President’s Budget Request for Fiscal Year 2005

SECRETARY POWELL: Thank you very much, Mr. Chairman. Senator Leahy, thank you for your welcome and for your opening remarks.

And Uncle Ted, it's always a pleasure to see you in attendance, sir.

SENATOR STEVENS: Good to see you.

SECRETARY POWELL: Did you get the Flat Stanley picture I sent you, Uncle? Good.

(Laughter.)

SENATOR STEVENS: I'll tell the committee, he did. He was gracious enough to have his photo taken with my granddaughter's Flat Stanley. If you don't know what a Flat Stanley is, go to his website.

SECRETARY POWELL: To show you how modern we are trying to be at the State Department, my website has a picture of Senator Stevens and me and Senator Hollings and a Flat Stanley. For those of you who don't know what a Flat Stanley is, if you want to yield any part of your five minutes of time, I'll be happy to describe what a Flat Stanley is to you. (Laughter.)

But it's a wonderful children's story about a little boy who gets run over by a steamroller and becomes Flat Stanley, and he travels all over the world in an envelope. And Senator Stevens, in the spirit of the Flat Stanley doll, took Flat Stanley to Asia on a recent trip. I met up with the good Senator in Pakistan and we took a picture of his traveling Stanley, and now children all over the world are going to the State Department website, state.gov for anybody watching, to take a look at Senator Stevens' Flat Stanley.

With that serendipitous opening to my presentation, let me seriously thank all the members of the committee for the support you've provided to me and to the State Department over the last three years. I feel it is a privilege to be able to come before you to express my thanks and also to lay before you what the President has asked for Fiscal Year '05 and what the needs of the Department and the wonderful men and women of the Department need to do their jobs for the American people in Fiscal Year 2005.

I might, before encapsulating my remarks, just say a word about Iraq. Senator McConnell, I did see that poll that you mentioned and they were very interesting numbers. The people of Iraq, what we want for them -- they want what we want for them. They want democracy. They want peace. They are so glad to be rid of this regime that filled mass graves, that murdered people, that had rape rooms and torture rooms. And they are through with it and it isn't coming back.

Now there are these remnants remaining that will be dealt with, and I can assure you of that. And I'll continue when Senator Leahy comes back on the specific comments that the Senator was asking me about or questions he was posing to me. But for other members of the committee, let me just get started with my presentation.

The President's Fiscal 2005 International Affairs Budget Request for the Department of State, USAID and Other Foreign Affairs Agencies totals $31.5 billion, broken down as follows: Foreign Operations, 21.3; State Operations, 8.4; PL-480 Food Aid, 1.2; International Broadcasting, $569 million; and the United States Institute for Peace, $22 million.

President Bush's top foreign policy priority is winning the war on terrorism. Winning on the battlefield with our superb military forces is just one part of this strategy. To eradicate terrorism altogether, the United States must help stable governments and nations that once supported terrorism, like Iraq, like Afghanistan, and we must go after terrorist support mechanisms as well as the terrorists themselves. And we must help alleviate conditions in the world that enable terrorists to find and bring in new recruits.

To these ends, the 2005 Budget will continue to focus on the reconstruction of Iraq and Afghanistan. We will continue to support our coalition partners to further our counterterrorism, law enforcement and intelligence cooperation. And we will continue to expand democracy and help generate prosperity, especially in the Middle East.

Mr. Chairman, 48 percent of the President's Budget for Foreign Affairs supports the war on terrorism. For example, $1.2 billion supports Afghanistan reconstruction, security and democracy-building activities. More than $5.7 billion provides assistance to countries around the world that have joined us in the war on terrorism. Three and a half billion dollars indirectly supports the war on terrorism by strengthening our ability to respond to emergencies and conflict situations. And finally, $190 million is aimed at expanding democracy in the Greater Middle East, which is crucial if we are to attack successfully the motivation of people to engage in terrorism.

Mr. Chairman, two of the greatest challenges confronting us today are the reconstruction of Iraq and Afghanistan. And let me begin with Iraq.

Despite the headlines of the last several days, the Coalition Provisional Authorities and the Iraqi Governing Council have made great strides in the area of security, in the area of economic stability and growth and democratization. Iraqi security forces now comprise more than half of the total security forces in the country. In addition, the CPA has established a new Iraqi army, still an army in its infancy, but an army that will grow and become strengthened in the years ahead. They have issued a new currency, which is very stable, and refurbished and equipped schools and hospitals throughout the country. And as you know, the CPA is taking steps to help the Iraqis form a fully sovereign government this summer. We will keep to this timetable, as the President indicated earlier this week.

But much more work needs to be done. Working with our coalition partners, we will continue to train Iraqi police, border guards, the civil defense corps and the army in order to ensure the country's security as we effect a timely transition to democratic self-governance and to a stable future.

At the same time, we are helping provide critical infrastructure, including clean water, electricity, reliable telecommunications systems. These are all essential for meeting basic human needs, as well as for economic and democratic development within the country.

As a definitive example of this progress, on March 8th, the Iraqi Governing Council formally signed the Transitional Administrative Law, essentially an interim constitution for Iraq, and this was a remarkable milestone. The administrative law recognizes freedom of religion and expression, the right to assemble and to organize political parties, and other fundamentally democratic principles, as well as at the same time prohibiting discrimination of any kind based on gender, nationality or religion.

This is a huge step for the people of Iraq and for the region, a step towards constitutional democracy. It is a step that just a year ago, Iraqis would not have imagined possibly, and with the poll results, the results that Senator Mitchell -- Senator McConnell mentioned earlier, you can see that they now believe that this is a real possibility for them in the future.

The United Nations Secretary General's Special Advisor Lakhdar Brahimi is in Iraq now, having been invited to return by the interim Governing Council, the Iraqi Governing Council. Working with the CPA, he will help the Iraqis to determine what sort of transitional Iraqi government will be developed and to prepare for elections that will be held at the end of this year or early in the next year.

Creating a democratic government in Iraq will be an enormous challenge, but Ambassador Bremer, working with the Iraqi Governing Council, and with the United Nations and our coalition partners, is committed to success, and when the State Department assumes the lead role this summer in representing and managing U.S. interests in Iraq, we will carry on that commitment.

We're already thoroughly involved. I was in Baghdad three weeks ago. I met with Ambassador Bremer, with members of the Iraqi Governing Council, and spoke to some of our troops as well. I know how committed we all are, how committed they all are, and we will succeed.

The recent rise in U.S. and coalition casualties is disquieting. We are saddened at every death, but we will not be dissuaded or driven out, whether we are confronted by an outlaw and his mobs claiming to themselves the mantle of religion, or by disgruntled members of the former tyrants regime, or by foreign terrorists. We will deal with them.

In that way, we are resolute. And, Mr. Chairman, the coalition is resolute. I believe the vast majority of Iraqis feel the same way; the polls indicate such. They want livelihoods. They want security. They want freedom. They want to strive for their nation's democratic future within the best traditions of tolerance and harmony. And that is why we will win.

Mr. Chairman, I know that many of the members are concerned about the transition from CPA under the Department of Defense to a U.S. mission under the State Department. I can tell you that we have made significant progress in planning for this transition and in working on the challenges we will confront.

To make sure we act in accord with your intent, we will be sending a number of members of my staff to the Congress over the coming weeks to brief you and to answer your questions. Before we make our final recommendations to the President, you will be kept fully informed and your advice and counsel will be sought.

Afghanistan is another high priority for this Administration. The United States is committed to helping build a stable and democratic Afghanistan that is free from terror and no longer harbors threats to our security. After we and our coalition partners defeated the Taliban government, we faced the daunting task of helping the Afghan people rebuild their country.

We have demonstrated our commitment to this effort by providing over $3.7 billion in economic and security assistance for Afghanistan since 2001. Through our assistance and the assistance of the international community, the Government of Afghanistan is successfully navigating the transition that began in October 2001.

Afghanistan adopted a constitution earlier this year, and is preparing for democratic national elections this September. With technical assistance from the United States, Afghanistan successfully introduced a new and still stable currency in October 2002, and is working to improve revenue collection in the provinces.

The lives of women and girls are improving as women pursue economic and political opportunities and as girls return to school. Since 2001, the United States has rehabilitated 205 schools and 140 health clinics, and trained fifteen battalions of the Afghan National Army -- battalions that are out now in action helping to secure the countryside.

Also, President Bush’s commitment to demine and repave the entire stretch of the Kabul-Kandahar highway was fulfilled. The road had not been functional for over 20 years. What was once a 30-hour journey can be accomplished in just 5 or 6 hours.

This fundamentally changes all kinds of dynamics within Afghanistan. People can move around. The country can be brought back together with the simple act of completing this road. In the next building season, we will extend the road out to the west, as well as to the north, and try to create a ring road in this Central Asian nation that, then, can connect to the other Central Asian nations: to Pakistan, and through Pakistan, ultimately to India, which will put the Silk Road back into operation after so many years of misuse and no use.

While the Afghanistan of today is very different from the Afghanistan of September 2001, there is still much left to accomplish. In the near term, the United States will assist the Government of Afghanistan in its preparations for elections this September to ensure that they are free and fair.

The 2005 Budget contains $1.2 billion in assistance for Afghanistan, as I mentioned, and that money will concentrate on education, health, infrastructure, and assistance to the Afghan National Army.

For example, the U.S. assistance efforts will focus on rehabilitation and construction of an additional 275 schools, 150 health clinics, all by June 2004, and complete equipping of the 15 Afghan Army battalions, extend the road to Herat, as I mentioned. And I might also mention that last week I attended a donors conference on Afghanistan. It was hosted by our German friends in Berlin. There we raised $4.5 billion for President Karzai's fiscal year budget, 102 percent of what he sought.

So I feel confident of our ability, working with the international community, to continue making progress in the reconstruction of that country.

Mr. Chairman, the challenges we face in Iraq and Afghanistan are hugely complex, daunting and dangerous, and security and stability are two of our greatest needs. It's hard to rebuild with one hand and fight off attacks with the other. But we are making progress and we will continue until we've reached our objective: two countries that are on their way to good governance, tolerance and economic recovery.

Mr. Chairman, as important as waging the war on terrorism is to America, there are many other priorities that are contained within this budget that are vital to our foreign policy agenda. Africa, for example, is high on our foreign policy agenda, particularly with respect to the devastating HIV/AIDS pandemic. When people are dying in the millions, particularly people of working age and younger, it is extremely difficult to make economic improvements in your society, in your country. It is President Bush's intent to fight even more aggressively against the pandemic of HIV/AIDS.

Over the past year, we have worked with Congress to pass legislation laying the groundwork for this fight. Marking our progress, last month, Ambassador Tobias, Secretary Thompson, USAID Administrator Natsios and I rolled out the strategy for this plan and announced the first dispensation of dollars.

Three hundred and fifty million dollars is now being applied to the fight by NGOs and PVOs, private organizations who are working at the grassroots level. As a crucial next step, the 2005 Budget Request expands on the President's plan with $2.8 billion to combat AIDS in the most afflicted countries in Africa and the Caribbean.

Together, the Department of State, USAID and Secretary Thompson, the Department of Health and Human Services, will use the significantly increased resources quickly and effectively to achieve the President's ambitious goals in the fight against global AIDS.

Of course, there are other dimensions of economic success in Africa and around the globe, and they, too, are a part of our foreign policy agenda. For example, an innovative program that you know full well is the Millennium Challenge Account. In February of 2003, we sent the Congress a budget request for the MCA and legislation to authorize a creation of a corporation to administer these monies.

The agency, the corporation designed to support our new and innovative development strategies and to ensure accountability, is now up and running. And as you know, I am the Chairman of the Board of that corporation, Under Secretary Al Larson is the interim CEO, Mr. Paul Applegarth has been nominated by the President to be the approved CEO, and we're waiting for congressional action in his nomination now.

Congress appropriated $1 billion for MCA for 2004. The 2005 Budget Request for $.5 billion makes a significant second year increase to the MCA, and paves the way to reaching the President's commitment of $5 billion in 2006. With these dollars, we will help those countries committed to helping themselves, commitment demonstrated by the fact that their governments govern justly, invest in their people and encourage economic freedom.

Mr. Chairman, these are two important accounts: the HIV/AIDS account and the Millennium Challenge Account. We know that we are asking for significant funding in this second year of their existence. But the world is watching to see whether we are serious about HIV/AIDS, whether we are serious about this new way of providing development assistance, and I strongly encourage that you approve the amounts requested for both HIV/AIDS and for the Millennium Challenge Account.

Of course, Mr. Chairman, gentlemen, we can't deal with any of our foreign policy priorities successfully if State operations are not funded appropriately. I know that such operations are not this subcommittee's specific oversight responsibility, but the full Appropriations Committee will have to consider this funding.

So just to touch on a few things that are of interest to me. First, the Diplomatic Readiness Initiative to hire new foreign and civil service employees. We have had great success in getting wonderful young men and women to apply for the Foreign Service and to come into the Department, and also to apply for the Civil Service and come into the Department. It's the first time in years that we invested in the manpower needs of the Department, and I ask for your continued support for the Diplomatic Readiness Initiative.

We have also had tremendous success with our information technology upgrade, and I'm very proud of what we have done to put the internet in every office everywhere in the world that a State Department officer is located in.

I'm also very pleased that we have done a great job in using the money given to us for securing our embassies. New embassy construction has been accelerated. We are going to bring 150 embassies and consulates up to standards over the next 14 years for a total cost of $17 billion.

We owe our employees a safe environment in which to work, and we want to do more than just protect the embassy, but protect some of the other facilities we occupy in the cities in which we are located, to include schools, places of residence and other facilities that we use.

Mr. Chairman and members of the committee, let me stop, at this point. You have my prepared testimony, and I'm ready for your questions. But before going to those questions, let me just say a word about the strategy that we are pursuing in Iraq, to follow up to Senator Leahy's comments a few moments ago.

The strategy has a number of dimensions to it. First of all, we do believe that the international community must play a significant and important and vital role in our efforts in Iraq. If you look at NATO, 17 of the 26 nations of NATO are in Iraq, standing alongside of us. They can't make as large a military contribution as we can, but they are there within the limits of their capability. That, I think, is a statement of the international community.

When I went to NATO last week for meetings, the NAC, North Atlantic Council, met at the foreign ministers level. We talked about what NATO could do in these two places that are of such interest to us: Afghanistan and Iraq. In Afghanistan, NATO has taken over. NATO has shown its willingness to step forward. NATO is going to expand its presence, as we get closer to the elections.

NATO is also willing to consider a role for itself in Iraq. Afghanistan is its first priority, but they are starting to look at Iraq. And I think that, in due course, we will be able to structure a role for NATO that may add to the number of nations that are there, but more significantly, will give a collective tone, an alliance tone, to what we are doing.

Exactly what that's going to look like, I can't tell you yet. But not one member of the Alliance, not one of the 25 other members of the Alliance, has said, "No, we will not consider it." Many of them are very enthusiastic about it. Some who were not with us a year ago -- France and Germany, to be direct -- are not opposing a NATO role. They're not sure whether they would actually send troops or how they might participate, but they are willing to listen to ideas.

Especially after sovereignty transfers on the 1st of July, I think all sorts of new opportunities open up for NATO to participate, as well as, perhaps, other countries and organizations that are not part of NATO.

We are interested, as we move forward toward the 1st of July and we get deeper into the process of setting up an interim government for the Iraqi people, we want the UN to play a more vital and important role.

I've had conversations with the Secretary General about designating a senior representative of the Secretary General to perform that role, and we are starting to look at what resolution might be appropriate: a new UN resolution that would extend a hand to the new Iraqi government, that would deal with reconstruction activities of the whole international community, that would encourage other nations to get involved, that would structure a role for the United Nations.

We're not resisting the United Nations. The President has said clearly, he's been saying it for quite a while, we want the UN to play a "vital role." And we spend a great deal of time with the UN. I spoke to Lakhdar Brahimi this morning to see how he was doing in Baghdad, and his conversations with respect to the creation of an interim government.

So we want the international community to be involved. We're working on it. The President speaks to the American people on a regular basis about what his intentions area with respect to Iraq.

It is a challenging environment right now because of these remnants, these terrorists, these individuals who don't want to see the Iraqi people achieve their dreams. They are not in this 70 percent and 56 percent and 71 percent you talk about, Senator McConnell, but we're doing this for that 71 percent, for that 70 percent and for that 56 percent. They deserve it, and we're going to see that they get it.

And we're not alone. We have coalition partners with us who are staying the course, even under the most difficult set of circumstances. And I think that over the next days and weeks you will see that our superb armed forces will deal with the threats they are facing, and when these insurgents have been cleared away, and then we can get back on track and continue the work that we have laid out: the creation of an interim government, a UN resolution, involvement of NATO and other organizations in transition from a CPA to an American mission.

Mr. Chairman, members of the committee, let me stop at that point and make myself available for your questions.

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