Order Code RL32919
CRS Report for Congress
Received through the CRS Web
Foreign Operations (House)/State, Foreign
Operations, and Related Programs (Senate):
FY2006 Appropriations
May 13, 2005
Larry Nowels
Specialist in Foreign Affairs
Foreign Affairs, Defense, and Trade Division
Susan B. Epstein
Specialist in Foreign Policy and Trade
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

The annual consideration of appropriations bills (regular, continuing, and supplemental) by
Congress is part of a complex set of budget processes that also encompasses the
consideration of budget resolutions, revenue and debt-limit legislation, other spending
measures, and reconciliation bills. In addition, the operation of programs and the spending
of appropriated funds are subject to constraints established in authorizing statutes.
Congressional action on the budget for a fiscal year usually begins following the submission
of the President’s budget at the beginning of the session. Congressional practices governing
the consideration of appropriations and other budgetary measures are rooted in the
Constitution, the standing rules of the House and Senate, and statutes, such as the
Congressional Budget and Impoundment Control Act of 1974.
This report is a guide to one of the regular appropriations bills that Congress considers each
year. It is designed to supplement the information provided by the House Subcommittee on
Foreign Operations and the Senate Subcommittee on State, Foreign Operations, and Related
Programs. It summarizes the status of the bill, its scope, major issues, funding levels, and
related congressional activity, and is updated as events warrant. The report lists the key
CRS staff relevant to the issues covered and related CRS products.
NOTE: A Web version of this document with active links is
available to congressional staff at
[http://www.crs.gov/products/appropriations/apppage.shtml].


Foreign Operations (House)/State, Foreign Operations,
and Related Programs (Senate) Appropriations for
FY2006
Summary
The annual Foreign Operations appropriations bill in the House, and the State,
Foreign Operations measure in the Senate are the primary legislative vehicles through
which Congress reviews the U.S. international affairs budgets and influences
executive branch foreign policy making generally. They contain the largest shares
— the House bill, about two-thirds; the Senate bill, about 97% — of total U.S.
international affairs spending.
Funding for Foreign Operations and State Department/Broadcasting programs
have been rising for five consecutive years, while amounts approved in FY2004
reached an unprecedented level compared with the past 40 years. Emergency
supplementals enacted since the September 11, 2001 terrorist attacks to provide
assistance to the front line states in the war on terrorism, Afghanistan and Iraq
reconstruction, and for State Department operations and security upgrades have
pushed spending upward.
The President seeks $22.8 billion for Foreign Operations and $9.8 billion for
State Department and Related Agencies appropriations. These amounts are 15.7%
and 12.2%, respectively, higher than FY2005 amounts enacted in “regular,” non-
supplemental appropriations. The combined State/Foreign Operations request of
$32.64 billion is 14.7% larger than regular FY2005 funding. Including the FY2005
supplemental (H.R. 1268), which was signed into law on May 11, adds $4.55 billion
current spending for Foreign Operations and State Department/Broadcasting and
makes the FY2006 combined request slightly smaller (-0.8%) than the total
appropriation of $32.9 billion for this year.
One of the major challenges for Congress in considering the President’s Foreign
Operations and State Department/Broadcasting spending proposals is the tightening
budget environment. The FY2006 Budget Resolution (H.Con.Res. 95) sets a target
for international affairs spending 7% below the President’s request. The House
Appropriations Committees spending allocation among its 10 subcommittees
provides $20.27 billion for Foreign Operations, 11.2% less than the submitted
proposal. Other key issues for congressional consideration of the FY2006
recommendations include foreign aid in support of the global war on terror, the
Millennium Challenge Account, HIV/AIDS funding, spending allocations among the
“core” development and humanitarian aid programs, funding for the new U.S.
embassy in Iraq, public diplomacy, educational and cultural exchange programs,
rising demands for U.N. peacekeeping contributions, and democracy promotion
activities.
This report will be updated to reflect congressional action on the legislation.

Key Policy Staff
Subject
Name
Telephone
E-Mail
General: Foreign Operations Policy Issues/Budget
Larry Nowels
7-7645
lnowels@crs.loc.gov
General: Foreign Operations Policy Issues
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
General: State Dept Policy Issues/Budget
Susan Epstein
7-6678
sepstein@crs.loc.gov
Africa Aid
Raymond Copson
7-7661
rcopson@crs.loc.gov
Agency for International Development (USAID)
Larry Nowels
7-7645
lnowels@crs.loc.gov
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
Asia Aid Programs
Thomas Lum
7-7616
tlum@crs.loc.gov
Broadcasting, International
Susan Epstein
7-6678
sepstein@crs.loc.gov
Central Asia
Jim Nichol
7-2289
jnichol@crs.loc.gov
Debt Relief
Jonathan Sanford
7-7682
jsanford@crs.loc.gov
Development Assistance (bilateral)
Larry Nowels
7-7645
lnowels@crs.loc.gov
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
Disaster/Humanitarian Aid
Rhoda Margesson
7-0425
rmargesson@crs.loc.gov
Drug/Counternarcotics Programs
Raphael Perl
7-7664
rperl@crs.loc.gov
Drug/Counternarcotics, Andean Region
Connie Veillette
7-7127
cveillette@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
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 (IMF)
Marty Weiss
7-5407
mweiss@crs.loc.gov
Jonathan Sanford
7-7682
jsanford@crs.loc.gov
Iraq Reconstruction
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
Latin America Assistance
Connie Veillette
7-7127
cveillette@crs.loc.gov
Microenterprise
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
Middle East Assistance
Jeremy Sharp
7-8687
jsharp@crs.loc.gov
Military Aid/Arms Sales
Richard Grimmett
7-7675
rgrimmett@crs.loc.gov
Millennium Challenge Account
Larry Nowels
7-7645
lnowels@crs.loc.gov
Multilateral Development Banks (MDBs)
Jonathan Sanford
7-7682
jsanford@crs.loc.gov
Marty Weiss
7-5407
mweiss@crs.loc.gov
Overseas Private Investment Corporation (OPIC)
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
Nina Serafino
7-7667
nserafino@crs.loc.gov
Public Diplomacy
Susan Epstein
7-6678
sepstein@crs.loc.gov
Refugee Aid
Rhoda Margesson
7-0452
rmargesson@crs.loc.gov
Russia/East Europe Aid
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
Terrorism
John Rollins
7-5529
jrollins@crs.loc.gov
Raphael Perl
7-7664
rperl@crs.loc.gov
Trafficking in Persons
Francis Miko
7-7670
fmiko@crs.loc.gov
UNFPA
Larry Nowels
7-7645
lnowels@crs.loc.gov
U.N. Assessed and Voluntary Contributions
Vita Bite
7-7662
vbite@crs.loc.gov
U.S. Institute for Peace
Susan Epstein
7-6678
sepstein@crs.loc.gov

Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Foreign Operations Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
State Department/Broadcasting Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Related Foreign Policy Authorization Measures . . . . . . . . . . . . . . . . . . . . . . 3
Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Foreign Operations and State Department Policy Trends and Goals . . . . . . . . . . . 6
Foreign Aid Policy Shifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Impact of the September 11 Terrorist Attacks . . . . . . . . . . . . . . . . . . . . . . . . 7
Foreign Operations and State Department Funding Trends . . . . . . . . . . . . . . . . . . 8
Foreign Operations Appropriations Trends . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Growing Importance of Supplementals . . . . . . . . . . . . . . . . . . . . . . . . 10
State Department/Broadcasting Appropriation Trends . . . . . . . . . . . . . . . . 12
Foreign Operations/State Department, the FY2005 Budget Resolution, and
Sec. 302(b) Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Foreign Operations/State Department Appropriations Request for FY2006 . . . . 16
Foreign Operations Request Overview and Congressional Action . . . . . . . . . . . 16
Fighting the War on Terrorism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
The Millennium Challenge Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
President’s Emergency Plan for AIDS Relief (PEPFAR) . . . . . . . . . . . . . . 20
Development and Humanitarian Assistance: Funding Priorities,
Account Restructuring, and Policy Differences . . . . . . . . . . . . . . . . . . 22
Funding Disagreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
USAID Appropriation Account Realignment Proposals . . . . . . . . . . . 26
Family Planning and UNFPA Policy Controversies . . . . . . . . . . . . . . 28
Conflict Response Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Other Key Elements of the FY2006 Request . . . . . . . . . . . . . . . . . . . . . . . . 30
Leading Foreign Aid Recipients Proposed for FY2006 . . . . . . . . . . . . . . . . 32
State Department Appropriations and Related Agencies Overview and
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
State Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Diplomatic and Consular Programs (D&CP) . . . . . . . . . . . . . . . . . . . 35
Embassy Security, Construction and Maintenance (ESCM) . . . . . . . . 36
Educational and Cultural Exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . 36
The Capital Investment Fund (CIF) . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
International Organizations and Conferences . . . . . . . . . . . . . . . . . . . . . . . 38
Contributions to International Organizations (CIO) . . . . . . . . . . . . . . 38
Contributions to International Peacekeeping Activities (CIPA) . . . . . 38
International Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Related State Department Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . 39
The Asia Foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
The International Center for Middle Eastern-Western Dialogue Trust
Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
National Endowment for Democracy (NED) . . . . . . . . . . . . . . . . . . . . 39
East-West and North-South Centers . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Broadcasting Board of Governors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Visa Issuance and Homeland Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
FY2005 Emergency Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Selected World Wide Websites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
List of Figures
Figure 1. Foreign Operations Funding Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Figure 2. Supplemental Funding for Foreign Operations . . . . . . . . . . . . . . . . . . 11
Figure 3. State Department/Broadcasting Funding Trends . . . . . . . . . . . . . . . . . 13
Figure 4. Budget Function 150 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
List of Tables
Table 1. House Status of Foreign Operations, FY2006 . . . . . . . . . . . . . . . . . . . . 5
Table 2. Senate Status of State, Foreign Operations, FY2006 . . . . . . . . . . . . . . . 6
Table 3. Foreign Operations Appropriations, FY1996 to FY2006 . . . . . . . . . . . 10
Table 4. State Department/Broadcasting Appropriations, FY1996 to FY2006 . . 13
Table 5. Foreign Operations Significant Increases FY2006 . . . . . . . . . . . . . . . . 17
Table 6. Global Counter-Terrorism Program Funding . . . . . . . . . . . . . . . . . . . . 19
Table 7. U.S. International HIV/AIDS, Tuberculosis, and Malaria Programs . . 21
Table 8. Development Assistance Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Table 9. Economic Aid Allocations, by Program Sector . . . . . . . . . . . . . . . . . . 25
Table 10. Summary of Foreign Operations Appropriations . . . . . . . . . . . . . . . . 32
Table 11. Leading Recipients of U.S. Foreign Aid . . . . . . . . . . . . . . . . . . . . . . . 33
Table 12. Summary of State Department/Broadcasting Appropriations . . . . . . . 35
Table 13. Foreign Policy Funds in FY2005 Supplemental . . . . . . . . . . . . . . . . . 45
Table 14. Foreign Operations: Detailed Account Funding Levels . . . . . . . . . . . 54
Table 15. State Department/Broadcasting: Detailed Account Funding Levels . 58


Foreign Operations (House)/State, Foreign
Operations, and Related Programs (Senate)
Appropriations for FY2006
Most Recent Developments
On May 11, 2005, President Bush signed into law P.L. 109-13 (H.R. 1268), the
Emergency Supplemental, Appropriations Act for Defense, the Global War on
Terror, and Tsunami Relief, 2005, providing $5.78 billion in additional funding for
Foreign Operations and State Department programs, primarily related to activities in
Iraq, Afghanistan, Sudan, the West Bank and Gaza, and tsunami-affected countries
in the Indian Ocean. The Senate had passed the measure on May 10 and the House
on May 5. The supplemental amount is about $600 million, or 10% less than the
Administration’s $6.15 billion request for Foreign Operations and State Department
activities. Conferees offset part of these costs by rescinding $1 billion in FY2003-
appropriated funds for aid to Turkey that had not yet been obligated.1 As a result, the
“net” appropriation for foreign aid and State Department programs in P.L. 109-13 is
$4.54 billion, or $1.6 billion below the request. The conference agreement provides
near full-funding for a U.S. embassy in Iraq and for tsunami relief, increases the
President’s request for humanitarian assistance to the Darfur region of Sudan and
other areas of Africa, and provides $200 million, as requested, for the Palestinians,
but with a number of restrictions.
On May 5, 2005, the House Appropriations Committee released funding
allocations for each of its ten subcommittees (Sec. 302(b) allocations). Spending for
Foreign Operations is set at $20.27 billion, 3.7% higher than the regular (excluding
supplemental) appropriation, but over $2.5 billion, 11.2%, less than the President’s
FY2006 request.
Previously, on February 7, the White House submitted its FY2006 budget
request, including $22.8 billion for Foreign Operations and $9.8 billion for State
Department and Related Agencies appropriations. These amounts are 15.7% and
12.2%, respectively, higher than FY2005 amounts enacted in “regular,” non-
supplemental appropriations. The combined State/Foreign Operations request of
$32.64 billion is 14.7% larger than regular FY2005 funding. Including the FY2005
supplemental makes the FY2006 combined request slightly smaller (-0.8%) than the
total appropriation of $32.9 billion for this year.
1 Congress appropriated $1 billion in the FY2003 Emergency Supplemental (P.L. 108-11)
that could be used by Turkey to guarantee loans of about $8.5 billion to bolster its ailing
economy. With substantial economic recovery during the past two years, Turkey has not
drawn on the $1 billion loan guarantee funds.

CRS-2
Introduction
Amounts appropriated for Foreign Operations programs and for the Department
of State and related agencies comprise about 97% of the total International Affairs
budget and represent roughly 7% of discretionary budget authority under the
jurisdiction of House and Senate Appropriations Committees.
At the beginning of the 109th Congress, House and Senate Committees on
Appropriations reorganized their subcommittee structures. The House panel reduced
the number of subcommittees to ten and reconfigured several of their jurisdictions.
These changes, however, do not affect the previous organizations for Foreign
Operations and State Department/Broadcasting programs. The jurisdiction of the
House Foreign Operations Committee remains the same, while State Department,
Broadcasting, and related activities continue to be funded within the re-titled
Subcommittee on Science, State, Justice, Commerce, and Related Agencies (SSJC).
The Senate Appropriations Committee chose to restructure its subcommittees
differently from the House by maintaining twelve sub-panels. The Senate
configuration combines Foreign Operations with the State Department, Broadcasting,
and related agencies, creating a re-titled Subcommittee on State, Foreign Operations
and Related Programs.
This report covers funding and policy issues related to both Foreign Operations
and State Department programs. The discussion and accompanying tables are
designed to track the House Foreign Operations Appropriation measure, as well as
the broader Senate State, Foreign Operations spending bill. To read about State
Department/Broadcasting issues within the context of the House SSJC appropriation
measure, see CRS Report RL32885.
Foreign Operations Overview
Foreign Operations, the larger of the two components with a request of $22.8
billion for FY2006, 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.2
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
2 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 regarded as a trade promotion program, rather
than foreign aid. In recent years, funding for food aid has run somewhat higher than for the
Eximbank, so Foreign Operations is slightly smaller than the official foreign aid budget.
Nevertheless, throughout this report, the terms Foreign Operations and foreign aid are used
interchangeably.

CRS-3
Corps and the Inter-American and African Development Foundations. Foreign
Operations also includes resources for the two newest Administration initiatives: the
Millennium Challenge Corporation (MCC) and the Global AIDS Initiative managed
by the State Department’s HIV/AIDS Coordinator. Most humanitarian aid activities
are funded within Foreign Operations, including USAID’s disaster/famine 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 other security aid programs
administered largely by the State Department, in conjunction with USAID and the
Pentagon. Foreign Operations appropriations also fund reconstruction programs in
Afghanistan and Iraq, and for countries affected by the December 2004 Indian Ocean
tsunami. 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.
State Department/Broadcasting Overview
Budgets for the Department of State, including embassy construction and
security and public diplomacy, are within the State Department and related programs
title of the Science, State, Justice, and Commerce (SSJC) appropriations in the House
and the State, Foreign Operations measure in the Senate. This title, for which the
Administration requests $9.8 billion in FY2006, also funds the Broadcasting Board
of Governors (BBG), and U.S. assessed contributions to United Nations (U.N.),
International Organizations, and U.N. Peacekeeping. State Department and related
programs further include funding for the U.S. Institute for Peace, Asia Foundation,
National Endowment for Democracy, and several other small educational and
exchange organizations. This title also appropriates resources for international
commissions.
Related Foreign Policy Authorization Measures
Intertwined with both Foreign Operations and State Department appropriations
are foreign policy authorization bills that, by law, Congress must pass prior to foreign
aid and the State Department’s expenditure of its appropriations. When Congress
does not pass these authorization measures, as was the case during the 108th
Congress, the appropriation bills must waive the authorization requirement for
foreign policy agencies and programs to continue to function.3 In some cases, this
results in the attachment of foreign affairs authorizing provisions to Foreign
3 For details on the history and the most recent foreign relations authorization legislation
from the 108th Congress, H.R. 1950/S. 2144, see CRS Report RL31986, Foreign Relations
Authorization, FY2004 and FY2005: State Department and Foreign Assistance
.

CRS-4
Operations and State Department appropriation measures, adding increased
importance to the appropriation bills in terms of both funding and setting policy
priorities for U.S. foreign policy.
This has been the situation especially for Foreign Operations. For two decades,
the Foreign Operations appropriations 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.4 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 the channel through which the President has utilized foreign
aid as a tool in the global war on terrorism since the attacks of September 11, 2001,
and launched Afghan and Iraqi reconstruction operations.
These appropriation measures have also been a key instrument 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.
Key Foreign Operations/State Department Funding
Issues for FY2006
While appropriation bills funding foreign aid, State Department operations,
embassy construction, public diplomacy, and contributions to international
organizations can address the entire range of U.S. foreign policy issues, the FY2006
budget request poses several key matters that the 109th Congress will likely closely
examine and debate. For Foreign Operations programs, major issues include:
! The overall size of the request — a 15.7% increase over regular
FY2005 Foreign Operations funds — and whether competing budget
proposals for domestic programs and efforts to reduce the deficit
will permit full funding of the $22.63 billion recommendation.
! Foreign aid in support of the global war on terror and whether the
FY2006 request fully addresses this high national security priority,
4 Although Congress has not approved a broad, comprehensive foreign aid authorization,
individual foreign aid components have been authorized, including legislation for the
Millennium Challenge Account, the President’s HIV/AIDS initiative, assistance for the
former Soviet states (Freedom Support Act) and Eastern Europe (SEED Act),
microenterprise programs, and the Peace Corps.

CRS-5
including resources for reconstruction efforts in Iraq and
Afghanistan.
! The Millennium Challenge Account and whether progress thus far
on this new, innovative foreign aid program justify a doubling of its
budget in FY2006.
! HIV/AIDS funding and whether the 12.5% funding increase for
FY2006 and the implementation and allocation of resources,
including those for the Global Fund to Fight AIDS, Tuberculosis,
and Malaria, are fully meeting the vision of the President’s $15
billion initiative.
! “Core” development and humanitarian aid programs and whether
proposed funding reductions for some activities and account
restructuring to enhance flexibility are justified.
On State Department operations, key policy and funding issues include:
! The U.S. embassy in Iraq and funding for ongoing operations,
security, and construction.
! Public Diplomacy: educational and cultural exchange funds would
increase in FY2006 by 21% and broadcasting operations by 10%.
! International Peacekeeping contributions would rise by 114% over
FY2005 regular appropriation levels for new operations in Sudan
and elsewhere.
! Democracy promotion activities, emphasized by President Bush and
Secretary of State Rice, is highlighted by a 35% increase in funds for
the National Endowment for Democracy.
Status
Table 1. House Status of Foreign Operations, FY2006
Subcomm.
Conf. Report
Markup
House
House
Senate
Senate
Conf.
Approval
Public
Report
Passage
Report
Passage
Report
Law
House
Senate
House
Senate

CRS-6
Table 2. Senate Status of State, Foreign Operations, FY2006
Subcomm.
Conf. Report
Markup
House
House
Senate
Senate
Conf.
Approval
Public
Report
Passage
Report
Passage
Report
Law
House
Senate
House
Senate
Foreign Operations and State Department Policy
Trends and Goals
Arguably, from the end of World War II until the early 1990s, the underlying
rationale for foreign aid and diplomatic efforts was the defeat of communism. U.S.
aid programs were designed to promote economic development and policy reforms,
in large part to create stability and reduce the attraction to communist ideology and
to block Soviet diplomatic links and military advances. Other security assistance
activities provided defense equipment and training to American allies and friendly
states, some of which faced Soviet or Soviet-proxy threats. Aid programs also were
used to help the United States gain access to military bases around the world in order
to forward deploy American forces. Diplomacy emphasized strengthening alliances
and building coalitions to isolate and confront the Soviet threat.
Foreign aid and diplomatic programs also supported a number of secondary U.S.
policy goals in the developing world, such as reducing high rates of population
growth, promoting wider access to health care, expanding the availability of basic
education, advancing U.S. trade interests, and protecting the environment. If these
secondary goals were also achieved, U.S. aid programs could be promoted as
delivering “more bang for the buck.”
With the end of the Cold War, the focus of American foreign policy shifted to
support more extensively other U.S. national interests, including stopping the
proliferation of weapons of mass destruction, curbing the production and trafficking
of illegal drugs, expanding peace efforts in the Middle East, seeking solutions to
conflicts around the globe, protecting human rights, countering trafficking in persons.
Foreign Aid Policy Shifts
Foreign assistance, in particular, underwent significant changes during the
1990s. The United States launched expansive aid programs in Russia and many
eastern-bloc states, the influence of which U.S. assistance previously tried to combat.
While these and other new elements of American foreign aid emerged, no broad
consensus developed over what the new overarching rationale for U.S. aid programs
should be. Throughout the 1990s, policymakers and Congress explored a number of
alternative strategic frameworks around which to construct a revised foreign
assistance policy rationale. Not only did a policy consensus fail to emerge, but

CRS-7
efforts to overhaul the largely Cold War-based foreign aid legislation also did not
succeed.
During this period, the Clinton Administration emphasized the promotion of
“sustainable development” as the new, post-Cold War main strategy of those parts
of the foreign aid program under the aegis of the U.S. Agency for International
Development (USAID). Economic assistance supported six inter-related goals:
achievement of broad-based, economic growth; development of democratic systems;
stabilization of world population and protection of human health; sustainable
management of the environment; building human capacity through education and
training; and meeting humanitarian needs.
Early in the Bush Administration these goals were modified around three
“strategic pillars” of: 1) economic growth, agriculture, and trade; 2) global health;
and 3) democracy, conflict prevention, and humanitarian assistance. More recently,
a USAID White Paper on American foreign aid identified five “core” operational
goals of U.S. foreign assistance:
! Promoting transformational development, especially in the areas of
governance, institutional capacity, and economic restructuring;
! Strengthening fragile states;
! Providing humanitarian assistance;
! Supporting U.S. geostrategic interests, particularly in countries such
as Iraq, Afghanistan, Pakistan, Jordan, Egypt, and Israel; and
! Mitigating global and international ills, including HIV/AIDS.5
Impact of the September 11 Terrorist Attacks
The most defining change in U.S. foreign policy, however, came following the
September 11, 2001, terrorist attacks in the United States. Since 9/11 American
foreign aid and diplomatic efforts have taken on a more strategic sense of importance
and has been cast frequently in terms of contributing to the global war on terrorism.
In September 2002, President Bush released his Administration’s National Security
Strategy that established global development, for the first time, as the third “pillar”
of U.S. national security, along with defense and diplomacy. Also in 2002, executive
branch foreign assistance budget justifications began to underscore the war on
terrorism as the top foreign aid priority, highlighting amounts of U.S. assistance to
28 “front-line” states in the terrorism war — countries that cooperated with the
United States in the war on terrorism or faced terrorist threats themselves.6 The
substantial reconstruction programs in Afghanistan and Iraq — which totaled more
in FY2004 than the combined budgets of all other aid programs — are also part of
the emphasis on using foreign aid to combat terrorism. State Department efforts
5 U.S. Agency for International Development. U.S. Foreign Aid: Meeting the Challenges
of the Twenty-First Century
. January 2004.
6 According to the State Department, these “front-line” states include Afghanistan, Algeria,
Armenia, Azerbaijan, Bangladesh, Colombia, Djibouti, Egypt, Ethiopia, Georgia, Hungary,
India, Indonesia, Jordan, Kazhakistan, Kenya, Oman, Pakistan, Philippines, Poland, Russia,
Saudi Arabia, Tajikistan, Tunisia, Turkey, Turkmenistan, Uzbekistan, and Yemen.

CRS-8
focused extensively on building coalitions to assist in the war on terror and finding
new and more effective ways of presenting American views and culture through
public diplomacy.
At roughly the same time that fighting terrorism became the leading concern of
U.S. foreign policy, the Bush Administration announced other significant initiatives
that have defined and strengthened two additional key foreign assistance goals:
promoting economic growth and reducing poverty, and combating the global
HIV/AIDS pandemic. The Millennium Challenge Corporation (MCC) is a new aid
delivery concept, authorized by Congress and established in early 2004 in P.L. 108-
199, that is intended to concentrate significantly higher amounts of U.S. resources in
a few low- and low-middle income countries that have demonstrated a strong
commitment to political, economic, and social reforms. If fully funded, $5 billion
will be available by FY2006 to support these “best development performers” in order
to accelerate economic growth and lower the number of people living in absolute
poverty.
Addressing global health problems has further become a core U.S. aid objective
in recent years. Congress created a separate appropriation account for Child Survival
and Health activities in the mid-1990s and increased funding for international
HIV/AIDS and other infectious disease programs. President Bush’s announcement
at his 2003 State of the Union message of a five-year, $15 billion effort to combat
AIDS, malaria, and tuberculosis has added greater emphasis to this primary foreign
assistance objective.
Beyond these recently emerging foreign policy goals, other prominent objectives
that have continued since the early 1990s have included supporting peace in the
Middle East through assistance to Israel, Egypt, Jordan, and the Palestinians;
fostering democratization and stability for countries in crisis, such as Bosnia, Haiti,
Rwanda, Kosovo, and Liberia; facilitating democratization and free market
economies in Central Europe and the former Soviet Union; suppressing international
narcotics production and trafficking through assistance to Colombia and other
Andean drug-producing countries; and alleviating famine and mitigating refugee
situations in places throughout the world.
Foreign Operations and State Department Funding
Trends
Foreign Operations Appropriations Trends
As shown in Figure 1, Foreign Operations funding levels, expressed in real
terms taking into account the effects of inflation, have fluctuated widely over the past
30 years.7 After peaking at over $35 billion in FY1985 (constant FY2006 dollars),
7 Some of these swings in budget levels are not the result of policy decisions, but are due to
technical budget accounting changes involving how Congress “scores” various programs.
(continued...)


CRS-9
Foreign Operations appropriations began a period of decline to a low-point of $14.6
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 1. 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 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.
7 (...continued)
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 here can be regarded as illustrative of general trends in
Congressional decisions regarding Foreign Operations appropriations over the past 29 years.

CRS-10
While funding for regular, continuing foreign aid programs also rose modestly
during this period, supplemental spending for special activities, such as Central
American hurricane relief (FY1999), Kosovo emergency assistance (FY1999), Wye
River/Middle East peace accord support (FY2000), a counternarcotics initiative in
Colombia and the Andean region (FY2000), aid to the front line states in the war on
terrorism and Iraq-war related assistance (FY2003-FY2005), was chiefly responsible
for the growth in foreign aid appropriations.
While Foreign Operations appropriations had been rising for five consecutive
years, amounts approved in FY2003 and FY2004 reached unprecedented levels
compared with funding over the past 40 years. Substantial supplementals of $7.5
billion and $21.2 billion, respectively, for assistance to the front line states in the war
on terrorism and Afghanistan and Iraq reconstruction, pushed spending upward.
Foreign Operations spending for FY2004 — $41 billion (constant FY2006 dollars)
— was the highest level, in real terms, since the early 1960s.
The enacted level for FY2005 of $22.75 billion (in constant terms and including
supplemental appropriations,) while less than the previous two years, is the largest
Foreign Operations appropriation, in real terms, in over a decade.
Table 3. Foreign Operations Appropriations, FY1996 to FY2006
(discretionary budget authority in billions of current and constant dollars)

FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03
FY04
FY05 FY06
nominal
$s
12.46 12.27 13.15 15.44 16.41 16.31 16.54 23.67
39.05
22.27 22.83
constant
FY06 $s
15.15 14.64 15.54 18.00 18.67 18.14 18.11 25.41
41.01
22.75 22.83
Note: FY1999 excludes $17.861 billion for the IMF. FY2003 includes $2.475 billion and FY2004 includes
$19.42 billion in supplemental appropriations for Iraq reconstruction. FY2005 includes the regular
appropriation, plus $100 million for Caribbean hurricane relief provided in P.L. 108-324 and $2.77 billion
provided in H.R. 1268, the FY2005 emergency supplemental for Iraq, Afghanistan, and tsunami relief.
Growing Importance of Supplementals. Supplemental resources for
Foreign Operations programs, which in FY2004 exceeded regular Foreign Operations
funding, have become a significant channel of funding for U.S. international
activities. Due to the nature of rapidly changing overseas events and the emergence
of unanticipated contingencies to which it is in the U.S. national interest to respond,
it is not surprising that foreign aid and defense resources from time to time are the
major reason for considering and approving supplemental spending outside the
regular appropriation cycle. Supplementals have provided resources for such major
foreign policy events as the Camp David accords (FY1979), Central America
conflicts (FY1983), Africa famine and a Middle East economic downturn (FY1985),
Panama and Nicaragua government transitions (FY1990), the Gulf War (FY1991),
and Bosnia relief and reconstruction (FY1996).

CRS-11
But after a period of only one significant foreign aid supplemental in eight years,
beginning in FY1999 Congress approved Foreign Operations supplemental
appropriations exceeding $1 billion in each of the past six years. Relief for Central
American victims of Hurricane Mitch, Kosovo refugees, and victims of the embassy
bombings in Kenya and Tanzania in FY1999 totaled $1.6 billion, and was followed
in FY2000 by a $1.1 billion supplemental, largely to fund the President’s new
counternarcotics initiative in Colombia. As part of a $40 billion emergency
supplemental to fight terrorism enacted in September 2001, President Bush and
Congress allocated $1.4 billion for foreign aid activities in FY2001 and FY2002.
Another $1.15 billion supplemental cleared Congress in FY2002 to augment Afghan
reconstruction efforts and assist other front-line states in the war on terrorism.
Figure 2. Supplemental Funding for Foreign Operations
Until FY2003, these additional resources accounted for between 7% and 11%
of total Foreign Operations spending. The $7.5 billion Iraq War supplemental for
FY2003, however, went well beyond these standards, representing nearly one-third
of the FY2003 Foreign Operations budget, and was surpassed, as noted above, only
by FY2004 supplemental appropriations, which more than doubled the Foreign
Operations budget for the year. Congress approved another large Foreign Operations
supplemental for FY2005 — $2.52 billion — largely for additional Afghan

CRS-12
reconstruction, tsunami disaster relief, and additional aid for Sudan — representing
about 11% of total appropriations for this year.8
State Department/Broadcasting Appropriation Trends
Over the past nearly three decades, the funding level for the State Department
and international broadcasting has reflected generally an upward trend. Although
there were a few brief periods of declining resources, appropriations continually
climbed to the point where the FY2006 budget request is more than double what it
was in the 1978-1984 time period.
Many of the spikes in funding over the years were related to overseas security
issues. Since the Vietnam War, American embassies have increasingly been the
targets of hostile action. Terrorist attacks grew in number in the 1970s, the decade
ending with the taking of American hostages in Tehran in 1979. Similarly, in the
early 1980s, the State Department recognized a greater need to tighten security after
the 1983 bombing of U.S. Marine barracks in Beirut, Lebanon, and the bombing of
the embassy annex in Beirut in 1984. In 1985, a report by the Advisory Panel on
Overseas Security, headed by Admiral Bobby Inman, set new standards for security
measures at U.S. facilities around the world. In 1986 Congress provided an embassy
supplemental appropriation to meet those standards. Again in August 1998, another
major attack occurred on U.S. embassies in Kenya and Tanzania. Later that year,
Congress passed an emergency supplemental that sharply increased total State
Department spending. And, as noted above, following the September 11, 2001
terrorist attacks, several emergency supplemental appropriations raised the State
Department funding levels to all-time highs by FY2004.
The Clinton Administration generally believed in a multilateral approach to
handling international problems, and sought an expansion of U.N. involvement in
international peacekeeping. In 1994, the Administration requested supplemental
funding for U.N. peacekeeping to provide more help with Cyprus and African
regional efforts, as well as Angola, Iraq, Yugoslavia, Somalia, Haiti, and
Mozambique. Congress appropriated $670 million for the peacekeeping
supplemental in 1994, more than doubling the international peacekeeping account
that year.
During this same period, both Congress and the Administration struggled to
reduce the Federal deficit. Some Members contended that, with the end of the Cold
War, a peace dividend could be derived, and believed that foreign policy agency
funding could be trimmed to help meet growing budget pressures. Reorganization
of the international broadcasting entities beginning in 1994, and later the
consolidation of the foreign policy agencies into the Department of State in 1999,
reflected the mood in Congress to streamline these foreign policy agencies, thereby
realizing budgetary savings.
8 The FY2005 supplemental included $3.52 billion in “new” Foreign Operations funds, but
a $1 billion rescission of FY2003 economic aid to Turkey lowered the “net” supplemental
to $2.52 billion.


CRS-13
From the outset of the George W. Bush Administration, then-Secretary of State
Colin Powell strongly asserted within the executive branch and in testimony to
Congress that State Department resource needs had been neglected during the
previous decade and that significant increases were needed to improve technology
and staffing challenges. The Administration of Foreign Affairs portion of State
Department spending, the area of the budget out of which personnel and technology
costs are paid, has risen from $4 billion FY2000 to nearly $6.8 billion in the FY2006
request, an increase, in real terms, of 70%.
Figure 3. State Department/Broadcasting Funding Trends
Table 4. State Department/Broadcasting Appropriations, FY1996 to
FY2006
(discretionary budget authority in billions of current and constant dollars)

FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03
FY04
FY05 FY06
nominal
$s
4.77
4.87
5.06
6.91
6.16
6.91
7.71
8.05
9.29
10.65
9.80
constant
FY06 $s
5.80
5.81
5.98
8.05
7.01
7.69
8.44
8.64
9.76
10.87
9.80

CRS-14
Data Notes
Unless otherwise indicated, this report expresses dollar amounts in terms of
discretionary budget authority. The Foreign Operations and State Department
Appropriation bills include two mandatory retirement programs for USAID and
State Department officers that are not included in figures and tables. The two
retirement funds are scheduled to receive $42.5 million and $132.6 million,
respectively, for FY2005.
In addition, funding levels and trends discussed in this report exclude U.S.
contributions to the International Monetary Fund (IMF), which 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 would 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.
Foreign Operations/State Department, the FY2005
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
Figure 4. Budget Function 150
panels under what is referred to as
Total = $33.6 billion
the Section 302(a) allocation
State Dept. $9.803
Food Aid, Agriculture - $0.985
process. Section 302(a) is the
pertinent authority in the
2.9%
29.2%
Congressional Budget Act.
Following this, House and Senate
A p propri at i o n s C o m m i t t ees
separately decide how to allot the
total amount available among their
67.9%
subcommittees, staying within the
functional guidelines set in the
budget resolution. This second step
is referred to as the Section 302(b)
Foreign Operations - $22.826
allocation. Foreign Operations and
State Department funds fall within
the International Affairs budget function (Function 150), representing in most years
about 67% and 30%, respectively, of the function total. The other major component
of Function 150 — international food assistance — is funded in the Agriculture
spending measure.

CRS-15
How much International Affairs money to allocate among each of the
subcommittees with jurisdiction, 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
subcommittees will operate when they meet to mark up their annual appropriation
bills.
On March 17, 2005, both houses approved budget resolutions for FY2006
(H.Con.Res. 95 and S.Con.Res.18) that reduce the amount of discretionary budget
authority for International Affairs funding compared with the Presidents’s request.
The House measure cut Function 150 by about $1.6 billion, or 4.7%, while the Senate
resolution set discretionary spending roughly $350 million, or 1%, below the
Administration’s proposal.
The final agreement on H.Con.Res. 95, which cleared both Houses on April 28,
cut deeper into the International Affairs budget function than either of the earlier
resolutions. As approved, Function 150 is set at $31.37 billion for FY2006, about
$2.4 billion, or 7%, less than the President’s request.
House and Senate Appropriations Committees, however, can choose to allocate
the final amount set out in the budget resolution among the various subcommittees
with jurisdiction over the International Affairs budget proportionally different than
what the President proposed or to alter the overall amount for foreign policy
activities. Depending on other competing priorities, the final allocations can diverge
significantly from those assumed in the budget resolution. Nevertheless, the size of
the reduction compared with the executive request approved in the budget resolution
creates a challenging budget picture for appropriation subcommittees with
jurisdiction over Foreign Operations and State Department/Broadcasting programs.
The House Appropriations Committee announced its subcommittee allocations
on May 5, providing $20.27 billion to the Foreign Operations Subcommittee, a level
$2.56 billion, or 11.2%, below the Administration’s recommendation. During each
of the past two years, the House Foreign Operations Subcommittee was able to
absorb more modest reductions to the President’s request largely by paring back the
large increases proposed by the President for the Millennium Challenge Account.
Once again the executive branch seeks a substantial increase for the MCA —
doubling its budget to $3 billion. But even if the Subcommittee decides again to
recommend a sizable cut to the MCA proposal, it will likely not be sufficient to cover
a significant portion of the shortfall in the Subcommittee’s allocation compared to
the President’s request. Reductions, it appears, will be required across a number of
programs and accounts.
For State Department and related programs, the implications of the Sec. 302(b)
allocations are less clear because these funds are merged with a range of domestic
agencies. However, the $3.16 billion House SSJC Subcommittee allocation is 5.2%
less than the Administration’s request. How this impacts State
Department/Broadcasting funding levels specifically will be determined when the
Subcommittee meets to mark up its legislation.

CRS-16
Foreign Operations/State Department
Appropriations Request for FY2006
On February 7, 2005, the President submitted his FY2006 budget request,
including $22.8 billion for Foreign Operations and $9.8 billion for State Department
and Related Agencies appropriations. These amounts are 15.7% and 12.2%,
respectively, higher than FY2005 amounts enacted in regular, non-supplemental
appropriations. The combined Foreign Operations/State Department request of
$32.65 billion is 14.7% larger than regular FY2005 funding. With passage of the
FY2005 Emergency Supplemental Appropriations (H.R. 1268), total Foreign
Operations for this year increases to $22.27 billion, while State
Department/Broadcasting funds rise to $10.65 billion. Comparing the FY2006
request with the total amount enacted for FY2005 — regular and supplemental —
finds Foreign Operations increasing by about $300 million, or 2.5%, and State
Department and related programs decreasing by $850 million, or 8%.
Foreign Operations Request Overview and
Congressional Action
The 15.7% increase over regular FY2005 appropriations proposed for Foreign
Operations is one of the largest additions in the President’s request for discretionary
spending in FY2006. By comparison, the Administration seeks increases for two
other high priority budget areas — defense and homeland security — of about 5%
and 3%, respectively.
Despite the large overall increase for Foreign Operations, much of the added
funding is concentrated in a few areas. The FY2006 budget continues to highlight
foreign aid in support of the war on terrorism as the highest priority, with a 9%
increase in aid to the front-line states in the war on terrorism and 12% more funds for
global counter-terror programs. Resources would continue to grow for the
President’s two newest foreign aid initiatives — the Millennium Challenge Account
(MCA) and the President’s Emergency Plan for AIDS Relief (PEPFAR). The MCA
request doubles to $3 billion in FY2006 while Foreign Operations funds for PEPFAR
would rise from $2.28 billion in FY2005 to $2.56 billion in the FY2006 request.
(Additional PEPFAR funds are proposed in the Labor/HHS appropriation measure,
bringing the total FY2005 PEPFAR request to $3.16 billion.) After failing to win
congressional approval the past three years for a contingency fund that could be used
in response to unanticipated foreign policy emergencies, the White House again
proposes $100 million for a Crisis Response Fund. The State Department’s
International Narcotics and Law Enforcement program would also receive a
significant funding boost of over 60%, almost entirely to support a nearly three-fold
increase in programs to stem opium poppy cultivation in Afghanistan. The
Administration is also seeking the transfer of about $300 million in food assistance,
traditionally funded in the Agriculture appropriation measure, to Foreign Operations
and USAID’s disaster assistance account in order to enhance the flexibility and lower
costs for providing timely emergency food relief overseas.

CRS-17
Combined, funding for these major elements of the Foreign Operations request
total $12.5 billion, or 26% higher than for FY2005. By contrast, the $10.3 billion
proposed for all other Foreign Operations activities is just 4.8% higher than FY2005
regular appropriations amounts.
Table 5. Foreign Operations Significant Increases FY2006
($s — billions)
FY2005
FY2006
FY2006 +/-

Regular*
Request
FY2005
Foreign Operations Total
$19.737
$22.826
15.7%
Significant increases for FY2006:
“Front-Line States” aid
$5.300
$5.800
9.4%
Anti-Terrorism programs
$0.142
$0.159
12.0%
Millennium Challenge Account
$1.488
$3.000
101.6%
Emergency Plan for AIDS Relief
$2.279
$2.564
12.5%
Conflict Response Fund

$0.100

Counter-narcotics aida
$0.237
$0.264
11.4%
USAID disaster assistance
$0.485
$0.656
35.3%
Significant increases for FY2006, Total
$9.931
$12.543
26.3%
Remaining Foreign Operations Programs
$9.806
$10.283
4.9%
* FY2005 excludes emergency supplemental funding.
a. Because all assistance for Afghanistan is included in the figures for the front-line states above,
counter-narcotics programs for Afghanistan are not included here in order to avoid double-
counting. If Afghan counter-drug aid was included, FY2005 would total $326 million,
compared with $524 million requested for FY2006, a 60% increase.
Fighting the War on Terrorism
Since the terrorist attacks in September 2001, American foreign aid programs
have shifted focus toward more direct support for key coalition countries and global
counter-terrorism efforts. In total, Congress has appropriated approximately $46.2
billion in FY2002-FY2005 Foreign Operations funding to assist the approximately
28 front-line states in the war on terrorism, implement anti-terrorism training
programs, and address the needs of post-conflict Iraq and other surrounding
countries. (“Front-line” states are those nations cooperating with the United States
in the global war on terrorism or are facing terrorist threats themselves.) Nearly half
of all Foreign Operations appropriations the past four years have gone for terrorism
or Iraq war-related purposes.
Although 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 address

CRS-18
some of the factors that terrorists use to recruit disenfranchised individuals for their
cause.
The FY2006 budget continues the priority of fighting terrorism with $5.8
billion, or 25%, of Foreign Operations resources assisting the front-line states. The
largest front-line state recipients for FY2006 include Afghanistan ($920 million),
Pakistan ($698 million), Jordan ($462 million), and Iraq ($414 million). While the
FY2006 request changes little in the size and composition of bilateral assistance for
these countries that play key roles in the war on terror, questions are likely to be
raised over the proposals for Afghanistan and Iraq.
The $920 million aid package for Afghanistan, while similar in size to amounts
appropriated in the FY2005 regular Foreign Operations measure, does not include
military assistance to train and equip the Afghan army, an activity that received
around $400 million in Foreign Operations funding for FY2004 and FY2005.
Instead, the Administration proposes placing military aid programs under the
direction of the Defense Department and sought $1.3 billion for such purposes in the
FY2005 Emergency Supplemental (H.R. 1268). Military assistance programs have
maintained a long tradition of falling under the policy authority of the Secretary of
State and civilian diplomats at the Department, with DOD given responsibility to
manage the operations. Congress approved the shift from Foreign Operations to
Defense Department funds for Afghan military aid in the FY2005 Emergency
Supplemental, but only after adding the requirement that the Secretary of State must
concur with DOD decisions over how to program these funds.
The FY2006 request for front-line states also differs from previous proposals
in that for the first time, Iraq reconstruction funds are sought in a regular, rather than
an emergency spending measure. Since Congress approved $18.44 billion for Iraq
in the FY2004 emergency supplemental P.L. 108-106), no additional Foreign
Operations funds have been requested until now.9 The Administration’s $414 million
would largely focus on democracy and governance activities ($130 million) and
economic reconstruction ($230 million). Some critics, however, continue to argue
that since $5.6 billion of the $18.44 billion remains unobligated and that only $4.7
billion has been spent, there are sufficient funds available to meet current and future
reconstruction needs in Iraq.10
Anti-terrorism training and technical assistance programs also would rise by
12% above FY2005 levels, as illustrated in Table 6.
9 The FY2005 Emergency Supplemental includes $5.7 billion, as requested, for Iraq security
forces training programs, an amount that comes out of the Defense Department’s budget, not
Foreign Operations.
10 Obligation and spending figures from Department of State. Iraq Weekly Status Report,
April 27, 2005, p. 19. For more details on the status and implementation of Iraq
reconstruction programs, see CRS Report RL31833, Iraq: Recent Developments in
Reconstruction Assistance
.

CRS-19
Table 6. Global Counter-Terrorism Program Funding
($s — millions)
FY03
FY04
FY05
FY06
FY06
FY06
FY06
Program
Enacted
Enacted
Enacted
Request
House
Senate
Conf.
Anti-Terrorism Aid
65.6
141.4
117.8
133.5



Terrorist Interdiction
5.0
5.0
5.0
7.5



Engagement w/ Allies


2.0
2.0



Terrorist Financing -
5.0

7.2
7.5



State Dept
Terrorist Financing -
5.0
5.0
10.0
8.5



Treasury
TOTAL Counter-
80.6
151.4
142.0
159.0



Terrorism
The Millennium Challenge Account11
The largest funding increase in the FY2006 Foreign Operations budget is for the
Millennium Challenge Account (MCA), a foreign aid program announced in early
2002 and created in February 2004. The MCA is designed to radically transform the
way the United States provides economic assistance, concentrating resources on a
small number of “best performing” developing nations. MCA funds are managed by
a new Millennium Challenge Corporation (MCC), which provides assistance through
a competitive selection process to developing nations that are pursing political and
economic reforms in three areas:
! Ruling justly — promoting good governance, fighting corruption,
respecting human rights, and adhering to the rule of law;
! Investing in people — providing adequate health care, education,
and other opportunities promoting an educated and healthy
population; and
! Fostering enterprise and entrepreneurship — promoting open
markets and sustainable budgets.
If fully implemented and funded at its $5 billion per year target level, 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.
11 For a complete discussion of the Millennium Challenge Account, its current status, and
future challenges, see CRS Report RL32427, The Millennium Challenge Account:
Implementation of a New U.S. Foreign Aid Initiative.


CRS-20
The MCA concept is based on the premise that economic development succeeds
best where it is linked to the principles and policies of free market economy and
democracy, and where governments are committed to implementing reform measures
in order to achieve such goals. The MCA differs in several fundamental respects
from past and current U.S. aid practices:
! the size of the $5 billion commitment;
! the competitive process that will reward countries for past actions
measured by 16 objective performance indicators;
! the pledge to segregate the funds from U.S. strategic foreign policy
objectives that often strongly influence where U.S. aid is spent; and
! the requirement to solicit program proposals developed solely by
qualifying countries with broad-based civil society involvement.

The request for FY2006 is $3 billion, twice the amount appropriated for
FY2005, but less than the $5 billion FY2006 target that the President pledged when
he announced the initiative in March 2002. The MCC’s Board of Directors selected
17 countries12 to participate in the program in FY2004 and FY2005, and the
Corporation signed its first agreement, or Compact, with Madagascar on April 18,
2005.
Some Members of Congress, however, believe the initiative has started more
slowly than they had anticipated, spending only small amounts of the roughly $2.5
billion appropriated in total for FY2004 and FY2005. Doubling the budget of an
untested foreign aid program while other traditional development assistance
programs are scheduled for reductions in FY2006, they assert, may not be the best
allocation of Foreign Operations resources. The MCC argues, however, that the
signing of additional Compacts will accelerate in the coming months, that existing
resources are likely to be fully committed by the end of calendar 2005, and that an
additional $3 billion is necessary to finance new countries selected for FY2006
programs. The Board is expected to meet and finalize the FY2006 participants in
November.
President’s Emergency Plan for AIDS Relief (PEPFAR)
In his January 2003 State of the Union address, President Bush pledged to
increase substantially U.S. financial assistance for preventing and treating
HIV/AIDS, especially in the most heavily affected countries in Africa and the
Caribbean. The President promised $15 billion over five years, $10 billion of which
would be money above and beyond current funding. Most, but not all PEPFAR
funds are included in the Foreign Operations bill; the balance is provided in the
Labor/HHS appropriation measure.
12 The 17 countries are: Armenia, Benin, Bolivia, Cape Verde, Georgia, Ghana, Honduras,
Lesotho, Madagascar, Mali, Mongolia, Morocco, Mozambique, Nicaragua, Senegal, Sri
Lanka, and Vanuatu.

CRS-21
Table 7. U.S. International HIV/AIDS, Tuberculosis, and Malaria
Programs
(millions of current dollars)
FY2002 FY2003 FY2004
FY2005
FY2006
FY2006 FY2006 FY2006
Program
Actual
Actual
Actual
Estimate
Request
House
Senate
Conf.
USAID Child Survival/Health account
$395.0
$587.6
$513.4
$347.2
$330.0



for HIV/AIDS - regular
USAID Child Survival/Health account
$50.0
$248.4
$397.6
$248.0
$100.0



for the Global Fund
USAID Global Fund Carry-over

— ($87.8)a
$87.8




USAID Child Survival/Health account
$165.0
$129.0
$155.0
$168.6
$109.0



for TB & Malaria
USAID other economic assistance
$40.0
$38.2
$51.7
$51.1
$53.0



State Dept. Global AIDS Initiative


$488.1
$1,373.9
$1,870.0



GHAI for the Global Fund




$100.0



Foreign Military Financing

$2.0
$1.5
$2.0
$2.0



Subtotal, Foreign Operations
$650.0 $1,005.2 $1,519.5 $2,278.6 $2,564.0



CDC Global AIDS Program
$143.8
$182.6
$273.9
$123.8
$123.9



CDC International Applied Prevention
$11.0
$11.0
$11.0
$11.0
$11.0



Research
CDC International TB & Malaria
$15.0
$15.8
$17.9
$15.9
$11.0



NIH International Research
$218.2
$278.6
$317.2
$332.3
$350.0



Global Fund contribution, NIH/HHS
$125.0
$99.3
$149.1
$99.2
$100.0



Labor Dept AIDS in the Workplace
$8.5
$9.9
$9.9
$2.0
$0.0



Subtotal, Labor/HHS/Ed
$521.5
$597.2
$779.0
$584.2
$595.9



DOD HIV/AIDS prevention education
$14.0
$7.0
$4.2
$7.5
$0.0



with African militaries
USDA Section 416(b) Food Aid
$25.0
$24.8
$24.8
$24.8
$0.0



TOTAL, all appropriations
$1,210.5 $1,634.2 $2,327.5 $2,895.1 $3,159.9



TOTAL, Global Fund
$175.0
$347.7
$546.7
$435.0
$300.0



Sources: House and Senate Appropriations Committees, Departments of State and HHS, USAID, and CDC.
Note: FY2004 and FY2005 estimates are adjusted for required across-the-board rescissions of 0.59% and 0.8%, respectively.
a. Reflects the amount that could not be transferred to the Global Fund in FY2004, but that has been carried over for a contribution
in FY2005.
The program aims to prevent 7 million new infections, provide anti-retroviral
drugs for 2 million infected people, and provide care for 10 million infected people,
including orphans, in the 15 “focus” countries where much of the additional

CRS-22
resources are concentrated. These 15 nations — 12 in sub-Saharan Africa,13 plus
Haiti, Guyana, and Vietnam — are among the world’s most severely affected and
where about half of the current 39 million HIV-positive people live. The new funds
are channeled through the State Department’s Global HIV/AIDS Initiative (GHAI),
an office headed by the United States Global AIDS Coordinator, Randall Tobias.
The AIDS Coordinator oversees not only the GHAI programs in the focus countries,
but also the HIV/AIDS programs of USAID and other agencies in both focus and
non-focus countries.
For FY2006, the President requests a total of $3.16 billion for the international
HIV/AIDS initiative — $2.56 billion in Foreign Operations — up from the $2.9
billion enacted for FY2005 ($2.28 billion in Foreign Operations). As shown in
Table 7, however, the increased budget request concentrates new resources in the
State Department’s GHAI program where funding for the 15 focus countries
increases by over one-third. Bilateral HIV/AIDS assistance for non-focus countries
remains at roughly the same level in the FY2006 request, while USAID bilateral
malaria and tuberculosis appropriations would decline by 35%.
A contentious executive-legislative issue in the past has been how much to
allocate out of the PEPFAR budget for a U.S. contribution to the Global Fund to
Fight AIDS, Tuberculosis, and Malaria. The Fund is an international organization
established in 2001 to receive contributions from countries that will finance
HIV/AIDS, tuberculosis, malaria, and broad public health programs in nations facing
acute health crisis. Some believe the President’s plan is too strongly unilateral and
argue for the United States to act in closer cooperation with other countries and
donors, particularly the Global Fund. Since FY2003, Congress has boosted the
President’s annual $200 million request for the Global Fund to between $350 million
and $550 million. The President proposes $300 million for the Global Fund for
FY2006, still well below congressional appropriations the past three years.
Development and Humanitarian Assistance: Funding
Priorities, Account Restructuring, and Policy Differences

A continuing source of disagreement between the executive branch and
Congress is how to allocate the roughly $3 billion “core” budget for USAID
development assistance and global health programs. Among the top congressional
development aid funding priorities in recent years have been programs supporting
child survival, basic education, and, as noted above, efforts to combat HIV/AIDS and
other infectious diseases. The Administration has also backed these programs, but
officials object to congressional efforts to increase funding for children and health
activities when it comes at the expense of other development sectors.
In years when Congress has increased appropriations for its priorities, but not
included a corresponding boost in the overall development aid budget, resources for
other aid sectors, such as economic growth and the environment, have been
substantially reduced. This was more problematic during the mid-to-late 1990s when
13 These 12 countries are: Botswana, Cote d’Ivoire, Ethiopia, Kenya, Mozambique, Namibia,
Nigeria, Rwanda, South Africa, Tanzania, Uganda, and Zambia.

CRS-23
world-wide development aid funding fell significantly. In more recent years, and
especially since FY2003, Congress increased overall development assistance so that
both congressional and executive program priorities could be funded without
significant reductions for non-earmarked activities. Nevertheless, Administration
officials continue to argue that such practices undermine their flexibility to adjust
resource allocations to changing global circumstances.
Most recently, USAID Administrator Natsios told the House Foreign Operations
Subcommittee that part of the problem lay with development contractors, non-
governmental organizations (NGOs), trade associations, universities, and other
groups that have become major implementors of USAID development assistance
programs. These organizations and individuals, he asserts, lobby Congress to
earmark higher funds for programs the groups manage, mainly in the social sectors,
but ignore other development programs, such as those supporting agriculture,
infrastructure, institutional capacity building, and governance. The result, according
to Administrator Natsios, is that the areas of USAID’s budget that are not earmarked
get “squeezed” by resource requirements mandated in Foreign Operations
appropriation bills, leaving serious funding gaps in conducting a broad,
comprehensive, and well-integrated development assistance strategy.14
Table 8. Development Assistance Funding
($s — millions)
FY2004
FY2005
FY2006
FY06 +/- FY05

Actual
Estimate
Request
$ %
USAID “Core Development” Accounts:
Development Asst. Fund
$1,376.8
$1,448.3
$1,103.2
($345.1)
-23.8%
Transition Initiatives (TI)
$54.7
$48.6
$325.0
$276.4
568.7%
subtotal, Development & TI
$1,431.5
$1,496.9
$1,428.2
($68.7)
-4.6%
Child Survival/Health
$1,824.2
$1,537.6
$1,251.5
($286.1)
-18.6%
Subtotal, “Core Development”
$3,255.7
$3,049.4
$2,679.7
($369.7)
-12.1%
Global AIDS Initiative
$488.1
$1,373.9
$1,970.0
$596.1
43.4%
Millennium Challenge Account
$994.0
$1,488.0
$3,000.0
$1,512.0
101.6%
TOTAL, Development Aid
$4,737.8
$5,911.3
$7,649.7
$1,738.4
29.4%
Source: USAID.
14 Testimony of USAID Administrator Andrew Natsios before the House Foreign Operations
Appropriations Subcommittee, April 20, 2005. Figures shown in Table 9 illustrate some of
these points made by Administrator Natsios. Comparing amounts requested in FY2005 for
specific programs with those enacted by Congress show a substantial reduction in the
enacted level for the categories of Agriculture/Environment and Economic Growth.
Conversely, there are significant increases between requested and enacted for the areas of
Child Survival, Vulnerable Children, Other Infectious Diseases, and Family Planning.

CRS-24
a. USAID’s strategic pillars for Economic Growth and Democracy correspond to the Development
Assistance account in title II of annual Foreign Operations appropriations bills.
b. USAID’s strategic pillar for Global Health corresponds to the Child Survival and Health Program
Fund account in title II of annual Foreign Operations appropriations bills.
Funding Disagreements. All sides agree that the Bush Administration has
increased significantly overall funding for U.S. development and humanitarian aid
activities, underpinned by the launch of the PEPFAR and MCA initiatives. This
trend would continue in FY2006 under the President’s request in which total
development assistance would grow by over $1.7 billion, or 29% (see Table 8). A
concern expressed frequently by development aid proponents and some Members of
Congress, however, is that the two new initiatives were intended to be an additional
source of international development funding, not a substitute for traditional
programs. While the State Department’s Global AIDS Initiative account (the major
element of the PEPFAR program) and the MCA program have grown to represent a
combined $5 billion in the President’s FY2006 request, over $2.1 billion higher than
for FY2005, the budget recommendations for the long-standing, traditional USAID
accounts of Development Assistance and Child Survival and Health Programs are
about $370 million, or 12% less than approved for FY2005.
Looking below the Account Level at Sector Allocations. Perhaps a
more informative analysis of the FY2005 proposal is to look not at the totals but to
compare funding levels recommended for individual components of development
assistance. This broadens the scope of Foreign Operations account to include both
the “core” development aid accounts and other funding channels, such as the
Economic Support Fund, assistance to Eastern Europe and states of the former Soviet
Union, and alternative development programs funded under the Andean Counterdrug
Initiative.
Using this broader scope of comparison, as illustrated in Table 9, a mixed
picture emerges regarding the FY2006 budget proposal. The Administration seeks
a substantial increase in Economic Growth (+21%), Higher Education (+10%), and
Conflict Management (+18%) activities, with smaller increases proposed for
Agriculture/Environment (+4%), Basic Education (+2%), Child Survival (+5%), and
Democracy/Governance (+7%). Conversely, large cuts are proposed in most health
categories — Vulnerable Children (-63%), Other Infectious Diseases (-28%), and
contributions to the Global AIDS Fund, as well as reductions for Human Rights (-
18%) and Family Planning programs (-3%).
Because of USAID plans to realign the structure of two accounts, however, there
is a degree of uncertainty over precise sector allocation comparisons. USAID
proposes to move programs for four “fragile” countries — Ethiopia, Sudan, Haiti,
and Afghanistan — from the Development Assistance account to the Transition
Initiatives (TI) account. (See discussion below regarding this request.) In order to
compare FY2005 and FY2006 accurately, amounts for these four countries must be
deducted from FY2005 totals because USAID has not determined how FY2006
resources for these four states under the Transition Initiatives account will be
allocated. This is likely to distort some of the comparisons, making an accurate

CRS-25
analysis of changes between FY2005 and FY2006 impossible until USAID
determines how it plans to disburse TI assistance to the four fragile states.15
Table 9. Economic Aid Allocations, by Program Sector
($s — millions)
FY2006
FY2005
FY2005
FY2006
Strategic Pillar
+/-
Request
Estimate
Request
FY2005
Economic Growth/Agriculture/Trade
$3,509.9
$3,381.4
$3,692.6
9.2%
Agriculture & Environment
$765.1
$738.5
$766.4
3.8%
Economic Growth
$1,914.7
$1,787.6
$2,165.1
21.1%
Basic Education for Children
$273.2
$333.8
$341.2
2.2%
Higher Education and Training
$128.8
$146.5
$161.9
10.5%
Special Concernsa
$428.0
$375.0
$258.0
-31.2%
Global Health
$1,604.0
$1,747.5
$1,501.9
-14.1%
Child Survival/Maternal Health
$408.6
$425.3
$446.5
5.0%
Vulnerable Children
$18.6
$36.2
$13.5
-62.7%
HIV/AIDS (USAID non-focus countries)b
$521.0
$386.3
$363.0
-6.0%
Global Fund for AIDS, TB, & Malaria
$100.0
$248.0
$100.0
-59.7%
Other Infectious Diseases
$152.4
$214.7
$153.9
-28.3%
Family Planning
$403.4
$437.0
$425.0
-2.7%
Democracy, Conflict, & Humanitarian
$1,070.1
$1,172.7
$1,255.7
7.1%
Democracy & Local Governance
$936.6
$937.1
$1,003.3
7.1%
Human Rights
$35.6
$57.2
$47.0
-17.9%
Conflict Management
$98.0
$178.3
$205.4
15.2%
Source: USAID.
Notes: This table shows the distribution of economic aid funding, by sector, across most Foreign
Operations accounts: Development Assistance, Child Survival/Health, Economic Support Fund, East
European aid, foreign Soviet aid, Andean Counterdrug Initiative, and Transition Initiatives (except
for FY2006 “fragile states”). It does not include allocations for HIV/AIDS “focus countries” that are
now allocated exclusively out of the State Department’s Global AIDS Initiative account. See footnote
“b” below.
For FY2006, the Administration proposes to fund Economic Growth and Democracy programs for
four “fragile” countries — Ethiopia, Sudan, Haiti, and Afghanistan — out of the Transition Initiatives
15 For example, comparisons for the sector of Basic Education may be one that is most
difficult, and possibly mis-leading. In FY2005, USAID allocated $24 million out of the
Development Assistance account for Basic Education programs in Afghanistan, an amount
not included in the Table 9 comparison. For FY2006, USAID proposes $42 million in Basic
Education for Afghanistan, to be drawn from the ESF account and therefore, included in
Table 9 totals. If the ESF amount represents the entire FY2006 Basic Education program
for Afghanistan and no Basic Education funds are allocated from the Afghan Transition
Initiatives account, overall Basic Education appropriations for FY2006 would decline by 5%
rather than increase by 2%, as shown in Table 9.

CRS-26
account rather than the Development Assistance account. USAID, however has not reported how it
plans to allocate the $275 million for these four countries among the program sectors shown in this
table. For consistency and comparative purposes, amounts for these four countries in the Economic
Growth and Democracy sectors for FY2005 requested and FY2005 estimated have been excluded.
a. Special Concerns category include economic aid programs for Israel and the South Pacific Fisheries.
b. Excludes Global AIDS Initiative allocations of $605.8 million in FY2005 estimate and FY2006
request. The FY2005 request did not utilize this methodology and cannot be compared with the
other columns. In the FY2005 Foreign Operations conference report, Congress directed the
Administration to allocate all focus-country assistance out of the Global AIDS account and not
from the Child Survival/Health account. As a result, there was a sharp reduction in the amount
of HIV/AIDS funding allocated from the Child Survival/Health account from the requested
level, but a corresponding increase in the Global AIDS account that is not shown in this table.
USAID Appropriation Account Realignment Proposals. For FY2006,
the Administration proposes to realign four appropriation accounts, one of which is
in the Agriculture appropriation bill, that will require action by the Foreign
Operations subcommittees. The rationale in each case, according to Executive
branch officials, is to provide USAID with greater flexibility and the means to
respond more effectively and appropriately to rapidly changing development needs.
Broadening the Transition Initiatives Account. A growing concern
among U.S. national security and development officials is the threat posed to U.S.
interests and the complexities of addressing the needs of fragile, failing, and post-
conflict states. Last year, the State Department created an Office of the Coordinator
for Reconstruction and Stabilization (O/CRS) in order to strengthen the U.S. capacity
to deal with such countries which can be the source of regional instability and
terrorists/criminal operations. The Senate has under consideration legislation that
would authorize an expansion of the O/CRS (see S. 600) while funding for the
Coordinator’s Office is included in the State Department appropriations budget
request.
Related to this effort is a proposal by USAID to transfer economic growth and
democracy program resources, currently funded in the Development Assistance
account, for four “fragile” states and place them in the Agency’s Transition Initiatives
(TI) account. The FY2006 USAID request recommends that $275 million in
development aid for Ethiopia, Sudan, Haiti, and Afghanistan be shifted to the TI
account, and combined with the traditional Transition Initiatives budget for a total
TI appropriation request of $325 million. (See Table 8, above.) The TI account,
which was established about 10 years ago, supports countries that face crisis or are
in transition from conflict to stable development. It is a form of assistance that can
bridge the gap between a strictly humanitarian intervention and the establishment of
a permanent, long-term development strategy. In the past, Congress has approved a
core appropriation to the TI Office at USAID from which funds are allocated as
needs emerge. Annual appropriations have ranged between $40 and $55 million.
The FY2006 request marks the first time that USAID would manage a full
country development assistance program out of the TI account. From the Agency’s
perspective, this offers greater flexibility — TI funds are available “notwithstanding”
restrictions and conditions that might otherwise apply to development aid resources

CRS-27
— and would permit USAID officials to design programs aimed at achieving results
in a shorter time frame than the current five-year development program time horizon.
At present, the TI account does not include congressional country or programmatic
earmarks and permits a shorter congressional review period for new activities.
Agency officials argue that this shift would avoid the more common six- twelve-
month period for a regular development aid program to make its way through the
contracting and congressional notification processes.16
Besides making it more difficult to compare USAID program funding priorities
for FY2006 with FY2005, an issue noted above, some Members have questioned
why this account realignment is necessary. Some wonder whether the change will
erode congressional oversight of aid programming in these highly volatile
environments. It is also unclear how these fragile state USAID programs will fit into
the broader U.S. strategy addressing failing and fragile countries overseen by the
O/CRS. For FY2006, USAID says that its field missions will manage the TI
programs in the same way that they currently operate regular development assistance
activities.
Shifting Conditions for Food Aid Programing. The Administration also
seeks to transfer $300 million from the so-called PL480 Title II food assistance
program,17 funded in the annual Agriculture appropriation bill, to the International
Disaster and Famine Assistance (IDFA) account in Foreign Operations. This would
not result in a net gain or loss of resources available for international food aid, but
change considerably how the $300 million could be programmed. Currently, PL480
assistance must be used to purchase U.S. commodities and transported, for the most
part, on ships owned by American firms. IDFA resources have no such conditions
attached. “Buy America” and cargo preference required by PL480 help U.S.
agricultural and maritime interests, but add costs to the shipment of commodities
overseas.
The Administration argues the proposal substantially improves the
developmental impact of food aid by allowing the $300 million to purchase
commodities in developing nations, thereby providing additional markets and income
sources to local farmers. In some cases the commodities may come from an area
close to an emergency situation, helping deliver the food more quickly and at a far
lower cost. Transportation expenses of PL480 commodities often can equal the value
of the food itself. Some in Congress, however, are opposed to this re-alignment of
the PL480 and IDFA accounts. To them, it represents a further erosion of support for
American farmers. They also raise questions regarding the quality of foreign-
purchased commodities and whether proper standards and inspections are in place
to ensure that the emergency food supplies are suitable. These critics contend that
food could be pre-positioned near famine-prone regions so that commodities could
be made able immediately.
16 See comments by USAID Administrator Natsios before the Council on Foreign Relations,
April 20, 2005.
17 Title II of the Agricultural Trade Development and Assistance Act of 1954, P.L. 83-480.
Title II authorizes grant food aid for both emergency and non-emergency purposes.

CRS-28
Family Planning and UNFPA Policy Controversies.18 U.S. population
assistance and family planning programs overseas have sparked continuous
controversy during Foreign Operations debates for nearly two decades. For FY2006,
the Administration requests $425 million for international reproductive health and
family planning programs, an amount that includes $25 million for the U.N.
Population Fund (UNFPA) in the event the organization is declared eligible for U.S.
assistance. This represents a cut of 8% from the combined $462 million available
in FY2005 for bilateral family planning programs and UNFPA, or other reproductive
health programs if UNFPA is ineligible.
Although funding considerations have at times been heatedly debated by
Congress, the most contentious family planning issues addressed in nearly every
annual congressional consideration of Foreign Operations bills have focused on two
matters: 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, and whether
abortion-related restrictions should be applied to bilateral USAID population aid
grants (commonly known as the “Mexico City” policy).
UNFPA Funding. During the Reagan and George H.W. Bush
Administrations, the United States did not contribute to UNFPA because of concerns
over practices of forced abortion and involuntary sterilization 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 supports or participates “in the
management” of a program of coercive abortion or involuntary sterilization. In 1993,
President Clinton determined that UNFPA, despite its presence in China, was not
involved in the management of a coercive program. From 1993 through the end of
the decade, in most years Congress appropriated about $25 million for UNFPA, but
added a directive that required that the amount be 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 George W. Bush requested $25 million for UNFPA.
Congress provided in the FY2002 Foreign Operations bill “not more than” $34
million for UNFPA. But after the White House placed a hold on UNFPA funds in
January 2002 and sent a State Department team to investigate, in July 2002 Secretary
of State Powell announced that UNFPA was in violation of the Kemp-Kasten
provision and that funds would be withheld. Although Congress has continued to
earmark funds for UNFPA in subsequent Foreign Operations bills, the
Administration has continued to find UNFPA ineligible under the Kemp-Kasten
restrictions and has re-directed the earmarked funds for other women’s programs.
18 For more extensive discussion of the these controversies surrounding U.S. family planning
programs and UNFPA contributions, see CRS Issue Brief IB96026, Population Assistance
and Family Planning Programs: Issues for Congress
; CRS Report RL30830, International
Family Planning: The “Mexico City” Policy
; and CRS Report RL32703, The U.N.
Population Fund: Background and the U.S. Funding Debate
.

CRS-29
For FY2005, Congress again earmarked $34 million for UNFPA — $25 million
drawn from the International Organizations and Programs (IO&P) account and $9
million drawn from the Child Survival/Health account. The entire $34 million is
subject to Kemp-Kasten restrictions, but the Administration has issued no
determination regarding the FY2005 funds. If the President determines that UNFPA
is ineligible, Congress directs the Administration to transfer the $25 million IO&P
account funds to the Child Survival/Health account for USAID-managed family
planning, maternal and reproductive health programs.
Mexico City Policy. The debate over international family planning policy
and abortion began over 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
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. 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.
Subsequently, on January 22, 2001, two days after taking office, President
George W. Bush issued a Memorandum to the USAID Administrator to rescind the
1993 memorandum of President Clinton and to direct the Administrator to “reinstate
in full all of the requirements of the Mexico City Policy in effect on January 19,
1993.” The President further said that it was his “conviction that taxpayer funds
should not be used to pay for abortions or to advocate or actively promote abortion,
either here or abroad.” 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.” 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.
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, in
effect, imposes a “gag” order on the ability of foreign NGOs and multilateral groups

CRS-30
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, closes the fungibility loophole.
Since reinstatement of the Mexico City policy in early 2001, several bills have
been introduced to reverse the policy, but except for language included in the Senate
FY2004 Foreign Operations appropriations bill (S. 1426), none has passed either the
House or Senate, and no measure has been enacted into law. On April 5, 2005, the
Senate approved 52-46 an amendment by Senator Boxer to S. 600 that would
effectively overturn the Mexico City policy. S. 600, an omnibus foreign policy and
aid authorization bill, remains under consideration in the Senate and has not received
a final vote.
Conflict Response Fund
The Administration proposes to establish within the State Department a $100
million contingency fund to allow the United States to respond quickly to unforseen
foreign crises with resources targeting immediate stability and reconstruction needs.
This would include funding the capacity to mobilize and deploy an emergency
civilian presence in the field. In the past, Congress has been reluctant to approve
this type of contingency fund for which it can apply little oversight. The
Administration had asked lawmakers to launch somewhat similar crisis funds in
several recent emergency supplemental and Foreign Operations appropriation
requests, proposals that were rejected in each case. The Conflict Response Fund,
however, differs from these previous requests in that it is linked with a broad State
Department strategy to more effectively respond to weak, fragile, and post-conflict
states that can pose serious security risks for the United States. In mid-2004, with
considerable encouragement by Senator Lugar and other Members of Congress, the
Department created the Office of the Coordinator for Reconstruction and
Stabilization to manage the U.S. government civilian response to crisis and unstable
situations and is seeking funds to form and train a civilian ready response corps.
Presumably, the Conflict Response Fund could be utilized by the Coordinator as an
operational tool in the immediate aftermath of an international crisis where American
interests were threatened. Previous requests for contingency funds had placed control
of the money in the White House and did not link the resources with a specific U.S.
policy initiative.
Other Key Elements of the FY2006 Request
Beyond these specific and prominent issues, the Foreign Operations proposal
for FY2006 seeks to increase aid activities in a few areas while cutting resources for
several programs. Significant appropriation increases included:

CRS-31
! Export-Import Bank resources would increase from $99 million to
$226 million, allowing the Bank to guarantee about $13.76 billion
in loans, the same as estimated for FY2005.
! USAID administrative costs would grow substantially, with
operating expenses climbing by 11% and capital investment costs
rising by one-third.
! Peace Corps spending would increase by 9%, but falls far below the
level necessary to sustain the President’s initiative announced three
years ago to double the number of Peace Corps volunteers by
FY2007.
! Refugee assistance resources would rise by 17% over FY2005
regular appropriations (excluding supplementals), with one-third of
the additional resources for overseas programs and two-thirds
available for refugee admissions into the United States.
! Peacekeeping funds would grow by 10%, including the expansion
of Global Peace Operations Initiative ($114 million) that trains and
equips foreign troops to strengthen their capacity to support global
peace support operations. The program incorporates previous efforts
focused exclusively in Africa, but with a substantial increase in
resources.
! Contributions to the World Bank’s International Development
Association (IDA) and to the African Development Fund. The
United States recently joined new replenishment agreements for both
institutions. The FY2006 request includes $107 million and $31
million more, respectively, for IDA and the African Fund.
For several other Foreign Operations accounts, the FY2006 submission
represents a reduction below regular amounts approved in FY2005. The proposal
cuts funding in three main areas:
! assistance to former Soviet states and Eastern Europe,
collectively, would decline by $85 million, or 10% from FY2005
levels.
! Worldwide totals for Foreign Military Financing (FMF), the main
U.S. military aid account, would decline by about over $150 million,
or 3%. This reduction, however, is entirely the result of military aid
for Afghanistan — $400 million in FY2005 — shifting to DOD
appropriations. Adjusting for this transfer, the FMF request is 5%
higher than FY2005 regular levels.
! Voluntary contributions to international organizations would
decrease 13%, with reductions proposed for UNICEF (-$10 million)
and the UN Development Program (-$13 million).

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Table 10. Summary of Foreign Operations Appropriations
(Discretionary funds — in millions of current dollars)
FY2004
FY2005 FY2005 FY2005
FY2006
Bill Title & Program
Enacted
Regular
Supp
Total
Request
Title I - Export Assistance
(123)
(62)

(62)
97
Title II - Bilateral Economic Aid
32,626
13,241
2,042
15,283
16,241
Development/Child
3,744
4,408

4,408
4,650
Survival/Global AIDS
Iraq Relief & Reconstruction
18,439



414
Millennium Challenge Acct
994
1,488

1,488
3,000
Title III - Military Assistance
4,868
5,012
490
5,502
4,871
Israel/Egypt
4,378
3,439

3,439
3,520
Title IV - Multilateral Aid
1,678
1,545

1,545
1,617
Total Foreign Operations
39,049
19,736
2,532
22,268
22,826
Total, without Iraq Recon.
20,610
19,736
2,532
22,268
22,412
Source: House Appropriations Committee and CRS calculations.
Leading Foreign Aid Recipients Proposed for FY2006
While Iraq is the largest current recipient of U.S. assistance, cumulatively, since
FY2003, and Israel and Egypt remain the largest annual U.S. aid recipients,
significant changes among other benefactors of U.S. assistance have emerged. In the
aftermath of the September 11 terrorist attacks, the war in Iraq, and the initiation of
the President’s Emergency Program for AIDS Relief (PEPFAR), foreign aid
allocations have changed in several significant ways. The request for FY2006
continues the patterns of aid distributions of the past three years, with the added
feature of several PEPFAR countries joining the list of top recipients. Table 11 lists
those nations that have received an average of more than $100 million from the
United States in FY2005 and requested for FY2006. Countries are listed in the order
of the combined amounts for those two years.
Since September 11, the Administration has used economic and military
assistance increasingly as a tool in efforts to maintain a cohesive international
coalition to conduct the war on terrorism and to assist nations that 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 it
conducted nuclear tests in May 1998, experienced a military coup in 1999, and fell
into arrears on debt owed to the United States. Since lifting aid sanctions in October
2001, the United States has transferred over $2.4 billion to Pakistan. Jordan,
Indonesia, and the Philippines also are among the top aid recipients as part of the
network of “front-line” states in the war on terrorism.

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Table 11. Leading Recipients of U.S. Foreign Aid
(Appropriation Allocations; in millions of current dollars)
FY2003
FY2004
FY2005
FY2005
FY2005
FY2006

Total
Total
Regular
Supp
Total
Request
Israel
3,682
2,624
2,559

2,559
2,520
Egypt
2,204
1,865
1,821

1,821
1,796
Afghanistan
543
1,799
956
1,724
2,680
920
Pakistan
495
387
536
150
686
698
Colombia
602
574
568

568
559
Jordan
1,556
560
458
200
658
462
West Bank/Gaza
125
75
74
200
274
150
Iraq
2,485
18,439



414
Sudan*
27
171
201
33
234
112
Kenya
59
85
159

159
213
Uganda
70
113
149

149
220
South Africa
73
99
139

139
190
Haiti*
35
102
126
20
146
164
Nigeria
73
80
130

130
176
Indonesia*
132
123
136

136
159
Peru
177
157
153

153
135
Zambia
57
82
113

113
159
Ethiopia*
56
74
114

114
145
Ukraine
153
113
94
60
154
117
Bolivia
139
133
132

132
123
Philippines
153
111
129

129
96
Sources: U.S. Department of State.
Note: Countries are listed in order of the combined FY2005 and FY2006 estimate.
* Amounts in this table reflect only direct bilateral, non-food aid programs to these
countries. In several cases, especially those noted with an “*”, countries that have or
are experiencing a crisis or natural disaster will receive considerable amounts of U.S.
aid through worldwide emergency humanitarian assistance accounts for disaster,
refugee, and food relief. For example, assistance for Sudan in FY2005 totals more
than $1 billion after including these emergency programs. In many cases this
emergency assistance is not identified on a country basis. It should be kept in mind,
however, that for these selected countries, U.S. assistance is considerably higher in
some years than the figures noted here.
Another major cluster of top recipients are those in the Andean region —
Colombia, Peru, and Bolivia — where the Administration maintains a large
counternarcotics initiative that combines assistance to interdict and disrupt drug

CRS-34
production, together with alternative development programs for areas whose
economies rely on the narcotics trade.
A new dimension in U.S. aid allocations — the impact of the President’s
international HIV/AIDS initiative — can also be seen in amounts allocated for
FY2004/FY2005 and proposed for FY2006. Uganda, Ethiopia, Kenya, Zambia,
South Africa, and Nigeria, all PEPFAR focus countries, are now among the leading
recipients of U.S. assistance. This list will further change once the Administration
announces aid packages for Millennium Challenge Account qualifying countries,
perhaps adding several additional countries that receive more than $100 million in
U.S. assistance.
Missing, from the list of top recipients, are several countries in the Balkans and
the former Soviet Union — Serbia and Montenegro, Kosovo, Russia, Armenia, and
Georgia — which have seen levels decline in recent years. Since Armenia and
George are MCA-eligible countries, aid levels may return to $100 million-plus
annual levels if they are awarded grants. Turkey, a leading recipient in most years
over the past 25 years, also falls off the list.
State Department Appropriations and Related
Agencies Overview and Congressional Action
Budgets for the Department of State and the Broadcasting Board of Governors
(BBG), as well as U.S. contributions to United Nations (U.N.) International
Organizations, and U.N. Peacekeeping, under the House Appropriations Committee
structure, fall within the Science, State, Justice, Commerce and Related Agency
(SSJC) appropriations.19 Under the new divisions of the Senate Appropriations
Committee organization, however, the State Department and BBG programs are
combined with Foreign Operations programs as part of the State, Foreign Operations
and Related Programs appropriations.
Intertwined with the annual appropriations process is the biannual Foreign
Relations Authorization that, by law, Congress must pass prior to the State
Department’s expenditure of its appropriations. Frequently, these authorizing
measures address both State Department and selected foreign aid issues. The Senate
is considering a State Department authorization bill for FY2006 and FY2007 (S.
600), but has not come to a final vote on the measure.20
On February 7, 2005, the Administration requested a funding level for the
Department of State of $9.15 billion, representing a 13.6% increase over the FY2005
19 See CRS Report RL32885, Science, State, Justice, Commerce and Related Agency
(SSJC) Appropriations,
for a full discussion of that bill.
20 For details on the history and past foreign relations authorization legislation, H.R. 1950/S.
2144, see CRS Report RL31986, Foreign Relations Authorization, FY2004 and FY2005:
State Department and Foreign Assistance
.

CRS-35
regular appropriations. For international broadcasting, the request of $652 million
represents a 10.2% increase over the FY2005 enacted amount.
Table 14 provides regular and supplemental State Department and related
agencies’ appropriations for FY2004, FY2005 and the FY2006 request. Rescissions
for FY2005 are reflected in the table.
State Department
The State Department’s mission is to advance and protect the worldwide
interests of the United States and its citizens through the staffing of overseas
missions, the conduct of U.S. foreign policy, the issuance of passports and visas, and
other responsibilities. Currently, the State Department coordinates with the activities
of 50 U.S. government agencies and organizations in operating more than 260 posts
in over 180 countries around the world. The Department’s staff size has increased,
largely because of the integration in 1999 of the Arms Control and Disarmament
Agency (ACDA) and the U.S. Information Agency (USIA) into State. Currently, the
State Department employs approximately 30,000 people, about 60% of whom work
overseas. Highlights of the FY2006 appropriations proposals follow.
Table 12. Summary of State Department/Broadcasting
Appropriations
(Discretionary funds — in millions of current dollars)
FY2004
FY2005 FY2005 FY2005
FY2006
Bill Title & Program
Enacted
Regular
Supp
Total
Request
State Department/Admin of
6,872
6,230
1,326 7,556
6,644
Foreign Affairs
Diplomatic & Consular Progs.
4,849
4,172
734
4,906
4,473
Embassy Security/Upgrades
1,441
1,504
592
2,096
1,516
Ed and Cultural Exchanges
317
356

356
430
Int’l Organizations/Confs.
1,695
1,650
680
2,330
2,332
Int’l Organizations
1,000
1,166

1,166
1,297
Int’l Peacekeeping
695
484
680
1,164
1,036
International Commissions
57
63

63
70
Related Appropriations
78
99
7
106
105
subtotal, State Department
8,702
8,042
2,013
10,055
9,151
International Broadcasting
592
592

592
652
Total State Dept/Broadcasting
9,294
8,634
2,013
10,647
9,803
Source: House and Senate Appropriations Committee and CRS calculations.
Diplomatic and Consular Programs (D&CP). The D&CP account funds
overseas operations (e.g., motor vehicles, local guards, telecommunications,
medical), activities associated with conducting foreign policy, passport and visa

CRS-36
applications, regional bureaus, under secretaries, and post assignment travel.
Beginning in FY2000, the State Department’s Diplomatic and Consular Program
account included State’s salaries and expenses, as well as the technology and
information functions of the former USIA and the functions of the former ACDA.
For the FY2006 budget, the Administration is requesting $4.47 billion for
D&CP, a 7.2% increase over the FY2005 level. Included in the FY2006 request is
$334 million for public diplomacy expenses and $690 million for worldwide security
upgrades.
The enacted FY2005 funding level for D&CP was set at $4.17 billion, including
$320 million for public diplomacy. Within the D&CP account, the conferees also
designated $650 million for worldwide security upgrades. They noted progress by
State on right-sizing embassies and urged continued efforts in staffing overseas posts.
The conferees provided $837 million for the FY2005 Border Security Program, of
which $75 million is from appropriated funds and $662 million will be derived from
machine readable visa (MRV) fees.
Embassy Security, Construction and Maintenance (ESCM). This
account supports the maintenance, rehabilitation, and replacement of overseas
facilities to provide appropriate, safe, secure and functional facilities for U.S.
diplomatic missions abroad. Early in 1998, Congress had enacted $640 million for
this account for FY1999. However, following the embassy bombings in Africa in
August 1998, Congress agreed to more than $1 billion (within a supplemental
funding bill) for the Security and Maintenance account by establishing a new
subaccount referred to as Worldwide Security Upgrades.
For FY2005, Congress enacted $604 million for regular ESCM and $900
million for worldwide security upgrades. The conferees included language to
establish the Capital Security Cost Sharing Program, as requested by the
Administration in that budget request.
For FY2006, the President requests $616 million for regular ESCM
expenditures and $910 million for worldwide security upgrades, for a total account
level of $1.53 billion, a 1.5% increase over FY2005 enacted funding. The most
significant portion of funding for this account — that needed for the U.S. embassies
in Iraq and Afghanistan — are not included in the President’s FY2006 State
Department budget, but are included in the FY2005 Emergency Supplemental
Appropriation, as requested, that passed Congress on May 10 and was signed by the
President on May 11 (P.L. 109-13; H.R. 1268).
Educational and Cultural Exchanges. This account funds programs
authorized by the Mutual Educational and Cultural Exchange Act of 1961, such as
the Fulbright Academic Exchange Program, as well as leadership programs for
foreign leaders and professionals. Government exchange programs came under close
scrutiny in past years for being excessive in number and duplicative. By a July 1997

CRS-37
executive order,21 the Office of U.S. Government International Exchange and
Training Coordination was created. For the FY2002 budget, Congress passed $237
million, including $125 million for the Fulbright programs. For FY2003 this account
funding was $244 million, including $132 million for the Fulbright programs. The
Consolidated Appropriations Act, FY2004, set the funding for Educational and
Cultural Exchanges at $317 million, including $150 million for Fulbright. The
conferees noted that exchanges with Eastern European and former Soviet Union
countries are to be built into the base of the Educational and Cultural Exchanges, but
Congress did not provide the money necessary to fully fund those programs.
The FY2005 appropriation for exchanges overall totaled $356 million. Included
is $161 million for the Fulbright Program that, according to the conferees, is to
include a Foreign Student Program with Iraq and Afghanistan.
The FY2006 request for Educational and Cultural Exchanges totals $430
million, representing a 21% increase over the FY2005 level. The President’s request
includes $180 million targeted for key Muslim populations.
The Capital Investment Fund (CIF). CIF was established by the Foreign
Relations Authorization Act of FY1994/95 (P.L. 103-236) to provide for purchasing
information technology and capital equipment which would ensure the efficient
management, coordination, operation, and utilization of State’s resources. In
FY1998 Congress approved a 250% increase in this fund, from $25 million in
FY1997 to $86 million in FY1998.
For FY2004, Congress enacted $79 million for the FY2004 CIF account. In
addition, an estimated $114 million was to be derived from expedited passport fees,
providing a total of $194 million for FY2004. Conferees noted that $40 million was
provided within the Diplomatic and Consular Programs (D&CP) account for IT
improvements.
The FY2005 request for CIF was $155 million (95.8% above the FY2004
enacted level), with an additional $114 million in estimated Expedited Passport Fees
to be combined with CIF funds to provide a total $269 million for information
technology and communication systems at the Department of State. However,
Congress enacted $52 million for CIF in FY2005 and also created the Centralized
Information Technology Modernization Program, with an appropriation of $77
million. Combined, the two accounts totaled $128 million, 17.3% less than requested
for overall IT funding.
For FY2006, the Bush Administration is requesting $133 million for CIF and
no funds for the Centralized Information Technology Modernization Program. The
CIF request represents a 3.7% increase when compared with the combined
technology accounts funded in FY2005.
21 EO 13055, July 15, 1997, 62 F.R. 39099.

CRS-38
International Organizations and Conferences
In recent years, U.S. contributions to U.N. international organizations and
peacekeeping activities have been complicated by a number of issues, such as the
withholding of funds related to international family planning policies. Recently,
some controversial issues have included 1) the lack of agreement about the U.N.’s
role in the current worldwide dispute on how to deal with Iraq; and 2) the loss of the
U.S. seat on the U.N. Commission on Human Rights.
In past years, overdue U.S. arrearage payments had been an issue. Shortly after
the September 11th terrorist attack and at a time when the U.S. government was
seeking U.N. support in its coalition to fight terrorism, however, Congress passed,
and the President signed, legislation (P.L. 107-46) that allowed the United States to
make its second tranche ($475 million) of arrearage payments to the U.N.22
Contributions to International Organizations (CIO). CIO provides
funds for U.S. membership in numerous international organizations and for
multilateral foreign policy activities that transcend bilateral issues, such as human
rights. Maintaining a membership in international organizations, the Administration
argues, benefits the United States by advancing U.S. interests and principles while
sharing the costs with other countries. Payments to the U.N. and its affiliated
agencies, the Inter-American Organizations, as well as other regional and
international organizations are included in this account.
For FY2006 President Bush requests $1.3 billion for international organizations,
11.2% greater than the FY2005 enacted level. The request represents full funding of
U.S. assessed contributions to the 47 international organizations.
Congress enacted $1.17 billion as the funding level for CIO in FY2005 and
urged the U.N. to do more to resolve the Sudan crisis and investigate the oil-for-food
program in Iraq.
Contributions to International Peacekeeping Activities (CIPA). The
United States supports multilateral peacekeeping efforts around the world through
payment of its share of the U.N. assessed peacekeeping budget. The President’s
FY2006 request totals $1.04 billion. This represents 114.2% increase over the
FY2005 enacted level of $484 million. The FY2005 conferees expressed concern
that the Administration had voted in the U.N. Security Council for five new or
expanded peacekeeping missions (Haiti, Burundi, Liberia, Cyprus, and Ivory Coast)
without seeking appropriations for them from Congress. That is why the FY2006
request is more than double the previous year’s funding level.23 As discussed below,
the Administration also proposed $780 million for CIPA in its FY2005 emergency
supplemental request. (This amount mirrors the amount the Administration said was
lacking in the enacted FY2005 budget for U.N. peacekeeping missions that the
22 For more detail, see CRS Issue Brief IB86116, U.N. System Funding: Congressional
Issues,
by Vita Bite.
23 For more detail on international peacekeeping, see CRS Issue Brief IB90103, United
Nations Peacekeeping: Issues for Congress,
by Marjorie Ann Browne.

CRS-39
Administration voted for in the U.N. security council last year, but did not seek
funding for in the FY2005 budget cycle.) Congress reduced the request, however,
to $680 million.
International Commissions
The International Commissions account includes the U.S.-Mexico Boundary and
Water Commission, the International Fisheries Commissions, the International
Boundary Commission, the International Joint Commission, and the Border
Environment Cooperation Commission. The FY2006 request of $70 million is an
11.1% increase from the FY2005 level of $63 million.
Related State Department Appropriations
The Asia Foundation. The Asia Foundation is a private, nonprofit
organization that supports efforts to strengthen democratic processes and institutions
in Asia, open markets, and improve U.S.-Asian cooperation. The Foundation
receives both government and private sector contributions. Government funds for
the Asia Foundation are appropriated to, and pass through, the State Department. For
FY2005, Congress funded the Foundation at $12.8 million, even though the
President’s request of $8.9 million was well below that level. The Administration
request for FY2006 is $10 million, nearly a 22% decrease over funds enacted in
FY2005.
The International Center for Middle Eastern-Western Dialogue Trust
Fund. The FY2004 conferees added language in the conference agreement for the
Consolidated Appropriations Act, FY2004, to establish a permanent trust fund for the
International Center for Middle Eastern-Western Dialogue. The act provided $6.9
million for perpetual operations of the Center, to be located in Istanbul, Turkey.
Despite the fact that the Administration did not request any FY2005 funding for this
Center, Congress provided $7.3 million. The Administration is requesting to spend
$0.8 million of interest and earnings from the Trust Fund for program funding in
FY2006.
National Endowment for Democracy (NED). The National Endowment
for Democracy, a private nonprofit organization established during the Reagan
Administration, supports programs to strengthen democratic institutions in more than
90 countries around the world. NED proponents assert that many of its
accomplishments are possible because it is not a government agency. NED’s critics
claim that it duplicates U.S. government democracy programs and either could be
eliminated or could operate entirely with private funding. NED’s enacted FY2004
budget was $39.6 million. President Bush included a proposal in his State of the
Union address in January 2004 to double NED’s funding in FY2005 to $80 million
for its Greater Middle East Democracy Initiative. However, final congressional
action provided $60 million for NED for FY2005. The conferees strongly
encouraged NED and its four core grantees to focus funding on democracy promotion
activities in the Middle East. The Administration’s FY2006 budget request for NED
amounts to the same as its FY2005 request of $80 million. This represents a 35.1%
increase over the enacted $59.2 million for FY2005.

CRS-40
East-West and North-South Centers. The Center for Cultural and
Technical Interchange between East and West (East-West Center), located in
Honolulu, Hawaii, was established in 1960 by Congress to promote understanding
and cooperation among the governments and peoples of the Asia/Pacific region and
the United States. The Center for Cultural and Technical Interchange between North
and South (North-South Center) is a national educational institution in Miami, FL,
closely affiliated with the University of Miami. It promotes better relations,
commerce, and understanding among the nations of North America, South America
and the Caribbean. The North-South Center began receiving a direct subsidy from
the federal government in 1991. The enacted FY2004 appropriation included $17.7
million for the East-West Center and no funds for the North-South Center. For
FY2005 the East-West Center received $19.2 million while, once again, no funds
were included for the North-South Center.
The Administration FY2006 request is for $13 million (a decrease of 32.3%) for
the East-West Center and no funds for the North-South Center.
Broadcasting Board of Governors
The United States International Broadcasting Act of 199424 reorganized within
USIA all U.S. government international broadcasting, including Voice of America
(VOA), Broadcasting to Cuba, Radio Free Europe/Radio Liberty (RFE/RL), Radio
Free Asia (RFA), and the more recently-approved Radio Free Iraq and Radio Free
Iran. The 1994 Act established the Broadcasting Board of Governors (BBG) to
oversee all U.S. government broadcasting; abolished the Board for International
Broadcasting (BIB), the administering body of RFE/RL; and recommended that
RFE/RL be privatized by December 31, 1999. This recommendation was repealed
by P.L. 106-113.
During the State Department reorganization debate in 1999, the 105th Congress
agreed that credibility of U.S. international broadcasting was crucial to its
effectiveness as a public diplomacy tool. Therefore, Congress agreed not to merge
broadcasting functions into the State Department, but to maintain the Broadcasting
Board of Governors (BBG) as an independent agency as of October 1, 1999.
In 2004, the 9/11 Commission recommended that international broadcasting
receive an increase in funding, and the Intelligence Reform and Terrorism Prevention
Act of FY2004 (P.L. 108-458) included language supporting programs to strengthen
a free and independent media in countries with Muslim populations.
Congress enacted a total of $592 million for international broadcasting in
FY2005 — $30 million more than the President’s FY2005 request. The conferees
expressed concern about the “blurring of distinction” between the broadcasting done
by the BBG and that done by the Department of Defense and required the BBG to
report to congressional committees of any such DoD activities.
24 Title III of the Foreign Relations Authorization Act, Fiscal Years 1994 and 1995, P.L.
103-236.

CRS-41
For FY2006 international broadcasting activities the President is requesting
$652 million with an emphasis on enhancing programming for the war on terrorism,
as well as a $10 million increase for modernization of techniques and technology for
Cuba Broadcasting. The international broadcasting funding request is10.2% higher
than the FY2005 enacted level.
Visa Issuance and Homeland Security
The State Department traditionally has had sole authority to issue visas
overseas. The Homeland Security Act of 200225 now provides the Secretary of the
Department of Homeland Security (DHS) with exclusive authority to: 1) issue
regulations regarding administering and enforcing visa issuance, 2) impose upon any
U.S. government employee, with consent of the head of his/her agency, any functions
involved in visa issuance, 3) assign DHS employees to each overseas post where
visas are issued, and 4) use the National Foreign Affairs Training Center to train
DHS employees who will be involved in visa issuance. The act states that these
authorities will be exercised through the Secretary of State. The Homeland Security
Act of 2002 further provides the Secretary of State and consular officers with the
authority to refuse visa applications. The act stipulates that within one year after the
act is signed, the Secretary of DHS and the Secretary of State must report to Congress
on implementation of visa issuance authorities and any proposals that are necessary
to improve the activities surrounding visa issuance. Specifically regarding visa
issuance in Saudi Arabia, the act stipulates that upon enactment of the act, the third
party screening program in Saudi Arabia will terminate, but on-site personnel of the
DHS shall review all visa applications prior to adjudication there.
The Homeland Security Act of 2002 did not alter the current authority for the
Department of State to use machine readable visa fees as a part of its expenditures.
State’s total allocation of machine readable visa fees in FY2001 was $395 million;
in FY2002 it was $443 million; the FY2003 estimate is $623 million; and the
FY2004 estimate is for $688 million. The FY2005 appropriation includes $662
million from MRV fee collections. The budget request for FY2006 includes a
request for the use of $672 million in MRV fees. The fees are typically used for State
Department border security programs, technology, and personnel.
Now, as part of the war on terrorism, the visa issuance process takes much
longer and the U.S.-led war may have reduced demand for travel to America. Thus,
officials are seeing a gap between the MRV fee total estimates and actuals. The
emergency supplemental appropriation helped to fill that gap in FY2004.
25 H.R. 5005/P.L. 107-296, signed into law on November 25, 2002.

CRS-42
FY2005 Emergency Supplemental26
On February 14, 2005, President Bush submitted an $82 billion supplemental
appropriation request for FY2005 to provide funds for ongoing military operations
in Iraq and Afghanistan, the global war on terror, reconstruction in Afghanistan,
Tsunami relief and rehabilitation, and other activities. The request included $6.3
billion to support a broad range of foreign policy activities:27
! U.S. diplomatic costs in Iraq
! Afghanistan reconstruction and counternarcotics programs
! Darfur humanitarian relief and peace implementation aid in Sudan
! War on Terrorism assistance, including funds for Jordan and
Pakistan
! Palestinian aid
! Ukraine assistance
! U.N. peacekeeping contributions
! Broadcasting programs in the Middle East
! Tsunami recovery and reconstruction
As signed by the President on May 11 (P.L. 109-13; H.R. 1268), lawmakers
provided $5.78 billion in new appropriations for State Department, foreign aid,
tsunami relief, and other foreign policy activities. This represents a $512 million, or
8% reduction to the President’s $6.3 billion request. Conferees, as had earlier House
and Senate-passed versions of H.R. 1268, offset part of these costs by rescinding $1
billion in FY2003-appropriated funds for aid to Turkey that had not yet been
obligated.28 As a result, the “net” appropriation for foreign policy programs in H.R.
1268 is $4.78 billion, or $1.5 billion below the request. The entire amount is
designated as emergency appropriations.
Beyond congressional decisions to reduce selected supplemental requests, the
conference agreement and the $512 million cut may have significant implications for
Congress’ consideration later this year of regular FY2006 appropriations for Foreign
Operations and the State Department. In some cases, House and Senate
Appropriation Committees had expressed the view that some supplemental requests
did not require immediate funding and could be addressed during the debate on
FY2006 appropriation bills. This is particularly relevant to the funds proposed for
Afghanistan reconstruction and economic aid programs in southern Sudan. As noted
earlier, Congress approved a budget resolution for FY2006 (H.Con.Res. 95) that
26 For a complete discussion of the supplemental request and congressional action, see CRS
Report RL32783, FY2005 Supplemental Appropriations for Iraq and Afghanistan, Tsunami
Relief, and Other Activities.

27 With the exception of $150 million in food aid that is funded out of the Agriculture
appropriation bill, the entire $6.3 billion was sought for Foreign Operations and State
Department/Broadcasting programs.
28 Congress appropriated $1 billion in the FY2003 Emergency Supplemental (P.L. 108-11)
that could be used by Turkey to guarantee loans of about $8.5 billion to bolster its ailing
economy. With substantial economic recovery during the past two years, Turkey has not
drawn on the $1 billion loan guarantee funds.

CRS-43
assumes a reduction in the President’s foreign policy funding request of about $2.4
billion, or 7%. If House and Senate Appropriation Committees add to the pending
FY2006 request some of the items not approved in the FY2005 supplemental
conference agreement, the challenge of meeting the budget resolution target for
international affairs program will be an even greater challenge.
Major recommendations in P.L. 109-13 include:
! Afghanistan reconstruction and police training — $1.78 billion,
$262 million less than requested. This level falls between the
House-passed measure ($1.4 billion) and the Senate ($2.05 billion).
The conference agreement fully funded counter-narcotics activities,
but reduces police training by $40 million.
! Darfur humanitarian aid — at least $238 million, roughly the
amount proposed by the President. The conference agreement,
however, added $90 million in food aid world-wide, some of which
might be available for Darfur, and permitted the transfer of $50
million in support of African Union peacekeeping operations in the
region. The House measure had increased the funding level for
Darfur to $342.4 million. The Senate version approved $242
million, as requested, but added an additional $320 million in food
assistance, some of which could be used in Darfur, and $90 million
that could have been transferred to meet humanitarian and
peacekeeping needs.
! Sudan peace implementation aid — $37 million, as had been
included in the House measure. Conferees deleted $63 million in
rehabilitation and reconstruction funding. The Senate bill had
included the entire $100 million request.
! Palestinian aid — $200 million, as requested and passed in earlier
House and Senate votes. The conference measure set aside $50
million, similar to the Senate version, for Israel to help facilitate the
movement of Palestinian people and goods in and out of Israel.
None of the funds can be used for direct aid to the Palestinian
Authority.
! Pakistan military aid — $150 million, as requested.
! Jordan economic and military aid — $200 million, as requested.
! Iraq embassy — $592 million, $66 million below the request. This
is the same level as in the Senate bill, while the House measure
included an amendment barring the use of the funds for construction
of the embassy.
! Peacekeeping — $680 million, $100 million below the request. The
conference amount is higher than both the House ($580 million) and
Senate ($442 million).

CRS-44
! Tsunami relief and prevention — $656 million for relief and $25.4
million for prevention, the same as in the Senate bill. The House-
passed amount was slightly higher. The conference agreement
provided authority (but not the $45 million requested) to defer and
reschedule debt owed by tsunami-affected countries. The House bill
had not granted such authority.
! Partners Fund and Solidarity Fund — No funds were provided for
the Partners Fund ($200 million proposed), while the full $200
million request for the Solidarity Fund was included. In addition,
the conference agreements added $30 million for other Global War
on Terror security assistance, as determined by the President. The
House had denied all funding for these purposes, while the Senate
approved $225.5 million for the two contingency funds.
! Ukraine aid — $60 million, as requested and including in the Senate
measure. The House had approved $33.7 million. In addition,
similar to the Senate, the conference agreement provided $10 million
for other regional aid requirements in Belarus and the North
Caucasus.
! Haiti assistance — $20 million, of which $2.5 million for criminal
case management, case tracking, and the reduction of pre-trial
detention in Haiti, similar to the Senate position. The $20 million
had not been requested or included by the House.
! Iraqi families and communities affected by military operations —
$20 million for civilians who have suffered losses due to military
activities, similar to a Senate-added provision. These funds will be
drawn from the $18.44 billion appropriated in P.L. 108-106, the
FY2004 emergency supplemental for Iraq reconstruction.
Table 12 (below) summarizes the spending request and congressional action.

CRS-45
Table 13. Foreign Policy Funds in FY2005 Supplemental
(in millions of dollars)
House
Senate
Activity (account)*
Request
Enacted
Passed
Passed
Iraq:
U.S. Mission operations (DCP)
$690.0
$690.0
$280.5a $663.5
New Embassy Compound in Baghdad
$658.0
$592.0b $592.0
$592.0
(Embassy Security/Construction)
USAID operating expenses (USAID/OE)
$24.4
$24.4
$24.4
$24.4
USAID Inspector General (USAID/IG)
$2.5
$2.5
$2.5
$2.5
Subtotal, Iraq
$1,374.9
$1,308.9
$899.4
$1,282.4
Afghanistan:
U.S. Mission operations (DCP)
$60.0
$55.5
$60.0a $60.0
Police training (INCLE)
$400.0
$400.0
$444.5
$360.0
Counternarcotics (INCLE)
$260.0
$194.0
$215.5
$260.0
Counternarcotics related activities (ESF)
$248.5
c.
c.
c.
Reconstruction & Democratic institu-
$1,060.8
$739.2 c. $1,309.3
c.
$1,086.6 c.
tions/Government capacity building (ESF)
Anti-terrorism training and protection
$17.1
$17.1 $17.1
$17.1
programs (NADR)
Subtotal, Afghanistan
$2,046.4
$1,405.8
$2,046.4
$1,783.7
Sudan/Darfur:
Refugee relief for Darfur and Chad (MRA)
$48.4
$98.4
$48.4
$48.4
Humanitarian relief for Darfur (IDFA)
$44.0
$94.0
$44.0d
$40.0
Emergency food aid for Darfur (PL 480)e
$150.0
$150.0 $470.0
f
$240.0 f
Peacekeeping for Darfur (PKO)


g
g
Peace implementation aid for southern
$22.0
$22.0 $22.0
$22.0
Sudan (ESF)
Security sector reform-southern Sudan
$10.0
$10.0 $10.0

$10.0
(PKO)
Rehabilitation/reconstruction, mainly in
$63.0
$0.0 $63.0

$0.0
southern Sudan (TI)
Repatriation of Sudanese refugees (MRA)
$5.0
$5.0
$5.0
$5.0
Subtotal, Sudan/Darfur
$342.4
$379.4
$662.4
$365.4
Other Global War on Terror Related:
Global War on Terrorism Partners Fund
$200.0
$0.0
$25.5
$0.0
Aid for coalition partners with troops in
$200.0
$0.0
$200.0
$200.0
Iraq & Afghanistan-Solidarity Fund (PKO)
Global War on Terror aid (PKO)



$30.0
Jordan econ. & military (ESF & FMF)
$200.0
$200.0
$200.0
$200.0
Pakistan military aid (FMF)
$150.0
$150.0 $150.0

$150.0

CRS-46
House
Senate
Activity (account)*
Request
Enacted
Passed
Passed
Subtotal, Other Global War on Terror
$750.0
$350.0
$575.5
$580.0
Other:
Palestinian economic aid (ESF)
$200.0
$200.0
$150.0
$200.0 h
Israel (ESF)


$50.0
h
Ukraine economic assistance (FSA)
$60.0
$33.7
$60.0
$60.0
Belarus/North Caucasus (FSA)


$10.0
$10.0
Office of the Coordinator for
$17.2
$3.0 $17.2
$7.7
Reconstruction & Stabilization (DCP)
Non-Proliferation and Disarmament Fund
$15.0
$0.0
$15.0
$7.5
classified (NADR)
Peacekeeping, mainly for operations in
$780.0
$580.0
$533.0i
$680.0i
Haiti and Africa (CIPA)
Refugee admissions backlog (MRA)


$25.9
$26.0
Africa refugees needs (MRA)


$29.1
$41.0
Africa emergencies (IDFA)



$50.0
Haiti economic aid (ESF)



$20.0
Lebanon democracy programs (ESF)


$5.0
$5.0
Middle East Broadcasting (BBG)
$4.8
$4.8
$4.8
$4.8
Broadcasting system upgrade (BBG)
$2.5
$0.0
$2.5
$2.5
Reduction in ESF account

($3.0)


Subtotal, Other
$1,079.5
$818.5
$902.5
$1,114.5
Tsunami Recovery and Reconstruction:
Replenish USAID for immediate response
$120.0
$120.0 $120.0

$120.0
& relief
Recovery and reconstruction, of which up
$581.0
$539.0
$536.0
$536.0
to $45 million for debt reduction
Replenish DOD’s immediate response
$226.1
$226.1
$226.1
$226.1
Tsunami warning system (NOAA and US
$22.6
$22.6
$25.4
$25.4
Geological Survey)
Subtotal, Tsunami Recovery and
$949.7
$907.7
$907.5
$907.5
Reconstruction
Less, non-Foreign Policy funds
($248.7)
($248.7)
($251.5)
($251.5)
Net, Foreign Policy Tsunami Recovery
$701.0
$659.0
$656.0
$656.0
and Reconstruction
Rescission of FY2003 Turkey aid

($1,000.0)
($1,000.0)
($1,000.0)
TOTAL, Foreign Policy Funds
$6,294.2
$3,921.6 $4,742.2
$4,782.0
* Account acronyms: BBG = Broadcasting Board of Governors; CIPA = Contributions for
International Peacekeeping Activities; DCP = Diplomatic and Consular Programs; ESF = Economic

CRS-47
Support Fund; FMF = Foreign Military Financing; FSA = Assistance for the Independent States of the
Former Soviet Union; IDFA = International Disaster and Famine Assistance; INCLE = International
Narcotics & Law Enforcement; MRA = Migration and Refugee Assistance; NADR =
Nonproliferation, Anti-terrorism, Demining, and Related Programs; NOAA = National Oceanic and
Atmospheric Administration; PKO = Peacekeeping Operations; PL 480 = Food for Peace; TI =
Transition Initiative; USAID/OE/IG = US Agency for International Development Operating Expenses
and Inspector General.
a. The Senate-passed bill reduced the Diplomatic and Consular Programs account by $400 million
from the requested level but did not specify whether the reductions would come from Iraq or
Afghanistan mission operations. In this table, the entire amount is taken from the Iraq mission
operations line.
b. H.R. 1268, as passed by the House, included $592 million for a new U.S. embassy in Baghdad.
However, an amendment adopted during floor debate prohibited the use of any funds in the bill
for embassy security, construction, and maintenance.
c. Counternarcotics ESF funds included in Reconstruction/Democracy totals in House, Senate, and
conference bills.
d. In addition to this amount, the Senate bill earmarked $40.5 million for disaster relief activities in
Darfur that could be transferred from the Contribution to International Peacekeeping account,
listed below. The enacted bill does not include this transfer authority, but provides a direct
disaster relief appropriation of $50 million (see below) for other emergencies in Africa.
e. PL480 food aid is funded in the Agriculture appropriation bill.
f. The Senate bill added $320 million in food aid, some of which would be available for Darfur, but
some (to the maximum extent possible) would be available to restore funds that had previously
been diverted to respond to the tsunami disaster and to the situation in Darfur. The enacted bill
also provides a higher level — $90 million more — for food aid that, like the Senate bill, is
available to replenish accounts from which emergency food relief had been diverted. It is likely
that not all of the $240 million food aid appropriation will be for Darfur relief.
g. The Senate bill and the conference agreement provided that up to $50 million for Africa Union
peacekeeping operations in Darfur could be transferred from the Contribution to International
Peacekeeping account, listed below.
h. The enacted bill provides $200 million for Palestinian aid, of which $50 million should be
available to Israel to improve the movement of people and goods between Palestinian areas and
Israel.
i. The Senate bill reduced the peacekeeping account by $147 million in order to offset appropriations
for additional border patrol agents. In addition, the Senate measure provided that $90.5 million
could be transferred to support emergency and peacekeeping activities in Darfur. The enacted
bill provides that up to $50 million can be transferred from this account to support Africa Union
peacekeeping operations in Darfur.

CRS-48
For Additional Reading
Overview
CRS Report 98-916. Foreign Aid: An Introductory Overview of U.S. Programs and
Policy, by Curt Tarnoff and Larry Nowels.
CRS Report RL32885. Science, State, Justice, Commerce and Related Agencies
(House)/ Commerce, Justice, Science and Related Agencies (Senate): FY2006
Appropriations,
by Susan Epstein and Ian Fergusson.
CRS Report RL32783, FY2005 Supplemental Appropriations for Iraq and
Afghanistan, Tsunami Relief, and Other Activities, Amy Belasco and Larry
Nowels.
Foreign Operations Programs
CRS Issue Brief IB10050. AIDS in Africa, by Raymond Copson.
CRS Report RL32252. AIDS Orphans and Vulnerable Children (OVC): Problems,
Responses, and Issues for Congress, by Tiaji Salaam.
CRS Report RS21437. The Asian Development Bank, Martin A. Weiss.
CRS Issue Brief IB88093. Drug Control: International Policy and Approaches, by
Raphael Perl.
CRS Report 98-568, Export-Import Bank: Background and Legislative Issues, by
James Jackson.
CRS Report RL31712. The Global Fund to Fight to Fight AIDS, Tuberculosis, and
Malaria: Background and Current Issues, by Raymond Copson and Tiaji
Salaam.
CRS Report RL32773. The Global Peace Operations Initiative: Background and
Issues for Congress, by Nina Serafino.
CRS Report RS21181. HIV/AIDS International Programs: Appropriations, FY2003-
FY2006, by Raymond Copson.
CRS Report RL32714. International Disasters and Humanitarian Assistance: U.S.
Governmental Response, by Rhoda Margesson.
CRS Report RL30830. International Family Planning: The “Mexico City” Policy,
by Larry Nowels.
CRS Report RS22134. International Financial Institutions: Funding U.S.
Participation, by Jonathan Sanford.

CRS-49
CRS Report RS21330. The International Monetary Fund: Current Reforms, by
Martin A. Weiss.
CRS Report RL30932, Microenterprise and U.S. Foreign Assistance, by Curt
Tarnoff.
CRS Report RL32427. The Millennium Challenge Account: Implementation of a
New U.S. Foreign Aid Initiative, by Larry Nowels.
CRS Report RS22133. Multilateral Development Banks: Current Authorization
Requests, by Jonathan Sanford.
CRS Report 98-567. The Overseas Private Investment Corporation: Background
and Legislative Issues, by James Jackson.
CRS Report RS21168. The Peace Corps: Current Issues, by Curt Tarnoff.
CRS Report RL32862. Peacekeeping and Conflict Transitions: Background and
Congressional Action on Civilian Capabilities, by Nina Serafino and Martin
Weiss.
CRS Report RL30545. Trafficking in Women and Children: The U.S. and
International Response, by Francis Miko.
CRS Issue Brief IB96026. U.S. International Population Assistance: Issues for
Congress, by Larry Nowels.
State Department/Broadcasting Programs
CRS Report RL31370. State Department and Related Agencies: FY2005
Appropriations and FY2006 Request, by Susan Epstein.
CRS Report RS22031. Peacekeeping and Post-Conflict Capabilities: The State
Department’s Office for Reconstruction and Stabilization, by Nina Serafino and
Marin Weiss.
CRS Report IB90103. United Nations Peacekeeping: Issues for Congress, by
Marjorie Ann Browne.
CRS Issue Brief IB86116. United Nations System Funding: Congressional Issues,
by Vita Bite.
CRS Report RS21867. U.S. Embassy in Iraq, by Susan Epstein.
CRS Report RL32607. U.S. Public Diplomacy: Background and the 9/11
Commission Recommendations, by Susan Epstein.

CRS-50
Country and Regional Issues
CRS Report RL32686. Afghanistan: Narcotics and U.S. Policy, by Christopher
Blanchard.
CRS Report RL30588. Afghanistan: Post-War Governance, Security, and U.S.
Policy, by Kenneth Katzman.
CRS Report RL32489. Africa: Development Issues and Policy Options, by Raymond
Copson.
CRS Report RL32796. Africa, the G8, and the Blair Initiative, by Raymond Copson.
CRS Issue Brief IB95052. Africa: U.S. Foreign Assistance Issues, by Raymond
Copson.
CRS Report RL32001. AIDS in the Caribbean and Central America, by Mark
Sullivan.
CRS Report RL32337. Andean Counterdrug Initiative (ACI) and Related Funding
Programs: FY2005 Assistance, by Connie Veillette.
CRS Report RS21865. Assistance to Afghan and Iraqi Women: Issues for Congress,
by Febe Armonios and Rhoda Margesson.
CRS Report RS20749. Burma-U.S. Relations, by Larry Niksch.
CRS Report RL32250. Colombia: Issues for Congress, by Connie Veillette.
CRS Report RS21686. Conditions on U.S. Aid to Serbia, by Steven Woehrel.
CRS Issue Brief IB93087. Egypt-United States Relations, by Clyde Mark.
CRS Report RL32407. The Greater Middle East Initiative: An Overview, by Jeremy
Sharp.
CRS Report RL32294. Haiti: Developments and U.S. Policy Since 1991 and
Current Congressional Concerns, by Maureen Taft-Morales.
CRS Report RL32715. Indian Ocean Earthquake and Tsunami: Humanitarian
Assistance and Relief Operations, by Rhoda Margesson.
CRS Report RS21765. Iraq: Debt Relief, by Martin Weiss.
CRS Report RL31833. Iraq: Recent Developments in Humanitarian and
Reconstruction Assistance, by Curt Tarnoff.
CRS Issue Brief IB85066. Israel: U.S. Foreign Assistance, by Clyde Mark.

CRS-51
CRS Issue Brief IB93085. Jordan: U.S. Relations and Bilateral Issues, by Alfred
Prados.
CRS Report RS21457. The Middle East Partnership Initiative: An Overview, by
Jeremy M. Sharp.
CRS Report IB94041. Pakistan-U.S. Relations, by K. Alan Kronstadt.
CRS Report RS20895. Palestinians: U.S. Assistance, by Clyde Mark.
CRS Issue Brief IB98043. Sudan: Humanitarian Crisis, Peace Talks, Terrorism and
U.S. Policy, by Ted Dagne.
CRS Report RS21594. United States Aid to the Palestinians, by Clyde Mark.
CRS Report RL32866. U.S. Assistance to the Former Soviet Union, by Curt Tarnoff.
CRS Report RL32636. U.S. Assistance to Vietnam, by Mark Manyin.
CRS Report RL32260. U.S. Foreign Assistance to the Middle East: Historical
Background, Recent Trends, and the FY2005 Request, by Clyde Mark.
CRS Report RL32487. U.S. Foreign Assistance to Latin America and the
Caribbean, by Connie Veillette.
CRS Report RL31785. U.S. Assistance to North Korea, by Mark Manyin and Ryun
Jun.
CRS Report RS21834. U.S. Assistance to North Korea: Fact Sheet, by Mark
Manyin.
CRS Report RL31362. U.S. Foreign Aid to East and South Asia: Selected
Recipients, by Thomas Lum.
CRS Report RL32260. U.S. Foreign Assistance to the Middle East: Historical
Background, Recent Trends, and the FY2005 Request, by Jeremy M. Sharp.
CRS Report RL32239. World Bank Activities in the Middle East and North Africa
(MENA), Martin A. Weiss.
Selected World Wide Websites
African Development Bank
[http://www.afdb.org/home.htm]
African Development Foundation
[http://www.adf.gov/]

CRS-52
Asian Development Bank
[http://www.adb.org/]
Broadcasting Board of Governors
[http://www.bbg.gov/]
CRS Current Legislative Issues: Foreign Affairs
[http://www.crs.gov/products/browse/is-foreignaffairs.shtml]
Export-Import Bank
[http://www.exim.gov/]
Global Fund to Fight AIDS, Tuberculosis, and Malaria
[http://www.theglobalfund.org/en/]
Inter-American Development Bank
[http://www.iadb.org/]
Inter-American Foundation
[http://www.iaf.gov/]
International Fund for Agricultural Development
[http://www.ifad.org]
International Monetary Fund
[http://www.imf.org/]
Millennium Challenge Corporation
[http://www.mcc.gov]
Overseas Private Investment Corporation
[http://www.opic.gov/]
Peace Corps
[http://www.peacecorps.gov/]
Trade and Development Agency
[http://www.tda.gov/]
United Nations
[http://www.un.org/]
United Nations Children’s Fund (UNICEF)
[http://www.unicef.org/]
United Nations Development Program (UNDP)
[http://www.undp.org/]
United Nations Population Fund (UNFPA)
[http://www.unfpa.org/]

CRS-53
United Nations Program on HIV/AIDS (UNAIDS)
[http://www.unaids.org/en/default.asp]
U.S. Agency for International Development — Home Page
[http://www.usaid.gov/]
U.S. Agency for International Development — Congressional Budget Justification
[http://www.usaid.gov/policy/budget/]
U.S. Agency for International Development — Emergency Situation Reports
[http://www.usaid.gov/our_work/humanitarian_assistance/disaster_assistance/cou
ntries/fy2003_index.html]
U.S. Agency for International Development — Foreign Aid Data (“Greenbook”)
[http://qesdb.cdie.org/gbk/index.html]
U.S. Department of State — Home Page
[http://www.state.gov/]
U.S. Department of State — Foreign Operations Budget Justification, FY2006
[http://www.state.gov/m/rm/rls/cbj/2006/]
U.S. Department of State — International Affairs Budget Request, FY2006
[http://www.state.gov/m/rm/rls/iab/2006/]
U.S. Department of State — International Topics and Issues
[http://www.state.gov/interntl/]
U.S. Department of State — State Department Budget Request, FY2006
[http://www.state.gov/m/rm/rls/]
U.S. Department of the Treasury — Office of International Affairs
[http://www.ustreas.gov/offices/international-affairs/index.html]
World Bank
[http://www.worldbank.org/]
World Bank debt website
[http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTDEBTDEPT/0,,
menuPK:64166739~pagePK:64166681~piPK:64166725~theSitePK:469043,00.html]

CRS-54
Table 14. Foreign Operations: Detailed Account Funding Levels
(millions of current dollars)
FY2004
FY2005
FY2005
FY2005
FY2006
FY2006
FY2006
FY2006
Program
Totala
Regularb
Suppc
Totald
Request
House
Senate
Conference
Title I - Export and Investment Assistance:
Export-Import Bank
38.5
98.9

98.9
225.7



Overseas Private Investment Corp.
(211.0)
(211.6)

(211.6)
(177.5)



Trade and Development Agency
49.7
51.1

51.1
48.9



Total, Title I - Export Aid
(122.8)
(61.6)
0.0
(61.6)
97.1



Title II - Bilateral Economic:
Development Assistance:
Child Survival & Health (CS/H)
1,824.2
1,537.6

1,537.6
1,251.5



Global AIDS Initiative
488.1
1,373.9

1,373.9
1,970.0



Development Assistance Fund (DA)
1,376.8
1,448.3

1,448.3
1,103.2



Transition Initiatives
54.7
48.6

48.6
325.0



Subtotal, CS/H, AIDS, & DA
3,743.8
4,408.4
0.0
4,408.4
4,649.7



Intl Disaster & Famine Aid
544.0
484.9
90.0
574.9
655.5



Tsunami Recovery and Reconstruction Fund


656.0
656.0




Development Credit Programs
8.0
8.0

8.0
8.0



Subtotal, Development Aid
4,295.8
4,901.3
746.0
5,647.3
5,313.2



USAID Operating Expenses
640.5
613.1
24.4
637.5
680.7



USAID Inspector General
34.8
34.7
2.5
37.2
36.0




CRS-55
FY2004
FY2005
FY2005
FY2005
FY2006
FY2006
FY2006
FY2006
Program
Totala
Regularb
Suppc
Totald
Request
House
Senate
Conference
USAID Capital Investment Fund
98.3
58.5

58.5
77.7



Subtotal, Development Aid & USAID
5,069.4
5,607.6
772.9
6,380.5
6,107.6



Economic Support Fund (ESF)
3,244.9 e
2,462.6
1,433.6
3,896.2
3,036.4



Economic Support Fund rescission — Turkey


(1,000.0)
(1,000.0)




f
International Fund for Ireland
18.4
18.4

18.4



Eastern Europe/Baltic States
442.4
393.4

393.4
382.0



Former Soviet Union
584.5
555.5
70.0
625.5
482.0



Conflict Response Fund




100.0



Global War on Terror Partners Fund


0.0





Iraq Relief and Reconstruction Fund
18,439.0g







Coalition Provisional Authority OE
983.0







Inter-American Foundation
16.2
17.9

17.9
17.8



African Development Foundation
18.6
18.8

18.8
18.9



Peace Corps
308.2
317.4

317.4
345.0



Millennium Challenge Corporation
994.1
1,488.0

1,488.0
3,000.0



Intl Narcotics/Law Enforcement
460.3 e
326.2
620.0
946.2
523.9



Intl Narcotics — Andean Initiative
726.7
725.2

725.2
734.5



Migration & Refugee Assistance
780.7
763.8
120.4
884.2
892.8



Emergency Refugee Fund (ERMA)
29.8
29.8

29.8
40.0



Non-Proliferation/anti-terrorism/demining
396.4
398.8
24.6
423.4
440.1




CRS-56
FY2004
FY2005
FY2005
FY2005
FY2006
FY2006
FY2006
FY2006
Program
Totala
Regularb
Suppc
Totald
Request
House
Senate
Conference
Treasury Dept. Technical Assistance
18.9
18.8

18.8
20.0



Debt reduction
94.4
99.2

99.2
99.8



Total Title II-Bilateral Economic
32,625.9
13,241.4
2,041.5
15,282.9
16,240.8
0.0
0.0
0.0
Title III - Military Assistance:
Intl Military Education & Training
91.2
89.0

89.0
86.7



Foreign Mil Financing (FMF)
4,632.7 e
4,745.2
250.0
4,995.2
4,588.6



Czech FMF loan
19.9







Peacekeeping Operations
124.5
103.2
240.0
343.2
195.8



Peacekeeping Operations - Darfur emergency

74.4

74.4




Total, Title III-Military Aid
4,868.3
5,011.8
490.0
5,501.8
4,871.1
0.0
0.0
0.0
Title IV - Multilateral Economic Aid:
World Bank - Intl Development Assn
907.8
843.2

843.2
950.0



World Bank Environment Facility
138.4
106.6

106.6
107.5



World Bank-Mult Investment Guaranty Agency
1.1



1.7



Inter-American Development Bank
24.9
10.9

10.9
1.7



Inter-American Investment Corporation




1.7
Asian Development Bank
143.6
99.2

99.2
115.3



African Development Fund
112.1
105.2

105.2
135.7



African Development Bank
5.1
4.1

4.1
5.6




CRS-57
FY2004
FY2005
FY2005
FY2005
FY2006
FY2006
FY2006
FY2006
Program
Totala
Regularb
Suppc
Totald
Request
House
Senate
Conference
European Bank for R & D
35.2
35.1

35.1
1.0



Intl Fund for Agriculture Development
14.9
14.9

14.9
15.0



Intl Organizations & Programs
294.9
325.8

325.8
281.9



Total, Title IV - Multilateral
1,678.0
1,545.0
0.0
1,545.0
1,617.1



TOTAL, Foreign Operations
39,049.4
19,736.6
2,531.5
22,268.1
22,826.1



TOTAL, without Iraq Reconstruction
20,610.4
19,736.6
2,531.5
22,268.1
22,826.1



Sources: House and Senate Appropriations Committee and CRS adjustments.
a. FY2004 includes “regular”and supplemental appropriations, plus amounts transferred from the FY2002 DOD Emergency Response Fund (ERF) for Afghanistan.
b. Amounts shown in this column are FY2005 “regular” appropriations provided in Division D of P.L. 108-447, the Consolidated Appropriation Act , 2005. Sec. 122, Division J of
P.L. 108-447 required an 0.8% across-the-board rescission for each account. Amounts in this column are adjusted to reflect the required reduction for each account. Also included
in this column is $100 million provided for Caribbean hurricane relief in P.L. 108-324, the FY2005 Military Construction appropriation.
c. Amounts enacted in H.R. 1268, the FY2005 Emergency Supplemental Appropriation.
d. The “FY2005 total” column includes all enacted appropriations, including the Emergency Supplemental.
e. Includes funds for Afghanistan that were reprogrammed in FY2004 from FY2002 Emergency Response Funds.
f. The Administration’s FY2006 request includes $8.5 million for the International Fund for Ireland as part of the Economic Support Fund.
g. Excludes $210 million transferred to the International Disaster and Famine Aid account for Liberia ($100 million) and Sudan ($10 million), and to the Economic Support Fund for
Jordan ($100 million).

CRS-58
Table 15. State Department/Broadcasting: Detailed Account Funding Levels
(millions of current dollars)
FY2004
FY2005
FY2005
FY2005
FY2006
FY2006
FY2006
FY2006
Program
Total
Regular
Supp.
Total
Request
House
Senate
Conference
Administration of Foreign Affairs:
Diplomatic and Consular Program
4,849.3
4,172.2
734.0
4,906.2
4,472.6



[Public Diplomacy]
[$301.6]
[$320.0]

[$309.2]
[$327.9]



[Worldwide Security Upgrades]
[$639.9]
[$649.9]

[$649.9]
[$327.9]



Educational & Cultural Exchanges
316.6
355.9

355.9
430.4



Office of Inspector General
31.4
30.0

30.0
30.0



Representation Allowances
8.9
8.5

8.5
8.3



Protection of Foreign Missions & Officials
9.9
9.7

9.7
9.4



Embassy Security-Ongoing Ops & Non-Security Construct
588.3
603.5
592.0
1,195.5
615.8



Embassy Security-Worldwide Security Upgrades
852.3
900.1

900.1
910.1



Emergencies in the Diplomatic & Consular Service
116.5
1.0

1.0
13.6



Repatriation Loans
1.2
1.2

1.2
1.3



Payment to the American Institute in Taiwan
18.6
19.2

19.2
19.8



Capital Investment Fund
79.2
51.5

51.5
133.0



Centralized IT Modernization Program

76.8

76.8




Total, Administration of Foreign Affairs
6,872.2
6,229.6
1,326.0
7,555.6
6,644.3



International Organizations and Conferences:
Contributions to International Organizations
1,244.8
1,166.2

1,166.2
1,296.2



Contributions to International Peacekeeping
450.1
483.5
680.0
1,163.5
1,035.5




CRS-59
FY2004
FY2005
FY2005
FY2005
FY2006
FY2006
FY2006
FY2006
Program
Total
Regular
Supp.
Total
Request
House
Senate
Conference
Total, International Organizations and Conferences
1,694.9
1,649.7
680.0
2,329.7
2,331.7



International Commissions
57.2
63.3

63.3
70.3



Related Appropriations:
International Center for Middle Eastern-Western Dialogue
6.9
7.3

7.3
0.8



Asia Foundation
12.9
12.8

12.8
10.0



National Endowment for Democracy
39.6
59.2

59.2
80.0



East-West Center
17.7
19.2

19.2
13.0



Eisenhower Exchange
0.5
0.5

0.5
0.5



Israeli Arab Scholarship
0.4
0.4

0.4
0.4



Total, Related Appropriations
78.0
99.4
0.0
99.4
104.7



TOTAL, STATE DEPARTMENT
8,702.3
8,042.0
2,006.0
10,048.0
9,151.0



International Broadcasting:
Capital Improvements
11.3
8.4
2.5
10.9
10.9



Broadcasting Operations
580.3
583.1
4.8
587.9
603.4



a
a
a
Broadcasting to Cuba

37.6



Total, International Broadcasting
591.6
591.5
7.3
598.8
651.9



TOTAL, STATE DEPT./INT’L BROADCASTING
9,293.9
8,633.5
2,013.3
10,646.8
9,802.9



Sources: House and Senate Appropriations Committee and CRS adjustments.
a. Included in Broadcasting Operations.