Order Code RL31311
Report for Congress
Received through the CRS Web
Appropriations for FY2003:
Foreign Operations, Export Financing, and
Related Programs
Updated December 2, 2002
Larry Nowels
Specialist in Foreign Affairs
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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].


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 $16.45 billion (amended on September 3) for
FY2003 Foreign Operations, an amount 7% 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 $1.4 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 $17.7 billion.
The FY2003 Foreign Operations proposal increases bilateral U.S. development
assistance by $348 million (+13%), including an additional $230 million, or nearly
one-half 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%.
Acting before the September 3 budget amendment, the Senate Appropriations
Committee (S. 2779) recommended $16.35 billion in FY2003 Foreign Operations
funding. The House Appropriations Committee reported a $16.55 billion bill on
September 19 (H.R. 5410), accommodating the additional funds sought by the
President.
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.

Key Policy Staff
Area of Expertise
Name
Tel.
E-Mail
General: Policy issues & budget
Larry Nowels
7-7645
lnowels@crs.loc.gov
General: Policy issues
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
Afghanistan reconstruction aid
Rhoda Margesson
7-0425
rmargesson@crs.loc.gov
Africa Aid
Raymond Copson
7-7661
rcopson@crs.loc.gov
Agency for Intl Development
Larry Nowels
7-7645
lnowels@crs.loc.gov
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
Andean Regional Initiative
Larry Storrs
7-7672
lstorrs@crs.loc.gov
Debt Relief
Larry Nowels
7-7645
lnowels@crs.loc.gov
Development Assistance
Larry Nowels
7-7645
lnowels@crs.loc.gov
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
Disaster aid
Rhoda Margesson
7-0425
rmargesson@crs.loc.gov
Drug/counternarcotics programs
Rensselaer Lee
7-7748
rlee@crs.loc.gov
Drug/counternarcotics, Colombia
Nina Serafino
7-7667
nserafino@crs.loc.gov
Export-Import Bank
James Jackson
7-7751
jjackson@crs.loc.gov
Family planning programs
Larry Nowels
7-7645
lnowels@crs.loc.gov
Health programs
Rhoda Margesson
7-0425
rmargesson@crs.loc.gov
Tiaji Salaam
7-7677
tsalaam@crs.loc.gov
HIV/AIDS
Raymond Copson
7-7661
rcopson@crs.loc.gov
International affairs budget
Larry Nowels
7-7645
lnowels@crs.loc.gov
International Monetary Fund
Jonathan Sanford
7-7682
jsanford@crs.loc.gov
Jeff Hornbeck
7-7782
jhornbeck@crs.loc.gov
Kosovo/Yugoslavia aid
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
Microenterprise
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
Middle East assistance
Clyde Mark
7-7681
cmark@crs.loc.gov
Military aid/Arms sales
Richard Grimmett
7-7675
rgrimmett@crs.loc.gov
Multilateral Development Banks
Jonathan Sanford
7-7682
jsanford@crs.loc.gov
North Korea/KEDO
Larry Niksch
7-7680
lniksch@crs.loc.gov
Overseas Private Investment Corp
James Jackson
7-7751
jjackson@crs.loc.gov
Peace Corps
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
Peacekeeping
Marjorie Browne
7-7695
mbrowne@crs.loc.gov
Refugee aid
Larry Nowels
7-7645
lnowels@crs.loc.gov
Russia/East Europe Aid
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
Terrorism
Rensselaer Lee
7-7748
rlee@crs.loc.gov
Trafficking in Women/Children
Francis Miko
7-7670
fmiko@crs.loc.gov
U.N. Voluntary Contributions
Vita Bite
7-7662
vbite@crs.loc.gov

Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Implications for Foreign Operations of Continuing Appropriation Funding . . . . . 4
Foreign Operations Funding Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Foreign Operations, the FY2003 Budget Resolution, and Sec.
302(b) Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Foreign Operations Appropriations Request for FY2003 and
Congressional Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Request Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Fighting the War on Terrorism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Other Key Elements of the FY2003 Request . . . . . . . . . . . . . . . . . . . . 11
Leading Foreign Aid Recipients Proposed for FY2002/FY2003 . . . . . . . . . 12
Congressional Response to the FY2003 Request . . . . . . . . . . . . . . . . . . . . 14
Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Supplemental FY2002 Foreign Operations Funding . . . . . . . . . . . . . . . . . . . . . . 16
Funding Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
DOD’s Role in Military Aid Allocations . . . . . . . . . . . . . . . . . . . . . . . 20
Colombia Aid Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Removal of Restrictions for Other Economic and Military
Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Congressional Action on the Administration’s Supplemental
Foreign Operations Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Major Policy and Spending Issues for FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Foreign Aid as a Tool in the War on Terrorism . . . . . . . . . . . . . . . . . . . . . . 24
Anti-Terrorism Assistance (ATA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Terrorist Interdiction Program (TIP) . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Terrorist Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
USAID Physical Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Aid Restrictions for Terrorist States . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Development Aid Policy Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Family Planning, Abortion Restrictions, and UNFPA Funding . . . . . . . . . 32
UNFPA Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
“Mexico City” Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Andean Regional Initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Millennium Challenge Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Selected World Wide Web Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
List of Figures
Figure 1. Foreign Policy Budget, FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Figure 2. Foreign Operations Funding Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
List of Tables
Table 1. Status of Foreign Operations Appropriations, FY2003 . . . . . . . . . . . . . 4
Table 2. Foreign Operations Appropriations, FY1995 to FY2003 . . . . . . . . . . . . 7
Table 3. Summary of Foreign Operations Appropriations . . . . . . . . . . . . . . . . . 11
Table 4. Leading Recipients of U.S. Foreign Aid . . . . . . . . . . . . . . . . . . . . . . . . 13
Table 5. FY2002 Supplemental Compared with Enacted & Requested . . . . . . . 18
Table 6. Funding for USAID Global Health Programs . . . . . . . . . . . . . . . . . . . . 31
Table 7. Foreign Operations: Discretionary Budget Authority . . . . . . . . . . . . . 48

Appropriations for FY2003:
Foreign Operations, Export Financing,
and Related Programs
Most Recent Developments
On September 19, 2002, the House Appropriations Committee reported a
$16.55 billion FY2003 spending measure, $102 million higher than the President’s
request. H.R. 5410 accommodates an Administration budget amendment of $350
million sent to Congress on September 3. The budget amendment, consisting of
additional aid for Israel, the Palestinians, and international HIV/AIDS programs,
had been approved by Congress as a “contingent emergency” appropriation in P.L.
107-206, the FY2002 Supplemental spending measure. But when the President
decided not to spend any of the $5.1 billion contingent emergency funds provided in
the supplemental bill, these and other Foreign Operations funds became unavailable.
The Senate Appropriations Committee, in late July and prior to the President’s
budget amendment, reported a $16.35 billion measure (S. 2779) that at the time was
$253 million higher than the request.

Both House and Senate bills add funds in key areas. S. 2779 provides $750
million for international HIV/AIDS programs while the House measure supports
$786 million, including the President’s budget amendment of an additional $100
million for the Mother and Child HIV Prevention initiative. The President had
originally proposed $640 million for HIV/AIDS prior to the September 3 amendment.
The Senate bill further 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 and partially reverses the
President’s “Mexico City policy” for certain non-governmental organizations. H.R.
5410 includes $425 million for bilateral family planning assistance and $25 million
for UNFPA, but does not alter the terms of eligibility.

The House measure further provides $731 million, as requested, for the Andean
Regional counternarcotics initiative, while S. 2779 includes $637 million. H.R. 5410
allocates $296 million in economic aid for Afghanistan, compared with $157 million
included in the S. 2779. The Administration estimated that it would allocate $98
million for Afghan aid out of its Foreign Operations request. Both bills provide full
funding for regular aid to Israel ($2.7 billion), although the Senate had reported its
measure before the President’s budget amendment for an additional $200 million for
Israel, which the House bill includes.


CRS-2
Meanwhile, in the absence of an enacted appropriation, Foreign Operations
programs are operating at FY2002 levels under a Continuing Appropriation (P.L.
107-294; H.J.Res. 124) that funds federal agencies through January 11, 2003.

On July 22, the Administration 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 State
Department has recommended the transfer of $34 million to other family planning
activities.

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 major aspects of 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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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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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
9/19
7/24
9/5 7/16






107-663
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 reported a bill for
FY2003 on July 24 (S. 2779). The House Foreign Operations Subcommittee
approved its bill on September 5, a measure that was marked up by the full
Committee on September 12 and reported on September 19 (H.R. 5410). In the
absence of an enacted appropriation, Foreign Operations programs are operating at
FY2002 levels under a Continuing Appropriation (P.L. 107-294; H.J.Res. 124) that
funds federal agencies through January 11, 2003.
Implications for Foreign Operations of Continuing
Appropriation Funding
Since October 1, 2002, Foreign Operations, like most appropriation bills, has
operated under the terms and limitations of a series of continuing appropriations. In
general, these continuing resolutions (CRs) permit spending in FY2003 at the
“current rate;” that is, the rate of FY2002 spending based on a calculation designated
by OMB. Moreover, unless a waiver is issued, OMB requires agencies to apportion
funds based on the percentage of the year covered by the CR.2 As a result, funding
for programs that operate under a CR for an extended period of time may experience
resource shortfalls, especially those that are affected by inflation-related increases,
that traditionally require large obligations early in the fiscal year or that represent
increased funding proposals or new initiatives for which the “current rate” is far
below the pending request.3
2 See OMB Bulletin No. 02-06, Supplement No. 2, October 16, 2002
[http://www.whitehouse.gov/omb/bulletins/b02-06a2.pdf]
3 For more general information concerning a CR, see CRS Report RL30343, Continuing
Appropriations Acts: Brief Overview of Recent Practices.


CRS-5
Generally, most Foreign Operations programs are not facing these potential CR
limitations. The enactment of nearly $1 billion in terrorism-related FY2002
supplemental appropriations for Foreign Operations – amounts that are included in
the “current rate” calculation – provides sufficient funding in FY2003 for many
Foreign Operations accounts compared with the Administration requests and bills
reported by House and Senate committees.
There are, however, a few exceptions in which agencies may experience
difficulties funding operations under a CR through at least mid-January 2003 and
perhaps beyond. The major impact for some programs will be a delay in the
availability of increased funds above FY2002 levels and consequently the
postponement of expansion efforts until later in the fiscal year. USAID development
aid accounts, the Treasury Department’s technical assistance program, including anti-
terrorism financing projects, the Peace Corps, and the State Department’s Andean
counternarcotics initiative are scheduled for substantial increases under the
Administration’s pending budget request. For the Peace Corps and counternarcotics
activities, however, the Senate Appropriations Committee did not support significant
increases, raising the possibility that Congress will decide to keep funding for these
programs at or near the current rate allowed under the CR.
A new USAID initiative – the Capital Investment Fund, which will support
agency efforts to construct secure facilities overseas and make information
technology improvements – will also face delays in implementation under a longer-
term CR since the program had no funding in FY2002. Nevertheless, House and
Senate Committees have reduced the Fund’s $95 million proposed budget, raising the
possibility that overseas construction plans may be significantly curtailed in FY2003,
but not because of extended funding under a CR.
The State Department’s refugee assistance program, which funds both refugee
admissions to the U.S. and humanitarian relief abroad, may experience a funding gap
due to the CR apportionment guidelines. Normally, the United States pledges and
makes available within the first quarter of a new fiscal year a substantial amount –
around $125 million – to the U.N. High Commissioner for Refugees in support of
UNHCR’s worldwide appeals. A UNHCR pledging conference is scheduled for
early December at which U.S. officials may commit a lower amount due to the
uncertainty of FY2003 funding and the apportionment rules of the CR.
Funding the daily operational expenses of USAID may also pose difficulties
under the CR apportionment formula. USAID, like all federal agencies, will need to
absorb a salary increase in January 2003 within a current rate that USAID managers
say was barely enough to meet FY2002 costs.
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


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past 25 years.4 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).
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,
4 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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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.5 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.
Table 2. Foreign Operations Appropriations, FY1995 to FY2003
(discretionary budget authority in billions of current and constant 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
17.70
16.45
constant FY03 $s
15.91
14.27
13.77
14.57
16.86
17.42
15.61
18.09
16.45
* 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.6 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.
5 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.
6 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.

CRS-8
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

CRS-9
20, 2002, recommending $759 billion in total discretionary budget authority,
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 $759 billion (including 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 at that time.
Subsequently, President Bush proposed on September 3 an additional $350
million for Foreign Operations, but without identifying any offsets. The House
Foreign Operations Subcommittee, acting two days later on its draft bill, approved
a $16.55 billion measure, exceeding by $200 million its June allocation. A week
later, at the full Committee markup of the Foreign Operations bill, the Committee
increased the allocation to $16.55 billion and reduced the defense allocation by an
equal amount. Subsequently, Congress restored the defense money prior to enacting
the FY2003 Defense Appropriations bill.
Foreign Operations Appropriations Request for
FY2003 and Congressional Consideration
Request Overview
In February 2002, President Bush asked Congress to appropriate $16.1 billion
for FY2003 Foreign Operations, a request that was subsequently raised to $16.45
billion on September 3. The amended budget proposal is nearly $1.1 billion, or 7%
higher than regular Foreign Operations appropriations for FY2002. When the $2.3
billion provided for foreign assistance in the Emergency Terrorism Response
supplemental measure (P.L. 107-38) and the FY2002 supplemental bill (H.R. 4775)

CRS-10
are added to enacted amounts for FY2002, the proposal for FY2003 is $1.4 billion
below FY2002 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, American foreign aid programs have shifted focus toward more
direct support for key coalition countries and global counter-terrorism efforts. The
Administration says that the FY2003 proposal includes $3.5 billion to assist the so-
called “front-line” states in the war on terrorism.7 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 (of which $98 million would
come from the Foreign Operations bill) 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 some 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 that did not adequately address the most urgent
requirements of the war on terrorism.8
To a large extent, the $1.8 billion FY2002 Foreign Operations supplemental
(H.R. 4775) addressed the concerns of those who doubt that the FY2003 plan is
adequate. As outlined below in more detail, the supplemental included 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
provided over $250 million more assistance for Afghanistan. Nevertheless, when
President Bush decided not to spend any money in the supplemental that had been
designated as “contingent emergency,” about $600 million of Foreign Operations
funds, including some for Afghanistan and other “front-line” states, will not be
available.
7 “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.
8 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.

CRS-11
Other Key Elements of the FY2003 Request. Beyond the issue of aid to
combat terrorism, the Foreign Operations proposal for FY2003 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 $350 million, or over
13%, 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.)
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
404.1
399.3

Title II - Bilateral Economic Aid
9,121.8
11,511.9
10,125.6 10,324.1 10,090.9

Development aid
2,325.0
2,611.5
2,959.6 3,108.0 3,130.0

Israel/Egypt economic aid
1,532.6
1,375.0
1,415.0 1,415.0 1,215.0

Former Soviet Union
808.2
940.5
755.0
755.0
765.0

Anti-terrorism programs
41.9
122.0
69.2
69.2
69.2

Narcotics control/Andean Init
275.0
1,029.0
927.7
928.0
833.7

Title III - Military Assistance
3,752.5
4,497.0
4,295.5 4,285.2 4,272.3

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

Title IV - Multilateral Aid
1,330.0
1,383.3
1,627.0 1,535.9 1,587.5

Rescissions
– (269.0)

– –

Total Foreign Operations
14,943.2
17,701.1
16,447.2 16,549.3 16,350.0

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 $1.378 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.
FY2003 request includes a $350 million budget amendment submitted on September 3. The Senate had
reported its bill before the budget amendment had arrived in Congress.
! 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

CRS-12
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.
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 $1 billion to Pakistan. India, the Philippines,
Turkey, and Uzbekistan also are among the top aid recipients in FY2002 and planned
for FY2003 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

CRS-13
Yugoslavia, Kosovo, Russia, Ukraine, and Georgia — would continue to be among
the top recipients, although at somewhat lower funding levels.
Table 4. Leading Recipients of U.S. Foreign Aid
(Appropriation Allocations; $s in millions)
FY2001
FY2002
FY2003
Actual
Estimatea
Request
Israel
2,814
2,788
2,900b
Egypt
1,992
1,956
1,916
Pakistan
4
1,036
305
Colombia
49
416
538
Jordan
229
355
453
Afghanistanc
184
530
98
Peru
90
198
189
Ukraine
183
163
166
Russia
169
165
158
FRYugoslavia
186
165
136
Indonesia
121
137
132
Bolivia
89
126
137
Turkey
2
232
21
India
60
80
153
Philippines
49
131
95
Georgia
100
123
97
Uzbekistan
31
161
44
Kosovo
150
118
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
estimated and FY2003 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 estimates includes funds allocated from the regular Foreign Operations appropriation, plus
funds drawn from the Emergency Response Fund appropriated in P.L. 107-38 and enacted in
the FY2002 Supplemental Appropriation (P.L. 107-206).
b Includes $200 million for anti-terrorism assistance requested on September 3.
c Amounts for Afghanistan are estimates that include funds allocated from refugee, food, and other
humanitarian aid accounts.

CRS-14
Congressional Response to the FY2003 Request
Senate Action. Meeting on July 18, before the President submitted on
September 3 a $350 million budget amendment, the Senate Appropriations
Committee approved a $16.35 billion Foreign Operations spending measure for
FY2003 (S. 2779), a level $253 million (at that time) above the President’s request.
The Committee made a number of key changes in the Administration’s proposal:
! 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. A general provision (Sec. 581) also prohibits the
President from denying family planning grants to non-governmental
organizations that may perform abortions with funds other than
those provided by the United States. This would reverse one criteria
of the President’s so-called “Mexico City policy,” imposed last year.
NGOs would still be barred from advocating abortion as a method
of family planning with non-U.S. funds.
! 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.

CRS-15
House Action. On September 12, ten days after receiving a $350 million
budget amendment, the House Committee approved a $16.55 billion spending
measure. The bill (H.R. 5410) is $80 million higher than the President’s amended
request and $200 million more than the Senate bill. The Committee had planned,
prior to receiving the September 3 budget amendment, to approve a $16.35 billion
bill. At the higher level, the Committee accommodated the President’s request for
an extra $200 million for anti-terrorism aid to Israel, $50 million in humanitarian aid
to the Palestinians, and $100 million in international HIV/AIDS spending. While
raising the level by $200 million, the Committee absorbed the other $150 million in
the budget amendment by reducing other accounts. Key highlights of the House
Committee measure include:
! Child Survival and Health programs receive $1.71 billion, slightly
higher than the request. The bill provides $786 million for
HIV/AIDS, and also restores funds for other health programs.
! Population assistance is set at the $425 million request.
! UNFPA contributions are earmarked at $25 million, even though the
President declared UNFPA ineligible in FY2002 for U.S. support
due to the organization’s programs in China. The House Committee
measure further conditions U.S. assistance on UNFPA not providing
any support to China’s State Planned-Birth Commission or its
regional affiliates. H.R. 5410, however, retains current law
regarding the terms under which the President can declare UNFPA
ineligible.
! Andean Regional Initiative funding is set at the $731 million
request and the bill modifies an existing certification requirement
regarding the release of these funds.
! Afghanistan reconstruction aid is set at $296 million. The
Administration did not transmit a specific request for FY2003, but
says there is about $98 million in humanitarian aid accounts for
Afghanistan.
! Peace Corps funding is set at $317 million, the requested amount.
! A Palestinian Statehood general provision is included that bars
U.S. assistance to help establish a Palestinian state unless certain
conditions are met, including those relating to democratic reforms
and the end of support for terrorism. An amendment to modify this
provision by Representative Obey was defeated during
Subcommittee markup.

CRS-16
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
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 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 – $134 million
! Philippine military aid – $30 million
! International HIV/AIDS, malaria, and tuberculosis – $200 million

CRS-17
The White House said, however, that the President supported more aid to Israel, the
Palestinians, and for HIV/AIDS, and would seek other means to gain congressional
approval for these activities in the future.
Subsequently, on September 3, the Administration submitted a $996 million
budget amendment to the pending FY2003 request, including $350 million for
Foreign Operations. Included are $200 million for Israel, $50 million for the
Palestinians, and $100 million for the International Mother and Child HIV Prevention
program. An additional $100 million for HIV/AIDS is requested for the Centers for
Disease Control fund in the Labor/HHS appropriation.
Other Foreign Operations contingent emergency funds, including those for
Afghanistan and the Philippines, were not part of the President’s amendment. The
effect of not seeking to restore the contingent emergency funds for Afghanistan and
the Philippines not only means less aid for those two countries than amounts assumed
by Congress when it passed the supplemental bill, but reductions for several other
countries. Congress had assumed that Afghanistan would receive about $264 million
in P.L. 107-206, $14 million more than the $250 million request. Ultimately, as
shown in Table 5 below, the State Department allocated Afghanistan $258 million.
Working with $75 million less in total economic and military assistance than
requested, a congressional directive to spend $7 million on a Muslim education
exchange program, and the loss of the contingent emergency funds, Administration
officials had to reduce amounts for a number of priority aid recipients in order to
maintain a high level for Afghanistan. Final supplemental allocations cut aid to
Pakistan by $30 million, to African nations by $16.5 million, for a Middle East
economic initiative by $30 million, and to Yemen, Nepal, and Colombia by smaller
amounts. The Philippines received $37 million, $3 million less than requested and
$33 million below what Congress assumed when it passed the supplemental.
The FY2003 budget amendment request also proposed no offsets, but the White
House says it expects Congress to absorb the additional funds within the original
$759 billion appropriation request for all 13 spending bills. In the case of Foreign
Operations, the House Committee raised the bill’s total by $200 million, reduced the
amount available for defense appropriations, and accommodated the balance of the
President’s amendment by reducing other programs in the Foreign Operations bill by
$150 million.

CRS-18
Table 5. FY2002 Supplemental Compared with Enacted &
Requested
($s – millions)
FY2002
FY2002
FY2001
FY2002
FY2003
Country/Program
Supplemental
Supp.
Enacted
Enacted
Request
Request
Enacted
South Asia:
a
Afghanistan
$184.3a
$530.0a
$250.0
$258.0b
Nepal
$21.3
$30.0
$20.0
$12.0
$41.2
Pakistan
$3.5
$921.0
$145.0
$115.0
$305.0
Middle East
Bahrain
$0.2
$0.4
$28.5
$28.5 $0.5
Jordan
$226.2
$227.0
$125.0
$125.0
$450.4
Oman
$0.0
$0.3
$25.0
$25.0
$20.3
Yemen
$4.2
$5.5
$25.0
$23.0
$12.7
Economic Initiative


$50.0
$20.0

b
Israel
$2,813.8
$2,788.0
$0.0
$2,700.0
b
Palestinians
$71.0
$72.0
$0.0
$75.0
East Asia
Indonesia
$121.0
$124.7
$16.0
$12.0
$71.9
Philippines
$50.4
$92.1
$40.0
$37.0b
$93.1
Africa
c
Cote d’Ivoire
$2.8
$3.1
$2.0
$3.1
Djibouti
$0.2
$0.2
$6.0
$1.5c
$0.2
Ethiopia
$40.6
$46.8
$12.0
$2.0 c
$51.1
Kenya
$34.6
$40.7
$22.0
$15.0 c
$48.8
c
Mauritania
$2.1
$1.9
$1.0
$1.9
c
Nigeria
$86.6
$62.4
$2.0
$73.0
c
Southern Sudan
$4.5
$11.4
$10.0
$22.3
Africa Regional


[$35.0]c
$20.0c

Europe/Eurasia
Georgia
$97.8
$100.9
$20.0
$20.0
$95.2
Kazakstan
$48.4
$48.6
$3.5
$3.5
$47.0
Kyrgyz Republic
$35.2
$37.6
$42.0
$42.0
$41.1
Tajikistan
$16.7
$19.9
$40.0
$40.0
$22.5
Turkey
$1.7
$22.7
$228.0
$228.0
$20.3
Turkmenistan
$7.3
$7.6
$4.0
$4.0
$8.2
Uzbekistan
$28.4
$95.6
$45.5
$45.5
$41.5
Latin America
Colombia
$49.0
$381.7
$35.0
$31.0
$538.2

CRS-19
FY2002
FY2002
FY2001
FY2002
FY2003
Country/Program
Supplemental
Supp.
Enacted
Enacted
Request
Request
Enacted
Mexico
$31.1
$35.6
$25.0
$25.0
$43.6
Ecuador
$16.4
$47.5
$3.0
$3.0
$65.8
Regional Border
– –
$5.0
$4.0

Control
Global
Antiterrorism
$38.0
$83.5
$20.0
$20.0 $64.2
Training
Terrorist Financing


$10.0
$10.0

Terrorist Interdiction
$4.0
$8.0
$10.0
$10.0
$5.0
USAID
– –
$7.0
$7.0

admin/security
Defense admin costs


$2.0
$2.0

b
HIV/AIDS, TB,
$553.0
$640.0
$0.0
$817.5
Malaria, & Global
Fund
b
Migration/Refugee
$698.0
$705.0
$0.0
$705.6
aid
Muslim Education
– –
$0.0
$7.0

Exchange
Rescissions
– – ($157.0)
($269.0)

TOTAL
$5,292.3
$7,191.7
$1,122.5
$927.0d
$6,486.2
Sources: Department of State and House and Senate Appropriations Committee.
a Afghan aid figures for FY2001 and FY2002 represent estimates of U.S. assistance provided
primarily through humanitarian aid accounts, such as food, refugee relief, and disaster aid. The
FY2002 enacted level includes total amounts obligated for Afghanistan, including funds enacted
in the Supplemental bill. For FY2003, the Administration did not request a specific amount for
Afghanistan, but estimates that about $140 million is assumed for Afghanistan within several
humanitarian aid accounts.
b As enacted, P.L. 107-206 appropriated $200 million for Israel, $50 million for the Palestinians, $200
million for HIV/AIDS,$30 million in additional military aid to the Philippines, $40 million
refugee relief for Afghanistan, plus additional amounts in disaster assistance for Afghanistan.
These funds represented new items not requested by the President but added by Congress. As
such, they were designated as “contingent emergency” funds that needed the President also to
declare them as emergency spending before they would become available. Because of the
President’s decision not to spend money designated as “contingent emergency,” none of these
funds are available.
c The Administration did not allocate economic aid for African states on a country-by-country basis,
but as a “regional” program shown in the line below. As it suggests, the $35 million economic
aid request for Africa was reduced to $20 million in the final allocation. Additional amounts
shown here for Djibouti, Ethiopia, and Kenya are allocations for military assistance.
d As enacted, P.L. 107-206 appropriated $1.549 billion, $622 million of which was designated as
“contingent emergency” funding. The President decided he would not spend any of the $5.1
billion contingent emergency funds provided in P.L. 107-206. See footnote “b” above.

CRS-20
Funding Issues
The proposed supplemental set new directions in the distribution of assistance
to meet the 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
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 other nations outside the region.
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.

CRS-21
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
prerogatives of the Secretary of State as the “overseer of foreign policy and foreign
aid.”9
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.”10 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
9 Testimony by Secretary of State Armitage before the Foreign Operations Subcommittee,
Senate Appropriations Committee, April 18, 2002.
10 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].

CRS-22
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 coup, 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
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 included $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
International Mother and Child Prevention 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.
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.

CRS-23
In most cases, the conference agreement did not set specific country allocations,
leaving that to the discretion of the President.
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 said he did not agree with the emergency designation,
and did not make these funds available. Only $1.2 billion of the $1.8 billion total in
new foreign aid funds would be spent, according to the White House. Nevertheless,
on September 3, the President amended his FY2003 Foreign Operations request
seeking the contingent emergency funds for Israel, the Palestinians, and international
HIV/AIDS programs. In late September, the State Department released the final
country and program allocations of the supplemental funding, making reductions not
only to levels assumed for Afghanistan and the Philippines, but also to requested
amounts for Pakistan, Nepal, Colombia, Yemen, several African nations, and a
Middle East economic initiative (see Table 5, above).
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 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, 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. Between mid-January and mid-July 2002, the White House had
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. 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.

CRS-24
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 concluded that UNFPA was 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 participated
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
did not include any language regarding UNFPA. Nevertheless, the Senate bill
included language nearly identical to Lowey/Kolbe text.
Under any of these amendments, a determination that UNFPA was involved in
coercive practices would have resulted in the termination of U.S. support. Without
such a determination, however, the Senate and Lowey/Kolbe amendments would
have required the President to transfer the full $34 million. Under the Tiahrt
provision, however, the President could have reduced 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 has occurred in Pakistan and
Afghanistan, to bolster coalition-partner government efforts to counter domestic

CRS-25
dissent and armed 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
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.

CRS-26
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
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 requested $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 insuring 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

CRS-27
systems, and dwindling non-appropriated trust funds used to finance some in-country
costs. As a result, security upgrades 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
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. For USAID
security upgrades and construction of new missions, the Senate Committee cuts the
Capital Investment Fund from $95 million to $65 million. The bill earmarks the full
$13 million request for information and technology upgrades, but expresses renewed

CRS-28
concern over the lack of coordination between the State Department and USAID
regarding the construction of new facilities.
The House-reported bill (H.R. 5410) is somewhat more specific on funding
levels, especially activities in the NADR account. The measure allocates $64.2
million for ATA and $5 million for TIP, as requested. The measure increases the
Treasury Department’s program for international technical assistance, including
terrorist financing programs, from $10 million to $11 million. Like the Senate bill,
the House measure reduces ESF and FMF accounts, from which most aid to the
“front-line” states will be drawn, only slightly. Also like the Senate, the House bill
includes two general provisions relating to aid prohibitions for countries supporting
terrorism (sections 527 and 543). H.R. 5410 reduces USAID’s Capital Investment
Fund further, to $43 million, providing $13 million for technology improvements and
because of the urgent security requirements, $30 million for construction of the new
mission in Kenya. The Committee, however, does not provide construction funds for
other facilities, urging the State Department, USAID, and OMB to resolve the long-
term issue of whose budget should absorb the costs of overseas building.
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.
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.

CRS-29
For FY2003, USAID seeks $2.96 billion for development aid (as amended on
September 3), an increase of about $350 million, or 13% above FY2002 levels.11
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 9% 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 nearly one-half to $740 million,
including $100 million for the Global Fund to Combat HIV/AIDS,
Malaria, and Tuberculosis and $100 million for the International
Mother and Child HIV Prevention Initiative.12
! 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.
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,
11 The $2.96 billion figure includes USAID’s development aid request of $2.74 billion
submitted in February, $100 million proposed in a September 3 budget amendment for the
International Mother and Child HIV Prevention Initiative, and 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.
12 The Global Fund would also receive a $100 million appropriation under the Department
of Health and Human Services (HHS) budget, making the total U.S. pledge $200 million for
FY2003, the same as for FY2002. On September 3, the White House submitted a budget
amendment requesting $200 million for the International Mother and Child HIV Prevention
Initiative – $100 million from the Foreign Operations bill and $100 million from the
Labor/HHS appropriation. Previously, Congress had approved $200 million for the
Mother/Child initiative and the Global Fund as part of the FY2002 Supplemental
appropriation (P.L. 107-206). Because the President had not requested this $200 million for
the FY2002 Supplemental, it was designated as “contingent emergency” funding and
available only if the President declared it as an emergency. In mid-August, President Bush
announced that he would not designate any of the $5.1 billion of contingent emergency
funds in P.L. 107-206 as an emergency. The September 3 budget amendment for FY2003
substitutes for what Congress had previously approved but which will not be available.

CRS-30
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 encountering close
congressional scrutiny. USAID requests $1.59 billion for child survival and health
programs (including $120 million for UNICEF and the September 3 budget
amendment) within the Development Assistance account, about $155 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 $1.77
billion, an increase of $115 million, or 7%. As noted above, with a large increase
proposed for HIV/AIDS programs (+45%), 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
.)

CRS-31
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
$344.0
$350.0
Of which:
Morbidity & mortality

[269.8]
[243.5]


Polio
[27.6]
[25.5]
[25.0]
[30.0]
Micronutrients
[30.6]
[25.7]
[30.0]
[30.0]
Iodine Deficiency Disorder
[2.0]
[0.0]

[3.3]
Vaccine Fund (former GAVI)
[53.0]
[50.0]
[60.0]
[60.0]
Vulnerable Children
$22.0
$32.0
$20.0
$30.0
$25.0
HIV/AIDS
$433.0
$510.0
$740.0
$786.0
$750.0
Of which:
HIV/AIDS bilateral programs
[367.0]
[467.0]
– –
Microbicides
[15.0]
[15.0]
[15.0]
[18.0]
Global Fundb
[75.0]b
[100.0]b [250.0] [200.0]
Mother & Child HIV Prevention

[100.0]c
[100.0]

UNAIDS
[18.0]
[18.0]
– –
Intl AIDS Vaccine Initiative
[10.0]
[10.0]
[10.0]

Commodity Promotion Fund
[25.0]
[30.0]
– –
Other Infectious Diseases
$140.0
$165.0
$122.0
$170.0
$185.0
Of which:
Malaria
[60.0]
[42.5]
[60.0]
[75.0]
Tuberculosis
[70.0]
[52.5]
[85.1]
[75.0]
Other
[35.0]
[25.0]
[24.9]
[35.0]
UNICEF
$110.0
$120.0
$120.0
$120.0
$120.0
Reproductive Health
$424.0
$446.5
$425.0
$425.0
$450.0
TOTAL, GLOBAL HEALTH
$1,490.0
$1,656.5 $1,771.0 $1,875.0 $1,880.0
Note: Amounts shown in this table for House and Senate levels concerning Child Survival and
Maternal Health, Vulnerable Children, and Other Infectious Diseases, as well as the Senate total for
Global Health, are estimates based on House and Senate report directives and CRS estimates.
a USAID has not 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. Congress had approved (FY2002 Supplemental Appropriations;
P.L. 107-206) an additional $200 million for HIV/AIDS activities, recommending that $100
million be transferred to the Global Fund. President Bush, however, decided not to spend these
funds, but instead proposed $200 million more for the International Mother and Child HIV
Prevention Initiative. Resources to fulfill pledges to the Global Fund are derived from both
Foreign Operations funds (shown here) and those from the National Institutes of Health.
c The President seeks an additional $100 million for the International Mother and Child HIV
Prevention Initiative from the Department of Health and Human Services appropriation.

CRS-32
Congressional Action. S. 2779 increases global health programs by over
$100 million from the President’s amended request even though the Senate
Committee held its markup prior to the submission of an additional Administration
$100 million HIV/AIDS proposal. The Senate measure stands $10 million above the
amended HIV/AIDS request, although at the time of the markup, the Senate figure
was $110 million more for HIV/AIDS than the pending request at that time. S. 2779
further restores amounts to those at or above FY2002 levels for several other key
health activities that had been slated for cuts in FY2003 under the President’s budget:
polio, micronutrients, Vaccine Fund, malaria, tuberculosis, and reproductive health.
(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.
The House-reported bill (H.R. 5410) specifies $1.875 billion for global health
programs across all Foreign Operations accounts, also roughly $100 million more
than the amended request. The bill adds $46 million for HIV/AIDS, including $100
million for the International Mother and Child Prevention Initiative and $250 million
for the Global Fund. Like the Senate measure, H.R. 5410 sets spending for other
health programs – micronutrients, Vaccine Fund, malaria, and tuberculosis – at or
above FY2002 amounts and above levels requested for FY2003. The House also
restores the Child Survival and Health account. For basic education, the House
measure provides $250 million, $50 million higher than the Senate and $85 million
above the request. The House Appropriations Committee further urges USAID to
strengthen its trade capacity building assistance and the means to budget resources
for prospective activities.
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-
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 July 2002 to block 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

CRS-33
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 allowed the President to allocate
however much he chose, 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
placed a hold on UNFPA funds in January because of new evidence that coercive
practices continue in Chinese 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.”13
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, which was led by former Ambassador William Brown, and
included Bonnie Glick, a former State Department official, and Dr. Theodore Tong,
a public health professor at the University of Arizona, made three findings and
recommendations in its report dated May 31:
Findings:
! There is no evidence that UNFPA knowingly supported or
participated in the management of a program of coercive abortion or
involuntary sterilization in China;
! China maintains coercive elements in its population programs;
! Chinese leaders view “population control as a high priority” and
remain concerned over implications for socioeconomic change.
13 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.)

CRS-34
Recommendations:
! The United States should release not more than $34 million of
previously appropriated funds to UNFPA;
! Until China ends all forms of coercion in law and practice, no U.S.
Government funds should be allocated to population programs in
China;
! Appropriate resources, possibly from the United States, should be
allocated to monitor and evaluate Chinese population control
programs.
Despite the team’s recommendation to release the $34 million, Secretary of
State Powell determined on July 22 to withhold funds to UNFPA and to recommend
that they be re-directed to other international family planning and reproductive health
activities. (The authority to make this decision has been delegated by the President
to the Secretary of State.) The State Department’s analysis of the Secretary’s
determination found that even though UNFPA did not “knowingly” support or
participate in a coercive practice, that alone would not preclude the application of
Kemp-Kasten. Instead, a finding that the recipient of U.S. funds – in this case
UNFPA – simply supports or participates in such a program, whether knowingly or
unknowingly, would trigger the restriction. The team found that the Chinese
government imposes fines and penalties on families that have children exceeding the
number approved by the government, a practice that in some cases coerces women
to have abortions they would not otherwise undergo. The State Department analysis
concluded that UNFPA’s involvement in China’s family planning program “allows
the Chinese government to implement more effectively its program of coercive
abortion.”14
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 where UNFPA operates, 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.
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, in 1973, 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
14 The full text of the State Department’s analysis can be found on its web site at
[http://www.state.gov/g/prm/rls/other/12128.htm]. The State Department’s assessment team
can be found at [http://www.state.gov/g/prm/rls/rpt/2002/12122.htm].

CRS-35
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 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

CRS-36
promote abortion, either here or abroad.”15 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
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.”16 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.17 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 for FY2002.
Critics of the certification requirement oppose it on several grounds. They
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 further argue that U.S. policy
imposes a so-called “gag” order on the ability of NGOs and multilateral groups 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 in FY2003 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
15 White House. Memorandum for the Administrator of the United States Agency for
International Development. January 22, 2001. Found online at the Whit House web site at
[http://www.whitehouse.gov/press/releases/20010123-5.html].
16 White House. Restoration of the Mexico City Policy. January 22, 2001. Found at
[http://www.whitehouse.gov/press/releases/20010123.html].
17 For more background on the Mexico City policy, see CRS Report RL30830, International
Family Planning: the Mexico City Policy.


CRS-37
more rigorous and specific test for determining whether UNFPA or any other
organization fell under the Kemp-Kasten conditions. The Senate bill further includes
a general provision (section 581) that would appear to partially reverse the Mexico
City policy. The language requires the President to apply the same conditions to
foreign NGOs in the use of non-U.S. funds for advocacy and lobbying activities that
are applied to American NGOs. As noted above, it is presumed that such restrictions
on how U.S. NGOs apply their own funds would be unconstitutional. The
requirement banning foreign NGOs that perform abortions with non-U.S. funds
would remain unchanged.
The House-reported measure (H.R. 5410) provides $425 million for bilateral
family planning aid and a “hard” earmark of $25 million for UNFPA. The House bill
further conditions the UNFPA contribution, including a restriction that UNFPA
provides no funding for the State Planned-Birth Commission or its regional affiliates
in China, and requires the U.S. to reduce its grant to UNFPA by whatever amount
the organization spends in China. The legislation does not address the Mexico City
policy.
Previously, Congress debated the UNFPA issue prior to the Administration’s
July 22 decision to terminate support. During 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 concluded that UNFPA was not involved in
coercive family planning practices in China. Meeting on May 15, however, the
Committee added an additional provision offered by Representative Tiahrt and
supported by the White House, requiring the President to determine by July 31, 2002,
whether UNFPA participated 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 have required 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.
Andean Regional Initiative18
The Andean Regional Initiative (ARI) was launched in April 2001, when the
Bush Administration requested $882.29 million in FY2002 economic and
18 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
.

CRS-38
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 2000,19 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.
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.20 During 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
19 “Plan Colombia” refers to the $1.3 billion 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.
20 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/]

CRS-39
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.
! 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.21 On March 6, 2002, the House passed H.Res.
21 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.
(continued...)

CRS-40
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
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
21 (...continued)
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-41
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 stated 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. The Senate Appropriations Committee, in S. 2779,
funds the Andean Counterdrug Initiative at $637 million, $94 million less than the
President’s request. There is no mention in the bill or accompanying report as to how
that amount is to be apportioned among the recipient countries. The bill provides up
to $88 million of the requested $98 million for the Cano-Limon pipeline protection
program, of which $71 million is to be used to purchase helicopters. It is not clear
how much of the remainder of the total ARI request ($979.8 million, or $150.8
million over the ACI and the Cano-Limon pipeline requests) is funded. The ACI
account may be augmented by an additional $35 million from new and prior year
monies in the INC account.
The bill specifies that not less than $215 million of the ACI account is to be
apportioned directly to USAID for social and economic programs. It also earmarks
(1) $5 million for training and equipping a Colombian Armed Forces unit dedicated
to apprehending the leaders of paramilitary organizations; (2) $3.5 million for
assistance to the Colombian National Park Service for training, equipment, and other
assistance to protect Colombia’s national parks and reserves, which according to the
report are threatened by illegal drug cultivation and illegal logging; and (3) $2
million for vehicles, equipment, and other assistance for the human rights unit of the
Procurador General.
The House measure, marked up on September 12, provides full funding of $731
million. Unlike S. 2779, the House bill does not allocate funds for specific purposes
but requires a report 45 days after enactment setting out country-by-country
distribution of the assistance and its purposes. It further specifies that FY2003 funds

CRS-42
shall be available for a unified campaign against narcotics trafficking, against
terrorist organizations such as the FARC, ELN, and AUC, and to protect the health
and welfare in emergency circumstances.
Both House and Senate bills retain the caps of 400 on the number of U.S.
civilian contractors and on the number of U.S. military personnel that can be funded
during FY2003. They also place several conditions on the use of funds in the bills.
Human rights conditions in S. 2779 would tighten previously existing conditions
regarding Colombian military ties to or tolerance of the actions of illegal rightist
“self-defense” groups. Two certifications are required, the first releasing 60% of the
funds, followed by a second submission after June 1, 2003, that the Colombian armed
forces continue to meet the criteria and are conducting “vigorous” operations to
restore government authority and respect for human rights in areas under the effective
control of paramilitary and guerrilla organizations. The House measure also
continues human rights requirements that must be met prior to the obligation of funds
but stipulates, unlike the Senate bill, that only a single certification must be made.
Both bills further:
! require the return of any helicopter procured with funding from this
bill if it is used to aid or abet the operations of any illegal self-
defense groups or illegal security cooperatives;
! prohibit the use of funds from the bill to support a Peruvian air
interdiction program unless the Secretary of State and Director of
Central Intelligence certify to Congress, 30 days before the
resumption of U.S. involvement in such a program, that effective
safeguards and procedures are in place to prevent a shoot down
similar to that of April 20, 2001, in Peru.
S. 2779 also requires that the Secretary of State submit a report on the usage and
safety of chemicals used in the aerial coca fumigation program in Colombia before
FY2003 funds can be used to purchase those chemicals. The Senate bill further bans
the participation of U.S. military personnel or U.S. civilian contractors in combat
operations.
Earlier, in the FY2002 supplemental (P.L. 107-206; H.R. 4775), Congress
endorsed the unified campaign policy proposed by the 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:

CRS-43
! 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 free market economic and democratic principals and 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; the competitive process that will reward countries for what they have
already achieved not just what is promised for the future; the pledge to segregate the
funds from U.S. strategic foreign policy objectives that often strongly influence
where U.S. aid is spent; and to solicit program proposals developed solely by
qualifying countries.
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
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%.
During the first year of the MCA, participants will be limited to the 79 poorest
nations that are eligible to borrow from the World Bank’s International Development
Association and have per capita incomes below $1,435. The list will expand to
include all lower-middle income countries by FY2006 with per capita incomes below
$2,975. Participants will be selected largely based on 16 performance indicators
related to the three categories of good governance, economic freedom, and investing
in people. Countries that score above the median on half of the indicators in each of
the three areas will qualify. Emphasizing the importance of fighting corruption,

CRS-44
however, should a country fall below the median on the corruption indicator (based
on the World Bank Institute’s Control of Corruption measure), it will be
automatically disqualified from consideration.
To manage the MCA, the Administration will propose the creation of a
Millennium Challenge Corporation (MCC), a new independent government entity
separate from the Departments of State and Treasury and from the U.S. Agency for
International Development (USAID). The White House envisions a staff of about
100, drawn from various government agencies and non-governmental organizations,
led by a CEO confirmed by the Senate. A review board, chaired by the Secretary of
State and composed of other cabinet officials, will oversee operations of the MCC.
Congressional Action
Despite some discussion to launch an MCA “pilot” project in FY2003 instead
of waiting until FY2004, it appears that such a plan has been deferred.
Administration officials say that they will not propose an MCA test program, and
neither House nor Senate-reported Foreign Operations appropriations bills (H.R.
5410 and S. 2779) allocate funds for an early start to the MCA initiative. The
Administration is expected, however, to submit authorizing legislation and an
FY2004 budget request of between $1 - 1.7 billion early in the new Congress.
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.
CRS Report 98-568. Export-Import Bank: Background and Legislative Issues.
CRS Report RS21181. HIV/AIDS international programs: FY2003 request and
FY2002 spending.

CRS-45
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.
CRS Report RL31362. U.S. Foreign Aid to East and South Asia: Selected
Recipients.

CRS-46
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/]
U.S. Agency for International Development
[http://www.info.usaid.gov/]
U.S. Department of State
[http://www.state.gov/]

CRS-47
World Bank
[http://www.worldbank.org/]
World Bank HIPC website
[http://www.worldbank.org/hipc/]

CRS-48
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
596.7
Overseas Private Invest Corp
(251.4)

(251.4)
(242.1)
(242.1)
(242.1)
Trade/Development Agency
50.0

50.0
44.5
49.5
44.7
Total, Title I - Export Aid
577.9

577.9
399.1
404.1
399.3
Title II - Bilateral Economic:
Development Assistance:
c
Child Survival & Health
1,433.5b

1,433.5
1,710.0
1,780.0
Development Asst Fund
1,178.0

1,178.0
2,959.5b 1,398.0
1,350.0
Subtotal
2,611.5

2,611.5
2,959.5
3,108.0
3,130.0
Of which:
UNICEF

[120.0]


[120.0]
[120.0]
[120.0]
Population aidd
[447.5]


[425.0]
[425.0]
[450.0]
HIV/AIDSc
[510.0]


[740.0]
[786.0]
[750.0]
Intl Disaster Aid
235.5
186.0
421.5
285.5
315.5
255.5
Transition Initiatives
50.0

50.0
55.0
40.0
65.0
Development Credit Programs
7.5

7.5
7.6
7.6
7.6
Subtotal, Development Aid
2,954.5
186.0
3,140.5
3,307.6
3,471.1
3,458.1
USAID Operating Expenses
549.0
22.0
571.0
572.2
572.2
571.1
USAID Inspector General
31.5

31.5
32.7
33.7
33.0
USAID Capital Invst Fund



95.0
43.0
65.0
Economic Support Fund (ESF)f
2,199.0
1,065.0
3,264.0
2,490.0
2,445.0
2,250.0
International Fund for Ireland
25.0

25.0
[25.0]f
25.0

East Europe
621.0

621.0
495.0
520.0
555.0
Former Soviet Union
784.0
156.5
940.5
755.0
755.0
765.0
Inter-American Foundation
13.1

13.1
14.0
16.0
16.4
African Development Foundation
16.5

16.5
16.7
19.7
17.7
Treasury Dept. technical asst
6.5
3.0
9.5
10.0
11.0
10.5
Debt reduction
229.0

229.0
0.0
0.0
40.0
Peace Corps
275.0
3.9
278.9
317.0
317.0
285.0
Intl Narcotics/Law
217.0
187.0
404.0
197.0
197.0
196.7
Intl Narcotics–Andean Initiative
625.0

625.0
731.0
731.0
637.0
Migration & refugee asst
705.0
100.0
805.0
705.0
800.0
782.0
Emerg. Refugee Fund (ERMA)
15.0

15.0
15.0
20.0
32.0

CRS-49
FY2002 FY2002 FY2002 FY2003
House
Senate
Program
Regular Supps.a
Total
Request FY2003 FY2003
Non-Proliferation/anti-terrorism
313.5
208.9
522.4
372.4
347.4
376.4
Total Title II-Bilat Economic
9,579.6
1,932.3
11,511.9 10,125.6
10,324.1 10,090.9
Title III - Military Assistance:
Intl Military Ed. & Training
70.0

70.0
80.0
80.0
80.0
Foreign Mil Financing (FMF)
3,650.0
402.0
4,052.0
4,107.2
4,080.2
4,067.0
Peacekeeping Operations
135.0
240.0
375.0
108.3
125.0
125.3
Total, Title III-Military Aid
3,855.0
642.0
4,497.0
4,295.5
4,285.2
4,272.3
Title IV - Multilateral Economic Aid:
World Bank - Intl Develop. Assn
792.4

792.4
874.3
874.3
837.3
World Bank-EnvironmentFacility
100.5

100.5
177.8
147.8
177.8
World Bank-Mult Invst Guaranty
5.0

5.0
3.6
1.6
2.6
Inter-Amer. Development Bank
18.0

18.0
59.9
54.9
47.9
Asian Development Bank
98.0

98.0
147.4
97.9
127.4
African Development Fund
100.0

100.0
118.1
113.1
108.1
African Development Bank
5.1

5.1
5.1
5.1
5.1
European Bank for R & D
35.8

35.8
35.8
35.8
35.8
Intl Fund for Ag Development
20.0

20.0
15.0
15.0
15.0
Intl Organizations & Programs
208.5f

208.5
190.0g
190.4
230.5
Total, Title IV - Multilateral
1,383.3

1,383.3
1,627.0
1,535.9
1,587.5
Rescissions
– (269.0)
(269.0)



Foreign Operations – Total
15,395.8
2,305.3
17,701.1 16,447.2
16,549.3 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. See also footnote “e” below regarding a budget amendment for this
account.
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. On September 3, 2002, the Administration amended its original request, proposing additional funds for three
accounts: development aid, from $2.86 billion to $2.96 billion for HIV/AIDS programs; international
disaster assistance, from $235.5 million to $285.5 million for humanitarian aid for the Palestinians; and
the Economic Support Fund, from $2.29 billion to $2.49 billion for anti-terrorism aid to Israel.
f. The Administration request includes the Ireland Fund as part of the Economic Support Fund.
g. Excludes UNICEF contribution which is part of Development Assistance under Title II above.