Order Code RL31311
Report for Congress
Received through the CRS Web
Appropriations for FY2003:
Foreign Operations, Export Financing, and
Related Programs
Updated August 30, 2002
Larry Nowels
Specialist in Foreign Affairs
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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Appropriations are one part of a complex federal budget process that includes budget
resolutions, appropriations (regular, supplemental, and continuing) bills, rescissions, and
budget reconciliation bills. The process begins with the President’s budget request and is
bound by the rules of the House and Senate, the Congressional Budget and Impoundment
Control Act of 1974 (as amended), the Budget Enforcement Act of 1990, and current
program authorizations.
This report is a guide to one of the 13 regular appropriations bills that Congress considers
each year. It is designed to supplement the information provided by the House and Senate
Foreign Operations Appropriations Subcommittees. It summarizes the current legislative
status of the bill, its scope, major issues, funding levels, and related legislative activity. The
report lists the key CRS staff relevant to the issues covered and related CRS products.
This report is updated as soon as possible after major legislative developments, especially
following legislative action in the committees and on the floor of the House and Senate.
NOTE: A Web version of this document with active links is
available to congressional staff at:
[http://www.crs.gov/products/appropriations/apppage.sht
ml].

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Appropriations for FY2003:
Foreign Operations, Export Financing, and
Related Programs
Summary
The annual Foreign Operations appropriations bill is the primary legislative
vehicle through which Congress reviews the U.S. foreign aid budget and influences
executive branch foreign policy making generally. It contains the largest share —
about two-thirds — of total U.S. international affairs spending.
President Bush has requested $16.12 billion for FY2003 Foreign Operations, an
amount 5% higher than regular FY2002 appropriations, but less than enacted FY2002
foreign aid appropriations when amounts allocated from the Emergency Terrorism
Response (ETR) fund and supplemental appropriations (P.L. 107-206; H.R. 4775)
are included. The White House has distributed nearly $1.3 billion in FY2002 from
the $40 billion emergency terrorism supplemental appropriation (P.L. 107-38)
enacted in mid-September 2001 following the September 11, 2001 terrorist attacks.
Congress approved in July an additional $927 million (net rescissions) in FY2002
supplemental Foreign Operations amounts aimed at bolstering homeland security and
fighting terrorism abroad. Combined with funds provided in the regular
appropriation (P.L. 107-115), enacted Foreign Operations spending for FY2002 totals
$17.76 billion.
The FY2003 Foreign Operations proposal increases bilateral U.S. development
assistance by $248 million (+9%), including an additional $165 million, or one-third
more for global HIV/AIDS programs. Other major additions in the FY2003 budget
include 15% more for the Peace Corps, 17% more for the Andean Counternarcotics
Initiative, 22% more for contributions to multilateral development banks, and 11%
more for military assistance, primarily to support countries facing terrorist threats.
Overall, the FY2003 request includes $3.5 billion in aid for “front-line” states in the
war on terrorism. In a few areas, the President’s request cuts spending: Export-
Import Bank appropriations would fall by nearly one-quarter while assistance to
Eastern Europe would drop by 20%.
The Senate Appropriations Committee (S. 2779) has recommended $16.35
billion in FY2003 Foreign Operations funding, $230 million above the request.
Major items added in the Committee’s bill are higher levels for HIV/AIDS and other
health programs, basic education, and assistance for Afghanistan.
Key Foreign Operations issues that are attracting considerable debate this year
include: size and composition of aid to help combat terrorism, including amounts
proposed as an FY2002 supplemental; the President’s pledge to increase U.S.
economic assistance by $5 billion by FY2006 and whether the initiative should begin
immediately; development aid funding priorities, especially the adequacy of U.S.
support for international HIV/AIDS programs and proposed reductions for other
global health programs; funding for family planning programs and eligibility of the
U.N. Population Fund; and assistance to Colombia, especially proposals to expand
aid beyond counter-narcotics to a broader counter-terrorism focus.

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Key Policy Staff
Area of Expertise
Name
Tel.
General: Policy issues & budget
Larry Nowels, Specialist, Foreign Affairs
7-7645
General: Policy issues
Curt Tarnoff, Specialist, Foreign Affairs
7-7656
Afghanistan reconstruction aid
Rhodie Margesson, Analyst, Foreign Affairs
7-0425
Africa Aid
Raymond Copson, Specialist, Intl Relations
7-7661
Agency for Intl Development
Larry Nowels, Specialist, Foreign Affairs
7-7645
Curt Tarnoff, Specialist, Foreign Affairs
7-7656
Andean Regional Initiative
Larry Storrs, Specialist, Latin American Affairs
7-7672
Debt Relief
Larry Nowels, Specialist, Foreign Affairs
7-7645
Development Assistance
Larry Nowels, Specialist, Foreign Affairs
7-7645
Curt Tarnoff, Specialist, Foreign Affairs
7-7656
Disaster aid
Rhodie Margesson, Analyst, Foreign Affairs
7-0425
Drug/counternarcotics programs
Rensselaer Lee, Analyst, International Affairs
7-7748
Drug/counternarcotics, Colombia
Nina Serafino, Specialist, Intl Security Affairs
7-7667
Export-Import Bank
James Jackson, Specialist, Intl Trade & Finance
7-7751
Family planning programs
Larry Nowels, Specialist, Foreign Affairs
7-7645
Health programs
Rhodie Margesson, Analyst, Foreign Affairs
7-0425
Tiaji Salaam, Analyst, Foreign Affairs
7-7677
HIV/AIDS
Raymond Copson, Specialist, Intl Relations
7-7661
International affairs budget
Larry Nowels, Specialist, Foreign Affairs
7-7645
International Monetary Fund
Jonathan Sanford, Specialist, Intl Political Economy
7-7682
Jeff Hornbeck, Specialist, Intl Trade & Finance
7-7782
Kosovo/Yugoslavia aid
Curt Tarnoff, Specialist, Foreign Affairs
7-7656
Microenterprise
Curt Tarnoff, Specialist, Foreign Affairs
7-7656
Middle East assistance
Clyde Mark, Specialist, Mid-East Affairs
7-7681
Military aid/Arms sales
Richard Grimmett, Specialist, National Defense
7-7675
Multilateral Development Banks
Jonathan Sanford, Specialist, Intl Political Economy
7-7682
North Korea/KEDO
Larry Niksch, Specialist, Asian Affairs
7-7680
Overseas Private Investment Corp
James Jackson, Specialist, Intl Trade & Finance
7-7751
Peace Corps
Curt Tarnoff, Specialist, Foreign Affairs
7-7656
Peacekeeping
Marjorie Browne, Specialist, Intl Relations
7-7695
Refugee aid
Larry Nowels, Specialist, Foreign Affairs
7-7645
Russia/East Europe Aid
Curt Tarnoff, Specialist, Foreign Affairs
7-7656
Terrorism
Rensselaer Lee, Analyst, International Affairs
7-7748
Trafficking in Women/Children
Francis Miko, Specialist, International Relations
7-7670
U.N. Voluntary Contributions
Vita Bite, Analyst, International Relations
7-7662

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Contents
Key Policy Staff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Foreign Operations Funding Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Foreign Operations, the FY2003 Budget Resolution, and Sec.
302(b) Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Foreign Operations Appropriations Request for FY2003 and
Congressional Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Request Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Fighting the war on terrorism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Other key elements of the FY2003 request . . . . . . . . . . . . . . . . . . . . . . 9
Leading Foreign Aid Recipients Proposed for FY2002/FY2003 . . . . . . . . . 11
Congressional Response to the FY2003 Request . . . . . . . . . . . . . . . . . . . . 12
Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Supplemental FY2002 Foreign Operations Funding . . . . . . . . . . . . . . . . . . . . . . 13
Funding Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
DOD’s Role in Military Aid Allocations . . . . . . . . . . . . . . . . . . . . . . . 17
Colombia Aid Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Removal of Restrictions for Other Economic and Military
Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Congressional Action on the Administration’s Supplemental
Foreign Operations Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Major Policy and Spending Issues for FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Foreign Aid as a Tool in the War on Terrorism . . . . . . . . . . . . . . . . . . . . . . 21
Anti-Terrorism Assistance (ATA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Terrorist Interdiction Program (TIP) . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Terrorist Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
USAID Physical Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Aid Restrictions for Terrorist States . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Development Aid Policy Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Family Planning, Abortion Restrictions, and UNFPA Funding . . . . . . . . . 27
UNFPA funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
“Mexico City” policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Andean Regional Initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

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Millennium Challenge Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Selected World Wide Web Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
List of Figures
Figure 1. Foreign Policy Budget, FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Figure 2. Foreign Operations Funding Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
List of Tables
Table 1. Status of Foreign Operations Appropriations, FY2003 . . . . . . . . . . . . . 4
Table 2. Foreign Operations Appropriations, FY1995 to FY2003 . . . . . . . . . . . . 6
Table 3. Summary of Foreign Operations Appropriations . . . . . . . . . . . . . . . . . 10
Table 4. Leading Recipients of U.S. Foreign Aid . . . . . . . . . . . . . . . . . . . . . . . . 12
Table 5. FY2002 Supplemental Compared with Enacted & Requested . . . . . . . 15
Table 6. Funding for USAID Global Health Programs . . . . . . . . . . . . . . . . . . . . 26
Table 7. Foreign Operations: Discretionary Budget Authority . . . . . . . . . . . . . 41

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Appropriations for FY2003:
Foreign Operations, Export Financing,
and Related Programs
Most Recent Developments
On July 18, the Senate Appropriations Committee marked up its version of the
FY2003 Foreign Operations spending bill (S. 2779), approving $16.35 billion. The
amount is about $230 million higher than the President requested and roughly $1
billion more than enacted in the regular FY2002 appropriations. (FY2002 Foreign
Operations Appropriations have grown to $17.76 billion, however, with additional
funds drawn from two supplemental spending bills.)
S. 2779 includes $750 million for international HIV/AIDS programs, $110
million above the request. It also provides $450 million for bilateral family planning
activities and $50 million for the U.N. Population Fund (UNFPA). The President
seeks $425 million for family planning and declared UNFPA ineligible for U.S.
support (see below). S. 2779, however, modifies the terms under which the President
can find an organization in violation of family planning conditions. The Senate
Committee further includes $637 million for the Andean Counternarcotics Initiative,
about $100 million less than requested. The legislation allocates $157 million in
economic aid to Afghanistan, provides full funding for Israel ($2.7 billion), and
increases the request for aid to Eastern Europe and non-proliferation and anti-
terrorism programs. The bill reduces the recommended appropriation for the Peace
Corps.
On August 2, the President signed into law legislation providing supplemental
appropriations for FY2002, including $1.6 billion (net rescissions) in foreign aid to
“front-line” states in the global war on terrorism (P.L. 107-206; H.R. 4775). The
enacted total is over $500 million above the request, with major additions for Israel
($200 million), the Palestinians ($50 million), and HIV/AIDS programs ($200
million). On August 13, however, the President announced that as a cost-saving
action, he would not spend any funds in the FY2002 supplemental designated as
“contingent emergency.” About one-third of the foreign aid funds in the
supplemental are designated as contingent emergency, including amounts for Israel,
Palestinians, and HIV/AIDS, and some aid to Afghanistan and the Philippines.
On July 23, the White House announced that the U.N. Population Fund
(UNFPA) was in violation of Foreign Operation restrictions regarding coercive
family planning programs due to its involvement in programs in China. The
Administration will transfer $34 million to other family planning activities.

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Introduction
The annual Foreign Operations appropriations bill is the primary legislative
vehicle through which Congress reviews and votes on the U.S. foreign assistance
budget and influences executive branch foreign policy making generally.1 It contains
the largest share — about two-thirds — of total international affairs spending by the
United States (see Figure 1). The legislation funds all U.S. bilateral development
assistance programs, managed mostly by the U.S. Agency for International
Development (USAID), together with several smaller independent foreign aid
agencies, such as the Peace Corps and the Inter-American and African Development
Foundations. Most humanitarian aid activities are funded within Foreign Operations,
including USAID’s disaster program and the State Department’s refugee relief
support. Foreign Operations includes separate accounts for aid programs in the
former Soviet Union (also referred to as the Independent States account) and
Central/Eastern Europe, activities that are jointly managed by USAID and the State
Department. Security assistance (economic and military aid) for Israel and Egypt is
also part of the Foreign Operations spending measure, as are smaller security aid
programs administered largely by the State Department, in conjunction with USAID
and the Pentagon. U.S. contributions to the World Bank and other regional
multilateral development banks, managed by the Treasury Department, and voluntary
payments to international organizations, handled by the State Department, are also
funded in the Foreign Operations bill. Finally, the legislation includes appropriations
for three export promotion agencies: the Overseas Private Investment Corporation
(OPIC), the Export-Import Bank, and the Trade and Development Agency.
1 Although the Foreign Operations appropriations bill is often characterized as the “foreign
aid” spending measure, it does not include funding for all foreign aid programs. Food aid,
an international humanitarian aid program administered under the P.L. 480 program, is
appropriated in the Agriculture appropriations bill. Foreign Operations also include funds
for the Export-Import Bank, an activity that is not regarded as “foreign aid,” but as a trade
promotion program. In recent years, funding for food aid and the Eximbank have been
about the same, so that Foreign Operations and the official “foreign aid” budget are nearly
identical. Throughout this report, the terms Foreign Operations and foreign aid are used
interchangeably.

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CRS-3
Figure 1. Foreign Policy Budget, FY2003
For nearly two decades, the Foreign Operations bill has been the principal
legislative vehicle for congressional oversight of foreign affairs and for congressional
involvement in foreign policy making. Congress has not enacted a comprehensive
foreign aid authorization bill since 1985, leaving most foreign assistance programs
without regular authorizations originating from the legislative oversight committees.
As a result, Foreign Operations spending measures developed by the appropriations
committees increasingly have expanded their scope beyond spending issues and
played a major role in shaping, authorizing, and guiding both executive and
congressional foreign aid and broader foreign policy initiatives. It has been largely
through Foreign Operations appropriations that the United States has modified aid
policy and resource allocation priorities since the end of the Cold War. The
legislation has also been a key tool used by Congress to apply restrictions and
conditions on Administration management of foreign assistance, actions that have
frequently resulted in executive-legislative clashes over presidential prerogatives in
foreign policy making.

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CRS-4
Status
Table 1. Status of Foreign Operations Appropriations, FY2003
Subcomm.
Conf. Report
Markup
House
House
Senate Senate
Conf.
Approval
Public
Report Passage Report Passage Report
Law
House Senate
House Senate
7/24
7/16






107-219
President Bush submitted his FY2003 federal budget request to Congress on
February 4, including funding proposals for Foreign Operations Appropriations
programs. Subsequently, on March 21, the White House requested FY2002
emergency supplemental funds for homeland security and combating terrorism
overseas, a proposal that includes assistance to “front-line” states. House and Senate
Appropriations Committees have held a series of hearings on both the FY2003 and
FY2002 supplemental requests, and are engaged in conference discussions for the
supplemental (H.R. 4775). The Senate Appropriations Committee ordered reported
a bill on July 18 (S. 2779).
Foreign Operations Funding Trends
As shown in Figure 2 below, Foreign Operations funding levels, expressed in
real terms taking into account the effects of inflation, have fluctuated widely over the
past 25 years.2 After peaking at over $33 billion in FY1985 (constant FY2003
dollars), Foreign Operations appropriations began a period of decline to $13.8 billion
in FY1997, with only a brief period of higher amounts in the early 1990s due to
special supplementals for Panama and Nicaragua (1990), countries affected by the
Gulf War (1991), and the former Soviet states (1993).
2 Some of these swings, however, are not the result of policy decisions, but due to technical
budget accounting changes involving how Congress “scores” various programs. For
example, the large increase in FY1981 did not represent higher funding levels, but rather the
fact that export credit programs began to be counted as appropriations rather than as “off-
budget” items. Part of the substantial rise in spending in FY1985 came as a result of the
requirement to appropriate the full amount of military aid loans rather than only the partial
appropriation required in the past. Beginning in FY1992, Congress changed how all Federal
credit programs are “scored” in appropriation bills which further altered the scoring of
foreign aid loans funded in Foreign Operations. All of these factors make it very difficult
to present a precise and consistent data trend line in Foreign Operations funding levels.
Nevertheless, the data shown in Figure 2 can be regarded as illustrative of general trends in
Congressional decisions regarding Foreign Operations appropriations over the past 25 years.

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CRS-5
Figure 2. Foreign Operations Funding Trends
Arguing that declining international affairs resources seriously undermined U.S.
foreign policy interests and limited the ability of American officials to influence
overseas events, Clinton Administration officials and other outside groups vigorously
campaigned to reverse the decade-long decline in the foreign policy budget. Foreign
aid spending increased slightly in FY1998, but beginning the following year and
continuing to the present, Foreign Operations appropriations have trended upward
due in large part to the approval of resources for special, and in some cases
unanticipated foreign policy contingencies and new initiatives. While funding for
regular, continuing foreign aid programs also rose modestly during this period,
supplemental spending for special activities, such as Central American hurricane
relief (FY1999), Kosovo emergency assistance (FY1999), Wye River/Middle East
peace accord support (FY2000), and a counternarcotics initiative in Colombia and
the Andean region (FY2000 and FY2002), was chiefly responsible for the growth in
foreign aid appropriations.3 The average annual funding level during the FY1999-
FY2002 period of $16.8 billion represents a level 22% higher than the low point in
Foreign Operations appropriation in FY1997.
3 Foreign Operations appropriations dipped in FY2001, a year in which there was only one,
relatively small ($100 million) supplemental for a global health trust fund, later named the
Global Health Fund to Fight AIDS, Tuberculosis, and Malaria.

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CRS-6
Table 2. Foreign Operations Appropriations, FY1995 to FY2003
(discretionary budget authority in billions of current dollars)
FY95
FY96
FY97
FY98
FY99*
FY00
FY01
FY02 FY03
nominal $s
13.61
12.46
12.27
13.15
15.44
16.36
14.99
17.76
16.12
constant FY03 $s
15.91
14.27
13.77
14.57
16.86
17.42
15.61
18.20
16.12
* FY1999 excludes $17.861 billion for the IMF.
Funding for Foreign Operations programs grew significantly in FY2002
following the terrorist attacks of September 11. As part of a $40 billion emergency
supplemental to fight terrorism enacted in September 2001 (P.L. 107-38), President
Bush and Congress allocated over $1.4 billion for foreign aid activities.4 Congress
approved an additional $927 million Foreign Operations supplemental (P.L. 107-206;
H.R. 4775), bringing amounts for FY2002 to $17.76 billion. This amount is the
largest in nominal terms since FY1985 and the highest in constant terms in 10 years.
Despite the recent trend of increased spending on foreign aid, however, by
historical standards current FY2002 and proposed FY2003 budgets, in real terms, are
relatively low. Except for the lowest point in foreign aid appropriations that occurred
in the mid-1990s, FY2002 and FY2003 are lower, in real terms than for any year
prior to FY1994.
As a share of the entire $2.1 trillion U.S. budget for FY2002, Foreign
Operations currently represents a 0.8% share. As a portion of discretionary budget
authority — that part of the budget provided in annual appropriation acts (other than
appropriated entitlements) — Foreign Operations consumes 2.3%. By comparison,
at the high point of Foreign Operations spending in FY1985, foreign aid funds
represented 2% of the total U.S. budget and 4.6% of discretionary budget authority.
4 Although the entire $40 billion was appropriated in FY2001, nearly all Foreign Operations
funds were not allocated to specific foreign aid programs until after the beginning of
FY2002 on October 1. Amounts are assigned to a specific fiscal year according to the time
at which the money was transferred from the Emergency Response Fund to a program
account.

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CRS-7
Data Notes
Unless otherwise indicated, this report expresses dollar amounts in terms of
discretionary budget authority. The Foreign Operations Appropriations bill
includes one mandatory program that is not included in figures and tables —
USAID’s Foreign Service retirement fund. The retirement fund is scheduled to
receive $45.2 million for FY2003.
In addition, funding levels and trends discussed in this report exclude U.S.
contributions to the International Monetary Fund (IMF), proposals that are enacted
periodically (about every five years) in Foreign Operations bills. Congress
approved $17.9 billion for the IMF in FY1999, the first appropriation since
FY1993. Including these large, infrequent, and uniquely “scored” IMF
appropriations tends to distort a general analysis of Foreign Operations funding
trends. Although Congress provides new budget authority through appropriations
for the full amount of U.S. participation, the transaction is considered an exchange
of assets between the United States and the IMF, and results in no outlays from the
U.S. treasury. In short, the appropriations are off-set by the creation of a U.S.
counterpart claim on the IMF that is liquid and interest bearing. For more, see
CRS Report 96-279, U.S. Budgetary Treatment of the IMF.
Foreign Operations, the FY2003 Budget Resolution, and
Sec. 302(b) Allocations
Usually, Appropriations Committees begin markups of their spending bills only
after Congress has adopted a budget resolution and funds have been distributed to the
Appropriations panels under what is referred to as the Section 302(a) allocation
process, a reference to the pertinent authority in the Congressional Budget Act.
Following this, House and Senate Appropriations Committees separately decide how
to allot the total amount available among their 13 subcommittees, staying within the
functional guidelines set in the budget resolution. This second step is referred to as
the Section 302(b) allocation. Foreign Operations funds fall within the International
Affairs budget function (Function 150), representing in most years about 65% of the
function total. Smaller amounts of Function 150 are included in three other
appropriation bills. (See Figure 1, above.)
How much International Affairs money to allocate to each of the four
subcommittees, and how to distribute the funds among the numerous programs are
decisions exclusively reserved for the Appropriations Committees. Nevertheless,
overall ceilings set in the budget resolution can have significant implications for the
budget limitations within which the House and Senate Foreign Operations
subcommittees will operate when they meet to mark up their annual appropriation
bills.
Complicating the Committees’ ability to set Section 302(b) allocations and
proceed with markups of the FY2003 appropriations has been the absence of
enactment of a budget resolution. The House approved H.Con.Res. 353 on March
20, 2002, recommending $759 billion in total discretionary budget authority,

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CRS-8
including a $10 billion reserve for defense, the level requested by the President. The
House-passed budget resolution further assumes full funding – $25.3 billion – for
the President’s proposal for International Affairs. On April 11, the Senate Budget
Committee reported its version of an FY2003 budget resolution (S.Con.Res. 100)
increasing total discretionary budget authority to $768 billion, including $25.8 billion
for International Affairs. Under either of the budget blueprints, House and Senate
Appropriations Committees would have sufficient foreign policy funds to allocate the
full amount requested to the Foreign Operations Subcommittees, if they so chose.
In the case of the Senate measure, the allocation for Foreign Operations might be
higher than levels proposed by the President.
Congress, however, has not concluded debate on a budget resolution and agreed
on a common framework. Some suggested that Congress include in the pending
FY2002 supplemental appropriation (H.R. 4775) a so-called “deeming resolution”
that would effectively enact one of the two pending budget resolutions and establish
a ceiling for FY2003 discretionary budget authority and outlays. Members remain
divided, however, over which budget resolution level to use.
Nevertheless, in the meantime House and Senate Appropriation Committees
issued section 302(b) allocations on June 21 and June 27, respectively, in order to
allow the Committees to begin marking up some of the spending bills. Overall, the
allocations differ significantly with the House approving $749 billion (excluding the
$10 billion defense reserve) while the Senate distributed a total of $768 billion.
Foreign Operations received a $16.35 billion allocation from each Committee, about
$230 million higher than the President’s request.
Foreign Operations Appropriations Request for
FY2003 and Congressional Consideration
Request Overview
In February 2002, President Bush asked Congress to appropriate $16.12 billion
for FY2003 Foreign Operations, an amount $774 million, or 5% higher than regular
Foreign Operations appropriations for FY2002. When the $3.24 billion provided for
foreign assistance in the Emergency Terrorism Response supplemental measure (P.L.
107-38) and the FY2002 supplemental bill (H.R. 4775) are added to enacted amounts
for FY2002, the proposal for FY2003 is $2.21 billion below current total
appropriations.
Fighting the war on terrorism. Although the request for FY2003 includes
a significant emphasis on aid activities associated with fighting the war on terrorism,
in several ways some have regarded it as an incomplete budget plan for addressing
U.S. interests overseas in a post-September 11 environment. Since the terrorist
attacks last year, the focus of American foreign aid programs has shifted to focus
more directly on supporting key coalition countries and global counter-terrorism
efforts. The Administration says that the FY2003 proposal includes $3.5 billion to

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CRS-9
assist the so-called “front-line” states in the war on terrorism.5 But FY2003 increases
proposed for many of these “front-line” states are uneven. For some – notably
Jordan, India, Oman, and Yemen – the FY2003 recommendations include
considerably more assistance than current allocations, while for others – the
Philippines, Uzbekistan, Tajikistan, Turkey, and Indonesia, for example – proposed
additional assistance is modest compared to FY2002 amounts. The FY2003 budget
submitted in February also does not include specific levels for Afghanistan.
Executive officials said that the request assumes about $138 million for Afghanistan
in several refugee and humanitarian aid accounts that are not allocated by recipient
countries, but that other bilateral reconstruction support for Kabul would be
determined later.
The absence of a comprehensive plan for Afghanistan and far less assistance
than anticipated for key nations cooperating in the war on terrorism led several
Members of Congress to characterize the FY2003 Foreign Operations plan as a
“business as usual” budget and one that did not adequately address the most urgent
requirements of the war on terrorism.6
To a large extent, the $1.8 billion FY2002 Foreign Operations supplemental
(H.R. 4775) addresses the concerns of those who doubt that the FY2003 plan is
adequate. As outlined below in more detail, the supplemental includes additional aid
to 27 nations around the world, many of which would receive no increase or only a
modest rise in U.S. aid under the FY2003 request. The supplemental further provides
over $250 million more assistance for Afghanistan.
Other key elements of the FY2003 request. Beyond the issue of aid to
combat terrorism, the Foreign Operations proposal for next year would substantially
increase aid activities in several areas while cutting resources for a few programs.
Significant appropriation increases include:
! Development assistance would rise by about $250 million, or over
9%, but increases among the many development programs are
mixed. Funding for HIV/AIDS, agriculture, environment, and
trade/investment programs would grow sharply, while resources for
several health activities would fall. (See below for more details in
section on development aid priorities.)
5 “Front-line” states are defined by the State Department as a group of countries not only
bordering Afghanistan or located in the region, but nations that have committed to helping
the United States in the war on terrorism globally. Although the complete list of “front-line”
states remains classified, the Administration has identified several (such as Jordan, Pakistan,
India, and Oman) of the countries in statements and budget justifications issued in the past
several months.
6 See statement of Congressman Kolbe, Chairman of the House Foreign Operations
Subcommittee, during a February 13, 2002 hearing. See also a February 26 press release
by Senator Leahy, Chairman of the Senate Foreign Operations panel, released prior to a
subcommittee hearing on USAID’s FY2003 request.

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CRS-10
Table 3. Summary of Foreign Operations Appropriations
(Discretionary funds – in millions of dollars)
FY2001
FY2002 FY2003 FY2003 FY2003 FY2003
Bill Title & Program
Enacted Enacted Request
House
Senate
Enacted
Title I - Export Assistance
738.9
577.9
399.1

399.3

Title II - Bilateral Economic Aid
9,121.8
11,569.7
9,775.7

10,090.0

Development aid
2,325.0
2,611.5
2,859.5

3,130.0

Israel/Egypt economic aid
1,532.6
1,375.0
1,215.0

1,375.0

Former Soviet Union
808.2
940.5
755.0

765.0

Anti-terrorism programs
41.9
122.0
69.2

69.2

Narcotics control/Andean Init
275.0
1,029.0
927.7

833.7

Title III - Military Assistance
3,752.5
4,497.0
4,295.5

4,272.3

Israel/Egypt
3,273.6
3,340.0
3,400.0

3,400.0

Title IV - Multilateral Aid
1,330.0
1,383.3
1,627.0

1,587.5

OMB Retirement Accruals
–
–
23.0

–

Rescissions
– (269.0)
–
–

Total Foreign Operations
14,943.2
17,758.9
16,120.3

16,349.1

Source: House and Senate Appropriations Committee and CRS calculations.
* FY2002 levels include $15.396 billion in regular Foreign Operations appropriations enacted in P.L. 107-115,
plus $1.436 billion emergency terrorism funding allocated from amounts provided in P.L. 107-38 and
$927 million (net $269 million in rescissions), provided in P.L. 107-206). See Table 7 at the end of this
report for more details regarding regular FY2002 Foreign Operations funding and terrorism-related
supplementals.
! Andean Regional Initiative would grow by $106 million, or 13%,
continuing a program of several years to enhance Colombia’s and
other regional states’ capabilities to interdict illegal drug production
and to support alternative development programs. (See below for
more details.)
! Peace Corps would increase by $42 million, or 15%, in an effort to
open eight new country programs and place 8,000 volunteers by the
end of FY2003.
! Contributions to the World Bank and other international financial
institutions would grow by $262 million, or 22%, covering all
scheduled U.S. payments to the multilateral development banks, plus
one-third ($177 million) of U.S. arrears owed to these institutions.

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CRS-11
Funding reductions are sought in three primary areas:
! Export-Import Bank funds would drop by $182 million, or 23%,
although the Administration says that Bank lending will increase by
over 10% because of what it calls “more focused” estimates of
default risk that will reduce the level of appropriations.
! East European assistance would fall by $126 million, or 20% from
enacted levels. The executive proposes reductions for nearly every
regional country, including Bosnia, Montenegro, and Kosovo.

! Debt reduction would receive no funding in FY2003, although this
does not represent a policy change. The United States fulfilled
current commitments to the Heavily Indebted Poor Country (HIPC)
initiative with the FY2002 appropriation of $229 million.
Leading Foreign Aid Recipients Proposed for FY2002/FY2003
While Israel and Egypt remain the largest U.S. aid recipients, as they have been
for many years, in the aftermath of the September 11 terrorist attacks, foreign aid
allocations have changed in several significant ways. The Administration has used
economic and military assistance as an additional tool in efforts to maintain a
cohesive international coalition to conduct the war on terrorism and to assist nations
which have both supported U.S. forces and face serious terrorism threats themselves.
Pakistan, for example, a key coalition partner on the border with Afghanistan, had
been ineligible for U.S. aid, other than humanitarian assistance, due to sanctions
imposed after India and Pakistan conducted nuclear tests in May 1998 and Pakistan
experienced a military coup in 1999. Since lifting aid sanctions in October, the
United States has transferred over $900 million to Pakistan, and another $450 million
remains pending in the FY2002 supplemental and FY2003 requests. India, the
Philippines, Turkey, and Uzbekistan also are among the top aid recipients planned
for this year and next as part of the network of “front-line” states in the war on
terrorism.
The other major cluster of top recipients are those in the Andean region where
the Administration maintains a large counternarcotics initiative that combines
assistance to interdict and disrupt drug production, together with alternative
development programs for areas that rely economically on the narcotics trade.
Several countries in the Balkans and former Soviet Union — Federal Republic of
Yugoslavia, Kosovo, Russia, Ukraine, and Georgia — would continue to be among
the top recipients, although at somewhat lower funding levels.

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CRS-12
Table 4. Leading Recipients of U.S. Foreign Aid
(Appropriation Allocations; $s in millions)
FY2001
FY2002
FY2002
FY2003
Actual
Enacteda
Supp. Request
Request
Israel
2,814
2,788
0
2,700
Egypt
1,992
1,956
0
1,916
Pakistan
4
921
145
305
Colombia
49
382
35
538
Jordan
229
230
125
453
Afghanistanb
184
420
270
138
Peru
90
198
0
189
Ukraine
183
163
0
166
Russia
169
165
0
158
FRYugoslavia
186
165
0
136
Indonesia
121
125
16
132
Bolivia
89
126
0
137
Turkey
2
4
228
21
India
60
80
0
153
Philippines
49
94
40
95
Georgia
100
103
20
97
Uzbekistan
31
115
46
44
Kosovo
150
118
0
85
Source: U.S. Department of State.
Note: Because of the unusual way in which the United States has allocated FY2002 country aid levels
(largely in support of the war on terrorism), this table lists countries in order of the combined FY2002
enacted and FY2002/2003 requested appropriations. This better reflects the ranking of current major
U.S. aid recipients, avoiding distortions that would result if the list ranked countries by one of the
years only.
a FY2002 includes funds allocated from the regular Foreign Operations appropriation, plus funds
drawn from the Emergency Response Fund appropriated in P.L. 107-38.
b Amounts for Afghanistan are estimates that include funds allocated from refugee, food, and other
humanitarian aid accounts.
Congressional Response to the FY2003 Request
Senate Action. Meeting on July 18, the Senate Appropriations Committee
approved a $16.35 billion Foreign Operations spending measure for FY2003 (S.
2779), a level $230 million above the President’s request. The Committee made a
number of key changes in the Administration’s proposal:

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CRS-13
! Child Survival and Health programs receive $1.78 billion, $109
million above the request. S. 2779 goes beyond the President’s
budget for HIV/AIDS – providing $750 million rather than $640
million – but also restores funds for other health programs that had
been scheduled for reductions under the Administration’s proposal
(see more below).
! Population assistance increases to $450 million, $25 million above
the request.
! UNFPA contributions are set at $50 million. The President has
declared UNFPA ineligible for U.S. support due to the
organization’s programs in China. S. 2779 further modifies the
terms under which the President can declare UNFPA ineligible in a
way which would make such a finding more difficult (see more
below).
! Tropical forest debt reduction receives $40 million. The President
had not requested funds for this activity, but had requested transfer
authority from development aid accounts.
! Andean Regional Initiative funding is cut to $637 million, $94
million less than requested. S. 2779 further continues existing
conditions on aid to Colombia.
! Afghanistan reconstruction aid is set at $157 million. The
Administration has net yet submitted a formal request for FY2003,
but says there is about $98 million in humanitarian aid accounts that
will likely support programs in Afghanistan.
! Peace Corps funding is set at $285 million, $32 million below the
request. The Committee supports the current Peace Corps expansion
efforts but believes a stronger planning effort should occur before
more funds are provided.
S. 2779 will not be debated in the Senate until at least September. The House
Appropriations Foreign Operations Subcommittee Committee is scheduled to mark
up its companion bill on September 8.
Supplemental FY2002 Foreign Operations Funding
The Administration sought $1.28 billion in additional FY2002 Foreign
Operations funding, primarily to increase economic, military, and counter-terrorism
assistance to so-called “front-line” states in the war on terrorism. Although the
complete list remains classified, the United States has placed a growing priority on
increasing assistance to over 20 nations representing not just those bordering
Afghanistan or located in the region, but including countries globally that have
committed to helping the United States in the war on terrorism. Administration

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CRS-14
officials have publically identified some of those front-line states for whom
supplemental assistance is sought.
As finalized by Congress and signed by the President on August 2 (P.L. 107-
206), the Administration received $1.8 billion more in foreign aid funding (less $269
million rescission), over $400 million above the request. This comes on top of about
$1.5 billion for Foreign Operations programs that were drawn, beginning October 1,
2001, from the $40 billion emergency terrorism supplemental approved by Congress
shortly after September 11 (P.L. 107-38). The proposed supplemental also included
several policy changes related to foreign aid activities that raised controversy during
congressional debate.
Nevertheless, as a result of the a decision made by President Bush on August 13
not to spend any of the $5.1 billion supplemental designated as “contingent
emergency,” about one-third of the foreign aid supplemental will not be available.
According to the 1985 Balanced Budget and Emergency Deficit Control Act as
amended, both the President and Congress must agree that spending is emergency for
those funds to be exempt from budgetary controls over total spending. After the
White House strongly objected to House and Senate proposals to exceed the
President’s $27.1 billion supplemental request, lawmakers agreed to provide $5.1
billion of the $28.9 billion supplemental total as contingent emergency funding for
which the President also would have to designate as emergency resources in order for
the money to become available. The $5.1 billion in contingent emergency funding
includes new items added by Congress and increases above the Administration’s
request. The enacted supplemental, however, included a so-called “all or nothing”
provision, requiring the President to declare either the entire $5.1 billion as
emergency funds or none of it.
On August 13, President Bush announced that he would not utilize the $5.1
billion of contingent emergency spending. The decision has the effect, in terms used
by the White House, of a “pocket veto” by the President of the contingent emergency
funds. Major activities foreign aid funds that will not be available because of the
President’s action include:
! Israel aid – $200 million
! Palestinian aid – $50 million
! Afghanistan aid and refugee relief – $174 million
! Philippine military aid – $30 million
! International HIV/AIDS, malaria, and tuberculosis – $200 million
The White House said, however, that the President supports more aid to Israel, the
Palestinians, and for HIV/AIDS, and will seek other means to gain congressional
approval for these activities in the future. This suggests that President Bush may
submit an amendment to his pending FY2003 Foreign Operations budget proposing
these additional amounts. Whether he will also request cuts in the pending
appropriation to off-set these increases is uncertain.

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CRS-15
Table 5. FY2002 Supplemental Compared with Enacted &
Requested
($s – millions)
FY2002
FY2002
FY2001
FY2002
FY2003
Country/Program
Supplemental
Supp.
Enacted
Enacted
Request
Request
Enacteda
South Asia:
Afghanistan
– $297.0
$250.0
– TBD
Nepal
$21.3
$30.0
$20.0
– $41.2
Pakistan
$3.5
$921.0
$145.0
– $305.0
Middle East
Bahrain
$0.2
$0.4
$28.5
– $0.5
Jordan
$226.2
$227.0
$125.0
– $450.4
Oman
$0.0
$0.3
$25.0
– $20.3
Yemen
$4.2
$5.5
$25.0
– $12.7
Economic Initiative
–
–
$50.0
–
–
Israel
$2,813.8
$2,788.0
$0.0
$200.0b
$2,700.0
Palestinians
$71.0
$72.0
$0.0
$50.0b
$75.0
East Asia
Indonesia
$121.0
$124.7
$16.0
– $71.9
Philippines
$50.4
$92.1
$40.0
$55.0b
$93.1
Africa
Cote d’Ivoire
$2.8
$3.1
$2.0
–
$3.1
Djibouti
$0.2
$0.2
$6.0
– $0.2
Ethiopia
$40.6
$46.8
$12.0
– $51.1
Kenya
$34.6
$40.7
$22.0
– $48.8
Mauritania
$1.0
–
Nigeria
$2.0
–
Southern Sudan
$4.5
$11.4
$10.0
–
$22.3
Europe/Eurasia
Georgia
$97.8
$100.9
$20.0
– $95.2
Kazakstan
$48.4
$48.6
$3.5
– $47.0
Kyrgyz Republic
$35.2
$37.6
$42.0
–
$41.1
Tajikistan
$16.7
$19.9
$40.0
– $22.5
Turkey
$1.7
$22.7
$228.0
– $20.3
Turkmenistan
$7.3
$7.6
$4.0
– $8.2
Uzbekistan
$28.4
$95.6
$45.5
– $41.5
Latin America
Colombia
$49.0
$381.7
$35.0
– $538.2
Mexico
$31.1
$35.6
$25.0
– $43.6

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CRS-16
FY2002
FY2002
FY2001
FY2002
FY2003
Country/Program
Supplemental
Supp.
Enacted
Enacted
Request
Request
Enacteda
Ecuador
$16.4
$47.5
$3.0
– $65.8
Regional Border
– –
$5.0
– –
Control
Global
Antiterrorism
$38.0
$83.5
$20.0
– $64.2
Training
Terrorist Financing
–
–
$10.0
–
–
Terrorist Interdiction
$4.0
$8.0
$10.0
–
$5.0
USAID
– –
$7.0
$7.0
–
admin/security
Defense admin costs
–
–
$2.0
–
–
HIV/AIDS, TB,
$573.0
$653.0
$0.0
$200.0b
$762.0
Malaria, & Global
Fund
Demining
$40.0
$40.0
$0.0
$4.0
$45.0
Migration/Refugee
$698.0
$705.0
$0.0
$40.0b
$705.6
aid
Rescissions
– – ($157.0)
($249.0)
–
TOTAL
$5,079.3
$6,947.4
$1,122.5
$1,549.0c
$6,400.8
Sources: Department of State and House Appropriations Committee.
a The Conference agreement earmarks funds for only a few countries and programs, as noted in the
table. The Administration must report to Congress 30 days after enactment with specific
allocations of the funds.
b Because of the President’s decision not to spend money designated as “contingent emergency,” all
or part of these amounts will not be available. See discussion above.
c Of this amount, $622 million is designated as “contingent emergency” which the President says he
will not spend. The total amount the White House says it will spend is $927 million.
Funding Issues
The supplemental sets new directions in the distribution of assistance to meet
the new terrorist threat. Much of the $1.5 billion emergency aid distributed prior to
March 2002 focused on two areas: 1) economic support to Afghanistan and
neighboring countries in anticipation of food shortages, displacement and other
humanitarian disruptions that would occur during the military campaign; and 2)
efforts to achieve security and stabilize the economic situation in Pakistan and
demonstrate support for President Musharraf. By contrast, the proposed $1.28 billion
supplemental would distribute additional economic and military assistance among
23 countries in all regions of the world.
In several respects the $1.28 billion supplemental proposal reflected what many
said should have been incorporated in the FY2003 plan. Although like the FY2003

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CRS-17
budget, the request included significant amounts for Pakistan ($145 million) and
Jordan ($125 million), it distributed, as shown in Table 5, considerable amounts of
aid to Central Asian states that would not receive substantial increases in FY2003
and to nations globally.
Policy Issues
The supplemental request included several general provisions that would change
current policy regarding the distribution of military aid, assistance to Colombia, and
conditions under which regular foreign aid is transferred. Each was closely examined
during congressional debate.
DOD’s Role in Military Aid Allocations. Currently, the State Department
receives funding through the Foreign Military Financing (FMF) account of the
Foreign Operations Appropriations and provides broad policy direction for U.S.
military assistance programs. DOD frequently administers FMF activities, but under
the policy guidance of the State Department. The Administration proposed in the
FY2002 supplemental to grant DOD authority to use up to $30 million to support
indigenous forces engaged in activities combating terrorism and up to $100 million
to support foreign government efforts to fight global terrorism. The $130 million
total would come from defense funds – not Foreign Operations – and be directed by
the Secretary of Defense and be available “not withstanding any other provision of
law.” A third provision proposed $420 million in DOD Operation and Maintenance
funding for payments to Pakistan, Jordan, and “other key cooperating states for
logistical and military support provided” to U.S. military operations in the war on
terrorism that would also be under DOD’s policy purview.
DOD officials said that these provisions were essential to help reimburse
countries for costs they incur in assisting U.S. forces engaged in the war on terrorism.
The United States had to delay payments to Pakistan for support provided in
Operation Enduring Freedom because of competing demands on regular military aid
funds and the absence of agreements between DOD and the Pakistan military that
would allow such transfers out of the defense budget. Nevertheless, critics charged
that such a change would infringe on congressional oversight and the State
Department’s traditional role in directing foreign aid policy and resource allocations.
By including a “notwithstanding” proviso, the request further would remove human
rights and other conditions that must be observed by countries in order to qualify for
U.S. security assistance.
At a House hearing on April 18, Deputy Secretary of State Armitage told the
Foreign Operations Appropriations Subcommittee that although the State Department
supports the “intent” of the provisions, the Administration drafted the legislation in
a “rather poor way” and that the authority “is a little broader in scope than we really
intended.” Secretary Armitage pledged that both State and DOD officials would
work with Congress to adjust the provisions in a way that would protect the

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CRS-18
prerogatives of the Secretary of State as the “overseer of foreign policy and foreign
aid.”7
Colombia Aid Restrictions. An additional provision in the supplemental
sought to broaden DOD and State Department authorities to utilize unexpended Plan
Colombia, FY2002 and FY2003 appropriations to support Colombia’s “unified
campaign against narcotics trafficking, terrorist activities, and other threats to its
national security.”8 The provision would allow funds to be used not only for counter
narcotics operations, but also for military actions against Colombian insurgents and
any other circumstances that threatened Colombian national security.
Although the most immediate effect of the change would be to permit the
United States to expand intelligence sharing with Colombian security forces, the
provision would also allow helicopters and other military equipment provided over
the past two years to fight drug production to be used against any threat to
Colombia’s security.
The Administration, however, did not ask Congress to soften two other
Colombia aid restrictions: a 400-person limit on U.S. personnel inside Colombia and
the prohibition of aid to Colombian military and police units that are engaged in
human rights violations (Leahy amendment). Despite the inclusion of a clause that
past and future aid be available “notwithstanding any provision of law” (see below)
– except for the two restrictions noted above – Administration officials said they
were not seeking to remove other enacted conditions on Colombian aid, such as those
related to human rights and aerial coca fumigation. Coupled with a pending FY2003
$98 million military aid request to help protect Colombia’s oil pipeline and other
infrastructure against guerilla activity, critics argued that the U.S. objective in
Colombia was shifting from one of combating narcotics production and trafficking
to a counter-terrorism and insurgency strategy.
Removal of Restrictions for Other Economic and Military
Assistance. The Administration’s supplemental submission asked Congress to
provide most of the economic and military aid funds “notwithstanding any other
provision of law.” Such language is usually reserved only for situations where
humanitarian assistance or aid in support of the highest U.S. foreign policy interests
would be prohibited due to existing legislative restrictions on assistance to
governments that violate human rights, engage in weapons proliferation, came to
power through a military coups, do not cooperate in counter-narcotics activities, or
a series of other similar aid conditions.
Because of the sweeping and broad nature of “notwithstanding” provisions,
Congress has often been reluctant to enact such a waiver without fully understanding
the implications of excluding foreign aid restrictions. More often, Congress prefers
7 Testimony by Secretary of State Armitage before the Foreign Operations Subcommittee,
Senate Appropriations Committee, April 18, 2002.
8 Department of Defense, FY2002 Supplemental request to Continue the Global War on
Terrorism, March 2002, page 28. For web version, see
[http://www.dtic.mil/comptroller/fy2003budget/fy2002_supp.pdf].

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CRS-19
to waive specific legislative constraints rather than approving across-the-board
waivers. Administration officials said that such a waiver was needed in the
supplemental because of impediments that apply to Afghanistan, Yemen, Ethiopia,
and Cote d’Ivoire. These first three countries were overdue in making debt payments
to the U.S. in violation of the “Brooke amendment” (section 512 of the Foreign
Operations Appropriations, FY2002). Cote d’Ivoire is ineligible for aid because of
the military coup against a democratically elected government in 1999, in violation
of section 508 of the Foreign Operations Appropriations, FY2002.
Congressional Action on the Administration’s Supplemental
Foreign Operations Request
House, Senate, and conference action increased foreign aid funding proposed
by the President, but limited to some extent policy provisions and waivers sought by
the White House. The enacted measure also added a new issue into the supplemental
debate – additional funding to fight global HIV/AIDS – but dropped a Senate-added
provision concerning the status of U.S. contributions to the U.N. Population Fund
(UNFPA).
As passed by Congress, the supplemental includes $1.818 billion in new Foreign
Operations funds, nearly $500 million above the request. (This total was offset by
$269 million in rescissions, for a “net” total of $1.55 billion for Foreign Operations.)
The House had included $1.82 billion, while the Senate measure provided $1.78
billion. New items added by both the House and Senate, and contained in the final
bill, included $200 million in assistance to Israel, $50 million for the Palestinians,
and $200 million to combat HIV/AIDS, malaria, and tuberculosis. The HIV/AIDS
money could be used to support the President’s new mother-to-child transmission
initiative, but conferees stated that $100 million of the total should be used as an
additional contribution to the Global Fund to Combat HIV/AIDS, Tuberculosis, and
Malaria. If followed, this recommendation by Congress would cut in half the amount
the President pledged for his initiative in FY2002.
Both versions increased aid to Afghanistan for reconstruction and security
support above the President’s $250 million request: the House by $120 million and
the Senate by roughly $110 million. The conference agreement did not set a specific
amount for Afghanistan, but with the $134 million designated for Afghanistan within
the International Disaster Assistance Account ($40 million requested), the final
allocation for Afghanistan would likely be higher than the request. The Senate bill
added $15 million to create an international exchange program for students from
countries with large Muslim populations, and conferees set the total at $10 million.
In most cases, the conference agreement did not set specific country allocations,
leaving that at the discretion of the President. The legislation directs the executive
branch to report on such allocations within 30 days of enactment (see Table 5,
above).
As noted above, however, the additional funds added by Congress over the
President’s request – aid to Israel, the Palestinians, for HIV/AIDS, and some of the
assistance to Afghanistan and the Philippines – were designated as a “contingent
emergency.” The President says he will not agree with the emergency designation,

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CRS-20
making these funds unavailable. Only $1.2 billion of the $1.8 billion total in new
foreign aid funds will be spent, according to the White House, although the President
says he will seek some of the contingent emergency funds (Israel, Palestinians, and
HIV/AIDS) in future requests.
On policy issues, the final bill removed the requested “notwithstanding any
provision of law” provisos, but waived the “Brooke amendment” regarding debt
payments in arrears. This will permit most of waivers the Administration sought.
On Colombia, the final bill included language similar but less sweeping than the
Administration’s request. It would allow Colombia to use American foreign aid
(money managed by the State Department) for a unified campaign against narcotics
trafficking, against organizations designated as terrorist groups, and for humanitarian
rescue operations. All current restrictions on Colombian aid, however, would remain
in effect. The bill further added a requirement regarding the newly elected
Colombian President and policies regarding human rights, military reforms, and
financial commitments to implement other reforms.
Congress denied DOD’s request for authority to use $30 million to support
indigenous forces engaged in activities combating terrorism, but approved $390
million for payments to Pakistan, Jordan, and other cooperating states for logistical
and military support provided.
H.R. 4775, as passed by the House, had approved DOD’s request for $100
million to support foreign government efforts to fight global terrorism, but with
significant changes. Transfers would be limited, however, only to reimbursements
for the costs of goods, services, or use of facilities by U.S. military forces and any
proposed commitment of funds must be submitted jointly to the Committees by the
Secretaries of State and Defense 15 days in advance for Committee approval. The
Senate measure and the final bill did not include a provision related to this issue.
During House Committee markup, another contentious foreign aid policy issue
was introduced. Since mid-January, the White House has maintained a hold on U.S.
contributions to the U.N. Population Fund (UNFPA) because of allegations that
UNFPA is participating in the management of coercive family planning practices in
China. If the White House determines that this is the case, UNFPA would become
ineligible for American contributions. For FY2002, Congress provided “not to
exceed” $34 million for UNFPA, and some Members have criticized the White
House for delaying a decision regarding UNFPA’s eligibility. A State Department
investigation team spent two weeks in China during May.
After initially adopting an amendment by Representatives Lowey and Kolbe
(32-31) that would require the President to transfer the full $34 million to UNFPA
by July 10 if the State Department team concludes that UNFPA is not involved in
coercive family planning practices in China, the Committee approved a further
amendment by Representative Tiahrt that over-rode the Lowey/Kolbe provision. The
Tiahrt amendment required the President to determine whether UNFPA participates
in the management of coercive family planning practices by July 31, 2002, but said
nothing about how much the President must contribute. Prior to final passage of
H.R. 4775, however, the second rule (H.Res. 431) under which the bill was debated
deleted both amendments from the legislation. As such, the House-passed measure

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CRS-21
does not include any language regarding UNFPA. Nevertheless, the Senate bill
includes language nearly identical to Lowey/Kolbe text.
Under any of these amendments, a determination that UNFPA is involved in
coercive practices would result in the termination of U.S. support. Without such a
determination, however, the Senate and Lowey/Kolbe amendments would require the
President to transfer the full $34 million. Under the Tiahrt provision, however, the
President could reduce the U.S. contribution to something less than $34 million to
express displeasure over alleged coercive family practices in China and UNFPA’s
involvement. The White House strongly opposed the Senate language.
Conferees agreed to drop all UNFPA language from the final bill, leaving the
decision entirely up to the President. Subsequently, on July 23, the White House
announced the U.S. would withhold the $34 million transfer.
Major Policy and Spending Issues for FY2003
While the Foreign Operations appropriations bill may include virtually any
foreign policy issue of interest to Congress, the annual debate usually focuses on
several major policy and spending issues. Possible issues for FY2003 are as follows.
Foreign Aid as a Tool in the War on Terrorism
As discussed above, since the September 11 terrorist attacks and the initiation
of military operations in Afghanistan, combating global terrorism has become one
of the top priorities of American foreign assistance. While there is disagreement
regarding the extent to which foreign aid can directly contribute to reducing the threat
of terrorism, most agree that economic and security assistance aimed at reducing
poverty, promoting jobs and educational opportunities, and helping stabilize conflict-
prone nations can indirectly attack some of the factors that terrorists use in recruiting
disenfranchised individuals for their cause. More than $2.7 billion has been extended
to or recommended for “front-line” states in FY2002, while the FY2003 budget
proposes $3.5 billion.
Foreign aid can be programmed in a number of ways that contribute to the war
on terrorism. Assistance can be transferred, as it has in Pakistan and Afghanistan,
to bolster coalition-partner government efforts to counter domestic dissent and
attacks by extremist groups, and to promote better health care, education, and
employment opportunities to its people. Security assistance can finance the provision
of military equipment and training to nations facing threats from their own internally-
based terrorist movements.
While there has been substantial congressional support for additional foreign aid
resources aimed at countering terrorism, some warn that the United States needs to
be cautious about the risks of creating a close aid relationship with governments that
may have questionable human rights records, are not accountable to their people, and
are possibly corrupt. As noted above, Members have been especially critical of
Administration efforts to include in aid proposals for “front-line” states legislative

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language that would waive all existing restrictions and prohibitions on the transfers.
Instead, these critics argue, the Administration should specifically identify any
obstacles to proceeding with a country aid program and seek a congressional waiver
for those particular problems. For example, last year when the Administration
wanted to provide Pakistan with $600 million in fast-disbursing economic aid,
Congress approved P.L. 107-57 which waived restrictions concerning aid to countries
that engaged in missile proliferation, whose leaders came to power through a military
coup, and were behind in debt payments to the United States.
Beyond substantial amounts of bilateral aid for “front-line” states, the Foreign
Operations appropriation bill funds several global programs specifically aimed at
anti-terrorism efforts overseas and the provision of security for USAID employees
living abroad.
Anti-Terrorism Assistance (ATA). Since FY1984, the State Department
has maintained the ATA program designed to maximize international cooperation in
the battle against global terrorism. Through training, equipment transfers, and
advice, the ATA program is intended to strengthen anti-terrorism capabilities of
foreign law enforcement and security officials. Between 1984 and 1999 (the most
recent year for which ATA data are available), over 23,000 officials from 112
countries participated in ATA programs. ATA funding is included within the
Foreign Operations account of Non-proliferation, Anti-terrorism, Demining, and
Related Programs (NADR).
Resources for the $38 million annual ATA program (FY2001) rose sharply
following September 11, with an additional $45.5 million allocated out of the
Terrorism Emergency Response Fund in FY2002. A further $20 million is requested
in the pending emergency supplemental appropriation (H.R. 4775) and the President
requests $64.2 million for FY2003. Increased funding for FY2002 and FY2003 will
finance three post-September 11 changes in the ATA program:
! conducting training sessions more frequently overseas, on-site where
participants can be withdrawn quickly to respond to an emerging
crisis;
! adding new courses on kidnap intervention and advanced crisis
response; and
! expanding training to counter the use of weapons of mass
destruction by terrorists.
Terrorist Interdiction Program (TIP). As one response to the 1998
bombings of American embassies in East Africa, the State Department launched the
TIP, an activity intended to restrict the ability of terrorists to cross international
borders, launch attacks, and escape. TIP strengthens border security systems in
particularly vulnerable countries by installing border monitoring technology, training
border security and immigration officials in its use, and expanding access to
international criminal information to participating nations. Like ATA, funds for TIP
are part of the NADR account in the Foreign Operations spending bill.
Since September 11, the State Department has expanded from 34 to 57 the
number of countries where it believes TIP would immediately contribute to the

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CRS-23
global counterterrorism campaign. The $4 million TIP budget doubled in FY2002
and the Administration seeks an additional $10 million in FY2002 supplemental
appropriations as well as $5 million for FY2003.
Terrorist Financing. In December 2001, an interagency review group
identified 19 countries where a significant terrorist financing threat existed, and with
$3 million allocated from the Emergency Response Fund, launched a training and
technical assistance program. The State Department requests $10 million in the
FY2002 supplemental appropriation to expand the program, while the Treasury
Department proposes funding for this activity out of its $10 million FY2003
“Technical Assistance” program. Anti-terrorist financing training is managed by the
Treasury Department.
USAID Physical Security. USAID maintains about 97 overseas facilities
where much of its workforce – both Americans and foreign nationals – is located.
Many missions are based in places where there is a high threat of terrorist activity,
and especially since the 1998 embassy bombings in Kenya and Tanzania, agency
officials have been concerned about the lack of adequate security. In countries where
USAID is or is scheduled to be co-located with the U.S. embassy, the State
Department’s Foreign Buildings Operations office had been responsible for financing
USAID secure facilities. These funds are appropriated in the Departments of
Commerce, Justice, and State appropriations. Nevertheless, there have been serious
construction delays for USAID co-located facilities – especially in Uganda – due to
competing State Department building priorities and conflicting congressional
directives.
In an effort to overcome these problems, USAID is requesting for FY2003 a
new Foreign Operations account – the Capital Investment Fund – that will support
enhanced information technology ($13 million) and facility construction ($82
million) specifically at co-located sites where security enhancements are needed.
USAID plans to use the money in FY2003 for construction projects in Kenya,
Guinea, Cambodia, and Georgia. With the facility in Uganda still not built, USAID
says it may have to divert some resources from other intended projects to Uganda if
an appropriate lease arrangement cannot be worked out in Kampala.
Security upgrades for the 64 overseas missions situated some distance from
American embassies have been provided out of USAID operating expenses, a
Foreign Operations account that has been under funding stress in recent years due to
agency relocation costs in Washington, replacement of failed financial management
systems, and dwindling non-appropriated trust funds used to finance some in-country
costs. As a result, security up-grades for some USAID missions have been deferred
due to funding shortfalls. For FY2003, USAID requests $7 million for security needs
out of its operations account, a slight increase over the $6.9 million level in FY2002.
The agency has further proposed $2 million in the pending FY2002 emergency
supplemental (H.R. 4775) for establishing secure USAID operating facilities in
Afghanistan and Pakistan.
Aid Restrictions for Terrorist States. Annual Foreign Operations
spending bills routinely include general provisions prohibiting U.S. assistance to

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CRS-24
countries engaged in terrorist activities or providing certain types of support to
terrorist groups. Included in the FY2002 funding measure are two:
! Sec. 527 prohibits bilateral U.S. assistance to any country that the
President determines grants sanctuary from prosecution to any
individual or group which has committed an act of international
terrorism, or otherwise supports international terrorism. The
President may waive the restrictions for national security or
humanitarian reasons.
! Sec. 544 prohibits any U.S. aid to a government which provides
lethal military equipment to a country that the Secretary of State has
determined is headed by a terrorist government. The President may
waive the requirement if it is important to U.S. national interests.
Despite these restrictions, however, certain types of humanitarian foreign assistance
may be provided “notwithstanding” other provisions of law, which would override
the terrorism restrictions. Disaster and refugee relief, child survival and HIV/AIDS
programs, emergency food and medicine, and demining operations are among the
categories of U.S. assistance that could potentially be provided to a country that
would otherwise be ineligible.
Congressional Action. Legislation reported by the Senate Appropriations
Committee provides most of the funding needed by the Administration to fulfill its
plan to use foreign aid in the war on terrorism. Because much of this money is not
specifically earmarked in S. 2779, there are few direct allocations for programs to
combat terrorism. Nevertheless, since the accounts out of which these funds would
be drawn are funded near or above the President’s request, the Administration will
be able to follow much of its original request. For example, S. 2779 provides $376
million for the Non-Proliferation, Anti-Terrorism, Demining, and Related (NADR)
Programs account, $4 million more than requested. Both the ATA and TIP programs
are funded out of this account. The Committee’s bill approves the full amount for
Treasury’s terrorist financing program, and makes only small reductions to the ESF
and FMF accounts where much of the bilateral assistance for “front-line” states will
be drawn. S. 2779 further continues both general provisions (sections 525 and 526
in the new bill) relating to prohibitions against terrorist countries.
Development Aid Policy Priorities
A continuing source of disagreement between the executive branch and
Congress is how to allocate the roughly $2.7 billion “core” budget for USAID
development assistance programs. Among the top congressional development aid
funding priorities in recent years have been programs supporting child survival, basic
education, and efforts to combat HIV/AIDS and other infectious diseases. The
Administration also backed these programs, but officials object to congressional
efforts to increase funding for children and health activities at the expense of other
development sectors. When Congress has increased appropriations for its priorities,
but not included a corresponding boost in the overall development aid budget,
resources for other priorities, such as economic growth and the environment, have
been substantially reduced.

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CRS-25
In 2001, the Bush Administration set out revised USAID core goals for
sustainable development programs focused around three “spheres of emphasis” or
“strategic pillars” that include Global Health, Economic Growth and Agriculture, and
Conflict Prevention and Developmental Relief. The Administration further
introduced a new initiative – the Global Development Alliance (GDA) – in an effort
to expand public/private partnerships in development program implementation.
Under the initiative, USAID would identify good development opportunities being
conducted by private foundations, non-governmental organizations, universities, and
for-profit organizations, and provide parallel financing to leverage resources already
committed to these activities. USAID officials envision that the agency will become
much more of a coordinating and integrating institution to expand and enhance
development efforts of these non-governmental development partners. Although
USAID requested $160 million in FY2002 to finance GDA projects, only $20 million
has been set aside. A budget of $30 million is proposed for FY2003.
For FY2003, USAID seeks $2.86 billion for development aid, an increase of
about $250 million, or nearly 10% above FY2002 levels.9 However, about $100
million of the increase represents a decision to transfer the funding source for a few
countries from the Economic Support Fund account in FY2002 to the Development
Assistance account in FY2003. After adjusting for this, the USAID proposal is
roughly 6% more than FY2002.
USAID proposes increases for each of its three “strategic pillars,” with specific
emphasis in several areas:
! agriculture programs would increase by 30% to $261 million.
! environmental activities would grow by 11% to $308 million. A
year ago USAID proposed $225 million for the environment.
! business, trade, and investment funding would rise by 25% to $317
million.
! basic education, a high congressional priority, would increase by
10% to $165 million.
! HIV/AIDS funding would rise by one-quarter to $640 million,
including $100 million for the Global Fund to Combat HIV/AIDS,
Malaria, and Tuberculosis.10
! democracy aid would rise by 68% to $200 million, although much
of this increase comes from shifting recipients that had previously
received similar types of aid from the Economic Support Fund (ESF)
account to the development aid account.
9 The $2.86 billion figure includes USAID’s development aid request of $2.74 billion plus
the State Department’s proposed $120 million contribution to UNICEF. In recent years,
Congress has incorporated UNICEF funds within development assistance. For consistency,
USAID’s request has been adjusted to include UNICEF.
10 The Global Fund would also receive a $100 million appropriation under the Department
of Health and Human Services budget, making the total U.S. pledge $200 million for
FY2003, the same as for FY2002.

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CRS-26
USAID is also asking Congress to appropriate all development aid in a single
Development Assistance account. Congress created a second account – the Child
Survival and Health Programs Fund – in FY1997 in order to highlight the importance
of aid activities aimed at promoting the health and well being of children, mothers,
and other vulnerable elements of society and to specifically appropriate funds for
these purposes. The Administration argues that a successful development strategy
requires an integrative approach for which resources can be flexibly drawn upon to
meet the changing, complex and interwoven nature of development goals.
Congressional proponents of a separate Child Survival/Health account, however,
continue to argue that special attention needs to be drawn to child and maternal
health programs, and say they will challenge the elimination of this second
development aid account.
The proposed budgets for various global health activities are likely to encounter
close congressional scrutiny. USAID requests $1.49 billion for child survival and
health programs (including $120 million for UNICEF) within the Development
Assistance account, about $55 million higher than current amounts. After adding
smaller health-related funds from other Foreign Operations accounts, the total
amount for child survival and health projects is $1.67 billion, an increase of $15
million, or 1%. As noted above, with a large increase proposed for HIV/AIDS
programs, funding for nearly all other global health activities would decline in
FY2003 under the agency’s budget plan. As illustrated in Table 6, resources for
Child Survival and Maternal Health would fall from $383 million in FY2002 to $344
million in FY2003; amounts for Vulnerable Children would drop from $32 million
to $20 million; levels for malaria would decline from $60 million to $42.5 million
and for tuberculosis, from $70 million to $52.5 million.
USAID maintains that resource limitations require the United States to
concentrate resources on the most severe health needs in the developing world, which
it views as fighting the HIV/AIDS epidemic. Some congressional critics of the
Administration’s decision to increase HIV/AIDS and de-emphasize other health
programs have said they will work to fully fund or exceed the HIV/AIDS proposal
while also restoring funds for areas set for reductions in FY2003. (For more
information on this issue, see CRS Report RL31433, U.S. Global Health Priorities:
USAID FY2003 Budget Request.)
Table 6. Funding for USAID Global Health Programs
(estimates across all Foreign Operations accounts – in millions of dollars)
FY2003 FY2003
FY2003
Program
FY2001a FY2002
est
Request
House
Senate
Child Survival/Maternal Health
$361.0
$383.0
$344.0
$350.0
Of which:
Morbidity & mortality
[269.8]
[243.5]
–
Polio
[27.6]
[25.5]
[30.0]
Micronutrients
[30.6]
[25.7]
[30.0]
Iodine Deficiency Disorder
[2.0]
[0.0]
[3.3]
Vaccine Fund (former GAVI)
[53.0]
[50.0]
[60.0]

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CRS-27
FY2003 FY2003
FY2003
Program
FY2001a FY2002
est
Request
House
Senate
Vulnerable Children
$22.0
$32.0
$20.0
–
HIV/AIDS
$433.0
$710.0
$640.0
$750.0
Of which:
HIV/AIDS bilateral programs
[367.0]
[467.0]
–
Microbicides
[15.0]
[15.0]
[18.0]
Global Fundb
[75.0]b
[100.0]b
[200.0]
UNAIDS
[18.0]
[18.0]
–
Intl AIDS Vaccine Initiative
[10.0]
[10.0]
–
Commodity Promotion Fund
[25.0]
[30.0]
–
Other Infectious Diseases
$140.0
$165.0
$122.0
$185.0
Of which:
Malaria
[60.0]
[42.5]
[75.0]
Tuberculosis
[70.0]
[52.5]
[75.0]
Other
[35.0]
[25.0]
[35.0]
UNICEF
$110.0
$120.0
$120.0
$120.0
Reproductive Health
$424.0
$446.5
$425.0
$450.0
TOTAL, GLOBAL HEALTH
$1,490.0
$1,856.5 $1,671.0
$1,780.0
a USAID has not yet finalized health budget figures for sub-account activities for FY2001.
b Contributions to the Global Fund benefits HIV/AIDS, malaria, and tuberculosis. In total, the United
States will contribute at least $200 million to the Global Fund in FY2002 and plans for a $200
million transfer in FY2003. An FY2002 supplemental appropriations (H.R. 4775) adds another
$200 million for HIV/AIDS activities, recommending the $100 million be transferred to the
Global Fund. Additional resources to fulfill these pledges are derived from National Institutes
of Health funds.
Congressional Action. S. 2779 increases global health programs by over
$100 million from the President’s request, adding $110 million for HIV/AIDS and
restoring amounts for other health activities that had been slated for cuts in FY2003
under the President’s budget. (See Table 6.) The Senate-reported bill achieves these
increases in part by adding funds to the Child Survival and Health account, and by
directing or recommending the allocation of funds from the ESF and other accounts
for health programs. The Senate measure further provides $200 million for basic
education rather than $165 million requested. S. 2779 also restores the second
development aid account for Child Survival and Health.
Family Planning, Abortion Restrictions, and UNFPA Funding
U.S. population assistance and family planning programs overseas have sparked
perhaps the most consistent controversy during Foreign Operations debates for nearly
two decades. The primary issues addressed in nearly every annual congressional
consideration of Foreign Operations bills focus on two matters: whether abortion-

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CRS-28
related restrictions should be applied to bilateral USAID population aid grants and
whether the United States should contribute to the U.N. Population Fund (UNFPA)
if the organization maintains a program in China where allegations of coercive family
planning have been widespread for many years.
UNFPA funding. The most contentious issue usually concerns the abortion
restriction question, but current attention is focused on UNFPA and a White House
decision in January 2002 to freeze the $34 million U.S. contribution to the
organization. During the Reagan and Bush Administrations, the United States did
not contribute to UNFPA because of concerns over practices of forced abortions and
involuntary sterilizations in China where UNFPA maintains programs. In 1985,
Congress passed the so-called Kemp-Kasten amendment which has been made part
of every Foreign Operations appropriation since, barring U.S. funds to any
organization that supported or participated “in the management” of a program of
coercive abortion or involuntary sterilization. In 1993, President Clinton determined
that UNFPA, despite its presence in China, was not involved in the management of
a coercive program. In most years since 1993, Congress has appropriated about $25
million for UNFPA, but added a directive that required that amount reduced by
however much UNFPA spent in China. Consequently, the U.S. contribution has
fluctuated between $21.5 million and $25 million.
For FY2002, President Bush requested $25 million for UNFPA. As part of a
larger package concerning various international family planning issues, Congress
provided in the FY2002 Foreign Operations bill “not more than” $34 million for
UNFPA. While members of the Appropriations Committees say it was their intent
to provide the full $34 million, the language would allow the President to allocate
however much he chooses, up to a $34 million ceiling. According to February 27
testimony by Arthur Dewey, Assistant Secretary of State for Population, Refugees,
and Migration before the Senate Foreign Relations Committee, the White House
initiated the hold on UNFPA funds because of new evidence that coercive practices
continue in counties where UNFPA concentrates its programs. A September 2001
investigation team, sponsored by the Population Research Institute, concluded that
a consistent pattern of coercion continues in “model” UNFPA counties, including
forced abortions and involuntary sterilizations. Refuting these findings, a UNFPA-
commissioned review team found in October 2001 “absolutely no evidence that the
UN Population Fund supports coercive family planning practices in China or violates
the human rights of Chinese people in any way.”11
While most observers agree that coercive family planning practices continue in
China, differences remain over the extent to which, if any, UNFPA is involved in
involuntary activities and whether UNFPA should operate at all in a country where
such conditions exist. Given the conflicting reports, the State Department sent its
own investigative team to China for a two-week review of UNFPA programs on May
13, 2002. The team was led by former Ambassador William Brown, and included
11 See House International Relations Committee hearing, Coercive Population Control in
China: New Evidence of Forced Abortion and Forced Sterilization, October 17, 2001. See
also testimony of Josephine Guy and Nicholaas Biegman before the Senate Foreign
Relations Committee, February 27, 2002.)

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Bonnie Glick, a former State Department official, and Dr. Theodore Tong, a public
health professor at the University of Arizona. The team’s objective was to determine
whether UNFPA “supports or participates in the management of a program of
coercive abortion or involuntary sterilization.” If Administration officials conclude
that this is the case, UNFPA would be in violation of the Kemp-Kasten amendment
and be ineligible for U.S. grants. Alternatively, the President could find that the
UNFPA did not violate Kemp-Kasten, but reduce the U.S. contribution to something
less than $34 million to express displeasure over alleged coercive family practices
in China and UNFPA’s involvement.
This issue has already been the subject of sharp debate during House
consideration of the FY2002 emergency supplemental (H.R. 4775). On May 9, 2002,
the House Appropriations Committee approved (32-31) an amendment by
Representatives Lowey and Kolbe that would have required the President to transfer
$34 million to UNFPA by July 10 if the State Department commission concludes
that UNFPA is not involved in coercive family planning practices in China. Meeting
on May 15, however, the Committee added an additional provision offered by
Representative Tiahrt, supported by the White House, requiring the President to
determine by July 31, 2002, whether UNFPA participates in the management of
coercive family planning practices. Before final passage, however, pursuant to
H.Res. 431, the second rule for consideration of H.R. 4775, both the Lowey/Kolbe
and the Tiahrt amendments were deleted from the bill.
The Senate-passed Supplemental Appropriation included a provision nearly
identical to the Lowey/Kolbe text. Under any of these amendments a finding that
UNFPA was in violation of Kemp-Kasten would result in the termination of U.S.
support. Without such a conclusion, however, the Senate and Lowey/Kolbe
amendments would require the full $34 million contribution to go forward. The
Tiahrt amendment would have left open the possibility for the President to allocate
something less than $34 million for UNFPA. As enacted, however, H.R. 4775
dropped all references to UNFPA leaving the decision up to the President.
For FY2003, the President proposes no funding for UNFPA, although $25
million is requested in “reserve” for the account from which UNFPA receives its
funding. Presumably, this could be made available to UNFPA if it is found not to be
in violation of Kemp-Kasten.
“Mexico City” policy. The debate over international family planning policy
and abortion began nearly three decades ago when Congress added a provision to the
Foreign Assistance Act of 1961 prohibiting the use of U.S. appropriated funds for
abortion-related activities and coercive family planning programs. During the mid-
1980s, in what has become known as the “Mexico City” policy (because it was first
announced at the 1984 Mexico City Population Conference), the Reagan
Administration, and later the George H. W. Bush Administration restricted funds for
foreign non-governmental organizations (NGOs) that were involved in performing
or promoting abortions in countries where they worked, even if such activities were
undertaken with non-U.S. funds. Several groups, including International Planned
Parenthood Federation-London (IPPF-London), became ineligible for U.S. financial
support. In some years, Congress narrowly approved measures to overturn this
prohibition, but White House vetoes kept the policy in place. President Clinton in

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1993 reversed the position of his two predecessors, allowing the United States to
resume funding for all family planning organizations so long as no U.S. money was
used by those involved in abortion-related work.
During the past six years, the House and Senate have taken opposing positions
on the Mexico City issue, and thus have repeatedly held up enactment of the final
Foreign Operations spending measure. The House position, articulated by
Representative Chris Smith (N.J.) and others, supported reinstatement of the Mexico
City policy restricting U.S. aid funds to foreign organizations involved in performing
abortions or in lobbying to change abortion laws or policies in foreign countries. The
Senate, on the other hand, has rejected in most cases House provisions dealing with
Mexico City policy, favoring a position that leaves these decisions in the hands of the
Administration.
Unable to reach an agreement satisfactory to both sides, Congress adopted
interim arrangements for FY1996-FY1999 that did not resolve the broad population
program controversy, but permitted the stalled Foreign Operations measure to move
forward. The annual “compromise” removed House-added Mexico City restrictions,
but reduced population assistance to $385 million, and in several years, “metered”
the availability of the funds at a rate of one-twelfth of the $385 million per month.
In FY2000, when the issue became linked with the un-related foreign policy
matter of paying U.S. arrears owed to the United Nations, a reluctant President
Clinton agreed to a modified version of abortion restrictions, marking the first time
that Mexico City conditions had been included in legislation signed by the President
(enacted in the Foreign Operations Act for FY2000, H.R. 3422, incorporated into
H.R. 3194, the Consolidated Appropriations Act for FY2000, P.L. 106-113).
Because the President could waive the restrictions for $15 million in grants to
organizations that refused to certify, there was no major impact on USAID family
planning programs in FY2000, other than the reduction of $12.5 million in
population assistance that the legislation required if the White House exercised the
waiver authority.
When Congress again came to an impasse in FY2001, lawmakers agreed to
allow the new President to set policy. Under the FY2001 Foreign Operations
measure, none of the $425 million appropriation could be obligated until after
February 15, 2001. Subsequently, on January 22, 2001, two days after taking office,
President Bush issued a Memorandum to the USAID Administrator rescinding the
1993 memorandum from President Clinton and directing the Administrator to
“reinstate in full all of the requirements of the Mexico City Policy in effect on
January 19, 1993.” The President further said that it was his “conviction that
taxpayer funds should not be used to pay for abortions or to advocate or actively
promote abortion, either here or abroad.”12 A separate statement from the President’s
press secretary stated that President Bush was “committed to maintaining the $425
million funding level” for population assistance “because he knows that one of the
12 White House. Memorandum for the Administrator of the United States Agency for
I n t e r n a t i o n a l D e v e l o p m e n t . J a n u a r y 2 2 , 2 0 0 1 . F o u n d a t
[http://www.whitehouse.gov/press/releases/20010123-5.html].

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CRS-31
best ways to prevent abortion is by providing quality voluntary family planning
services.” The press secretary further emphasized that it was the intent that any
restrictions “do not limit organizations from treating injuries or illnesses caused by
legal or illegal abortions, for example, post abortion care.”13 On February 15, 2001,
the day on which FY2001 population aid funds became available for obligation,
USAID issued specific policy language and contract clauses to implement the
President’s directive. The guidelines are nearly identical to those used in the 1980s
and early 1990s when the Mexico City policy applied.14 For FY2003, President Bush
seeks $425 million for USAID population assistance, the same as requested for
FY2002, but less than the $446.5 million appropriated.
Critics of the certification requirement oppose it on several grounds. From an
administrative standpoint, they say it increases USAID costs to manage family
planning programs because of the additional paperwork and delays in implementation
of projects. They further believe that family planning organizations may cut back
on services because they are unsure of the full implications of the restrictions and do
not want to risk losing eligibility for USAID funding. This, they contend, will lead
to higher numbers of unwanted pregnancies and possibly more abortions. Opponents
also believe the new conditions undermine relations between the U.S. Government
and foreign NGOs and multilateral groups, creating a situation in which the United
States challenges their decisions on how to spend their own money. They argue that
U.S. policy imposes a so-called “gag” order on the ability of the organization to
promote changes to abortion laws and regulations in developing nations. This would
be unconstitutional if applied to American groups working in the United States,
critics note.
Supporters of the certification requirement argue that even though permanent
law bans USAID funds from being used to perform or promote abortions, money is
fungible; organizations receiving American-taxpayer funding can simply use USAID
resources for permitted activities while diverting money raised from other sources to
perform abortions or lobby to change abortion laws and regulations. The certification
process, they contend, stops the fungibility “loophole.”
Congressional Action. S. 2779, as reported, provides $450 million for
population assistance and “not less than” $50 million for UNFPA. Moreover, the
legislation modifies the Kemp-Kasten language that would require a finding by the
Secretary of State that an organization “directly participates in he practice of coercive
abortion or involuntary sterilizations” before declaring the group ineligible for U.S.
support. Instead of the current, more implicit standard under which Kemp-Kasten
has been interpreted, this new language would appear to set a more rigorous and
specific test for determining whether UNFPA or any other organization fell under the
Kemp-Kasten conditions.
13 White House. Restoration of the Mexico City Policy. January 22, 2001. Found at
[http://www.whitehouse.gov/press/releases/20010123.html].
14 For more background on the Mexico City policy, see CRS Report RL30830, International
Family Planning: the Mexico City Policy.

---

CRS-32
Meanwhile, House and Senate conferees agreed to drop all language regarding
UNFPA from the FY2002 supplemental bill, thus leaving the decision entirely up to
the President. Subsequently, on July 22, the White House announced that UNFPA
is in violation of Kemp-Kasten and ineligible for U.S. funding. The White House
found that China’s one-child policy leads to forced abortions and involuntary
sterilizations, and is a policy implicitly supported by UNFPA. The State
Department’s team investigating the issue in May, however, did not find any direct
UNFPA participation in such coercive practices or that the organization knowingly
promoted abortions or involuntary sterilizations. Critics of the Administration’s
decision oppose it not only because of the negative impact it may have on access to
voluntary family planning programs by persons in around 140 countries, but also
because of the possible application of the determination for other international
organizations that operate in China and to which the U.S. contributes. The White
House will direct the $34 million be re-allocated to USAID family planning
activities.
Andean Regional Initiative15
The Andean Regional Initiative (ARI) was launched in April 2001, when the
Bush Administration requested $882.29 million in FY2002 economic and
counternarcotics assistance, as well as an extension of trade preferences and other
measures, for Colombia and six regional neighbors (Peru, Bolivia, Ecuador, Brazil,
Panama, and Venezuela). Of this amount, $731 million was designated as
International Narcotics Control (INC) assistance in a line item in the budget request
known as the Andean Counterdrug Initiative (ACI). A central element of the program
has been the training and equipping of counternarcotics battalions in Colombia.
According to the Administration, the distinctive features of the program,
compared to Plan Colombia assistance approved in 2000,16 are that a larger portion
of the assistance is directed at economic and social programs, and that more than half
of the assistance is directed at regional countries experiencing the spill-over effects
of illicit drug and insurgency activities. Another aspect of the initiative was
President Bush’s request for the extension and broadening of the Andean Trade
Preferences Act (ATPA) expiring in December 2001, that would give duty free or
reduced-rate treatment to the products of Bolivia, Peru, Ecuador and Colombia. This
was a central topic when President Bush met with Andean leaders at the Summit of
the Americas meeting in Canada in April 2001.
15 This section was prepared by Nina M. Serafino and K. Larry Storrs, and drawn from CRS
Report RL31383, Andean Regional Initiative (ARI): FY2002 Supplemental and FY2003
Assistance for Colombia and Neighbors.
16 “Plan Colombia” refers to the $1.3 billion in FY2000 emergency supplemental
appropriations approved by the 106th Congress in the FY2001 Military Construction
Appropriations bill (H.R. 4425, P.L. 106-246) for counternarcotics and related efforts in
Colombia and neighboring countries. For more detail, see CRS Report RL30541, Colombia:
Plan Colombia Legislation and Assistance (FY2000-FY2001). For the latest figures on aid
to Colombia, as well as past assistance, see CRS Report RS21213 , Colombia: Summary and
Tables on U.S. Assistance, FY1989-FY2003.

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CRS-33
In a mid-May 2001 briefing on the Andean Regional Initiative, Administration
spokesmen set out three overarching goals for the region that could be called the
three D’s - democracy, development, and drugs. The first goal was to promote
democracy and democratic institutions by supporting judicial reform, anti-corruption
measures, human rights improvement, and the peace process in Colombia. The
second was to foster sustainable economic development and trade liberalization
through alternative economic development, environmental protection, and renewal
of the Andean Trade Preference Act (ATPA). The third was to significantly reduce
the supply of illegal drugs to the United States from the source through eradication,
interdiction and other efforts.17 Under consideration by the Congress in 2001, critics
of the initiative argued that it overemphasized military and counter-drug assistance,
and provided inadequate support for human rights and the peace process in
Colombia. Supporters argued that it continued needed assistance to Colombia, while
providing more support for regional neighbors and social and economic programs.
By the end of 2001, Congress approved, in the Foreign Operations
Appropriations Act (H.R. 2506/P.L. 107-115), $625 million for the ACI, $106
million less than the President’s ACI request. Also included were a series of
conditions and certification requirements relating to human rights and to the
controversial aerial eradication spraying (also known as aerial fumigation) program
to destroy illicit coca crops, and an alteration of the cap on military and civilian
contractors serving in Colombia.
For FY2003, President Bush requests about $980 million for the Andean
Regional (ARI) Initiative, including $731 million in counternarcotics assistance
under the Andean Counterdrug Initiative (ACI), with some ACI funds being used for
social and economic programs. The FY2003 request is similar to the FY2002 request,
except that the Administration is requesting $98 million in Foreign Military
Financing (FMF) for Colombia to train and equip a Colombian army brigade to
protect the Cano-Limon oil pipeline in northeastern Colombia. The request marks a
sharp break with previous policy towards Colombia, as it is the first request for
military assistance provided specifically for a purpose other than counternarcotics
operations. The Administration is also requesting $1 million each for Bolivia,
Ecuador, Panama, and Peru in FY2003 FMF funding.
Requested FY2003 foreign operations funding of $979.8 million for the ARI,
including $731 million for ACI, is to be distributed as follows in descending order:
! Colombia: $537 million in ARI funding, including $439 million in
ACI funding and $98 million in FMF funding.
! Peru: $186.6 million in ARI funding, including $135 million in ACI
funding and $1 million in FMF funding.
17 See U.S. Department of State International Information Programs Washington File, Fact
Sheet: U.S. Policy Toward the Andean Region, and Transcript: State Department Briefing
on Andean Regional Initiative, May 17, 2001, also available at the following web site
[http://usinfo.state.gov/regional/ar/colombia/]

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CRS-34
! Bolivia: $132.6 million in ARI funding, including $91 million in
ACI funding and $1 million in FMF funding.
! Ecuador: $65.1 million in ARI funding, including $37 million in
ACI funding and $1 million in FMF funding.
! Brazil: $29.5 million in ARI funding, including $12 million in ACI
funding.
! Panama: $20.5 million in ARI funding, including $9 million in ACI
funding and $1 million in FMF funding.
! Venezuela: $8.5 million in ARI funding, including $8 million in ACI
funding.
Proponents of the Administration’s request argue in the context of the post-
September 2001 war on terrorism that Colombia and the region should be supported,
and they have urged the Administration to seek expanded authority to provide
support for an expansion of activities.18 On March 6, 2002, the House passed H.Res.
358 expressing the sense of the House of Representatives that “the President, without
undue delay, should transmit to Congress for its consideration proposed legislation,
consistent with United States law regarding the protection of human rights, to assist
the Government of Colombia protect its democracy from United States-designated
foreign terrorist organizations and the scourge of illicit narcotics.”
Critics argue that the new request would expand the U.S. military role in
Colombia, now strictly limited to counternarcotics, into a problematic
counterinsurgency one. Critics who emphasize human rights considerations argue
that such a role would inevitably involve tolerance of the linkages between the
Colombian military and paramilitary groups which are responsible for gross
violations of human rights. (A particular concern is the lifting of human rights
conditions concerning paramilitary groups in the FY2002 supplemental request, see
below.) Others, who believe U.S. military power should not be committed unless it
can be effective, warn that the proposed assistance falls far short of that required to
have any significant effect on the situation in Colombia. Many also worry that the
United States is slowly being drawn into a Vietnam-like morass, providing assistance
to a government that does not have the credibility and political will to pay for and
successfully wage its own war, and conclude a just peace.
In addition to the request for FY2003, on March 21, 2002, the Bush
Administration requested $27.1 billion in Emergency FY2002 Supplemental
18 For critical comments, see statements on the Center for International Policy’s Colombia
Project web site [http://www.ciponline.org/colombia/] under CIP Analyses, under U.S.
Military and Police Aid (especially Other Groups’ Analyses) and under U.S. Government
Information (especially Legislators). For supportive comments, see statements on the same
web site under U.S. Military and Police Aid (especially Other Groups’ Analyses), and U.S.
Government Information (especially statements from Officials and Legislators).

---

CRS-35
Assistance, which was mostly to support Department of Defense and Homeland
Security counter-terrorism efforts, but would also provide $38 million in additional
funding and authorities relating to Colombia and the Andean Region. Included in
this submission was a request for $4 million of International Narcotics Control (INC)
funding for Colombia police post support, $6 million of FMF funding for Colombia
for infrastructure security and $3 million for Ecuador for counter-terrorism
equipment and training, and $25 million of Nonproliferation, Anti-Terrorism and
Demining funding for a counter-kidnaping program for members of Colombia’s
police and armed forces. The supplemental submission proposed to broaden the
authorities of the Defense and State Departments to utilize FY2002 and FY2003
assistance and unexpended Plan Colombia assistance to support the Colombian
government’s “unified campaign against narcotics trafficking, terrorist activities, and
other threats to its national security.” According to the Administration’s explanation,
these provisions “would allow broader authority to provide assistance to Colombia
to counter the unified ‘cross-cutting’ threat posed by groups that use narcotics
trafficking to fund their terrorist and other activities that threaten the national security
of Colombia.”
Such a change would allow the Administration to expand the scope of U.S.
assistance, particularly military assistance, to Colombia, allowing State and Defense
department funds to assist the Colombian government to counter any threat to its
national security. The immediate, and widely discussed, effect of this change would
be to allow the U.S. government to broaden the circumstances under which it
currently shares intelligence with Colombian security forces, providing intelligence
not only for counterdrug operations, but also for military operations against the
Colombian guerrillas and paramilitaries. The change would also permit the Plan
Colombia helicopters and other equipment that the United States has provided to be
used for such purposes.
The Administration’s proposal would continue, the “Leahy Amendment” – a
provision in the foreign operations and defense appropriations legislation forbidding
assistance to military and police units credibly alleged to engage in gross violations
of human rights – as well as the current caps of 400 each on the number of U.S.
civilian contractors and U.S. military personnel supporting “Plan Colombia”
activities in Colombia. (The new proposed military activities, i.e., infrastructure
protection and anti-kidnaping assistance, are not, however, “Plan Colombia”
activities.) Except for those two specifically mentioned conditions, however, the
Administration’s proposal states that funding would be provided “notwithstanding
any provision of law.” That statement would lift conditions like those of Section 567
of P.L. 107-115, the FY2002 Foreign Operations Appropriations Act, which has
stiffer provisions regarding human rights violations by security forces, and also
requires the armed forces to address the continuing links of some of its members with
illegal rightist paramilitary groups. It would also lift P.L. 107-115 conditions
regarding aerial fumigation spraying and alternative development.
Congressional Action. S. 2779 as reported includes $637 million for the
Andean initiative, about the same as in FY2002 but $94 million under the request.
Various conditions are attached to the funds. In the FY2002 supplemental (H.R.
4775), Congress endorsed the unified campaign policy proposed by the

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CRS-36
Administration, thereby allowing funds to be used both for counter-narcotics and to
fight terrorism.
Millennium Challenge Account
In a speech on March 14, 2002, at the Inter-American Development Bank,
President Bush outlined a proposal for the United States to increase foreign economic
assistance beginning in FY2004 so that by FY2006 American aid would be $5 billion
higher than three years earlier. If the aid budget rises in three equal installments of
$1.67 billion each year, the initiative could provide as much as a cumulative $10
billion in additional economic assistance above what might be assumed for the three
year period without the President’s initiative. The funds would be placed in a new
Millennium Challenge Account (MCA) and be available to developing nations that
are pursing political and economic reforms in three areas:
! Ruling justly – promoting good governance, fighting corruption,
respecting human rights, and adhering to the rule of law.
! Investing in people – providing adequate health care, education, and
other opportunities promoting an educated and healthy population.
! Fostering enterprise and entrepreneurship – promoting open markets
and sustainable budgets.
If fully implemented, the initiative would represent one of the largest increases in
foreign aid spending in half a century, outpaced only by the Marshall Plan following
World War II and the Latin America-focused Alliance for Progress in the early
1960s.
The concept is based on the premise that economic development succeeds best
where it is linked to sound economic and good governance policies. Conditioning
assistance on policy performance and accountability by recipient nations is not new
to U.S. aid programs. Since the late 1980s at least, portions of American
development assistance have been allocated to some degree on a performance-based
system. What is different about the MCA is the size of the commitment and the
pledge to segregate the funds for use only to support development efforts by the
“good performers,” evidently without regard to other U.S. foreign policy objectives
that often strongly influence where U.S. aid is spent.
Assuming that Congress fully funds the President’s aid request for next year and
that FY2003 will be the baseline from which to compare growth in foreign aid
spending during implementation of the MCA, a $5 billion dollar increase by FY2006
would result in a $17.2 billion foreign aid budget. In real terms (constant FY2003
dollars), taking into the account the estimated effects of inflation, U.S. economic
assistance in FY2006 would be $16.14 billion, the highest amount since FY1979 and
the signing of the Camp David Middle East peace accords and FY1985, an unusual
year in which the United States responded to special Middle East economic
stabilization and African famine requirements. But using FY2003 as a baseline
rather than FY2000, the percentage of increase, especially in real terms (counting
inflation), between FY2003 and FY2006 will be less than the 50% figure used by

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CRS-37
some Administration officials. The nominal increase would be about 41% while in
real terms, FY2006 funding would be nearly 32% more. Because of the size of the
U.S. economy and continued growth projected over the next several years, the MCA
increases will have little impact on the amount of U.S. aid as a percent of GDP.
According to current projections, assistance would rise from the current 0.11% of
GDP to 0.13%.
There has also been some discussion about launching an MCA “pilot” project
in FY2003. While executive officials caution that delays in reaching agreement on
an overall MCA framework may prevent any early start to the initiative, some
Members of Congress have expressed support for immediately funding the MCA,
possible in the FY2003 regular Foreign Operations appropriations bill. The Senate-
reported FY2003 budget resolution (S.Con.Res. 100) appears to endorse an early start
for the MCA by increasing international affairs funding by $500 million above the
President’s request and using the money, among other things, to initiate a pilot
program targeting “foreign assistance on debt relief, development, global health, and
trade in top performing countries in Africa and other developing regions of the
world.”19 (For more information about this issue, see CRS Report RS 21209, The
Millennium Challenge Account: Bush Administration Foreign Aid Initiative.)
Congressional Action. S. 2779, as reported, does not address the
Millennium Challenge account or allocate funds for any pilot project for FY2003.
For Additional Reading
General/Overview
CRS Report 98-916. Foreign Aid: An Introductory Overview of U.S. Programs and
Policy.
CRS Report 97-62. The Marshall Plan: Design, Accomplishments, and Relevance
to the Present.
CRS Report RS21209. The Millennium Challenge Account: Bush Administration
Foreign Aid Initiative.
Foreign Operations Programs
CRS Report RS20329. African Development Bank and Fund.
CRS Issue Brief IB10050. AIDS in Africa.
CRS Issue Brief IB88093. Drug Control: International Policy.
19 Senate Committee on the Budget. Concurrent Resolution on the Budget, FY2003. Report
107-141, April 11, 2002, p. 21.

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CRS-38
CRS Report 98-568. Export-Import Bank: Background and Legislative Issues.
CRS Report RS21181. HIV/AIDS international programs: FY2003 request and
FY2002 spending.
CRS Report RS20622. International Disasters: How the United States Responds.
CRS Report RL30830. International Family Planning: The “Mexico City” Policy.
CRS Report RL30932. Microenterprise and U.S. Foreign Assistance.
CRS Issue Brief IB96008. Multilateral Development Banks: Issues for the 107th
Congress.
CRS Report RS21168. The Peace Corps: USA Freedom Corps Initiative.
CRS Issue Brief IB89150. Refugee Assistance in the Foreign Aid Bill: Problems and
Prospects.
CRS Issue Brief IB96026. U.S. International Population Assistance: Issues for
Congress.
CRS Report RL31433. U.S. global health priorities: USAID FY2003 budget.
Foreign Operations Country/Regional Issues
CRS Report RL31355. Afghanistan’s Path to Reconstruction: Obstacles,
Challenges, and Issues for Congress.
CRS Issue Brief IB95052. Africa: U.S. Foreign Assistance Issues.
CRS Report RL31383. Andean Regional Initiative (ARI): FY2002 Supplemental and
FY2003 Assistance for Colombia and Neighbors.
CRS Report RL30831. Balkan Conflicts: U.S. Humanitarian Assistance and Issues
for Congress.
CRS Report RS21213. Colombia: Summary and Tables on U.S. Assistance,
FY1989-FY2003.
CRS Issue Brief IB95077. The Former Soviet Union and U.S. Foreign Assistance.
CRS Issue Brief IB85066. Israel: U.S. Foreign Assistance.
CRS Report RL31342. Middle East: U.S. Foreign Assistance, FY2001, FY2002, and
FY2003 request.
CRS Report RS20895. Palestinians: U.S. Assistance.

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CRS-39
CRS Report RL31362. U.S. Foreign Aid to East and South Asia: Selected
Recipients.
Selected World Wide Web Sites
African Development Bank
[http://www.afdb.org/]
African Development Foundation
[http://www.adf.gov/]
Asian Development Bank
[http://www.asiandevbank.org/]
CRS Current Legislative Issues: Foreign Affairs
[http://www.crs.gov/products/browse/is-foreignaffairs.shtml]
Export-Import Bank
[http://www.exim.gov/]
Inter-American Development Bank
[http://www.iadb.org/]
Inter-American Foundation
[http://www.iaf.gov/]
International Monetary Fund
[http://www.imf.org/]
Overseas Private Investment Corporation
[http://www.opic.gov/]
Peace Corps
[http://www.peacecorps.gov/]
Trade and Development Agency
[http://www.tda.gov/]
United Nations Children’s Fund (UNICEF)
[http://www.unicef.org/]
United Nations Development Program (UNDP)
[http://www.undp.org/]
United National Population Fund (UNFPA)
[http://www.unfpa.org/]

---

CRS-40
U.S. Agency for International Development
[http://www.info.usaid.gov/]
U.S. Department of State
[http://www.state.gov/]
World Bank
[http://www.worldbank.org/]
World Bank HIPC website
[http://www.worldbank.org/hipc/]

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CRS-41
Table 7. Foreign Operations: Discretionary Budget Authority
(millions of dollars)
FY2002 FY2002 FY2002 FY2003
House
Senate
Program
Regular Supps.a
Total
Request FY2003 FY2003
Title I - Export and Investment Assistance:
Export-Import Bank
779.3
–
779.3
596.7
–
596.7
Overseas Private Invest Corp
(251.4)
–
(251.4)
(242.1)
–
(242.1)
Trade/Development Agency
50.0
–
50.0
44.5
–
44.7
Total, Title I - Export Aid
577.9
–
577.9
399.1
–
399.3
Title II - Bilateral Economic:
Development Assistance:
c
Child Survival & Health
1,433.5b
–
1,433.5
–
1,780.0
Development Asst Fund
1,178.0
–
1,178.0
2,859.5b
–
1,350.0
Subtotal
2,611.5
–
2,611.5
2,859.5
–
3,130.0
Of which:
UNICEF
[120.0]
–
–
[120.0]
–
[120.0]
Population aidd
[447.5]
–
–
[425.0]
–
[450.0]
HIV/AIDSc
[510.0]
–
–
[640.0]
–
[750.0]
Intl Disaster Aid
235.5
186.0
421.5
235.5
–
255.5
Transition Initiatives
50.0
–
50.0
55.0
–
65.0
Development Credit Programs
7.5
–
7.5
7.6
–
7.6
Subtotal, Development Aid
2,954.5
186.0
3,140.5
3,157.6
–
3,458.1
USAID Operating Expenses
549.0
22.0
571.0
572.1
–
571.1
USAID Inspector General
31.5
–
31.5
33.0
–
33.0
USAID Capital Invst Fund
–
–
–
95.0
–
65.0
Economic Support Fund (ESF)e
2,199.0
1,065.0
3,264.0
2,290.0
–
2,250.0
International Fund for Ireland
25.0
–
25.0
[25.0]e
–
–
East Europe
621.0
–
621.0
495.0
–
555.0
Former Soviet Union
784.0
156.5
940.5
755.0
–
765.0
Inter-American Foundation
13.1
–
13.1
14.0
–
16.4
African Development Foundation
16.5
–
16.5
16.6
–
17.7
Treasury Dept. technical asst
6.5
3.0
9.5
10.0
–
10.5
Debt reduction
229.0
–
229.0
0.0
–
40.0
Peace Corps
275.0
3.9
278.9
317.0
–
285.0
Intl Narcotics/Law
217.0
187.0
404.0
196.7
–
196.7
Intl Narcotics–Andean Initiative
625.0
–
625.0
731.0
–
637.0
Migration & refugee asst
705.0
100.0
805.0
705.0
–
782.0
Emerg. Refugee Fund (ERMA)
15.0
–
15.0
15.0
–
32.0

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CRS-42
FY2002 FY2002 FY2002 FY2003
House
Senate
Program
Regular Supps.a
Total
Request FY2003 FY2003
Non-Proliferation/anti-terrorism
313.5
266.7
580.2
372.4
–
376.4
Total Title II-Bilat Economic
9,579.6
1,990.1
11,569.7
9,775.4
–
10,090.9
Title III - Military Assistance:
Intl Military Ed. & Training
70.0
–
70.0
80.0
–
80.0
Foreign Mil Financing (FMF)
3,650.0
402.0
4,052.0
4,107.2
–
4,067.0
Peacekeeping Operations
135.0
240.0
375.0
108.3
–
125.3
Total, Title III-Military Aid
3,855.0
642.0
4,497.0
4,295.5
–
4,272.3
Title IV - Multilateral Economic Aid:
World Bank - Intl Develop. Assn
792.4
–
792.4
874.3
–
837.3
World Bank-EnvironmentFacility
100.5
–
100.5
177.8
–
177.8
World Bank-Mult Invst Guaranty
5.0
–
5.0
3.6
–
2.6
Inter-Amer. Development Bank
18.0
–
18.0
59.9
–
47.9
Asian Development Bank
98.0
–
98.0
147.4
–
127.4
African Development Fund
100.0
–
100.0
118.1
–
108.1
African Development Bank
5.1
–
5.1
5.1
–
5.1
European Bank for R & D
35.8
–
35.8
35.8
–
35.8
Intl Fund for Ag Development
20.0
–
20.0
15.0
–
15.0
Intl Organizations & Programs
208.5f
–
208.5
190.0f
–
230.5
Total, Title IV - Multilateral
1,383.3
–
1,383.3
1,627.0
–
1,587.5
OMB Retirement Accruals
–
–
–
23.0
–
–
Rescissions
– (269.0)
(269.0)
–
–
–
Foreign Operations – Total
15,395.8
2,363.1
17,758.9 16,120.0
–
16,350.0
Sources: House and Senate Appropriations Committee and CRS calculations.
a. FY2002 supplementals include funds appropriated in P.L. 107-38 (the Emergency Terrorism Response Fund)
and P.L. 107-206 (Emergency FY2002 Supplemental Appropriations).
b. Includes the UNICEF contribution.
c. For FY2003, the Administration is proposing to consolidate Child Survival/Health and Development
Assistance accounts into a single account. For comparative purposes with FY2002, the FY2003 request
breaks down as follows: $1.374 billion for Child Survival/Health and $1.365 billion for Development
Assistance.
d. Population and HIV/AIDS aid funding include small amounts from other Foreign Operations accounts. The
figures here represent totals “across all accounts,” not just those within the Development Aid subtotal.
e. The Administration request includes the Ireland Fund as part of the Economic Support Fund.
f. Excludes UNICEF contribution which is part of Development Assistance under Title II above.

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