 520

Proposed Changes: 

Estimated Authorization Level ................................. 0 15,221 15,570 476 478 479 

Estimated Outlays ................................................... 0 9,991 13,644 3,945 1,737 1,231 

Spending Under H.R. 1950 for the State Department, 

Related Agencies, and Various Assistance Programs: 

Estimated Authorization Level 1, 2 ........................... 17,937 16,121 15,570 476 478 479 

Estimated Outlays ................................................... 17,650 17,058 16,761 5,718 2,732 1,751

CHANGES IN DIRECT SPENDING

Estimated Budget Authority .................................... 0 * * 5 10 10 

Estimated Outlays ................................................... 0 * * 5 10 10 

NOTE: * = less than $500,000.

1 The 2003 level is the amount appropriated for that year and includes appropriations provided in Public Law 108–11, the Emergency Wartime Supplemental Appropriations Act, 2003. 2 Public Law 106–113, an act making consolidated appropriations for the fiscal year ending September 30, 2000, and for other purposes, authorized appropriations of $900 million for Embassy Security, Construction, and Maintenance in 2004. 

Basis of estimate 

H.R. 1950 would provide a comprehensive two-year authorization 

of appropriations for the State Department and related agencies, 

and it would authorize appropriations for various security and economic assistance programs. In addition, the bill contains several 

provisions that would affect direct spending and revenues. 

Spending subject to appropriation 

CBO estimates that Divisions A and B of H.R. 1950 would authorize appropriations of about $32 billion for the Department of 

State and related agencies and for various security and economic 

assistance programs. CBO estimates that implementing the bill 

would result in additional discretionary spending of $30.5 billion 

over the 2004–2008 period, assuming appropriation of the authorized amounts. 

Division A—Department of State Authorization Act, Fiscal Years 

2004 and 2005. CBO estimates that Division A would authorize appropriations of about $9.3 billion in 2004, $10.7 billion in 2005, and 

$0.1 billion a year over the 2006–2008 period for the Department 

of State and related agencies (see Table 2). It would specifically authorize appropriations of $9.3 billion in 2004, $10.1 billion in 2005, 

and some small amounts over the 2006–2008 period. In addition to 

the costs covered by the specified authorizations, the division contains provisions primarily dealing with international peacekeeping, 

public diplomacy, and personnel, that CBO estimates would require 

additional appropriations of almost $0.9 billion over the 2004–2008 

9

period to implement. CBO estimates that implementing this division would cost almost $19.5 billion over the 2004–2008 period, assuming appropriation of the specified and estimated amounts.

TABLE 2.—ESTIMATED SPENDING SUBJECT TO APPROPRIATION FOR DIVISION A OF H.R. 1950 

By fiscal year, in millions of dollars—

2003 2004 2005 2006 2007 2008

Spending Under Current Law for the State Department 

and Related Agencies: 

Authorization Level 1, 2 ............................................ 9,257 900 0 0 0 0 

Estimated Outlays ................................................... 8,998 3,338 1,649 1,065 657 347 

Proposed Changes: 

Estimated Authorization Level ................................. 0 9,340 10,694 106 108 109 

Estimated Outlays ................................................... 0 6,422 8,534 2,587 1,179 762 

Spending Under Division A of H.R. 1950 for the State 

Department and Related Agencies: 

Estimated Authorization Level 1, 2 ........................... 9,257 10,240 10,694 106 108 109 

Estimated Outlays ................................................... 8,998 9,760 10,183 3,652 1,836 1,109 

1 The 2003 level is the amount appropriated for that year and includes appropriations provided in Public Law 108–11, the Emergency Wartime Supplemental Appropriations Act, 2003. 2 Public Law 106–113, an act making consolidated appropriations for the fiscal year ending September 30, 2000, and for other purposes, 

authorized appropriations of $900 million for Embassy Security, Construction, and Maintenance in 2004. 

International Peacekeeping. Section 113 would authorize the appropriation of $550 million in 2004 and such sums as may be necessary in 2005 for contributions to international peacekeeping activities. Based on information from the Department of State and 

adjusting for inflation, CBO estimates that the department would 

require $560 million in 2005. 

Middle East Broadcasting Network. Section 501 would authorize 

annual grants for a Mideast Radio and Television Network to provide radio and television broadcasts to the Middle East region. 

Under current law, Radio Sawa provides radio programming to the 

Middle East at an annual cost of about $10 million. The Broadcasting Board of Governors (BBG) plans to add a satellite television 

network that would provide news, entertainment, and information 

programs to complement this radio programming. Public Law 108–

11, the Emergency Wartime Supplemental Appropriations Act, 

2003, provided $26 million in 2003 for start-up costs of the network. The bill provides an authorization of appropriations of $47 

million in each of 2004 and 2005 only. Based on information from 

the BBG, CBO estimates that operating costs for this television 

network would be $37 million a year over the 2004–2008 period, 

and the costs for Radio Sawa would continue at about $10 million 

a year. 

Exchange Programs. Section 251 would establish new educational 

and cultural exchange programs and expand existing ones in countries with predominantly Muslim populations. Section 112 would 

authorize the appropriation of $35 million a year for this purpose 

in 2004 and 2005. CBO estimates that continuing these programs 

would cost an additional $112 million over the 2006–2008 period. 

Promotion of Free Media. Section 607 would establish an International Free Media Fund within the department to promote the 

development of free and independent media all over the world. The 

bill would authorize appropriations of $15 million in 2004 for this 

purpose. Section 608 would require the BBG to support free media, 

especially in countries where it is reducing or discontinuing interVerDate Jan 31 2003 01:36 Jul 03, 2003 Jkt 019006 PO 00000 Frm 00013 Fmt 6659 Sfmt 6602 E:\HR\OC\HR105P3.XXX HR105P3
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national broadcasting, and would authorize appropriations of $2.5 

million each year in 2004 and 2005 for this purpose. 

Hardship and Danger Pay Allowances. Section 307 would increase the cap on hardship and danger pay allowances from 25 percent to 35 percent of basic pay for State Department employees 

serving overseas. Based on information from the Department of 

State, CBO estimates implementing this section would cost $8 million to $9 million annually over the 2004–2008 period. 

Office of Global Internet Freedom. Section 524 would authorize 

the BBG to establish an Office of Global Internet Freedom to prevent foreign governments from censoring or jamming the Internet 

and persecuting their citizens who use the Internet. The bill would 

specifically authorize appropriations of $8 million a year in 2004 

and 2005 to establish and operate this office. CBO estimates implementing this section would cost $8 million to $9 million annually 

over the 2004–2008 period. 

Indefinite Authorizations for Currency Fluctuations. Section 

113(c) would authorize the appropriation of such sums as may be 

necessary in 2004 to compensate for adverse fluctuations in exchange rates that might affect contributions to international organizations. Any funds appropriated for this purpose would be obligated and expended subject to certification by the Office of Management and Budget. Currency fluctuations are extremely difficult 

to estimate in advance, and they could result in spending either 

higher or lower than the amounts specifically authorized in the bill 

for contributions to international organizations and programs. 

Therefore, this estimate includes no costs associated with currency 

fluctuations. 

Colin Powell Center for American Diplomacy. Section 230 would 

authorize the Secretary of State to establish the Colin Powell Center for American Diplomacy at the Harry S. Truman Building in 

Washington, DC. According to the Department of State, it would 

establish the center through a partnership with the nonprofit Foreign Affairs Museum Council (FAMC). The department would provide the space, staff, and security for the center, while FAMC 

would provide funding from private sources. A feasibility study is 

currently underway, and the department was unable to provide details that would allow CBO to estimate the operating costs of the 

center. 

Reporting Requirements. Division A includes several provisions 

that would expand or introduce new reporting requirements. Combined, these provisions would raise spending subject to appropriation by about $2 million annually, but each provision would likely 

cost less than $500,000 a year. 

Miscellaneous Provisions. CBO estimates that the following sections of Division A would have an insignificant impact on spending 

subject to appropriation: 

• Section 206 would authorize a demonstration program in library sciences to help foreign governments improve literacy and 

public education in their countries by establishing or upgrading 

public library systems. 

• Section 224 would reduce by about half the reimbursement 

rate paid by the Department of State to the Department of Defense 

(DoD) for transporting armored vehicles by air. Over the 2000–

2002 period, the department reimbursed DoD an average of $2 milVerDate Jan 31 2003 01:36 Jul 03, 2003 Jkt 019006 PO 00000 Frm 00014 Fmt 6659 Sfmt 6602 E:\HR\OC\HR105P3.XXX HR105P3
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lion a year. Based on this information, CBO estimates that implementing this section would save the department $1 million a year, 

which would be offset by additional costs to DoD of the same 

amount. • Section 301 would authorize an exchange program for the assignment of civil and foreign service employees to fellowship positions in foreign governments, and the reciprocal assignment of foreign government employees as fellows in the department. • Section 302 would clarify the department’s authority to settle 

claims of back pay and other administrative claims and grievances. • Section 310 would give the department greater flexibility in 

awarding meritorious step increases in salaries. • Section 504 would authorize the BBG to conduct a pilot program to promote travel and tourism by broadcasting information on 

regions of the United States that rely on tourism. • Subtitle C of title V would transfer all functions and assets of 

the BBG and the International Broadcasting Bureau to a new independent agency named the International Broadcasting Agency. 

Division B—Defense Trade and Security Assistance Reform Act 

of 2003. Division B would tighten regulation of trade in defense 

and dual-use articles and technologies and authorize funding for 

various security assistance programs (see Table 3). Unlike Division 

A, which provides a comprehensive two-year authorization of appropriations of foreign relations authorizations, this division would 

authorize funding for various programs, projects, and activities 

through specific and indefinite authorizations of appropriation or 

through earmarks of funds not authorized elsewhere in the bill. For 

this estimate, CBO treats these earmarks as authorizations of appropriations since there are no amounts authorized for the programs in general. CBO estimates that implementing Division B 

would cost $3.6 billion in 2004 and $11.1 billion over the 2004– 2008 period, assuming the appropriation of the necessary amounts.

TABLE 3.—ESTIMATED SPENDING SUBJECT TO APPROPRIATION FOR DIVISION B OF H.R. 1950 

By fiscal year, in millions of dollars—

2003 2004 2005 2006 2007 2008 

Spending Under Current Law for Various Security Assistance Programs: 

Budget Authority 1 ................................................... 8,680 0 0 0 0 0 

Estimated Outlays ................................................... 8,652 3,729 1,468 708 339 173 

Proposed Changes: 

Estimated Authorization Level ................................. 0 5,881 4,876 370 370 370 

Estimated Outlays ................................................... 0 3,569 5,110 1,359 558 470 

Spending Under Division B of H.R. 1950 for Various Security Assistance Programs 

Estimated Authorization Level 1 .............................. 8,680 5,881 4,876 370 370 370 

Estimated Outlays ................................................... 8,652 7,298 6,578 2,067 897 643 

1 The 2003 level is the amount appropriated for that year and includes appropriations provided in Public Law 108–11, the Emergency Wartime Supplemental Appropriations Act, 2003. 

Security Assistance and Related Provisions. Title XIII would authorize the appropriation of $4.4 billion for foreign military financing and $91.7 million for international military education and 

training in 2004. 

Sections 1321 and 1322 would authorize foreign military financing and Economic Support Fund appropriations for Israel and 

Egypt through 2005. The sections would specify formulas that 

12

would continue through 2005 the gradual reduction of economic assistance to those two countries and the increase in foreign military 

financing for Israel begun in 1999. For Israel, section 1321 would 

authorize foreign military financing of $2.160 billion in 2004 and 

$2.220 billion in 2005, and Economic Support Fund appropriations 

of $480 million in 2004 and $360 million in 2005. For Egypt, section 1322 would authorize foreign military financing for Egypt of 

$1.3 billion in both 2004 and 2005 and Economic Support Fund appropriations of $575 million in 2004 and $535 million in 2005. Section 1337 would authorize the appropriation of $60 million a year for the nonproliferation fund in 2004 and 2005 and $25 million a year in 2004 and 2005 to secure highly enriched uranium in 

the states of the former Soviet Union. 

Missile Threat Reduction Assistance. Title XIV would authorize 

the appropriation of $250 million for assistance to countries that 

agree to destroy their ballistic missiles and their facilities for producing those missiles. Under the bill, the President would determine the terms and conditions for providing the assistance which 

could be economic or military in character. For this estimate, CBO 

assumes the funds would be appropriated at the rate of $50 million 

a year over the 2004–2008 period, consistent with report language 

accompanying the bill, and the rate of spending would be comparable to that for the Former Soviet Union Threat Reduction. 

Belarus. Title XV would authorize the appropriation of such 

sums as may be necessary in 2004 and 2005 for assistance and 

radio broadcasting to promote the development of democracy and 

civil society in Belarus. The assistance could be used to develop 

democratic parties, nongovernmental organizations, an independent broadcasting and print media, or to observe elections. 

Based on information from the State Department, CBO estimates 

that funding for such assistance in Belarus would continue at the 

2003 level of $10 million each year. Based on information from the 

BBG, CBO further estimates that funding for international broadcasting to Belarus would double to $3 million a year, for an increase of $1.5 million each year over the amount authorized in Division A of the bill. 

Israeli-Palestinian Peace Enhancement Act. Title XVI would express the sense of the Congress with respect to U.S. recognition of 

a Palestinian state and express a willingness to provide substantial 

economic and humanitarian assistance to such a state. It would authorize the appropriation of such sums as may be necessary to promote the economic and civil development of a Palestinian state. 

However, the President must certify a binding peace agreement between Israel and the Palestinians has been achieved under a set 

of conditions before any assistance may be provided to a Palestinian state. The President may waive the certification and the restrictions would not apply to humanitarian or development assistance provided to nongovernmental organizations for the benefit of 

the Palestinian people. CBO estimates that implementing title XVI 

would cost $0.8 billion over the 2004–2008 period, assuming the 

appropriation of the necessary amounts. The estimate assumes 

that funding in 2004 would continue at the 2003 rate and would 

increase to over $0.3 billion a year over the 2006–2008 period. 

It is difficult to estimate the cost of implementing title XVI because of the uncertainty over when or whether Israel and the PalVerDate Jan 31 2003 01:36 Jul 03, 2003 Jkt 019006 PO 00000 Frm 00016 Fmt 6659 Sfmt 6602 E:\HR\OC\HR105P3.XXX HR105P3
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estinians may reach an agreement recognizing a two-state solution 

to peace in the Middle East region. Under the roadmap to a permanent two-state solution, as outlined by the State Department on 

April 30, 2003, the goal would be a permanent status agreement 

in 2005. CBO estimates that substantially increased funding for 

the Palestinian people could begin by that year. 

Neither the bill nor the Committee report accompanying the bill 

provide much guidance for interpreting the intent of the phrase 

‘‘substantial economic and humanitarian assistance.’’ For the purpose of the estimate, CBO assumes that funding in 2004 for West 

Bank/Gaza in the Economic Support Fund would continue at the 

$75 million funding level appropriated for 2003 and triple to $225 

million in 2005. For the 2006–2008 period, we assume that the 

funding for a Palestinian state would be increased by the $95 million that the United States has in the past contributed for assistance to the Palestinian people through the United Nations Relief 

and Works Agency for Palestinian Refugees. That increase would 

raise funding to $320 million a year. In the past, breakthrough 

agreements such as the Camp David accords and peace with Jordan have been followed by bilateral assistance appropriations of 

billions or many hundreds of millions of dollars. Funding after a 

true peace agreement between Israel and the Palestinians could be 

much higher than CBO estimates. Without an agreement, funding 

would be much lower. 

Miscellaneous Provisions. Title XVII contains a number of provisions that would authorize appropriations for various economic and 

security assistance programs. They include: 

• Section 1703 would authorize $2 million a year in 2004 and 

2005 for a cooperative development program with Israel. 

• Section 1706 would authorize $25 million a year in 2004 and 

2005 for economic assistance for East Timor. 

• Section 1707 would authorize $15 million a year in 2004 and 

2005 for grants to individuals and groups supporting democracy 

building efforts in Cuba. 

• Section 1709 would authorize $18.6 million a year in 2004 and 

2005 for a Congo Basin forest partnership program. 

• Section 1710 would authorize $10 million for programs to provide equipment and training to law enforcement officials, prosecutors, and judges in foreign countries in interpreting intellectual 

property laws and in complying with obligations under various 

international copyright and intellectual property treaties and 

agreements. 

• Section 1711 would authorize assistance to law enforcement 

agencies in India and Ireland in 2004 and 2005. Based on information from the State Department, CBO estimates that implementing 

the provision would cost $3 million each year, assuming the appropriation of the necessary funds. 

• Section 1712 would authorize $24 million in 2004 and such 

sums as may be necessary in 2005 for the human rights and democracy fund administered by the Department of State. Based on 

information from the Department of State, CBO estimates funding 

in 2005 would continue at the level specified for 2004. 

• Section 1715 would authorize the appropriation of $1 million 

in 2004 and such sums as may be necessary in 2005 for a grant 

14

to the African Society for programs in Africa. CBO estimates funding in 2005 would continue at the level specified for 2004. 

Direct spending and revenues 

CBO estimates that several provisions in the bill would increase 

direct spending or have an insignificant effect on receipts. 

Transfer of Defense Articles in the U.S. War Reserve Stockpile 

for Allies (USWRSA). Section 1332 would extend for five years the 

President’s authority to transfer to Israel obsolete or surplus defense articles in the USWRSA in Israel in return for concessions 

to be negotiated by the Secretary of Defense. The concessions may 

include cash, services, waiver of charges otherwise payable by the 

United States, or other items of value. Since articles may be transferred by sale under current law, CBO estimates that the authority 

provided by the section could be used to negotiate noncash concessions thereby lowering offsetting receipts to the DoD. 

According to DoD, much of the materiel in the USWRSA in Israel 

was used in the recent Iraq conflict and the department is conducting a new inventory to determine what stocks remain. DoD 

also indicates that the existing authority has not been used for 

Israel in the past, though similar authority has been used for the 

stockpile in Korea. Given the current status of the USWRSA in 

Israel, CBO estimates the authority would not be used in 2004 and 

probably not in 2005. If the authority provided in section 1332 were 

used to the same extent as that for the stockpile in Korea, CBO 

estimates forgone receipts would total between $5 million and $10 

million a year over the 2006–2008 period. 

Colin Powell Center for American Diplomacy. Section 230 would 

authorize the Secretary to provide museum visitor and educational 

outreach services at the center and to sell, trade, or transfer documents and articles that are displayed at the center. Any proceeds 

generated from these services or sales would be retained and spent 

by the center. CBO estimates that this provision would have an insignificant net effect on direct spending. 

Arms Export Controls. Provisions in titles XI and XII would revise licensing requirements for the export of certain defense articles and technology and would lower the standard and increase 

fines for violations of export controls. CBO estimates implementing 

the provisions would have an insignificant effect on receipts and direct spending. 

Intergovernmental and private-sector impact: H.R. 1950 contains 

no intergovernmental or private-sector mandates as defined in 

UMRA and would impose no costs on state, local, or tribal governments. 

Previous CBO estimates 

On April 24, 2003, CBO transmitted a cost estimate for S. 925, 

the Foreign Relations Authorization Act, Fiscal Year 2004, as ordered reported by the Senate Committee on Foreign Relations on 

April 9, 2003. Several sections in Division A of H.R. 1950 are similar or identical to sections of S. 925 and would have similar costs. 

(The Senate bill would authorize appropriations only for 2004, 

whereas H.R. 1950 would authorize appropriations for 2004 and 

2005.) 

On June 9, 2003, CBO transmitted an estimate for S. 1161, the 

Foreign Assistance Authorization Act, Fiscal Year 2004, as reVerDate Jan 31 2003 01:36 Jul 03, 2003 Jkt 019006 PO 00000 Frm 00018 Fmt 6659 Sfmt 6602 E:\HR\OC\HR105P3.XXX HR105P3
15

ported by the Senate Committee on Foreign Relations on May 29, 

2003. Several sections in Division B of H.R. 1950 are similar or 

identical to sections of S. 1161 and would have similar costs; however, the Senate bill would provide a more comprehensive authorization of appropriations for economic and security assistance programs in 2004. 

On June 11, 2003, CBO transmitted a cost estimate for H.R. 

1950, the Foreign Relations Authorization Act, Fiscal Years 2004 

and 2005, as reported by the House Committee on International 

Relations on May 16, 2003. Both versions of the bill have similar 

or identical sections and would have similar costs; however, H.R. 

1950 as ordered reported by the House Committee on Armed Services does not include provisions affecting cost-sharing for the construction of new diplomatic facilities and export controls on satellites. 

Estimate Prepared by: 

Federal Costs: State Department: Sunita D’Monte, Security 

Assistance and Foreign Aid: Joseph C. Whitehill. 

Impact on state, local, and tribal governments: Victoria Heid 

Hall. 

Impact on the Private Sector: Patrice L. Gordon. 

Estimate approved by: Paul R. Cullinan, Chief for Human Resources Cost Estimates Unit of the Budget Analysis Division. 

COMMITTEE COST ESTIMATE

Pursuant to clause 3(d) of rule XIII of the Rules of the House of 

Representatives, the committee generally concurs with the estimate 

contained in the report of the Congressional Budget Office. 

OVERSIGHT FINDINGS

With respect to clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, this legislation results from hearings 

conducted by the committee pursuant to clause 2(b)(1) of rule X. 

With respect to clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives and section 308(a)(1) of the Congressional 

Budget Act of 1974, this legislation does not include any new 

spending or credit authority, nor does it provide for any increase 

or decrease in tax revenues or expenditures. The fiscal features of 

this legislation are addressed in the estimate prepared by the Director of the Congressional Budget Office under section 402 of the 

Congressional Budget Act of 1974. 

With respect to clause 3(c)(4) of rule XIII of the Rules of the 

House of Representatives, the committee amendments do not authorize specific program funding. However, the committee amended 

section 224 relating to the reimbursement rate for airlift services 

provided to the Department of State to ensure the fiscal integrity 

of the working capital fund established pursuant to 10 U.S.C. 2208. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the committee finds the authority for this legislation in Article I, section 8 of the United States Constitution. 

16

STATEMENT OF FEDERAL MANDATES

Pursuant to section 423 of Public Law 104–4, this legislation contains no federal mandates with respect to state, local, and tribal 

governments, nor with respect to the private sector. Similarly, the 

bill provides no unfunded federal intergovernmental mandates.

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported by the Committee on International Relations, are 

shown in Report 108–105 part 2, filed on June 11, 2003.

The Committee on the Armed Services adopted amendments 

(shown at the beginning of this report) to the bill as reported by 

the Committee on International Relations. Changes in provisions of 

existing law that would result from those amendments and differ 

from the changes that would result from the bill as reported by the 

Committee on International Relations are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new 

matter is printed in italic, existing law in which no change is proposed is shown in roman): 

TITLE 10, UNITED STATES CODE 

* * * * * * *

Subtitle A—General Military Law 

* * * * * * *

PART IV—SERVICE, SUPPLY, AND PROCUREMENT 

* * * * * * *

CHAPTER 157—TRANSPORTATION

Sec. 

2631. Supplies: preference to United States vessels. 

* * * * * * *

ø2642. Reimbursement rate for airlift services provided to Central Intelligence 

Agency.¿

2642. Airlift services provided to Central Intelligence Agency and Department of 

State: reimbursement rate.

* * * * * * *

ø§ 2642. Reimbursement rate for airlift services provided to 

Central Intelligence Agency¿

§ 2642. Airlift services provided to Central Intelligence Agency and Department of State: reimbursement rate

(a) AUTHORITY.—The Secretary of Defense may authorize the use 

of the Department of Defense reimbursement rate for military airlift services øprovided by a component of the Department of Defense to the¿ provided by a component of the Department of Defense 

as follows: 

17

(1) To the Central Intelligence Agency, if the Secretary of Defense determines that those military airlift services are provided for activities related to national security objectives. 

(2) To the Department of State for the transportation of armored motor vehicles to a foreign country to meet unfulfilled requirements of the Department of State for armored motor vehicles in that foreign country.

* * * * * * *

(18)

ADDITIONAL VIEWS OF REPRESENTATIVE VIC SNYDER 

H.R. 1950, as referred to the Committee on Armed Services, contained Section 227 that authorized a program of capital security 

cost sharing for security and construction of new embassies. Under 

the program, agencies and departments of the government who station personnel overseas in U.S. embassies would have paid the Department of State an amount annually based on the number of personnel stationed in the various diplomatic facilities and the type of 

office space they occupied. These funds would then have been applied to construction of new embassies in future years. 

The Manager’s amendment to the bill struck the capital security 

cost-sharing program authorization provision along with several 

others. I offered a second-degree amendment to the manager’s 

amendment to put the section back in, but with additional safeguards to ensure transparency, fairness, and accountability. My 

amendment was unfortunately rejected by a vote of 25–21, and the 

manager’s amendment was adopted by voice vote. 

It is important to note, first of all, that the capital security costsharing program did not originate as a whim of the State Department to lay its bills off on others departments of the government. 

The 1999 Overseas Presence Advisory Panel report called for such 

a measure as a management tool to encourage agencies to examine 

their presence in diplomatic facilities and align those with their actual needs. Similarly, the President’s Management Agenda 2002 

called for a mechanism to link agency policies, integrate 

‘‘rightsizing’’ into workforce plans, and link the overseas assignment process with construction planning. The cost of an embassy 

is directly linked to its size and security requirements and these, 

in turn, are directly linked to the size of the workforce stationed 

there. It is in our interests, as stewards of the taxpayer dollars, to 

encourage agencies to actually link their requirements with their 

actual overseas presence and, hopefully, reduce the cost of replacing our many inadequate and unsafe embassies. 

A second advantage of the program would have been to accelerate the ongoing program to replace the many woefully inadequate 

and insecure U.S. diplomatic facilities around the world. Over half 

of all U.S. diplomatic facilities are considered to have inadequate 

security. And scarcely a month goes by without another report of 

an attack, attempted attack, or planned attack that was foiled on 

one of our embassies or consulates. In the past, a number of these 

attacks have succeeded and Americans have been killed. These attacks will not stop. There will be future attacks, some of them will 

succeed, and Americans will be killed. The chances of this happening are a lot higher if we continue on the current path versus 

adopting the capital security cost-sharing program and accelerating 

the replacement of insecure facilities. I am afraid that the Committee’s action, if allowed to become law, will continue us on the curVerDate Jan 31 2003 05:09 Jul 03, 2003 Jkt 019006 PO 00000 Frm 00022 Fmt 6604 Sfmt 6604 E:\HR\OC\HR105P3.XXX HR105P3
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rent path of slowly replacing these facilities, over 26 years instead 

of 14 under the capital security cost sharing plan, and risking the 

lives of the dedicated Americans who serve our government overseas. 

VIC SNYDER. 

(20)

DISSENTING VIEWS OF REPRESENTATIVE ELLEN O. 

TAUSCHER 

I am deeply concerned that while the Armed Services Committee 

usually tries to craft legislation that strengthens national security 

and sustains American technological leadership, the committee’s 

decision to strike language relating to the export of satellites in the 

State Department Authorization bill was both misguided and 

harmful to U.S. interests. 

The short debate regarding satellite export controls preceding the 

vote focused extensively on the 1996 incident in China involving 

Loral and Hughes but had little to do with the substance of Title 

XV, the section of the bill before the committee that dealt with 

NATO and major non-NATO allies of the United States. The debate 

also ignored the larger opportunity the committee had before it to 

take a modest step toward reforming the United States’ satellite 

export control regime which remains dangerously out of sync with 

developments in satellite technology. 

While the transfer of licensing authority to the State Department 

in 1998 is not the only reason for the dismal state of the commercial satellite market today, the slow review process of licenses at 

State is undermining an industry we used to dominate at a time 

when the nation’s economy is in a major slump. 

Indeed, the market share of the U.S. industry for internationally 

competed orders fell from a historic seventy-five percent in the 

early 1990s to less than fifty percent in 1999 and 2000. So far, 

2003 is a disastrous year for industry as well. 

Commercial satellites provide cell phone and internet access as 

well as vital information to businesses and help protect Americans 

at home and abroad. They also offer video, data and voice service 

to millions of users around the world. 

They should not be subjected to the same convoluted, archaic and 

paper regulatory processes as weapons. 

The language in Title 15 was tightly focused on providing the 

President with urgently needed authority to determine the appropriate process for licensing commercial communication satellites to 

our NATO allies. 

It maintained all the national security safeguards put in place in 

1998 including: tight restrictions on satellite activities with China; 

a ban on launches in China; DoD cradle-to-grave monitoring of 

interactions with any foreign nationals; Tiananmen sanctions; 

launch vehicles licensing; and technology control plans. 

Finally this Presidential authority did not apply to military, scientific, weather and remote sensing satellites that all remain under 

the jurisdiction of the State Department. 

Our national security is closely linked to our technological leadership which guarantees the military advantage we have today. 

21

But our national security is being undermined by a sick industry 

that is falling behind its European competition in the world market. 

This decline will hurt the men and women that are working to 

produce our defense and intelligence satellite systems. With extensive national security safeguards in place, the President should 

have the authority to decide how to regulate commercial satellites. 

This small reform would remove some of the unpredictability and 

time lag that is involved in the State Department’s review, which 

irresponsibly regards all satellite technology as sensitive and controlled, irrespective of its use, its intended recipient, or its availability from non-U.S. sources. 

The President has the authority to determine the licensing regime for our most lethal military weapons—that authority should 

be extended to commercial satellites. 

By voting to strike Title XV of the State Department bill, this 

committee is abrogating its oversight of international developments 

that are having a significant impact on the United States’ security 

and economy and has lost the opportunity to make itself part of a 

thoughtful solution to this serious problem.

ELLEN O. TAUSCHER.

Æ