69–010 

Calendar No. 1093 

110TH CONGRESS REPORT " ! SENATE 2d Session 110–510 

ENHANCED PARTNERSHIP WITH PAKISTAN ACT OF 2008 

SEPTEMBER 26 (legislative day, SEPTEMBER 17), 2007.—Ordered to be printed 

Mr. DODD, from the Committee on Foreign Relations, 

submitted the following 

R E P O R T 

[To accompany S. 3263] 

The Committee on Foreign Relations, having had under consideration the bill S. 3263, to authorize appropriations for fiscal years 

2009 through 2013 to promote an enhanced strategic partnership 

with Pakistan and its people, and for other purposes, reports favorably thereon and recommends that the bill do pass. 

CONTENTS 

Page 

I. Purpose ........................................................................................................... 1 

II. Committee Action .......................................................................................... 1 

III. Discussion ....................................................................................................... 1 

IV. Cost Estimate ................................................................................................. 3 

V. Evaluation of Regulatory Impact .................................................................. 6 

VI. Changes in Existing Law .............................................................................. 6 

I. PURPOSE

The purpose of this legislation is to authorize appropriations for 

fiscal years 2009 through 2013 to promote an enhanced strategic 

partnership with Pakistan and its people. 

II. COMMITTEE ACTION

S. 3263 was introduced on July 15, 2008 by Senators Biden and 

Lugar. At a meeting on July 29, 2008, by unanimous voice vote, the 

committee ordered the bill favorably reported, without amendment. 

III. DISCUSSION

S. 3263, the Enhanced Partnership with Pakistan Act of 2008, 

seeks to transform the relationship between the United States and 

Pakistan from a transactional, tactically-driven set of short-term 

exercises in crisis-management, into a deeper, broader, long-term 

strategic engagement. The legislation aims to properly balance the 

relationship between United States and Pakistan by acknowledging 

and supporting the national security interests of the United States 

as well as the economic and geo-political interests. United States 


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economic and military assistance for Pakistan enhances our mutual 

security while helping to build a more economically and politically 

stable country important in a regional and strategic sense. Economic assistance is as critical an element as strengthening the capacity of the Pakistan military to counter terrorism, especially for 

projects that provide direct and concrete benefit to Pakistani citizens as a whole. The overall level of economic assistance authorized 

would be raised substantially, with the bulk of this aid intended for 

projects such as schools, roads, medical clinics, and infrastructure 

development. 

The significant increase in assistance authorized by this legislation is intended to broaden and deepen non-military programs 

across a country of some 170 million people, where less than 50 

percent of the population can read and write and whose Global 

Hunger Index ranking is nearly on par with that of North Korea. 

The legislation highlights the essential economic assistance pillar 

to achieve mutual goals of improved human security through basic 

services, education, economic opportunity, political participation 

and human rights. The legislation contains Sense of Congress language urging that security-related assistance be provided in close 

coordination with the Government of Pakistan, designed to improve 

the Government’s capabilities in areas of mutual concern, and 

maintained at a level that will bring significant gains in 

counterterrorism, counterinsurgency, and regional harmony. The 

legislation does not preclude an increase or a decrease in the level 

of security-related aid. 

The legislation mandates that funds appropriated or otherwise 

made available to carry out section 5 shall be utilized to the maximum extent possible as direct expenditures for projects and programs. It does not preclude the use of some portion of the authorized funds for temporary budgetary support (for example, in order 

to help the Government of Pakistan deal with economic crises resulting from sudden increases in the price of food and fuel), but the 

intent of the legislation is to shift most Economic Support Funds 

from budgetary support to direct expenditures for projects and programs with effective United States oversight of such assistance. 

The legislation permits up to 7 percent of the funds authorized 

to be used for administrative expenses of Federal departments and 

agencies in connection with the provision of assistance authorized 

by this section, or to be made available to the Inspector General 

of the United States Agency for International Development to provide audits and program reviews of projects funded pursuant to 

this section. It is the intent of this legislation that this provision 

provides important flexibility to the U.S. Agency for International 

Development, which has a limited overall budget for operational 

expenses. Given the magnitude of the assistance and the critical 

nature of the purpose of such funds, the Committee expects that 

the Agency will, however, endeavor to keep administrative expenses to a minimum, while at the same time, the Committee also 

expects that sufficient program funds will be made available, pursuant to subsection (f)(2), to the Office of Inspector General (OIG) 

to ensure adequate oversight of all programs. The significant 

growth of economic assistance contemplated by this Act warrants 

close oversight, by the Agency and by OIG. 


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Specifically, the legislation: 

Authorizes $7.5 billion over the next 5 fiscal years ($1.5 billion annually) under the Foreign Assistance Act. Advocates an 

additional $7.5 billion over the subsequent 5 years, subject to 

improvements in the political and economic climate; and 

Conditions military grant assistance and Foreign Military 

Financing assistance beginning in 2010, and new military sales 

beginning in 2012, on certification by Secretary of State that 

Pakistani security forces: 

are making concerted efforts to prevent al Qaeda and associated terrorist groups from operating in the territory of 

Pakistan; 

are making concerted efforts to prevent the Taliban from 

using the territory of Pakistan as a sanctuary from which 

to launch attacks within Afghanistan; 

are not materially interfering in the political or judicial 

processes of Pakistan. 

Urges a reorientation of engagement towards the Pakistani 

people rather than merely towards the Pakistani government 

(civilian or military). 

Urges accountability and transparent reporting of Coalition 

Support Funds. 

Directs the Secretary of State (in consultation with other officials) to develop a comprehensive strategy for the AfghanPakistan border area. 

A premise for this plan is a simple thought-exercise: Following 

the earthquake in Kashmir in 2005, the United States devoted 

nearly $1 billion to relief efforts, and reaped a greater reward in 

popular support than any amount of public diplomacy could generate. The sight of American servicemen and women saving the 

lives of Pakistani citizens was worth ten times the cost of operating 

the Chinook helicopters. For a brief period, America was challenging the terrorists in a true battle of hearts and minds-and winning. S. 3263 seeks to recreate such conditions—to materially and 

powerfully demonstrate the true friendship of the American people 

for the Pakistani people—without waiting for a natural (or manmade) disaster. 

IV. COST ESTIMATE

In accordance with Rule XXVI, paragraph 11(a) of the Standing 

Rules of the Senate, the committee provides this estimate of the 

costs of this legislation prepared by the Congressional Budget Office. 


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UNITED STATES CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, September 26, 2008 

Hon. JOSEPH R. BIDEN, JR., 

Chairman, Committee on Foreign Relations, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 3263, the Enhanced Partnership with Pakistan Act of 2008. 

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

to provide them. The CBO staff contact is John Chin. 

Sincerely, 

PETER R. ORSZAG. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

September 26, 2008. 

S. 3263 

Enhanced Partnership With Pakistan Act of 2008 

AS ORDERED REPORTED BY THE SENATE COMMITTEE ON FOREIGN

RELATIONS ON JULY 29, 2008. 

SUMMARY

S. 3263 would authorize the appropriation of up to $1.5 billion 

a year over the 2009–2013 period-a total of up to $7.5 billion over 

five years-for nonsecurity assistance to Pakistan. CBO estimates 

that implementing S. 3263 would cost $344 million in 2009 and 

about $5 billion over the 2009–2013 period, assuming appropriation 

of the authorized amounts. (Additional spending over the 2014– 

2018 period would total about $2.5 billion, CBO estimates.) Enacting the bill would not affect direct spending or revenues. 

S. 3263 contains no intergovernmental mandates as defined in 

the Unfunded Mandates Reform Act (UMRA) and would not affect 

the budgets of state, local, or tribal governments. 

S. 3263 could impose a private-sector mandate, as defined in 

UMRA, on exporters of major defense equipment. If the Secretary 

does not certify that the security forces of Pakistan have met certain security standards by 2012 or does not waive the requirement 

for such certification, the bill would prohibit the export of major defense equipment to Pakistan. CBO cannot determine whether the 

cost of the mandate, if imposed, would exceed the annual threshold 

established in UMRA for private-sector mandates ($136 million in 

2008, adjusted annually for inflation). 

ESTIMATED COST TO THE FEDERAL GOVERNMENT

The estimated budgetary impact of S. 3263 is shown in the following table. The costs of this legislation fall within budget function 150 (international affairs). 


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Changes in Spending Subject to Appropriation by S. 3263 

By Fiscal Year, in Millions of Dollars 

2009 2010 2011 2012 2013 2009– 

2013 

Authorization Level ............. 1,500 1,500 1,500 1,500 1,500 7,500 

Estimated Outlays ............... 344 854 1,098 1,296 1,401 4,993 

BASIS OF ESTIMATE

For this estimate, CBO assumes that S. 3263 will be enacted 

near the start of fiscal year 2009, that the authorized amounts will 

be provided in annual appropriation acts each year, and that outlays will follow historical spending patterns for existing programs. 

Assistance to Pakistan 

Section 5 would authorize the appropriation of up to $1.5 billion 

a year over the 2009–2013 period for assistance programs in Pakistan and would require the administration to prepare annual reports on the implementation of those programs. Those funds would 

be used for projects that promote democratic governance and private-sector growth, and for education, construction of physical infrastructure, and other programs intended to benefit the people of 

Pakistan. Consistent with the bill’s provisions on use of funds, CBO 

assumes that appropriations would be made through Economic 

Support Funds. Assuming appropriation of the authorized 

amounts, CBO estimates that implementing this provision would 

cost about $5 billion over the 2009–2013 period. 

Limitations on Security Assistance 

Section 6 would limit certain military assistance after 2010 and 

arms transfers after 2012 to Pakistan unless the Secretary of State 

certifies that Pakistani security forces are not materially interfering in their country’s judicial or political processes and that they 

are making concerted efforts to prevent terrorists from operating in 

Pakistan or using it as a sanctuary. The bill would allow the Secretary to waive those certification requirements in the interests of 

national security. CBO expects that the Secretary would exercise 

the waiver authority if she were unable to make the necessary certification, and thus, that implementing that section would have no 

significant effect on spending subject to appropriation. 

ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS

S. 3263 contains no intergovernmental mandates as defined in 

UMRA and would not affect the budgets of state, local, or tribal 

governments. 

ESTIMATED IMPACT ON THE PRIVATE SECTOR

S. 3263 could impose a private-sector mandate, as defined in 

UMRA, on exporters of major defense equipment to Pakistan if the 

Secretary of State does not certify that the security forces of Pakistan have met certain security standards by 2012. If the Secretary 

does not issue such certification, the bill would prohibit the necessary licenses and programs for private entities to export major 

defense equipment to Pakistan. The bill would, however, allow the 


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Secretary of State to waive the prohibition of exports of major defense equipment if the Secretary determines it is in the national 

security interest of the United States to provide such waiver. CBO 

assumes that the Secretary would exercise such a waiver. In the 

event that such exports are prohibited, the cost to comply with the 

mandate would be the forgone net income attributed to the sale of 

major defense equipment to Pakistan. According to industry experts and the Defense Security Cooperation Agency, the value of 

major defense equipment exported to Pakistan has varied from 

hundreds of millions of dollars per year to billions of dollars per 

year. Because of this variation, CBO cannot determine whether the 

cost of the mandate, if imposed, would exceed the annual threshold 

established in UMRA for private-sector mandates ($136 million in 

2008, adjusted annually for inflation). 

Estimate Prepared By: 

FEDERAL COSTS: John Chin. 

IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS Melissa 

Merrell. 

IMPACT ON THE PRIVATE SECTOR: Jacob Kuipers. 

Estimate Approved By: 

Theresa Gullo, Deputy Assistant Director for Budget Analysis 

V. EVALUATION OF REGULATORY IMPACT

Pursuant to Rule XXVI, paragraph 11(b) of the Standing Rules 

of the Senate, the committee has determined that there is no regulatory impact as a result of this legislation. 

VI. CHANGES IN EXISTING LAW

In compliance with Rule XXVI, paragraph 12 of the Standing 

Rules of the Senate, the committee has determined that there are 

no changes in existing legislation as a result of this legislation. 

Æ 


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