Order Code RL33420
CRS Report for Congress
Received through the CRS Web
Foreign Operations (House)/State, Foreign
Operations, and Related Programs (Senate):
FY2007 Appropriations
Updated July 14, 2006
Larry Nowels
Specialist in Foreign Affairs
Foreign Affairs, Defense, and Trade Division
Connie Veillette
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://beta.crs.gov/cli/level_2.aspx?PRDS_CLI_ITEM_ID=73].
Foreign Operations (House)/State, Foreign Operations,
and Related Programs (Senate): FY2007
Appropriations
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.
Due to subcommittee structural differences between the House and Senate, the
House Appropriations Committee considers the Foreign Operations request separate
from the State Department budget, with the latter falling under the jurisdiction of the
Science, State, Justice, and Commerce (SSJC) Subcommittee. The Senate
Appropriations Committee, however, combines Foreign Operations and State
Department funding requests.
Funding for Foreign Operations and State Department/Broadcasting programs
has been rising for six consecutive years, and 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 assist 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.
Major issues confronting Congress in considering the Foreign Operations and
State Department/Broadcasting appropriations request for FY2007 include:
! The overall size of the Foreign Operations request — a 14.4%
increase over regular FY2006 Foreign Operations funds;
! Proposed cuts in spending on core bilateral development assistance
and programs in Latin America;
! A 71% increase in appropriations for the Millennium Challenge
Account; and
! Secretary Rice’s Transformational Diplomacy initiative for the State
Department.
On June 9, 2006 the House passed the FY2007 Foreign Operations spending
measure (H.R. 5522) providing $21.3 billion, an increase of $597 million over
FY2006 levels, but nearly $2.4 billion less than the request. The Senate Committee
reported its version on June 29 providing $31.5 billion for both aid programs and
State Department operations. On June 29, the House passed H.R. 5672, the Science,
State, Justice and Commerce Appropriations Bill. This report will be updated.
Key Policy Staff
Subject
Name
Telephone
E-Mail
General: Foreign Operations Policy Issues/Budget
Connie Veillette
7-7127
cveillette@crs.loc.gov
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
General: State Dept Policy Issues/Budget
Susan Epstein
7-6678
sepstein@crs.loc.gov
Africa Assistance
Ted Dagne
7-7646
tdagne@crs.loc.gov
Agency for International Development
Connie Veillette
7-7127
cveillette@crs.loc.gov
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
Asia Assistance
Thomas Lum
7-7616
tlum@crs.loc.gov
Broadcasting, International
Susan Epstein
7-6678
sepstein@crs.loc.gov
Central Asia Assistance
Jim Nichol
7-2289
jnichol@crs.loc.gov
Debt Relief
Marty Weiss
7-5407
mweiss@crs.loc.gov
Development Assistance (bilateral)
Connie Veillette
7-7127
cveillette@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
Connie Veillette
7-7127
cveillette@crs.loc.gov
Health Programs, including HIV/AIDS
Tiaji Salaam
7-7677
tsalaam@crs.loc.gov
International Affairs Budget
Connie Veillette
7-7127
cveillette@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
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
Multilateral Development Banks
Jonathan Sanford
7-7682
jsanford@crs.loc.gov
Marty Weiss
7-5407
mweiss@crs.loc.gov
Overseas Private Investment Corporation
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 Assistance
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
Terrorism
John Rollins
7-5529
jrollins@crs.loc.gov
Trafficking in Persons
Francis Miko
7-7670
fmiko@crs.loc.gov
U.N. Population Fund (UNFPA)
Connie Veillette
7-7127
cveillette@crs.loc.gov
U.S. Institute of Peace
Susan Epstein
7-6678
sepstein@crs.loc.gov
U.N. Voluntary Contributions
Marjorie Browne
7-7695
mbrowne@crs.loc.gov
Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Foreign Operations Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
State Department/Broadcasting Overview . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Related Foreign Policy Authorization Measures . . . . . . . . . . . . . . . . . . . . . . 4
Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Foreign Operations and State Department Policy Trends and Goals . . . . . . . . . . . 6
Foreign Aid Policy Shifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Impact of the September 11 Terrorist Attacks . . . . . . . . . . . . . . . . . . . . . . . . 8
Transformational Development and the Director of Foreign Assistance . . . . 9
Foreign Operations and State Department Funding Trends . . . . . . . . . . . . . . . . . 10
Foreign Operations Appropriations Trends . . . . . . . . . . . . . . . . . . . . . . . . . 10
Growing Importance of Supplementals . . . . . . . . . . . . . . . . . . . . . . . . 12
State Department/Broadcasting Appropriation Trends . . . . . . . . . . . . . . . . 13
Foreign Operations/State Department, the FY2007 Budget Resolution, and
Section 302(b) Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Foreign Operations/State Department Appropriations Request for FY2007 . . . . 17
Foreign Operations Request Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Congressional Action:
FY2007 Foreign Operations Appropriations . . . . . . . . . . . . . . . . . . . . . . . . 18
House Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Senate Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Fighting the War on Terrorism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Iraq Reconstruction and Stabilization Assistance . . . . . . . . . . . . . . . . 22
Egypt Assistance and Political Reforms . . . . . . . . . . . . . . . . . . . . . . . 23
Core Development Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Program Sector Distribution Across All Foreign Operations
Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Regional Allocations for FY2007: Latin America and Africa . . . . . . . 32
The Millennium Challenge Account . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Other Key Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Leading Foreign Aid Recipients Proposed for FY2007 . . . . . . . . . . . . 37
State Department Appropriations and Related Agencies Overview and
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
FY2007 Funding Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Administration of Foreign Affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
International Organizations and Conferences . . . . . . . . . . . . . . . . . . . 40
International Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Related Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
International Broadcasting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
FY2006 Emergency Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Selected Websites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
List of Figures
Figure 1. Foreign Operations Funding Trends . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Figure 2. Supplemental Funding for Foreign Operations . . . . . . . . . . . . . . . . . . 13
Figure 3. State Department/Broadcasting Funding Trends . . . . . . . . . . . . . . . . . 14
Figure 4. Budget Function 150 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
List of Tables
Table 1. Status of Foreign Operations/State
Appropriations, FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 2. Foreign Operations Appropriations, FY1996 to FY2007 . . . . . . . . . . . 12
Table 3. State Department/Broadcasting Appropriations, FY1996 to FY2007 . . 15
Table 4. Foreign Operations Significant Increases FY2007 . . . . . . . . . . . . . . . . 18
Table 5. Development Assistance Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Table 6. Economic Aid Allocations for All Foreign Operations
Accounts, by Program Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Table 7. U.S. International HIV/AIDS, Tuberculosis, and Malaria Programs . . 29
Table 8. Basic Education Programs for Selected Regions and Recipients . . . . . 31
Table 9. Latin America and Africa Economic Aid Allocations . . . . . . . . . . . . . 33
Table 10. Leading Recipients of U.S. Foreign Aid . . . . . . . . . . . . . . . . . . . . . . . 37
Table 11. State Department and Foreign Aid Funds in FY2006
Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Table 12. Foreign Operations: Detailed Account Funding Levels . . . . . . . . . . . 51
Table 13. State Department/Broadcasting: Detailed Account Funding
Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Foreign Operations (House)/State, Foreign
Operations, and Related Programs
(Senate): FY2007 Appropriations
Most Recent Developments
On June 29, 2006, the Senate Appropriations Committee approved the FY2007
State, Foreign Operations bill (S.Rept. 109-277), providing $31.5 billion for both
foreign assistance programs and State Department Operations, a decrease of $2.4
billion from the President’s request. The Committee consolidated some accounts,
putting all health-related programs including HIV/AIDS funding in the Child
Survival and Health account, and democracy promotion programs in the Democracy
Fund account. The bill provides $1.9 billion for the Millennium Challenge
Corporation, a $1.1 billion reduction from the request. It provides $600 million for
the Global Fund to Fight AIDS, TB, and Malaria, an increase of $400 million over
the request.
Also on June 29, 2006, the House passed H.R. 5672, the Science, State, Justice
and Commerce Appropriations bill providing $9.7 billion for the State Department
and related programs, an amount $218.5 million below the request.
On June 9, 2006, the House passed H.R. 5522 (H.Rept. 109-486), the FY2007
Foreign Operations Appropriations Act providing $21.3 billion, a level that is $597
million, or 2.8%, above the FY2006 spending measure, but $2.387 billion, or 11.2%,
below the President’s $23.69 billion request. The House largely accepted the
recommendations of the House Appropriations Committee in its markup of the bill
on May 25 with regard to overall funding levels. Several floor amendments were
adopted that marked modest changes from what the Committee had recommended
for some programs. H.R. 5522 includes near full funding ($3.43 billion) for
HIV/AIDS, more than double the amount requested for the multilateral Global Fund
to Fight AIDS, Tuberculosis, and Malaria, but reduces proposed spending for the
Presidents Malaria Initiative by $47 million. Overall, H.R. 5522 provides $3.61
billion for the Foreign Operations portion of bilateral and multilateral HIV/AIDS,
malaria, and tuberculosis programs, about $55 million less than requested, but
roughly $820 million more than for FY2006.
The legislation further creates a new account the Trade Capacity Enhancement
Fund consolidating resources from multiple accounts that support trade capacity
building efforts. H.R. 5522 also proposes full or near-full funding for several fragile
and post-conflict states of Afghanistan, Haiti, Liberia, and Sudan, and provides $522
million for Iraq, about $150 million less than requested. The measure includes $2
billion for the Millennium Challenge Corporation (MCC), $1 billion less than
CRS-2
requested. H.R. 5522 would require USAID to rescind $200 million in cash
assistance to Egypt previously appropriated in FY2003 through FY2006.
Meanwhile, Congress approved the FY2006 emergency supplemental measure
(H.R. 4939/P.L. 109-234) that includes $2.4 billion in additional Foreign Operations
and $1.4 billion for State Department operations for this year.
Introduction
Amounts appropriated for Foreign Operations programs and for the Department
of State and related agencies comprise about 96% of the total International Affairs
budget and represent roughly 3.6% 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 combined Foreign Operations with the State Department, Broadcasting,
and related agencies, creating a re-titled Subcommittee on State, Foreign Operations
and Related Programs. After passing separate and structurally different bills in
2005, House and Senate leaders agreed that for FY2006 funding measures,
conference consideration would follow the House organization. Consequently, State
Department funds were removed from the Senate-passed legislation (H.R. 3057) and
incorporated into H.R. 2862, the SSJC measure.1 For the 2nd session of the 109th
Congress, the House and Senate Appropriations Committees are maintaining the
same jurisdiction structure as last year — House Foreign Operations and Senate
State/Foreign Operations. It is expected, however, that when the Committees meet
later in 2006 to resolve differences between House and Senate bills, conferees will
follow the Senate appropriations bill structure and consider Foreign Operations and
State Department spending levels in a single bill.
This report covers funding and policy issues related to Foreign Operations, as
addressed in the House and Senate, and State Department programs as debated in the
Senate. 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
1 H.R. 3057, enacted as P.L. 109-102, November 14, 2005; H.R. 2862, enacted as P.L. 109-
108, November 22, 2005.
CRS-3
RL33470, Science, State, Justice, Commerce and Related Agencies
(House)/Commerce, Justice, Science and Related Agencies (Senate): FY2007
Appropriations, coordinated by Susan B. Epstein.
Foreign Operations Overview
Foreign Operations, the larger of the two components with a request of $23.69
billion for FY2007, 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
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 office. 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 countries of strategic
importance to the United States is part of the Foreign Operations spending measure,
programs primarily administered by the State Department, in conjunction with
USAID and the Department of Defense. Foreign Operations appropriations also fund
reconstruction programs in Afghanistan and Iraq. 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 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.
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-4
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 $10.09 billion in FY2007, 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 Asia Foundation, the National Endowment
for Democracy, and several other small educational and exchange organizations.
This title also appropriates resources for international commissions, and under the
Senate bill structure, it includes the U.S. Institute for Peace and several foreign
policy-related 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 in advance of
spending by the State Department, USAID, or other agencies managing appropriated
foreign policy appropriations. When Congress does not pass these authorization
measures, as has been the case thus far in the 109th Congress, the appropriation bills
must waive authorization requirements 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 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
3 For details on foreign relations authorization legislation from the 109th Congress, see CRS
Report RL33000, Foreign Relations Authorization, FY2006 and FY2007: An Overview, by
Susan B. Epstein.
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, Afghanistan
reconstruction, assistance for the former Soviet states (Freedom Support Act) and Eastern
Europe (SEED Act), microenterprise programs, and the Peace Corps.
CRS-5
legislation has also been the channel through which the President has utilized foreign
aid as a tool in the war on terrorism since the attacks of September 11, 2001, and
launched Afghan and Iraqi reconstruction operations.
These appropriations measures have also been a key instrument by which
Congress applies restrictions and conditions on the Administration’s 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 FY2007
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 FY2007
budget request poses several key matters that the 109th Congress is likely to examine
closely and debate. For Foreign Operations programs, major issues include:
! The overall size of the request — a 14.3% increase over regular
FY2006 Foreign Operations funds — and whether competing budget
proposals for domestic programs and efforts to reduce the deficit
will permit full funding of the $23.69 billion recommendation.
! Foreign aid in support of the global war on terror and whether the
FY2007 proposal fully addresses this high national security priority.
Congress will likely focus on reconstruction and other aid in Iraq for
which the Administration seeks $771 million. This is in addition to
a pending $1.6 billion FY2006 emergency supplemental proposal for
Iraq.
! The Millennium Challenge Account and whether progress thus far
on this new, innovative foreign aid program justifies a 71% funding
increase to $3 billion in FY2007.
! Global health funding, especially amounts for HIV/AIDS, a new
Presidential Malaria Initiative, and avian flu, and whether reductions
for other health activities are warranted.
! “Core” bilateral development aid programs and whether proposed
funding reductions for some activities are justified, especially given
the large increases for MCA and HIV/AIDS programs.
! The creation of the new Director of Foreign Assistance within the
State Department, announced in early 2006, and whether the change
will result in better coordination and policy coherence of various
U.S. foreign aid programs.
On State Department operations, key policy and funding issues include:
CRS-6
! Transformational Diplomacy: the FY2007 request includes $102.8
million to begin implementing Secretary Rice’s vision of U.S.
diplomacy in the 21st Century, providing funds for repositioning
American diplomats, creating regional public diplomacy centers,
localizing small posts outside foreign capitals, training in new skills
and languages, and fostering working relationships with the Defense
Department and other federal agencies.
! Public Diplomacy: educational and cultural exchange funds increase
in the FY2007 request by 11% and broadcasting operations by 4%.
Status
Table 1. Status of Foreign Operations/State
Appropriations, FY2007
Conf. Report
Cmte. Markup
House
Senate
Approval
Public
Passage
Passage
Law
House
Senate
House
Senate
H.R. 5522
6/5
6/29
Foreign
H.Rept.
S.Rept.
6/9
Operations
109-486
109-277
6/22
H.R. 5672
H.Rept.
n/a
6/29
Science, State
109-520
Note: House and Senate bills do not contain the same program structure, as discussed above. In the
House, the State Department is funded through the Science, State, Justice and Commerce
Appropriations bill, while in the Senate, the State Department is funded through the Foreign
Operations Appropriations bill.
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 armed 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
CRS-7
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 and religious freedom, and
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. 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 repeated 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 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
5 U.S. Agency for International Development. U.S. Foreign Aid: Meeting the Challenges
of the Twenty-First Century. January 2004.
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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 have been cast frequently in terms of contributing to the 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.6 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.7 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
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, proposed by President Bush in March 2002 and authorized by
Congress and established in early 2004 by 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 to its proposed level, $5 billion will
be available annually 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 also 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. Subsequently, the President launched a new initiative in mid-
6 Development was again underscored in the Administration’s re-statement of the National
Security Strategy released on March 16, 2006.
7 According to the State Department, these “front-line” states included 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-9
2005 aimed specifically at malaria (President’s Malaria Initiative, PMI), pledging
$1.2 billion in more resources through 2010.
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, Liberia, and Sudan; 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.
Transformational Development and the Director of Foreign
Assistance8
A new dimension this year to the annual congressional debate on Foreign
Operations is the Administration’s “transformational” development agenda and the
creation of the position at the State Department of Director of Foreign Assistance.
Although not a funding issue, the realignment of responsibilities at the Department
and USAID will have a direct impact on programs funded within the Foreign
Operations spending measure.
The Director of Foreign Assistance (DFA), who concurrently holds the position
of USAID Administrator, maintains authority over foreign assistance programs
managed by USAID and the State Department. In addition, the DFA will “provide
guidance” for foreign assistance delivered through other government agencies, such
as the Millennium Challenge Corporation (MCC). Randall Tobias, previously the
State Department’s Global AIDS Coordinator, was confirmed by the Senate on
March 29, 2006, as the new USAID Administrator and also serves as the Director of
Foreign Assistance.
The DFA is charged with two missions: to develop a coordinated U.S. foreign
assistance strategy; and to direct a transformation of foreign assistance to achieve the
President’s Transformational Development Goals.9 As both the USAID
Administrator and the DFA, he will serve at the level equivalent to Deputy Secretary,
reporting directly to the Secretary of State. While USAID is, and remains, an
independent agency under the restructuring, the USAID Administrator reports to, and
serves under, the foreign policy guidance of the Secretary of State.
The degree to which the DFA will be able to guide and coordinate those entities
falling outside the State Department and USAID has not been fully articulated and
is likely to be one of the most difficult challenges the new Director faces.
8 For further discussion on the Director of Foreign Assistance, see CRS Report RL33491,
Restructuring U.S. Foreign Aid: The Role of the Director of Foreign Assistance, by Larry
Nowels and Connie Veillette.
9 U.S. Department of State Fact Sheet: New Direction for U.S. Foreign Assistance, January
19, 2006.
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Ambassador Tobias said at his confirmation hearing that he hoped to put in place a
“formal process” for achieving the DFA’s mandate of coordinating across the
government.10 Similar approaches have been tried in the past, but with limited
impact. An entity established in 1973 by Section 640B of the Foreign Assistance Act
of 1961 (FAA) — the Development Coordinating Council (DCC) — was intended
to coordinate government-wide foreign assistance activities. The DCC, however,
rarely met and, according to USAID, exists today “only as an unimplemented
provision in the FAA.”11
As with any restructuring initiative, the creation of the DFA raises a number of
questions with regard to implementation. Many applaud the restructuring initiative
as marking the beginning of what they perceive as a long overdue effort to reform a
cumbersome and fragmented U.S. foreign assistance program. Some supporters of
the plan, however, believe it does not go far enough and that the Administration is
missing an opportunity for launching a much bolder, and necessary reform effort.
Some critics have expressed strong concern that the new initiative may lead to a
greater degree of aid politicization and that USAID will be further marginalized as
a key decision maker of U.S. development policy. Congress is not required to
legislate the restructuring plan, although key congressional committees are likely to
maintain close oversight as the plan moves forward.
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.12 After peaking at over $35 billion in FY1985 (constant FY2007 dollars),
Foreign Operations appropriations began a period of decline to a low-point of $15.3
billion in FY1997. While funding for regular, continuing foreign aid programs
10 See exchange between Senator Lugar and Ambassador Tobias at the Senate Foreign
Relations Committee hearing on March 7, 2006.
11 See “USAID History,” found at [http://www.usaid.gov/about_usaid/usaidhist.html].
12 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.
The large increase in FY1981, for example, 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 30 years.
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began to rise modestly after FY1997, 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), has been chiefly responsible for the growth in foreign aid appropriations
during the past decade.
Figure 1. Foreign Operations Funding Trends
Although Foreign Operations appropriations had been rising for five consecutive
years, combined amounts approved for FY2003 — FY2005, reached unprecedented
levels compared with funding for similar three-year periods over the past four
decades. Substantial supplementals of $7.5 billion, $21.2 billion, and $2.5 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 FY2007 dollars) — was the highest
level, in real terms, since the early 1960s. The enacted level for FY2006 of $20.8
billion (in constant terms), while less than in each of the three previous years, is the
largest Foreign Operations appropriations, in real terms, in all other years in over a
decade. Moreover, the passage of an emergency supplemental containing $2.4 billion
in Foreign Operations funding raises the total to $23.2 billion.13
13 For a more detailed discussion of foreign aid and State Department spending trends over
the past three decades, see CRS Report RL33262, Foreign Policy Budget Trends: A Thirty-
Year Review, by Larry Nowels.
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Table 2. Foreign Operations Appropriations, FY1996 to FY2007
(discretionary budget authority in billions of current and constant dollars)
FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06
FY07
current
12.46 12.27
13.15
15.44
16.41
16.31
16.54
23.67
39.05
22.27
20.83
23.69
$s
constant 15.83 15.30 16.24 18.81 19.51 18.95 18.92 26.53 42.73 23.56 21.37 23.69
FY07 $s
Note: FY1999 excludes $17.861 billion for the IMF. FY2006 includes the regular appropriation, plus emergency
supplementals, rescissions, and a 1% across-the-board reduction provided in P.L. 109-148, the Defense Appropriation
for FY2006. FY2006 does not include the $2.3 billion of foreign assistance in the emergency supplemental (H.R. 4939).
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, especially those related to reconstruction efforts in Iraq and Afghanistan.
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 emergency 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).
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 seven 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.
CRS-13
Figure 2. Supplemental Funding for Foreign Operations
40
35
30
25
20
15
10
5
0
'98 '99 '00 '01 '02 '03 '04 '05 '06
Supplemental
Regular
Until FY2003, these additional resources accounted for between 7% and 11%
of total Foreign Operations spending. The $7.5 billion Iraq war and reconstruction
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 — $2.53 billion — largely for additional
Afghan reconstruction, tsunami disaster relief, and additional aid for Sudan —
representing about 11% of total Foreign Operations appropriations for that year.
Again in June 2006, Congress approved a supplemental providing $2.325 billion in
foreign assistance for Iraq, Afghanistan, Sudan, and Darfur, and other global
emergencies, representing 10% of the total.
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 FY2007 budget request is more than double what was
requested 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, for example, American embassies increasingly have
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
CRS-14
after the 1983 bombing of U.S. Marine barracks in Beirut, Lebanon, and the bombing
of the U.S. Embassy annex in Beirut in 1984. In 1985, a report by the Advisory
Panel on Overseas Security, headed by Admiral Bobby Inman, proposed 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 State Department funding levels to an all-time high by FY2004.
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 about $6.4 billion in FY2006, a
60% increase, in real terms. The FY2006 emergency supplemental (H.R. 4939/P.L.
109-234) provides an additional $1.4 billion to the existing Administration of
Foreign Affairs funding level for a total of $7.8 billion. The State Department seeks
$6.8 billion for FY2007.
Figure 3. State Department/Broadcasting Funding Trends
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Table 3. State Department/Broadcasting Appropriations,
FY1996 to FY2007
(discretionary budget authority in billions of current and constant dollars)
FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07
current $s
4.77
4.87
5.06
6.91
6.16
6.91
7.71
8.05
9.29 10.78
9.43
10.05
constant
6.06
6.07
6.24
8.41
7.33
8.03
8.82
9.02 10.17 11.40
9.65
10.05
FY07 $s
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 received $41.7 million and $131.7 million, respectively, for
FY2006.
In addition, funding levels and trends discussed in this report exclude U.S.
contributions to the International Monetary Fund (IMF), which are enacted
periodically in Foreign Operations bills. Congress approved $17.9 billion for the
IMF in FY1999, the most recent appropriation and the first 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 FY2007
Budget Resolution, and Section 302(b) Allocations
Usually, Appropriations Committees begin markups of their spending bills only
after Congress has adopted a budget resolution and funds have been distributed to the
Appropriations panels under what is referred to as the Section 302(a) allocation
process. Section 302(a) is the pertinent authority in the Congressional Budget Act.
Following this, House and Senate Appropriations Committees separately decide how
to allot the total amount available among their subcommittees, staying within the
functional guidelines set in the budget resolution. This second step is referred to as
the Section 302(b) allocation. Foreign Operations 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-16
How much International Affairs money to allocate among each of the
subcommittees, and how to distribute the funds among the numerous programs, are
decisions exclusively reserved for the Appropriations Committees. Nevertheless,
overall ceilings set in the budget
resolution can have significant
Figure 4. Budget Function 150
implications for budget limitations
FY 2006 Total = $31.64 billion
within which the House and Senate
subcommittees will operate when
Foreign Operations $20.84
they meet to mark up their annual
appropriations bills.
65.9%
On March 16, 2006, the Senate
approved a budget resolution for
3.9%
Food Aid - $1.24
FY2007 (S.Con.Res.83) that
reduces to $33.5 billion the amount
30.2%
of discretionary budget authority for
International Affairs funding. This
falls $1.6 billion, or 4.6%, less than
State Dept - $9.56
the Presidents’s request. The House
measure (H.Con.Res.376), which
passed on May 17, cuts Function 150 deeper than the Senate. The $33 billion
included in the House measure is $2.1 billion, or nearly 6%, below the
Administration’s proposal.
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 House and Senate budget resolutions creates a challenging budget
picture for appropriation subcommittees with jurisdiction over Foreign Operations
and State Department/Broadcasting programs. This is evident by the House
Appropriations Committee approval on May 10 of a $21.3 billion allocation for
Foreign Operations. Although 2.8% above regular Foreign Operations appropriations
for FY2006, the allocation is 11% below the FY2007 request, by far the largest
percentage cut made by the House panel for any of its 11 Section 302(b) allocations.
The Committee decided to reallocate $2.39 billion from Foreign Operations and $4.8
billion from Defense and Military Quality of Life subcommittees in order to increase
spending levels in several domestic appropriations bills, most prominently for
Agriculture, Homeland Security, and Labor, HHS, Education.
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Foreign Operations/State Department
Appropriations Request for FY2007
On February 6, 2006, the President submitted his FY2007 budget request,
including $23.69 billion for Foreign Operations and $10.09 billion for State
Department and Related Agencies appropriations (amounts are adjusted to reflect
CBO re-estimates of the request). These amounts are 14.3% and 6%, respectively,
higher than FY2006 amounts enacted in regular, non-supplemental appropriations.
The combined FY2007 Foreign Operations/State Department request of $33.8 billion
is 11.7% larger than regular FY2006 funding. However, the FY2006 emergency
supplemental (P.L. 109-234) provided an additional $4.3 billion for State Department
and Foreign Operations, resulting in an FY2006 total of more than $34 billion. This
brings the FY2006 enacted level into near parity with the FY2007 request. As in
previous years, it is possible that the Administration will request supplemental
funding for Iraq and Afghanistan that could raise the FY2007 level above that of last
year.
Foreign Operations Request Overview
The 14.3% increase over regular FY2006 appropriations proposed for Foreign
Operations is one of the largest additions in the President’s request for discretionary
spending in FY2007. By comparison, the Administration seeks increases for two
other high-priority budget areas — defense and homeland security — of about 6%
and 3%, respectively.
Despite the large overall increase for Foreign Operations, much of the added
funding is concentrated in a few areas. The FY2007 budget continues to highlight
foreign aid in support of the war on terrorism and Iraq reconstruction as the highest
priorities, with nearly $7 billion proposed. As shown in Table 4, increases for Iraq
and Afghanistan are especially sharp.14 Resources would continue to grow for the
President’s two cornerstone foreign aid initiatives — the Millennium Challenge
Account (MCA) and the President’s Emergency Plan for AIDS Relief (PEPFAR).
The $3 billion MCA request is 71% higher than in FY2006, while Foreign
Operations funds for PEPFAR would rise from $2.79 billion in FY2006 to $3.67
billion in the FY2007 request. (Additional PEPFAR funds are proposed in the
Labor/HHS appropriation measure, bringing the total FY2007 PEPFAR request to
$4.26 billion.)
After failing to win congressional approval the past four years for a contingency
fund that could be used to respond to unanticipated foreign policy emergencies, the
White House again proposes $75 million for a Crisis Response Fund. Funding for
debt reduction programs would nearly triple — to $183 million — largely to cancel
debt owed by the Democratic Republic of Congo. Peacekeeping funds for non-U.N.
14 The Administration requested $1.6 billion, and Congress approved 1.59 billion, in aid for
Iraq in the FY2006 emergency supplemental measure (H.R. 4939/P.L. 109-234).
CRS-18
sponsored operations would grow by 16%, mainly due to additional resources for
African Union peacekeeping activities in the Darfur region of Sudan.15
Table 4. Foreign Operations Significant Increases FY2007
(in billions of current $s)
FY2006
FY2007
FY2007 +/-
Regular*
Request
FY2006
Foreign Operations Total
$20.727
$23.687
14.3%
Significant increases for FY2007:
-Afghanistan
$0.931
$1.124
20.7%
-Iraq
$0.061
$0.771
1163.9%
-Anti-Terrorism programs
$0.136
$0.157
15.4%
-Millennium Challenge Account
$1.752
$3.000
71.2%
-Emergency Plan for AIDS Relief
$2.790
$3.665
31.4%
-Conflict Response Fund
—
$0.075
—
-Debt Reduction
$0.064
$0.183
185.9%
-Peacekeeping Operations
$0.173
$0.201
16.2%
Significant increases for FY2007, Total
$5.907
$9.176
55.3%
Remaining Foreign Operations Programs
$14.820
$14.511
-2.1%
* FY2006 Regular excludes emergency supplemental funding.
Combined, funding for these major elements of the Foreign Operations request
totals $9.2 billion, or 55% higher than for FY2006. By contrast, the $14.8 billion
proposed for all other Foreign Operations activities is 2.1% less than FY2006 regular
appropriations amounts.
Congressional Action:
FY2007 Foreign Operations Appropriations
Each of the high-priority items in the FY2007 Foreign Operations budget
request discussed above, and other issues of concern, are discussed below, including
congressional action.
House Consideration
On June 9, 2006, the House passed H.R. 5522 (H.Rept. 109-486), the FY2007
Foreign Operations Appropriations Act providing $21.3 billion, a level that is $597
15 The FY2006 emergency supplemental request included $123 million more for African
Union operations in Darfur, an amount that Congress increased to $173 million in the
conference agreement (H.R. 4939/P.L. 109-234).
CRS-19
million, or 2.8%, above the FY2006 spending measure, but $2.387 billion, or 11.2%,
below the President’s $23.69 billion request. The House largely accepted the
recommendations of the House Appropriations Committee in its markup of the bill
on May 25 with regard to overall funding levels. Several floor amendments were
adopted that marked modest changes from what the Committee had recommended
for some programs.
H.R. 5522 includes near full funding for HIV/AIDS, more than doubles the
amount requested for the multilateral Global Fund to Fight AIDS, Tuberculosis, and
Malaria, but reduces proposed spending for the President’s Malaria Initiative by $47
million. Overall, H.R. 5522 provides $3.61 billion for the Foreign Operations portion
of bilateral and multilateral HIV/AIDS, malaria, and tuberculosis programs, about
$55 million less than requested, but roughly $820 million more than for FY2006.
H.R. 5522 also proposes full or near-full funding for several fragile and
post-conflict states of Afghanistan, Haiti, Liberia, and Sudan, and provides $522
million for Iraq, about $150 million less than requested. The measure includes $2
billion for the Millennium Challenge Corporation (MCC), $1 billion less than
requested. H.R. 5522 would require USAID to rescind $200 million in cash
assistance to Egypt previously appropriated, FY2003-FY2006, amid concerns that
the Egyptian government had not made sufficient progress in implementing certain
financial sector reforms.
During House floor debate, a number of amendments were adopted:
! a Lynch amendment to increase by $5 million funding for the NADR
account for programs to address improvised explosive devices
(IEDs) and land mines. The increase was offset by a reduction in
administrative expenses for the Export-Import Bank;
! a Millender-McDonald amendment to increase ESF funding by $2
million for human trafficking programs. The increase was offset by
a reduction split between administrative expenses for the Export-
Import Bank and the Overseas Private Investment Corporation;
! a Hooley amendment to designate $10 million in counternarcotics
assistance to Mexico for methamphetamine programs;
! a McHenry amendment that takes away the State Department’s
authority to issue waivers to foreign countries that refuse to extradite
individuals accused in the United States of killing a law enforcement
officer;
! a Deal amendment that takes away the State Department’s authority
to issue waivers to foreign countries that refuse to extradite
individuals accused of a crime for which the maximum penalty is
life imprisonment;
! a Terry amendment to prohibit funds to organizations that
contravene U.S. law with regard to trademarks and intellectual
property;
! a Brown-Waite amendment that reduced counternarcotics funds to
Mexico from $40 million to $39 million;
! a Weiner amendment that prohibits funds to Saudi Arabia;
CRS-20
! a Sherrod Brown amendment that increased Child Survival and
Health funds for TB by $10 million. The increase is offset by a $5
million reduction in USAID’s operating expenses and $5 million
from the Asian Development Fund.
The House defeated a number of amendments, including:
! a Blumenauer amendment transfer $250 million in Foreign Military
Financing to Development Assistance;
! an Obey amendment to cut ESF to Egypt by $100 million, and
transfer $50 million to the Global HIV/AIDS initiative, and $50
million to International Disaster and Famine Assistance;
! a McGovern amendment to transfer $30 million from the ACI
account to the Emergency Refugee and Migration Assistance
account;
! a McGovern amendment to prohibit funding for programs at the
Western Hemisphere Institute for Security Cooperation;
! a Steve King amendment to withhold ESF funds for Mexico;
! a Kucinich amendment to prohibit MCC funds for El Salvador to be
used to support the Northern Transnational Highway;
! a Sanders amendment that prohibited U.S. funds to the Export-
Import Bank to support long-term loans or loan guarantees for oil
and gas field development;
! a Hefley amendment to reduce funding in the bill by 1%.
The House-passed bill contains a number of differences with regard to the
priorities of the Administration’s request. As articulated in the President’s Statement
of Administration Policy, the House took several actions opposed by the White
House. The Administration believes the overall $2.4 billion cut “would curtail
progress on the Administration’s National Security Strategy...” In addition, the bill
creates a new account — the Trade Capacity Enhancement Fund — with an
appropriation of $522 million, and creates a new position within USAID to
administer it. The Administration has expressed concern that the provision creates
an additional administrative layer at the same time as the new Director of Foreign
Assistance is working to integrate and coordinate assistance programs. Other
objections are included in discussions on topics that follow.
Senate Consideration
The Senate Appropriations Committee approved its version of the State/Foreign
Operations bill on June 29 (S.Rept. 109-277). The Senate bill provides $21.5 billion
for foreign aid programs, and $9.7 billion for State Department and related programs.
While the overall funding levels are similar to the request, the Senate bill
consolidated a number of programs spread among various accounts. The Child
Survival and Health account now includes funds for HIV/AIDS programs,
comprising $1.9 billion and $2.89 billion respectively. The Senate allocated $600
million for the Global AIDS Fund, a significant increase over the request of $200
million and the House recommendation of $445.5 million. The Senate bill also
consolidates funds from the Economic Support Fund, Development Assistance,
SEED and FSA into a Democracy Fund that totals $1.064 billion. Unlike the House,
CRS-21
the Senate bill does not provide for a Trade Capacity Enhancement Fund, but does
recommend $283 million for trade capacity building and other economic growth
programs. The Senate bill provides $100 million in FMF funds for a Combatant
Commanders Initiative Fund, a new program to identify critical shortfalls in the
training, equipment, and capabilities of allies serving in peacekeeping and peace
enforcement operations.
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 counterterrorism efforts. In total, Congress has
appropriated approximately $52.3 billion in FY2002-FY2006 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. About 43% of all Foreign Operations
appropriations in the past five years have funded war on terror and Iraq war-related
purposes.
Although there is disagreement regarding the extent to which foreign aid can
directly reduce 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 some of the factors
that terrorists use to recruit disenfranchised individuals for their cause.
The FY2007 request continues the priority of fighting terrorism with about $7
billion, or 29%, of Foreign Operations resources assisting the front-line states and
Iraq. The largest recipients for FY2007 include Afghanistan ($1.12 billion), Iraq
($771 million), Pakistan ($739 million), and Jordan ($457 million).
Foreign Operations spending to fight the war on terror would have been greater
in FY2005 and FY2006, and potentially higher for FY2007, except for an
Administration decision to transfer funding and program responsibility for security
forces training and equipping in Iraq and Afghanistan from the State Department to
the Department of Defense. In FY2005, Congress approved in an emergency
supplemental $6.9 billion for security force aid in Afghanistan and Iraq, and an
additional $4.3 billion the FY2006 supplemental (H.R. 4939). 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 programs. 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 concur with DOD decisions over how to program these funds.
Congressional Action. H.R. 5522, as passed by the House, provides mixed
funding levels for various countries and programs related to fighting the war on
terror. Aid for several front-line states is reduced:
! Afghanistan is set at $962 million, about $140 million below the
request;
! Pakistan would receive $500 million in security assistance, $150
million less than proposed;
CRS-22
! Indonesia security assistance would be $12 million less than
requested.
Security aid for Jordan, on the other hand, is set at $468 million, $16 million higher
than proposed. For counterterrorism programs under the NADR account, the House
bill provides $143.6 million, $14 million below the request. The Administration has
stated its opposition to cuts in assistance to Afghanistan and Pakistan arguing that in
the case of Pakistan, it would delay fulfilling the President’s five-year commitment
for reconstruction and other assistance following the October 2005 earthquake.
The Senate bill:
! fully funds the Administration’s $1.124 billion request for
Afghanistan;
! fully funds the $738.6 million request for Pakistan;
! provides $163.4 million for Indonesia, nearly $9 million above the
request;
! fully funds the $457.3 million request for Jordan.
For counterterrorism programs under the NADR account, the Senate bill provides the
Administration’s request of $157.5 million.
Iraq Reconstruction and Stabilization Assistance. A year ago, the
Administration proposed $414 million for Iraq in FY2006, the first request for such
assistance since Congress approved $18.44 billion in the FY2004 emergency
supplemental (P.L. 108-106). At the time of the budget’s submission, some critics
argued that since large portions of the $18.44 billion remained unobligated and even
larger amounts were unspent, there were sufficient funds available to meet current
and future reconstruction needs in Iraq. Subsequently, the pace of reconstruction
spending increased, and by the time Congress took final action on the FY2006 Iraq
request, the Administration reported that $14.77 billion, or 81%, of amounts
appropriated in P.L. 108-106 had been obligated and about 49% of the $18.44 billion
total had been spent.16 Nevertheless, with substantial amounts still remaining,
Congress provided only $61 million of the $414 million Iraq request for FY2006.
Despite its lack of success in obtaining full funding for Iraq reconstruction and
stabilization in the regular FY2006 budget, the Administration has requested nearly
$771 million in its regular FY2007 Foreign Operations budget, plus $1.6 billion more
in emergency FY2006 supplemental appropriations. About 90% of the $18.44 billion
appropriation has been obligated and over two-thirds has been disbursed.17
Administration officials say that the entire amount will be obligated by the end of
FY2006. The FY2006 emergency supplemental (H.R. 4939/P.L. 109-234) provided
an additional $1.6 billion in reconstruction and stabilization assistance.
16 Obligation and spending figures from Department of State. Iraq Weekly Status Report,
October 26, 2005, p. 17. For more details on the status and implementation of Iraq
reconstruction programs, see CRS Report RL31833, Iraq: Recent Developments in
Reconstruction Assistance, by Curt Tarnoff.
17 Department of State. Iraq Weekly Status Report, May 31, 2006, p. 10.
CRS-23
Most of the FY2007 request is composed of $478.8 million in Economic
Support Funds (ESF) to continue programs to sustain U.S.-funded infrastructure, and
support democracy, governance, civil society, private sector, and agriculture
programs. An additional $254.6 million is aimed at rule of law programs
(International Narcotics and Law Enforcement account - INCLE), $16.6 million is
for nonproliferation and anti-terrorism activities (Nonproliferation, Anti-Terrorism,
and Demining account - NADR), $20 million is for refugee assistance (Migration and
Refugee Assistance account - MRA), and $1.2 million for IMET (International
Military Education and Training).
Congressional Action. The House-passed bill provides $305.8 million in
ESF support — $173 million less than proposed. The House bill does not earmark
specific funds for Iraq from the INCLE, MRA, and IMET accounts. Overall funding
levels for INCLE and MRA have been reduced significantly from requested amounts,
although the report accompanying H.R. 5522 states support for the Administration’s
MRA request for Iraq. It is conceivable that Iraq would receive less than requested
amounts for counterterrorism support from the INCLE account.
The Senate bill provides the Administration’s request for $752.8 million and
recommends that funding requested from the INCLE and ESF accounts be transferred
to the Democracy Fund for activities in Iraq. The remaining ESF total would be
$453.8 million, and NADR would be $18.2 million.
Egypt Assistance and Political Reforms.18 Since 1979, Egypt has been
the second largest recipient, after Israel, of U.S. foreign assistance, receiving an
annual average of over $2 billion in economic and military aid. For FY2007, the
Administration requested $455 million in economic support and $1.3 billion in
military assistance.
Some lawmakers believe that U.S. assistance to Egypt has not been effective in
promoting political and economic reform and that foreign assistance agreements must
be renegotiated to include benchmarks that Egypt must meet to continue to qualify
for U.S. foreign aid. Others have periodically called for restrictions on U.S. aid to
Egypt on the grounds that Egypt indirectly supports Palestinian terrorism, suppresses
its own population, including minority Christians, and continues to allow Egyptian
state-owned media outlets to publish unsubstantiated conspiracy theories regarding
Israel and the Jewish people.
For years, Congress has specified in annual Foreign Operations appropriations
legislation that ESF funds to Egypt are provided with the understanding that Egypt
undertake certain economic reforms and liberalize its economy. More recently,
however, Congress has begun to attach conditions to Egyptian assistance intended
to support the political reform process. The FY2006 Foreign Operations
appropriations (P.L. 109-102), for example, designated $100 million in economic aid
for education and democracy and governance programming. The conference report
on the FY2006 spending measure (H.Rept. 109-265) stated that “not less than 50
18 This section was prepared by Jeremy Sharp. For more information, see CRS Report
RL33003, Egypt: Background and U.S. Relations, by Jeremy Sharp.
CRS-24
percent of the funds for democracy, governance and human rights be provided
through non-governmental organizations for the purpose of strengthening Egyptian
civil society organizations, enhancing their participation in the political process and
their ability to promote and monitor human rights.”
Congressional Action. H.R. 5522, as passed in the House, fully funds the
Administration’s $1.76 billion Egyptian aid package for FY2007 — $455 million in
economic aid and $1.3 billion in military assistance, but includes a $200 million
rescission of previous year ESF funds.
On the floor, the House defeated an amendment by Representative Obey,
ranking Member of the Appropriations Committee, to redirect $100 million in
military aid to Egypt to two other accounts: $50 million for International Disaster and
Famine Assistance for Darfur; and $50 million for the Global HIV/AIDS Initiative.
During debate, Obey and supporters argued that Egypt had not made sufficient
progress with regard to human rights, election procedures, and other matters.
Members expressed particular concern regarding the detention of democracy
activists. The Obey floor amendment was similar to an amendment he offered in full
Committee markup, and that also failed, that would have delayed $200 million of
Egypt’s military aid until Congress enacted future legislation approving the withheld
assistance.
It was also during full Committee markup that the House panel approved an
amendment offered by Subcommittee Chairman Kolbe adding report language
clarifying the terms of Section 578(b) of the bill, a provision requiring the rescission,
or cancellation of $200 million of previously appropriated Economic Support Funds.
The Kolbe report language specifies that the $200 million would be drawn from cash
assistance appropriated for Egypt in FY2003-FY2006. The language notes that such
cash aid is conditioned on Egypt meeting certain financial reform benchmarks.
While many have been met, the Committee report points out that some benchmarks
have not been implemented and that USAID has not released the associated cash
assistance.
Beyond these two amendments, and similar to last year’s language, H.R. 5522
stipulates that $50 million of ESF money shall support democracy and human rights
programs, half of which should be provided through non-governmental organizations.
The bill also requires $50 million for education activities.
The Senate bill approves the Administration’s request of $1.758 billion for
Egypt, but reallocates some funding to different accounts, such as the Democracy
Fund and Child Survival and Health. Of the total, $1.3 billion, as requested, remains
in the FMF account. The bill also maintains restrictions from previous years
regarding economic and political reforms, including a determination from the
Secretary of State that certain benchmarks have been met. The bill also rescinds
$300 million in prior year ESF funds.
Core Development Assistance. A continuing source of disagreement
between the executive branch and Congress is the size and allocation of the roughly
$3 billion “core” budget for USAID development assistance and global health
programs, and whether proposed cuts by the Administration are the result of
CRS-25
increases for the Millennium Challenge Corporation and the President’s Global AIDS
Initiative (PEPFAR). Similar to budget requests in recent years, the FY2007
proposal would reduce the two USAID “core” accounts — Child Survival/Health and
Development Assistance — by a combined $363 million, or nearly 12%. On the
other hand, MCC funding would grow by $1.25 billion (+71%) and PEPFAR
spending on the 15 “focus” countries would rise by $919 million (+46%) (Table 5).
Development Assistance (DA) and Child Survival/Health (CSH) funds support
education, agriculture, environment, democracy, health, family planning, and other
key long-term development activities worldwide, largely in low-income countries.
The MCC and PEPFAR programs, on the other hand, are far more selective, focusing
on a few, “best performing” countries in the case of the MCC or those judged to have
the worst HIV/AIDS problems.
Critics of the proposed DA and CSH reductions argue that these accounts are
fundamental to reducing poverty in the vast majority of countries assisted by the
United States, and that cuts in these programs affect large pockets of poor
populations around the globe. They have particularly objected to the DA and CSH
funding request for Latin America that would sustain substantial cuts in FY2007.
These critics, while supporting the MCC and PEPFAR programs, believe that
resources for these new initiatives should be in addition to and not a substitute for the
traditional USAID “core” accounts. Administration officials defend their budget
submission saying that the MCC in particular is not taking funds away from the
“core” accounts, but acknowledging that as the fiscal environment has become
constrained in recent years, priorities must be set and trade-offs may occur. They
also claim that when all Foreign Operations resources are taken into account, Latin
America will receive roughly the same amount of assistance in FY2007 as is
currently planned for FY2006.
Congressional Action. The House-passed measure provides $1.576 billion
for Child Survival and Health, an increase of nearly $143 million over the request,
but nearly $77 million less than provided in FY2006, including supplementals. The
House bill also slightly increased funding levels for Development Assistance,
providing $1.294 billion rather than the President’s request of $1.282 billion. At first
glance, this marks a decrease of $231.3 million from FY2006, including
supplementals. However, H.R. 5522 creates a new account — the Trade Capacity
Enhancement Fund — and transfers $214 million from DA to that new account, an
amount that the Committee reports is the amount that USAID estimates to spend on
trade-related activities in FY2006.
With regard to the Millennium Challenge Corporation, the House bill does not
fully fund the Administration’s request of $3 billion, instead providing $2 billion.
The House bill meets the Administration’s $3.3 billion request for HIV/AIDS
programs in both CSH and Global AIDS Initiative funds, but increases the
contribution to $445.5 million from the request of $200 million.
The Senate bill provides $1.677 billion for Child Survival and Health and
$1.400 billion for Development Assistance. Unlike the House, the Senate bill does
not create a Trade Capacity Enhancement Fund, but recommends $283 million for
trade capacity building and economic growth activities. The Senate bill provides
$1.877 billion for the Millennium Challenge Corporation, $123 million less than the
CRS-26
House bill, and $1.123 billion less than the request. With regard to HIV/AIDS
programs, the Senate bill meets the Administration’s $3.3 billion request, providing
$2.89 billion for the Global HIV/AIDS Initiative; $425 million in Child Survival and
Health funds; $4.16 million in ESF funds; $492,000 in SEED funds; and $14.215
million in FSA funds. The total is consolidated under the Child Survival and Health
account. The U.S. contribution (from foreign operations funding) to the Global
AIDS Fund is set at $600 million.
Table 5. Development Assistance Funding
(in millions of current $s)
FY2005
FY2006
FY2007
FY07 +/- FY06
Actual
Estimate Request
$
%
USAID “Core Development” Accounts:
Development Assistance
$1,448.3
$1,508.8
$1,282.0
($226.8)
-15.0%
Child Survival/Health
$1,537.6
$1,569.2
$1,433.0
($136.2)
-8.7%
Subtotal, “Core
$2,985.9
$3,078.0
$2,715.0
($363.0)
-11.8%
Development”
Global AIDS Initiative
$1,373.9
$1,975.1
$2,894.0
$918.9
46.5%
Millennium Challenge Account
$1,488.0
$1,752.3
$3,000.0
$1,247.7
71.2%
Total, Development Aid
$5,847.8
$6,805.4
$8,609.0
$1,803.6
26.5%
Source: USAID.
Program Sector Distribution Across All Foreign Operations
Accounts. To fully understand the implications of the FY2007 request for
development priorities, it is necessary to look beyond just the DA and CSH accounts
and include funds drawn from other Foreign Operations channels that provide
assistance for the same purposes and are programmed in much the same way as those
in the “core development” accounts. Funds appropriated under the State
Department’s Global HIV/AIDS Initiative (GHAI) support the same activities as
HIV/AIDS resources in the CSH account, but specifically target 15 countries with the
most severe HIV/AIDS problems. Resources provided through the ESF account,
assistance for former Soviet states (FSA) and Eastern Europe (SEED), and alternative
development activities supported with Andean Counternarcotics Initiative (ACI)
funds are largely spent in the same manner as those flowing through the DA and CSH
account.19
What is different about these funds is the rationale for why the aid is given.
Countries receiving ESF, FSA, SEED, and ACI have a more strategic or political
dimension in their relationships with the United States that justify the size and type
of aid received. Another difference, at least in the past, is that these latter, more
19 This is not always the case, however. At times, ESF resources are provided on more
flexible terms, as budget support and cash transfers, than are CSH and DA funds. Portions
of U.S. ESF assistance to Egypt and Pakistan, for example, are cash transfers.
CRS-27
strategic aid accounts are co-managed by the State Department and USAID, while
DA and CSH funds are controlled directly by USAID. Presumably, however, this
may no longer be a relevant distinction under Secretary Rice’s new foreign aid
realignment in which the Director of Foreign Assistance, who also serves as the
USAID Administrator, will maintain control over all State and USAID aid
appropriations, with the exception of GHAI funds, regardless of which agency has
primary management responsibility.
Keeping these similarities and differences in mind, Table 6 compares the
FY2007 budget request with FY2006 enacted amounts, taking into consideration all
bilateral economic aid Foreign Operations accounts — DA, CSH, ESF, FSA, SEED,
and ACI — broken down by key development assistance sector priorities. Through
an examination of this broader array of funding channels, several key findings
emerge.
Table 6. Economic Aid Allocations for All Foreign Operations
Accounts, by Program Sector
(in millions of current $s)
FY2007
FY2005
FY2006
FY2007
+/-
Development Sector
Actual
Enacted
Request
FY2006
Economic
$4,900.7
$3,471.1
$3,392.8 -2.3%
Growth/Agriculture/Trade
Agriculture
$495.1
$431.5
$622.9
44.4%
Environment
$494.3
$423.8
$445.6
5.1%
Economic Growth
$2,963.9
$1,675.0
$1,541.4
-8.0%
Basic Education for Children
$412.8
$519.7
$455.7
-12.3%
Higher Education & Training
$127.5
$183.5
$207.2
12.9%
Israel Cash Transfer
$407.1
$237.6
$120.0
-49.5%
Global Health
$3,148.4
$3,835.3
$1,733.0
-54.8%
Child Survival/Maternal Health
$450.7
$461.4
$421.8
-8.6%
Vulnerable Children
$35.3
$37.7
$13.4
-64.5%
HIV/AIDS (USAID non-focus
$376.4
$368.4
$343.9
-6.7%
countries)
HIV/AIDS (State Dept account)
$1,373.9
$1,777.1
$2,794.0
57.2%
Global Fund for AIDS, TB, &
$248.0
$445.5
$200.0
-55.1%
Malaria
Other Infectious Diseases
$216.0
$310.2
$396.6
27.9%
Family Planning
$448.1
$435.0
$357.3
-17.9%
Democracy, Conflict, &
$1,005.8
$1,048.1
$1,095.2
4.5%
Humanitarian
Democracy & Local Governance
$781.6
$833.0
$856.2
2.8%
CRS-28
FY2007
FY2005
FY2006
FY2007
+/-
Development Sector
Actual
Enacted
Request
FY2006
Human Rights
$46.8
$39.6
$30.1
-24.0%
Humanitarian Assistance
$49.4
$36.1
$45.0
24.7%
Conflict Management
$128.0
$139.4
$163.9
17.6%
State Dept. Initiatives
$490.7
$510.1
$730.3
43.2%
Source: USAID and CRS calculations.
Note: This table shows the distribution of economic aid funding, by sector, across all
bilateral Foreign Operations accounts: Development Assistance, Child Survival/Health,
Economic Support Fund, East European aid, former Soviet aid, Andean Counterdrug
Initiative, and the State Department’s Global HIV/AIDS Initiative.
! Agriculture programs increase but add-ons are limited to Iraq
and Afghanistan. The FY2007 request proposes a $192 million, or
44% increase in agriculture activities. USAID officials have argued
for a number of years that this sector has been under-funded, with
demands in developing countries far out-pacing available resources.
Congressional directives for higher spending on other sectors, they
contend, have squeezed the amount of resources available for
agriculture. Nevertheless, the entire increase for agriculture in
FY2007 is scheduled for Iraq and Afghanistan, leaving other nations
at or below FY2006 levels.
! Conflict Management increase targets Sudan. A 17.6% rise in
the FY2007 request for the conflict management sector is due to a
proposed $40 million increase — to $60 million — for activities in
Sudan.
! HIV/AIDS funds re-distributed. While HIV/AIDS resources for
non-focus countries channeled through CSH account are cut slightly
in the FY2007 request, overall resources in Foreign Operations to
fight the AIDS pandemic are up significantly in the proposed budget
(Table 7). Nevertheless, the FY2007 request continues a
fundamental disagreement between the executive branch and
Congress over the appropriate size of a U.S. contribution to the
multilateral Global Fund to Fight HIV/AIDS, Tuberculosis, and
Malaria. The Administration has proposed in every year since
FY2003 either $200 million or $300 million for the Global Fund,
while Congress has appropriated amounts ranging between $350
million and $550 million (including funds provided in the
Labor/HHS appropriations measure). For FY2007, the
Administration again requested $300 million for the Global Fund
(with $100 million requested in the Labor, Health and Human
Services, and Education Appropriations bill), while boosting
CRS-29
amounts for the 15 focus countries from $1.335 billion to $2.136
billion. The House-passed foreign operations bill provides $444.5
million for the Global Fund, while the House-passed Labor/HHS bill
does not include the President’s request. The Senate State/Foreign
Operations bill directs $600 million to the Global Fund.
! Other infectious diseases funding grows due to malaria initiative
and avian flu. The category of other infectious diseases — which
mainly includes funding for malaria, tuberculosis, and recently to
combat the anticipated avian influenza pandemic — would rise by
$86 million, or 28% in FY2007. In mid-2005, President Bush
announced a plan to provide $1.2 billion in additional funding
through FY2010 for malaria. The FY2007 request of $223 million
for malaria represents the second year of the plan that will increase
from three to seven focus countries next year. The FY2007 also
includes $55 million to deal with international aspects of avian flu.
The House-passed bill does not fully fund the President’s Malaria
Initiative, cutting it by $47 million. The bill also does not provide
the Administration’s $55 million request for Avian Influenza,
perhaps reflecting the inclusion of $2.3 billion in the FY2006
emergency supplemental. The Senate bill provides the
Administration’s request for malaria and avian flu.
Table 7. U.S. International HIV/AIDS, Tuberculosis, and Malaria Programs
(in millions of current $s)
FY2007
FY2002
FY2003
FY2004
FY2005 FY2006 FY2007 FY2007
Senate
Program
Actual
Actual
Actual
Actual
Est.
Request
House
Cmte
USAID CSH account for
$395.0 $587.6 $513.4 $347.2
$346.5 $325.0 $346.6 $342.5
HIV/AIDS - regular
USAID CSH account for
$50.0
$248.4
$397.6
$248.0
$247.5 $100.0 $200.0 $300.0
Global Fund
USAID Global Fund
—
—
-87.8a
$87.8
—
—
—
—
Carry-over
USAID CSH account for
$165.0
$129.0
$155.0
$168.6 $178.2
$304.0
$257.6
$303.4
TB & Malaria
USAID other economic
$40.0 $38.2 $51.7 $51.1
$42.6 $33.4 $32.4
$32.1
assistance
State Dept Global AIDS
—
—
$488.1 $1,373.9 $1,775.1 $2,794.0 $2,528.0 $2,776.5
Init. (GHAI)
GHAI for Global Fund
—
—
—
—
$198.0
$100.0
$244.5 [$300.0]c
FMF
—
$2.0
$1.5
$2.0
$1.9
$1.6
—
—
Subtotal,
$650.0
$1,005.2
$1,519.5 $2,278.6 $2,789.8 $3,658.0 $3,609.1 $3,754.5
Foreign Operations
CDC Global AIDS
$143.8
$182.6
$273.9
$123.8
$122.7
$121.9
$121.9
CRS-30
FY2007
FY2002
FY2003
FY2004
FY2005 FY2006 FY2007 FY2007
Senate
Program
Actual
Actual
Actual
Actual
Est.
Request
House
Cmte
CDC Internat’l Applied
$11.0 $11.0 $9.0 $14.0
$10.9 $0.0
Prevention Research
CDC International
$15.0
$15.8 $11.0 $11.0
$10.9 $11.0
$11.0b
TB & Malaria
NIH International Res.
$218.2
$278.6
$317.2
$332.3 $346.5
$368.0
NIH/HHS for
$125.0 $99.3
$149.1 $99.2
$99.0
$100.0 $0.0
Global Fund
Labor Dept AIDS in
$8.5 $9.9 $9.9 $2.0
$0.0 $0.0 $0.0
the Workplace
Subtotal,
$521.5
$597.2
$770.1
$582.3
$590.0
$600.9
Labor/HHS/Ed
DOD HIV/AIDS
prevention education
$14.0 $7.0
$4.2 $7.5
$5.2 $0.0
with African militaries
USDA Section 416
$25.0 $24.8 $24.8 $24.8
$24.8 $0.0
(b) Food Aid
Total,
$1,210.5 $1,634.2 $2,318.6 $2,893.2 $3,409.8 $4,258.9
all appropriations
Total, Global Fund
$175.0
$347.7
$458.9
$435.0
$544.5
$300.0
Sources: House and Senate Appropriations Committees, Departments of State and HHS, USAID, and CDC.
FY2004 and FY2005 figures are drawn from, Action Today, A Foundation for Tomorrow: The President’s
Emergency Plan for AIDS Relief, Second Annual Report to Congress. February 2006. p. 155.
Note: Following the launch in FY2006 of the President’s Malaria Initiative, malaria funding is no longer
included in the overall PEPFAR total. However, because HIV/AIDS, tuberculosis, and malaria have
traditionally been grouped together in years prior to FY2006, for comparability purposes they are included
in the totals for FY2006 and FY2007. Without malaria funding, the FY2006 total would be approximately
$3.297 billion, FY2007 request would be about $4.032 billion, and the House Foreign Operations
recommendation would be $3.431 billion.
a. Reflects the amount that could not be transferred to the Global Fund in FY2004, but that was carried over
for and contributed in FY2005.
b. The House Committee report states that it is fully funding the President’s CDC request for
malaria at $8.9 million; but does not provide an amount for TB.
c. The Senate bill provides $600 million for the Global Fund of which only $300 million is attributed by
source; the remaining $300 million to come from other HIV/AID funds.
! Basic education allocation for FY2006 exceeds congressional
directive but FY2007 shifts funds to strategic countries. One of
the highest congressional development assistance priorities in recent
years has been basic education programs. In most years, Congress
has increased significantly levels proposed by the Administration.
This was the case for FY2006, where lawmakers increased the
CRS-31
executive’s $341 million request to $465 million. Ultimately,
however, the Administration allocated $520 million for basic
education in FY2006 and proposes $456 million for FY2007, nearly
meeting the level directed by Congress for FY2006. The FY2007
request, however, marks a significant shift in resources away from
Africa and Latin America in order to increase programs in more
strategic countries, including Afghanistan and Jordan (Table 8).
The House bill reiterates congressional support for basic education
programs, providing $550 million. The Senate bill recommends
$455.7 million for basic education, and consolidates funds from
ESF, SEED, FSA, and ACI under the Development Assistance
account.
Table 8. Basic Education Programs for Selected Regions and
Recipients
(in millions of current $s)
FY2007
FY2005
FY2006
FY2007
+/-
Region/Country
Actual
Enacted
Request
FY2006
Africa
$146.1
$183.4
$129.1
-29.6%
Latin America
$47.1
$57.2
$41.7
-27.1%
Afghanistan
$37.9
$51.8
$81.0
56.4%
Jordan
$36.2
$14.0
$34.0
142.9%
Source: USAID and CRS calculations.
! Family planning funds reduced. For the first time during the Bush
Administration, the executive branch is seeking less than $425
million for international family planning and reproductive health
programs.20 Consistently one of the most controversial policy
elements of the Foreign Operations spending bill, family planning
programs generally have been supported by Congress with larger
appropriations, ranging between $432 million and $480 million in
recent years. In defending the request for $357 million, USAID
Administrator Tobias told the House Foreign Operations
Subcommittee that family planning remains a “very big priority” of
the Agency, but that with the increases for malaria and avian flu,
20 In January 2001, President Bush announced that he would re-apply the so-called “Mexico
City” policy restrictions banning foreign non-governmental organizations that performed
abortions or promoted abortions as a method of family planning from receiving USAID
funds even if these activities were financed with non-U.S. government funds. At the same
time, however, the President said he remained committed to international family planning
and would continue the Clinton Administration $425 million funding request. Each
subsequent budget proposal through FY2006 sought $425 million. For more information
on the Mexico City policy, see CRS Report RL30830, International Family Planning, The
“Mexico City” Policy, by Larry Nowels.
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funding trade-offs among various health activities were necessary.21
Instead, the House provided $432 million for international family
planning. Another $34 million would be available for the United
Nations Population Fund (UNFPA) if it is deemed eligible for U.S.
assistance. The Senate bill provides $465.3 million for family
planning and reproductive health from which $25 million could be
available for UNFPA.
Regional Allocations for FY2007: Latin America and Africa. As noted
above, some observers and Members of Congress have been critical of proposed
reductions in economic assistance for Latin America. As shown in Table 9, amounts
for Latin America from the DA and CSH accounts are down sharply in the FY2007
request — nearly 22%. Using a broader measure that includes all Foreign Operations
accounts, however, levels for Latin America are reduced in the FY2007 request, but
not to the same degree as for the “core” USAID development accounts. Combining
DA and CSH funding with these other Foreign Operations accounts that also provide
development and poverty reduction aid — ESF, alternative development under the
Andean Counternarcotics Initiative, and the Global AIDS Initiative — the FY2007
proposal for Latin America would cut amounts by $51 million, or about 6% below
FY2006. Administration officials also point out that FY2007 totals do not include
sizable support for Nicaragua and Honduras under the Millennium Challenge
Account, and that other regional countries may qualify for MCA assistance in the
future.22
Critics remain concerned, nevertheless, that the United States is withdrawing
foreign aid from Latin America where large pockets of poverty remain and where the
United States has substantial interests. They acknowledge that several regional
countries have benefitted from the more recent, selective U.S. initiatives — MCA,
HIV/AIDS, and ACI alternative development — but that a number of other Latin
American nations are excluded from these programs and are unlikely to qualify in the
near-term.
Economic assistance proposed for Africa, on the other hand, increases
significantly under the FY2007 proposal — by $860 million, or over one-third. U.S.
assistance to Africa has been increasing for several years, and at the 2005 G-8
summit, President Bush pledged to double U.S. aid to the continent by 2010. The
increase for Africa, however, is heavily concentrated in countries that are the primary
targets of the President’s HIV/AIDS and malaria initiatives. The 12 African AIDS
“focus” countries23 alone account for $755 million of the $860 million regional
increase. Similar to the case in Latin America, nations that are not participants in the
21 House Foreign Operations Subcommittee hearing, April 26, 2006.
22 For more discussion of these issues, see CRS Report RL32487, U.S. Foreign Assistance
to Latin America and the Caribbean, by Connie Veillette, Clare Ribando, and Mark
Sullivan.
23 Botswana, Cote d’Ivoire, Ethiopia, Kenya, Mozambique, Namibia, Nigeria, Rwanda,
South Africa, Tanzania, Uganda, and Zambia.
CRS-33
newest selective foreign aid initiatives are scheduled for flat or reduced assistance in
FY2007.24
Congressional Action. The House report to H.R. 5522 expresses concern
with the trend of decreased funding for Latin America. Both bill and report language
direct that levels for Child Survival and Health, Development Assistance, and the
new Trade Capacity Enhancement Fund in FY2007, should not fall below FY2006
levels. The Senate bill does not include similar language.
Table 9. Latin America and Africa Economic Aid Allocations
(in millions of current $s)
Latin America
Africa
Foreign Operations
FY2005 FY2006 FY2007 FY2005 FY2006 FY2007
Appropriation Account
Actual
Est.
Request Actual
Est.
Request
Development Assistance
$247.3
$254.4
$181.8
$517.6
$588.5
$563.4
Child Survival/Health
$144.6
$140.9
$128.0
$370.3
$391.9
$478.5
Subtotal, DA & CSH
$391.9
$395.3
$309.8
$887.9
$980.4 $1,041.9
Economic Support Fund
$163.0
$120.8
$152.1
$126.2
$121.3
$164.3
ACI, Alternative
$227.3
$226.5
$206.9
—
—
—
Development
Global AIDS Initiative
$58.8
$65.3
$88.0
$885.7 $1,238.7 $1,994.0
TOTAL
$841.0
$807.9
$756.8 $1,899.8 $2,340.4 $3,200.2
Source: USAID and CRS calculations.
The Millennium Challenge Account.25 The largest funding increase in the
FY2007 Foreign Operations budget is for the Millennium Challenge Account
(MCA), a foreign aid program announced in early 2002 and created by statute in
February 2004. The MCA is designed to 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 the Millennium
Challenge Corporation (MCC), which provides assistance through a competitive
selection process to countries 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;
24 For further details on U.S. aid to Africa, see CRS Issue Brief IB95052, Africa: U.S.
Foreign Assistance Issues, by Ted Dagne.
25 For a complete discussion of the Millennium Challenge Account, see CRS Report
RL32427, The Millennium Challenge Account: Implementation of a New U.S. Foreign Aid
Initiative, by Larry Nowels.
CRS-34
! 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.
The MCA concept is based on the premise that economic development succeeds
best where it is linked to the principles and policies of a 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 annual 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 FY2007 is $3 billion, the same as for FY2006, but substantially
higher than the $1.75 billion appropriated by Congress for this year. The requests of
$3 billion for each of the past two years fall well below the $5 billion target for
FY2006 and beyond that the President pledged when he announced the initiative in
March 2002. The MCC’s Board of Directors selected 23 countries26 to participate
in the program in FY2004-FY2006, and the Corporation has signed eight
agreements, or Compacts, with Madagascar, Honduras, Cape Verde, Nicaragua,
Georgia, Benin, Vanuatu, and Armenia between April 2005 and May 2006.
Some Members of Congress, however, believe the initiative has started more
slowly than they had anticipated, spending only small amounts of the roughly $3.7
billion appropriated in total for FY2004-FY2006. Increasing the budget of an
untested foreign aid program while other traditional development assistance
programs are scheduled for reductions in FY2007, they assert, may not be the best
allocation of Foreign Operations resources. The MCC, and its new CEO,
Ambassador John Danilovich, argue that changes have been made that will accelerate
the signing of more Compacts — three have been signed in 2006 — and that new
Compacts will be larger in size helping the MCC fulfill its vision of being a
“transformational” development agency. MCC officials say that existing resources
are likely to be fully committed by the end of calendar 2006, and that an additional
$3 billion is necessary to finance new Compacts signed in FY2007.
Another concern frequently raised is that additional spending for the MCC
comes at the expense of other core development aid accounts. President Bush
pledged in 2002 when the MCC concept was first announced that spending on the
26 The 23 countries are: Armenia, Benin, Bolivia, Burkina Faso, Cape Verde, East Timor,
El Salvador, Gambia, Georgia, Ghana, Honduras, Lesotho, Madagascar, Mali, Mongolia,
Morocco, Mozambique, Namibia, Nicaragua, Senegal, Sri Lanka, Tanzania, and Vanuatu.
CRS-35
new initiative would be additional, and not a substitute for existing foreign assistance
resources. It is usually impossible to attribute an increase in one program with
reductions in others, given the complicated process through which budgets are
compiled and the multiple, but not necessarily directly linked, trade-offs that occur.
The FY2007 Foreign Operations request is the first budget proposal since
establishment of the MCC where Compacts have been signed in countries where
USAID maintains programs. In each of these six countries — Armenia, Benin,
Honduras, Georgia, Madagascar, and Nicaragua — USAID resources decline. In
some cases, decisions to reduce regular aid programs are most likely unrelated to
MCC resources. For example, the Administration has been trying to reduce
assistance to Armenia and Georgia for a number of years, but congressional earmarks
keep levels higher. For other countries, however, executive officials have not
explained why traditional assistance has declined, especially for economic growth
programs that are the primary focus of MCC Compacts.
Congressional Action. The House Appropriations Committee provides $2
billion for the MCC, $1 billion under the request. While expressing strong support
for the MCC, the Committee’s report notes the constraints imposed by a reduced
Section 302(b) allocation and the lack of flexibility to fully fund the Administration’s
request. The Senate bill provides $1.877 billion, a reduction of $1.123 billion from
the request.
Other Key Items. Beyond these specific and prominent issues, the Foreign
Operations proposal for FY2007 seeks to increase aid activities in a few areas while
cutting resources for several programs. Significant requests for increases include the
following:
! USAID administrative costs would grow substantially under the
request, with operating expenses climbing by 9% and capital
investment costs nearly doubling. The largest new expense would
be for overseas construction in Burundi, Ethiopia, Madagascar,
Serbia, Philippines, Congo (Kinshasa), and Zambia where USAID
will co-locate within new U.S. embassy compounds. The House bill
provides $641 million, a reduction of nearly $38 million from the
request. The Senate bill provides $630 million.
! Refugee assistance resources would rise by 9% in the request over
FY2006 regular appropriations (excluding supplementals), with
most of the increase planned for refugee admissions into the United
States and for the Emergency Refugee and Migration Assistance
(ERMA) contingency fund. Overseas refugee assistance would
decline slightly. The House reduced funding for Migration and
Refugee Assistance, including the Emergency Refugee Fund, by
$108 million, while the Senate bill matched the request.
! Conflict Response Fund, a contingency resource available to the
Secretary of State to respond quickly to unforseen foreign crises,
would receive $75 million in the FY2007 proposal. Funds could
also be used to establish a U.S. civilian ground presence in post-
conflict situations. In the past, Congress has been reluctant to
CRS-36
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. Both House and Senate
bills again did not provide a separate conflict response fund.
! Debt restructuring spending would nearly triple in — from $64
million in FY2006 to $183 million — in FY2007. The additional
resources would be used largely to cover the costs of canceling debt
owed to the United States by the Democratic Republic of Congo,
estimated at $175 million, and to provide for additional
contributions to the Heavily Indebted Poor Countries (HIPC)
initiative. The House bill significantly cuts funding for debt relief,
providing a total of $20 million, while the Senate bill provides $21
million. The Administration argues that such a level would prevent
the United States from meeting its commitment to complete bilateral
debt reduction for the Democratic Republic of Congo, while the
Committee report notes that it has provided $200 million over the
last three years for debt relief for Congo.
! Peacekeeping funds would grow by 16%, mainly to increase
funding for the Trans-Sahara Counter-terrorism Initiative, support
for the African Union (AU) mission in Darfur, and for operations in
Liberia. Additional funds for AU operations in Darfur were
provided in the FY2006 emergency supplemental appropriations.
The House bill provides $170 million, which is $30 million less than
the request. The Senate bill provides $97.9 million after it redirected
$100 million to FMF for the new Combatants Commanders
Initiative Fund, instead of providing the Administration’s request for
$103 million for the Global Peace Operations Initiative.
For several other Foreign Operations accounts, the FY2007 request represents
a reduction below regular amounts approved in FY2006. The proposal cuts funding
in two main areas:
! Assistance to former Soviet states and Eastern Europe,
collectively, would decline by $151 million, or 17%, from FY2006
levels. The Administration proposes to graduate Bulgaria, Croatia,
and Romania from U.S. assistance and decrease every other program
in the region other than Kosovo, Ukraine, and the Kyrgyz Republic.
Large cuts are recommended for Armenia and Russia. The House
further cut this assistance by another $116 million, and the Senate
reduced the requested amount by $211 million.
! Voluntary contributions to international organizations would
decrease 11% under the request, with reductions proposed for
UNICEF (-$2.7 million), the U.N. Fund for Women (-$2.3
million), and the U.N. Development Program (-$14.4 million).
The House provided increased funds over the request, setting
CRS-37
voluntary contributions at $327.6 million, and recommending $127
million for UNICEF; $3.25 million for the U.N. Fund for Women;
and $109 million for the U.N. Development Program, all above the
Administration’s request. The Senate provided $306.1 million, an
increase of $17 million, including $127.5 million for UNICEF; $3
million for the U.N. Fund for Women; and $110 million for the U.N.
Development Program.
Leading Foreign Aid Recipients Proposed for FY2007. While Iraq has
been the largest 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 FY2007 continues the patterns of aid distributions
of the past four years, with the added feature of several PEPFAR countries moving
higher on the list of top recipients. Table 10 includes those nations that have
received an average of more than $150 million from the United States in FY2006 and
requested for FY2007. 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. armed 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 suspending aid
sanctions in October 2001, the United States has transferred over $3.3 billion to
Pakistan. Afghanistan, Jordan, and Indonesia also are among the top aid recipients
as part of the network of front-line states in the war on terrorism.
Table 10. Leading Recipients of U.S. Foreign Aid
(appropriation allocations; in millions of current $s)
FY2003 FY2004 FY2005 FY2006
FY2006
FY2006
FY2007
Total
Total
Total
Regular Supp Est.
Total
Request
Israel
3,682
2,624
2,610
2,495
—
2,495
2,460
Egypt
2,204
1,865
1,822
1,780
—
1,780
1,758
Afghanistan
543
1,799
2,674
931
46
977
1,124
Pakistan
495
387
688
754
—
754
738
Colombia
602
574
569
561
16
577
561
Jordan
1,556
560
659
462
50
512
457
Iraq
2,485
18,439
28
61
1,589
1,650
771
South Africa
73
99
155
226
—
226
360
Kenya
59
85
162
226
—
226
320
Nigeria
73
80
136
182
—
182
320
CRS-38
FY2003 FY2004 FY2005 FY2006
FY2006
FY2006
FY2007
Total
Total
Total
Regular Supp Est.
Total
Request
Ethiopia*
56
74
135
177
—
177
284
Uganda
70
113
170
189
—
189
233
Sudan*
27
171
377
125
263 388
206
Zambia
57
82
132
162
—
162
190
Haiti*
35
102
150
163
20
183
164
Tanzania
41
59
109
135
—
135
190
Indonesia*
132
123
140
143
—
143
154
Mozambique
55
60
84
114
—
114
157
Source: U.S. Department of State.
Note: Countries are listed in order of the combined FY2006 and FY2007 estimates. Amounts for
countries that have signed Millennium Challenge Account Compacts are not considered for this listing
of top recipients. MCC Compacts are four- or five-year agreements. If the annual average of the
Compacts was added to regular aid totals for the current eight MCC Compact countries, none of the
eight would break into this list. As more Compacts are signed, however, some MCC countries might
begin to appear among the top recipients.
Note: Amounts in this table reflect only direct bilateral, non-food aid programs to these countries.
In several cases, especially those noted with an asterisk (*), 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 totaled 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 that for
these selected countries, U.S. assistance is considerably higher in some years than the figures noted
here.
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-FY2006 and proposed for FY2007. Uganda, Ethiopia, Kenya, Mozambique,
Zambia, South Africa, Tanzania, and Nigeria, all PEPFAR focus countries, are now
among the leading recipients of 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, Ukraine,
Armenia, and Georgia — which have seen levels decline in recent years. Armenia
and Georgia, however, have signed MCC Compacts and, including the annual
average amount of these Compacts, both countries fall just short of the $150 million
FY2006/FY2007 average cut-off for Table 10. Turkey, a leading recipient in most
years over the past 25 years, also falls off the list. Andean countries, which have
been large recipients of American counternarcotics aid for the past 15 years are also
missing. Only Colombia, where U.S. assistance also has a counterterror dimension,
remains on the list; Bolivia and Peru are no longer among the top 18 recipients.
CRS-39
State Department Appropriations and Related
Agencies Overview and Congressional Action
Background
The State Department, established on July 27, 1789 (1 Stat.28; 22 U.S.C. 2651),
has a mission to advance and protect the worldwide interests of the United States and
its citizens. The State Department supports the activities of more than 50 U.S.
agencies and organizations operating at 260 posts in 180 countries. Currently, the
State Department employs approximately 30,000 people, about 60% of whom work
overseas. As covered in Title IV of the House Science, State, Justice, and Commerce
(SSJC) appropriations measure, State Department funding categories include
administration of foreign affairs, international operations, international commissions,
and related appropriations, such as international broadcasting. The enacted FY2006
appropriation for Title IV was $9.56 billion (after adjusting for two rescissions),
9.4% higher than the previous year’s regular appropriation, but 11% lower than the
previous appropriations when including the FY2005 supplemental funds within P.L.
109-13 for Title IV. Typically, about three-fourths of State’s budget is for
Administration of Foreign Affairs (about 69% in FY2006), which consists of salaries
and expenses, diplomatic security, diplomatic and consular programs, technology,
and security/maintenance of overseas buildings.
FY2007 Funding Issues27
Administration of Foreign Affairs. The Administration’s FY2007 request
for State’s Administration of Foreign Affairs is $6.93 billion, 5.5% above the
FY2006 estimated level of $6.57 billion (including rescissions). The House-passed
level in H.R. 5672 is $6.66 billion. The Senate Appropriations Committee funding
level in H.R. 5522 is $6.58 billion.
Diplomatic & Consular Programs (D&CP). D&CP covers primarily
salaries and expenses, hiring, diplomatic expenditures, cost of living and foreign
inflation, as well as exchange rate changes. The FY2007 request of $4.65 billion
represents an increase of 7.7%, compared with the $4.32 billion funding level enacted
for FY2006. The FY2007 funding level request includes $795.2 million for
worldwide security upgrades, compared with $680.7 million in the FY2006
appropriation. The D&CP funding request also includes $351 million, compared
with $329.7 million in the FY2006 budget, designated only for public diplomacy.
The House-passed funding for D&CP is $4.46 billion, including $351 million for
public diplomacy and $795.2 million for worldwide security upgrades. The Senate
27 See CRS Report RL32885, Science, State, Justice, Commerce and Related Agency (SSJC)
Appropriations, by Susan B. Epstein (coordinator), for a full discussion of this
appropriations measure. The total funding level for State Department and related programs
in this report will not match exactly the amount discussed in CRS Report RL32885. This
is because the Senate bill organization for State Department and related programs includes
the U.S. Institute for Peace and several foreign policy-related commissions that are funded
separately from the State Department in the SSJC bill.
CRS-40
Appropriations Committee set funding at $4.50 billion, including $795.2 million for
worldwide security upgrades.
Embassy, Security, Construction, and Maintenance (ESCM). ESCM
provides funding for embassy construction, repairs, and leasing of property for
embassies and housing facilities at overseas posts. The FY2007 request of $640.1
million is 12.1% above the FY2006 enacted level of $571.1 million (including
rescissions). The House agreed to a total of $1.51 billion for ESCM, including
$605.7 million for regular funding and $899.4 million for worldwide security
upgrades. The Senate Committee recommends funding for ESCM to be a total of
$1.38 billion and does not designate how much the Department should spend on
regular versus worldwide security upgrades overall.
Worldwide Security Upgrades. Ever since the bombings of two U.S.
embassies in eastern Africa in August 1998, Congress has appropriated additional
money within both D&CP and ESCM for increasing security. The funds in D&CP
for worldwide security upgrades are primarily for ongoing expenses due to the
upgrades that took place after 1998, such as maintaining computer security and
bullet-proof vehicles, and ongoing salaries for perimeter guards. Worldwide security
upgrades in ESCM are more on the order of bricks-and-mortar-type expenses. The
FY2007 request for upgrades within D&CP total $795.2 million — $114.5 million
(16.8%) above the enacted level of $680.7 million (reflecting rescissions) for
FY2006. The FY2007 request for worldwide security funding within ESCM totals
$899.4 million, virtually the same as the FY2006 level (after rescissions). The
combined total FY2007 request for State’s worldwide security upgrades is $1.69
billion.
Educational and Cultural Exchanges. This line item includes programs
such as the Fulbright, Muskie, and Humphrey academic exchanges, as well as the
international visitor exchanges and some Freedom Support Act and SEED programs.
The Administration’s FY2007 request is for $474.3 million, 11.3% more than the
FY2006 estimated level of $426.3 million. The Administration request includes
$200.3 million for the Fulbright program and $351 million within the D&CP account
for public diplomacy expenses. The House-passed funding level is $436.3 million,
while the Senate Committee level is $445.5 million.
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 that would ensure the efficient
management, coordination, operation, and utilization of State’s resources. The
FY2007 request is for $68.3 million, a 17.6% increase over the $58.1 million enacted
for FY2006 (after rescissions). In addition, the FY2006 appropriation included $68.5
million for the Centralized Information Technology Modernization Program. The
Administration did not request any funding for that account for either FY2006 or
FY2007. The House agreed to $58.1 million for CIF and the Senate Committee
recommended the same amount.
International Organizations and Conferences. The International
Organizations and Conferences account consists of two line items: U.S.
Contributions to International Organizations (CIO) and U.S. Contributions for
CRS-41
International Peacekeeping Activities (CIPA). The FY2007 request totals $2.40
billion for the overall account, up nearly 11% over the FY2006 level of $2.17 billion,
including rescissions.
Contributions to International Organizations (CIO). The CIO supports
U.S. membership in numerous international and multilateral organizations that
transcends bilateral relationships and covers issues such as human rights,
environment, trade, and security. The FY2007 request level for this line item is
$1.27 billion, 10.2% above the $1.15 billion enacted level for FY2006. The request
represents full funding of U.S. assessed contributions to the U.N. and other
international organizations. It does not include funding for prior-year funding
shortfalls. The House-passed bill provides $1.12 billion while the Senate Committee
recommendation is $1.15 billion for CIO in FY2007.
Contributions to International Peacekeeping (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 FY2007
request of $1.14 billion represents an increase of 11.1% over the FY2006 estimated
level of $1.02 billion (including rescissions). In addition, the Administration is
requesting an additional $69.8 million for this account to support U.N. peacekeeping
efforts in the southern Sudan. The House-passed bill sets funding at $1.14 billion,
as does the Senate Appropriations Committee.
International Commissions. The International Commissions account
includes the U.S.-Mexico Boundary and Water Commission (IBWC), the
International Fisheries Commissions (IFC), the International Joint Commission (IJC),
the International Boundary Commission (IBC), and the Border Environment
Cooperation Commission (BECC). The IBWC’s mission is to apply rights and
obligations assumed by the United States and Mexico under numerous treaties and
agreements, improve water quality of border rivers, and resolve border sanitation
problems. The mission of the IFC is to recommend to member governments
conservation and management measures for protecting marine resources. The IJC’s
mission is to develop and administer programs to help the United States and Canada
with water quality and air pollution issues along their common border. The IBC is
obligated by the Treaty of 1925 to maintain an effective boundary line between the
United States and Canada. Established by the North American Free Trade
Agreement, the BECC helps local states and communities to develop solutions to
environmental problems along the U.S.-Mexico border. The FY2007 funding request
of $63.9 million represents a decrease of 3.9% over the $66.5 million enacted in
FY2006. The FY2007 requested decrease is due largely to a decrease in funds for the
Great Lakes Fishery Commission. The House funding level for international
commissions is $67.9 million, while the Senate Committee level is $67.4 million.
Related Appropriations. Related appropriations include those for the Asia
Foundation, the National Endowment for Democracy (NED), and the East-West and
North-South Centers. The Administration’s FY2007 request for related
appropriations totals $103.6 million — 8.7% less than the FY2006 enacted level of
$113.6 million, after rescissions. The House-passed level of $68.1 million is close
to half of the current level, largely because of the significant increase in funding for
democracy promotion through the National Endowment for Democracy (NED) in
CRS-42
FY2006. The Senate Committee-recommended level is even lower — $43.5 million
— because the Committee recommends a much lower funding level for NED, as
more funding is recommended in the Democracy Fund account, elsewhere in the bill.
The Asia Foundation. The Asia Foundation (TAF) is a private, nonprofit
organization that supports efforts to strengthen democratic processes and institutions
in Asia, open markets, and improve U.S.-Asian cooperation. It receives government
and private sector contributions. Government funds for the Foundation are
appropriated and pass through the Department of State. The FY2007 request of $10
million reflected a 27.5% reduction over the FY2006 enacted funding level of $13.8
million. The organization states that the $10 million will support programs that
promote tolerance within Muslim minority/majority countries such as Pakistan,
Afghanistan, Nepal, and Cambodia; promote free and fair elections in Asia; and
develop democratic institutions for legal reform in China, Vietnam, Indonesia, and
Thailand. The Asia Foundation says it will continue to seek private funds and
expects to raise $4 million in private funds for FY2007. The House bill sets funding
at $13.8 million and the Senate Committee recommends $14.0 million for the Asia
Foundation in FY2007.
National Endowment for Democracy (NED). The National Endowment
for Democracy is a private, nonprofit organization established during the Reagan
Administration that supports programs to strengthen democratic institutions in more
than 80 countries around the world. NED proponents assert that many of its
accomplishments are possible because it is not a U.S. government agency. NED’s
critics claim that it duplicates government democracy promotion programs and could
be eliminated, or could be operated entirely through private sector funding. The
FY2007 request is for $80 million, the same level as was requested for FY2005 and
FY2006, and 8% higher than the final enacted level for FY2006 of $74.1 million,
including rescissions. The House-passed NED funding level is $50 million for
FY2007. The Senate Appropriations Committee recommends $8.8 million, as the
Committee recommends more than $1 billion for the Democracy Fund elsewhere in
the bill.
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 FY2007 request for the East-West Center is $12 million, a
36.8% decline from the FY2006 enacted level of $19 million, after rescissions. The
House level is $3 million, while the Senate Committee recommends significantly
more — $19 million.
The Center for Cultural and Technical interchange between North and South
(North-South Center) is a national educational institution in Miami, Florida, 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; however, it has not received a direct appropriation since
FY2000.
CRS-43
The International Center for Middle Eastern-Western Dialogue Trust
Fund. The conferees added language in the FY2004 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 which is 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 for it in FY2005. The
Administration requested spending $.8 million of interest and earnings from the Trust
Fund for program funding in FY2006. Congress appropriated $4.9 million for this
account in FY2006 and $.9 million for the Trust. The Administration is requesting
$.7 million of interest and earnings from the Trust Fund program for FY2007. The
House set spending of interest and earnings at $.4 million, while the Senate
Committee set it at $.75 million.
International Broadcasting. International Broadcasting, which had been
a primary function of the U.S. Information Agency (USIA) prior to 1999, now falls
under an independent agency referred to as the Broadcasting Board of Governors
(BBG). The BBG includes the Voice of America (VOA), Radio Free Europe/Radio
Liberty (RFE/RL), Cuba Broadcasting, Radio Sawa, Radio Farda, and Radio Free
Asia (RFA). In addition to the ongoing international broadcasting activities, the
Administration initiated a new U.S. Middle East Television Network — Alhurra.
The BBG’s FY2007 funding request totals $671.9 million, 4.3% above the
FY2006 level of $644 million, after rescissions. The FY2007 broadcasting request
includes $653.6 million for broadcasting operations, $18.3 million for capital
improvements, and $36.3 million for Broadcasting to Cuba. The House passed
funding at $651.3 million for broadcasting operations (including $36.1 million for
Cuba Broadcasting) and $7.6 million for capital improvements for a total of $658.9
million for international broadcasting. The Senate Appropriations Committee
recommends $653.6 million (including $36.3 million for Cuba Broadcasting) for
broadcasting operations and $7.6 million for capital improvements for a total of
$661.2 million.
FY2006 Emergency Supplemental28
On February 16, 2006, the Administration submitted an emergency FY2006
supplemental appropriations request totaling $92.2 billion for additional funding for
ongoing military operations in Iraq and Afghanistan ($67.9 billion), State Department
operations in Iraq and various foreign aid programs, including assistance for Iraq
($4.2 billion), and for recovery and reconstruction efforts in the hurricane-affected
Gulf Coast areas ($19.8 billion).
The supplemental proposal for international matters covers a range of activities
that were not addressed in the regular FY2006 appropriations, address circumstances
28 For a complete discussion of the supplemental request and congressional action, see CRS
Report RL33298, FY2006 Supplemental Appropriations: Iraq and Other International
Actvities; Additional Hurricane Katrina Relief, by Paul Irwin and Larry Nowels.
CRS-44
that have changed since passage of the regular spending measures, or, like military
operations in Iraq and Afghanistan, have been funded largely through supplementals
rather than incorporated into the base of annual, on-going diplomatic and aid
operations. The request of $1.6 billion in Iraq stabilization assistance is the first
sizable aid package for Baghdad since Congress approved $18.45 billion in the
FY2004 emergency supplemental measure. Other foreign policy elements include
funding for U.S. diplomatic costs in Iraq and Afghanistan, reconstruction aid for
Afghanistan, democracy promotion programs for Iran, Darfur humanitarian relief and
peace implementation aid in Sudan, Pakistan earthquake reconstruction, Liberia
refugee repatriation, and food aid for Africa (see Table 11 for detailed funding
levels).
Congressional Action. The conference agreement to H.R. 4939 (P.L. 109-
234) provides $4.254 billion in international affairs spending, including both State
Department operations in Iraq, and foreign assistance to Iraq, Afghanistan, Sudan and
a number of other countries. The foreign aid portion totals $2.326 billion, or $100
million above the President’s request.
Items included in the conference agreement that were not part of the President’s
request include: assistance for Liberia; Haiti; Congo; Jordan; Colombia; drought
relief for the Horn of Africa; hurricane relief for Guatemala; assistance for refugees
from Burma and other refugee situations; and increases over the President’s request
for Sudan and Darfur.
Table 11. State Department and Foreign Aid Funds in FY2006
Supplemental
(in millions of current $s)
Activity*
Request
House
Senate
Conf.
Iraq:a
U.S. mission operations
$1,097.5
$1,116.1
$1,037.5
$1,097.5
Provincial reconstruction teams support
$400.0
$208.0
$300.0
$229.8
Special Inspector General & State IGb
$25.3
$25.3
$25.3
$25.3
USAID security and operations
$119.6
$61.6
$119.6
$101.0d
US Peace Institute
$0.0
$1.3
$0.0
[$1.0]
Subtotal, Iraq mission security and support
$1,642.4
$1,412.3
$1,482.4
$1,453.6
Provincial reconstruction teams/employmentc
$675.0
$675.0
$675.0 $1,485.0 e
Infrastructure security
$287.0
$287.0
$287.0
e
Infrastructure sustainment
$355.0
$355.0
$355.0
e
Nat’l capacity building — democracy & rule of lawc
$172.0
$172.0
$172.0
e
Prison construction/Protection of judges
$107.7
$81.4
$104.4
$91.4
Financial integration & security promotion
$13.0
$13.0
$13.0
$13.0
Subtotal, Iraq stabilization assistance
$1,609.7
$1,583.4
$1,606.4
$1,589.4
Total, Iraq
$3,252.1
$2,995.7
$3,088.8
$3,043.0
Afghanistan:f
CRS-45
Activity*
Request
House
Senate
Conf.
U.S. mission security
$50.1
$50.1
$50.1
$50.1
USAID security
$16.0
$0.0
$16.0
d
Subtotal, Afghanistan mission security
$66.1
$50.1
$66.1
$50.1
Power sector projects
$32.0
$5.0
$32.0
$32.0
Debt cancellation
$11.0
$0.0
$11.0
$11.0
Afghan refugees returning from Pakistan
$3.4
$3.4
$7.4
$3.4
Subtotal, Afghanistan assistance
$46.4
$8.4
$50.4
$46.4
Total, Afghanistan
$112.5
$58.5
$116.5
$96.5
Iran:
Public diplomacy/independent TV & radio
$5.0
$5.0
$5.0
$5.0
Iranian student fellowships/visitor programs
$5.0
$5.0
$5.0
$5.0
Broadcasting
$50.0
$36.1
$30.3
$36.1
Democracy programs
$15.0
$10.0
$34.8
$20.0
Total, Iran
$75.0
$56.1
$75.1
$66.1
Sudan/Darfur:
USAID mission in Juba
$6.0
$0.0
$6.0
d
Refugees returning to southern Sudan
$12.3
$12.3
$12.3
$12.3
Food aid for southern Sudan
$75.0
$75.0
$75.0
$75.0
U.N. peacekeeping mission in Southern Sudan
$31.7
$31.7
$31.7
$31.7
Subtotal, southern Sudan
$125.0
$119.0
$125.0
$119.0
Humanitarian relief in Darfur
$66.3
$66.3
$66.3
$66.3
Refugees/conflict victims in Darfur & Chad
$11.7
$11.7
$11.7
$11.7
Food aid for Darfur
$150.0
$150.0
$150.0
$150.0
African Union peacekeeping mission, Darfur
$123.0
$173.0
$173.0
$173.0
UN peacekeeping mission in Darfur
$38.1
$98.1
$98.1
$98.1
Subtotal, Darfur
$389.1
$499.1
$499.1
$499.1
Total, Sudan/Darfur
$514.1
$618.1
$624.1
$618.1
Liberia:
Refugee repatriation
$13.8
$13.8
$13.8
$13.8
Economic aid
$0.0
$50.0
$50.0
$50.0
Total, Liberia
$13.8
$63.8
$63.8
$63.8
Other Refugee Aidg
$0.0
$0.0
$62.5
$17.5
Haiti
$0.0
$0.0
$40.0
$20.0
Congo, Democratic Republic of
$0.0
$0.0
$13.2
$7.5
Jordan
$0.0
$0.0
$100.0
$50.0
CRS-46
Activity*
Request
House
Senate
Conf.
Pakistan earthquake reconstructionh
$126.3
$126.3
$126.3
$126.3
Food aid, East and Central Africa
$125.0
$125.0
$125.0
$125.0
Drought relief for West/Horn of Africa
$0.0
$0.0
$35.0
$25.0
Food aid for refugees through WFP
$10.0
$10.0
$20.0
$12.0
Colombia
$0.0
$26.3
$5.8
$16.3
Hurricane Stan relief for Guatemala
$0.0
$0.0
$12.0
$6.0
Burma refugees
$0.0
$0.0
$0.0
$5.0
Rescission of prior aid to Egypt
$0.0
$0.0
($47.0)
$0.0
Rescission (House = Peacekeeping funds; Senate
$0.0
($17.0)
($13.2)
($44.0)
= Export-Import Bank)
TOTAL, State Dept. & Foreign Aid Funds
$4,228.8
$4,062.8
$4,447.9
$4,254.1
Source: Department of State and CRS calculations based on H.Rept. 109-388 and S.Rept. 109-230,
with modifications to reflect House and Senate floor amendments.
a. In addition to these figures for Iraq, the Defense Department portion of the supplemental includes
$3.7 billion for training and equipping Iraq security forces. The FBI also seeks $32.5 million
for operations and support in Iraq and Afghanistan, the Department of Justice’s United States
Attorneys Office and the U.S. Marshals Service requests $5.5 million in legal support for Iraq’s
criminal justice system, the Bureau for Alcohol, Tobacco, Firearms, and Explosives proposes
$5 million for firearms trafficking, explosives, and arson operations in Iraq, and the Treasury
Department seeks $1.8 million for its participation in the Iraq Finance Cell and to place a
Deputy Treasury Attache in Iraq.
b. Of the $25.3 million request, $1.3 million supports the work of the State Department’s IG in Iraq
and Afghanistan.
c. In addition to new appropriations for these activities, the House bill directs that funds be transferred
from previous Iraq Relief and Reconstruction Fund (IRRF) appropriations for Provincial
Reconstruction Teams ($152 million) and for democracy and rule of law programs ($33.5
million). These amounts are the same as what the Administration had planned to spend for these
activities out of the IRRF account. The Senate bill directs that $104.5 million of ESF for Iraq
should be available for broad-based democracy programs in Iraq.
d. The conference agreement combines amounts for USAID OE expenses in Iraq, Afghanistan, and
Sudan without specifying a total for each mission. The $101 million figure for Iraq includes
amounts for Afghanistan and Sudan.
e. The $1.485 billion ESF total for Iraq includes funding for all Iraq stabilization ESF activities.
f. In addition to these figures for Afghanistan, the Defense Department portion of the supplemental
includes $2.2 billion for training and equipping Afghan security forces and $192.8 million for
counter-drug activities in Afghanistan and the Central Asia area.
g. The Senate adds $42.5 million in refugee funds that include Somalia $3 million; Horn and W.
Africa $10 million; Congo $15 million; UNCHR $4 million; North Caucasus $2.5 million;
North Asia $3 million; and Burma $5 million. In addition, the Senate bill provides $20 million
for Emergency Refugee and Migration Assistance for the Horn of Africa.
h. Funds would reimburse several USAID accounts — Development Aid, Child Survival,
International Disaster & Famine Assistance, and ESF — for previously reprogrammed money,
plus support ongoing reconstruction projects.
CRS-47
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 RL33298, FY2006 Supplemental Appropriations: Iraq and Other
International Activities; Additional Katrina Hurricane Relief, by Paul Irwin and
Larry Nowels.
Foreign Operations Programs
CRS Report RL33073, Debt Relief for Heavily Indebted Poor Countries: Issues for
Congress, by Martin Weiss.
CRS Report RS22032, Foreign Aid: Understanding Data Used to Compare Donors,
by Larry Nowels.
CRS Report RL33262, Foreign Policy Budget Trends: A Thirty-Year Review, by
Larry Nowels.
CRS Report RL31712, The Global Fund to Fight AIDS, Tuberculosis, and Malaria:
Background and Current Issues, by Tiaji Salaam.
CRS Report RL32773, The Global Peace Operations Initiative: Background and
Issues for Congress, by Nina Serafino.
CRS Report RL33485, U.S. International HIV/AIDS, Tuberculosis, and Malaria
Spending: FY2004-FY2007, by Tiaji Salaam-Blyther.
CRS Report RL32714, International Disasters and Humanitarian Assistance: U.S.
Governmental Response, by Rhoda Margesson.
CRS Report RL33349, International Efforts to Control the Spread of the Avian
Influenza (H5N1) Virus: Affected Countries’ Responses, by Emma Chanlett-
Avery, Coordinator.
CRS Report RL33250, International Population Assistance and Family Planning
Programs: Issues for Congress, by Larry Nowels and Connie Veillette.
CRS Report RL30932, Microenterprise and U.S. Foreign Assistance, by Curt
Tarnoff.
CRS-48
CRS Report RL32427, The Millennium Challenge Account: Implementation of a
New U.S. Foreign Aid Initiative, by Larry Nowels.
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 RL33491, Restructuring U.S. Foreign Aid: The Role of the Director of
Foreign Assistance, by Larry Nowels and Connie Veillette.
C
CRS Report RL33219, U.S. and International Responses to the Global Spread of
Avian Flu: Issues for Congress, by Tiaji Salaam-Blyther.
State Department/Broadcasting Programs
CRS Report RL31370, State Department and Related Agencies: FY2006
Appropriations and FY2007 Request, by Susan Epstein.
CRS Issue Brief IB90103, United Nations Peacekeeping: Issues for Congress, by
Marjorie Ann Browne.
CRS Issue Brief IB86116, United Nations System Funding: Congressional Issues,
by Marjorie Browne and 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.
Country and Regional Issues
Africa
CRS Report RL32489, Africa: Development Issues and Policy Options, by Raymond
Copson.
CRS Issue Brief IB95052, Africa: U.S. Foreign Assistance Issues, by Ted Dagne.
CRS Issue Brief IB10050, AIDS in Africa, by Nicholas Cook.
CRS Issue Brief IB98043, Sudan: Humanitarian Crisis, Peace Talks, Terrorism and
U.S. Policy, by Ted Dagne.
East Asia/Pacific
CRS Report RL33316, U.S.-Vietnam Relations: Issues for Congress, by Mark
Manyin.
CRS-49
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.
Europe and Eurasia
CRS Report RS21686, Conditions on U.S. Aid to Serbia, by Steven Woehrel.
CRS Report RL32866, U.S. Assistance to the Former Soviet Union, by Curt Tarnoff.
Latin America/Caribbean
CRS Report RL32001, AIDS in the Caribbean and Central America, by Mark
Sullivan.
CRS Report RL33337, Article 98 Agreements and Sanctions on U.S. Foreign Aid to
Latin America, by Clare Ribando.
CRS Report RL32487, U.S. Foreign Assistance to Latin America and the Caribbean,
by Connie Veillette, Clare Ribando, and Mark Sullivan.
Middle East
CRS Report RL33003, Egypt: Background and U.S. Relations, by Jeremy Sharp.
CRS Report RL33376, Iraq: Debt Relief: Procedure and Potential Implications for
International Debt Relief, by Martin Weiss.
CRS Report RL31833, Iraq: Recent Developments in Reconstruction Assistance, by
Curt Tarnoff.
CRS Report RL31766, Iraq: United Nations and Humanitarian Aid Organizations,
by Tom Coipuram.
CRS Issue Brief IB93085, Jordan: U.S. Relations and Bilateral Issues, by Alfred
Prados.
CRS Report RL33222, U.S. Foreign Aid to Israel, by Jeremy Sharp.
CRS Report RS22370, U.S. Foreign Aid to the Palestinians, by Jeremy Sharp.
CRS Report RL32260, U.S. Foreign Assistance to the Middle East: Historical
Background, Recent Trends, and the FY2007 Request, by Jeremy Sharp.
South Asia
CRS Report RL30588, Afghanistan: Post-War Governance, Security, and U.S.
Policy, by Kenneth Katzman.
CRS-50
CRS Report RL33498, Pakistan-U.S. Relations, by K. Alan Kronstadt.
CRS Report RL33227, U.S. Assistance to Women in Afghanistan and Iraq:
Challenges and Issues for Congress, by Rhoda Margesson and Daniel
Kronenfeld.
CRS Report RL31362, U.S. Foreign Aid to East and South Asia: Selected Recipients,
by Thomas Lum.
Selected Websites
Global Fund to Fight AIDS, Tuberculosis, and Malaria
[http://www.theglobalfund.org/en/]
Millennium Challenge Corporation — [http://www.mcc.gov]
Peace Corps — [http://www.peacecorps.gov/]
Trade and Development Agency — [http://www.tda.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. Department of State — Foreign Operations Budget Justification, FY2007
[http://www.state.gov/m/rm/rls/cbj/2007/]
U.S. Department of State — International Affairs Budget Request, FY2007
[http://www.state.gov/m/rm/rls/iab/2007/]
U.S. Department of State — State Department Budget Request, FY2007
[http://www.state.gov/m/rm/rls/bib/2007/]
e
FY2007
Enacted
te
.0
0.0
5
8.4
51.6
50.3
3
—
38.0
95.0
Cm
(91.6)
350.7
630.0
te
(193.5)
1,899.8
2,894.0
1,400.0
6,228.8
6,587.9
FY2007
Sena
.0
0
8.4
4
—
se
51.6
50.3
39.0
(91.6)
522.0
348.8
641.0
105.3
(193.5)
1,575.6
2,772.5
1,294.0
6,204.1
6,561.3
FY2007
Hou
els
.0
0
57.6
50.3
—
5
—
13.4
38.0
(84.6)
,659.0
348.8
678.8
131.8
)
(192.5)
1,433.0
2,894.0
1,282.0
5
6,021.2
FY2007
Request
.6
9
0.0
7.9
l
76.8
50.4
—
3
35.6
69.3
724.7
et authority
ta
(178.1)
(50.9)
579.0
1,652.2
1,975.1
1,525.3
5,192.2
To
5,779.1
FY2006
ccount Funding Lev
budg
—
—
—
—
—
—
—
—
—
c
16.5
99.5
317.1
(62.0)
(62.0)
83.0
217.6
101.0
51
FY2006
Supp
Detailed A
.6
CRS-
b r
—
9
—
7.9
50.4
11.1
3
623.7
35.6
69.3
ula
138.8
361.4
(178.1)
1,569.2
1,975.1
1,508.8
5,092.7
5,462.0
FY2006
Reg
.6
8
8.0
a l
98.9
51.1
—
4
37.2
58.5
574.9
656.0
637.5
ta
(61.6)
,373.9
(211.6)
1,537.6
1
1,448.3
4,408.4
5,647.3
FY2005
To
(in millions of current $s — discretionary
ce:
d
n
Table 12. Foreign Operations:
n
a
u
rade Capacity
F
)
d
Assist
d
ction
rp.
n
d
ent
o
cy
(DA
n
d
stru
s
m
u
t C
/H)
en
ic:
n
t Fu
g
S
u
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Subtotal, CS/H, AI
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US
US
US
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te
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0.0
0
19.3
26.0
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23.7
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211.1
293.1
318.8
712.5
699.4
832.9
449.4
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7,350.9
2,227.1
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1,877.0
1,064.4
15,806.6
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se
19.3
22.7
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371.3
324.6
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7
19.3
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23.7
273.9
441.0
336.7
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6,869.8
3,214.5
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—
13.4
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19.3
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29.7
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357.4
508.9
319.9
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116.6
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6,608.7
4,293.7
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To
16,665.0
FY2006
—
—
—
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1.1
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—
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c
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b r
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2,607.7
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14,387.9
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18.4
17.9
18.8
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625.5
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725.2
884.2
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3,896.2
1,488.0
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15,282.9
FY2005
To
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Dept. T
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m
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8
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80.0
15.0
57.6
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4,854.6
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8
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23.0
18.0
170.0
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110.3
135.7
327.6
4,454.9
4,712.9
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FY2007
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5.0
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8
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56.3
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200.5
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139.0
135.7
289.0
4,550.9
4,840.3
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5
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1.3
1.7
3.6
1.0
l
8
9
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79.2
1.7
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940.5
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326.2
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To
FY2006
—
—
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178.0
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CRS-
b r
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8
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134.3
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35.1
14.9
417.6
106.6
105.2
325.8
ta
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843.2
4
5,501.8
FY2005
To
es)
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p
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23,687.4
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Request
en
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acted in
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n
sion
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co
ta
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f
b
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1,603.4
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h
lect u
To
23,105.6
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s accou
th
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an
d am
th
s Su
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In
54
FY2006
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v
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n
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T
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22,268.1
m
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To
S
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Program
teral
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total am
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En
th
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u
reg
to each
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in
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s-th
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ately
V
se an
u
istration
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redu
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gn
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clu
h
m
f
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a
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itl
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ts s
in
m
Hou
d
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rad
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d
colu
ppropriation
n
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Sen
ss-B
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n
e A
2005 in
ou
is
m
a 1% acros
h
A
e T
fu
e A
e
proportion
tal
tal
Y
h
h
h
o
o
T
Acro
T
illio
se th
. T
Sources:
m
u
a. F
b. A
c. T
d
e. T
f. T
FY2007
Conference
a
8.2
9.3
4.9
1.3
0.0
te
32.5
15.8
58.1
te
445.5
4,495.1
[795.2]
1,388.8
6,459.5
Cm
FY2007
Sena
els
8.2
9.3
4.9
1.3
0.0
32.5
se
15.8
58.1
436.3
605.7
899.4
4,460.1
[795.2]
6,531.6
[$351.0]
FY2007
Hou
8.2
9.3
4.9
1.3
0.0
32.5
15.8
68.3
,651.9
474.3
640.1
899.4
,806.0
4
6
[$351.0]
[$795.2]
FY2007
Request
)
8.2
9.3
1.3
ccount Funding Lev rityo
l
24.9
19.5
58.1
68.5
th
ta
431.3
54.9
571.1
898.6
7,849.0
To
5,703.3
[$329.7]
[$680.7]
et au
FY2006
g
d
u
b
—
—
5.0
—
—
—
—
—
—
—
—
—
ary
25.3
Detailed A n
1,383.6
1,413.9
55
FY2006
Supp.
iscretio
.2
.9
.3
.5
.1
CRS-
r
8
9.3
4
1
9
8
s — d
29.6
2
1
5
68.5
426.3
571.1
898.6
t $
ula
4,319.7
6,435.1
[$329.7]
[$680.7]
rren
FY2006
Reg
f cu
.5
.7
.0
.2
.2
.5
s o
8
9
1
1
9
1
n
l
30.0
1
5
ta
355.9
900.1
76.8
,555.6
4,906.2
1,195.5
7
illio
To
[$320.0]
[$649.9]
m
FY2005
(in
ice
rity
cu
rades
an
lar Serv
rs
n-Se
Upg
su
aiw
:
ficials
o
n
T
rity
ram
rs
Affai
]
es
Of
Co
te in
gn
Table 13. State Department/Broadcasting:
ecu
ram
g
s &
s & N
p
Prog
Affai
ades
an
stitu
n
ch
ide S
atic &
io
Program
gn
sion
m
In
eral
ces
ing O
lar Prog
Ex
lo
izat
of Forei
an
Mis
su
ity Upgr
ral
n
ngo
orldw
on
n
w
erican
o
ltu
-O
-W
e Dip
s
of Forei
u
or Gen
llo
reig
m
omacy]
A
o
th
an
ent Fund
on
d C
C
rity
rity
o
Modern
istrati
pl
ect
n
F
e A
L
stm
ide Secur
sp
cu
n
in
ecu
n
th
ic an
w
al &
of
m
n
In
tatio
Se
S
cies in
nve
istrati
at
ic Di
ld
io
t to
uctio
sy
en
l I
ized IT
in
en
, Ad
om
or
assy
m
cat
resen
atriatio
m
ita
tral
pl
b
bas
erg
[Publ
[W
fice of
nstr
p
tal
m
ay
en
o
Ad
Di
Edu
Of
Rep
Protection
E
Co
Em
Em
Rep
P
Ca
C
T
FY2007
Conference
0.8
8.8
0.5
0.4
7.6
te
67.4
14.0
19.0
43.5
te
653.6
661.2
1,151.3
1,135.3
2,286.6
8,857.0
9,518.2
Cm
FY2007
Sena
bb
0.8
3.0
0.5
0.4
7.6
se
67.9
13.8
50.0
68.5
646.3
653.9
1,122.3
1,135.3
2,257.6
8,925.6
9,579.5
FY2007
Hou
b
0.7
0.5
0.4
63.9
10.0
80.0
12.0
18.3
,268.5
103.6
653.6
671.9
1
1,135.3
2,403.8
9,377.3
10,049.2
FY2007
Request
b
5.8
0.4
l
66.5
13.8
74.1
19.0
0.5
36.6
ta
113.6
643.5
680.1
1,151.3
1,152.1
2,303.4
To
10,332.5
11,012.6
FY2006
—
—
—
—
—
—
—
—
0.0
—
10.3
36.1
129.8
25.8
129.8
,543.7
1
1,579.8
56
FY2006
Supp.
CRS-
r
5.8
0.4
66.5
13.8
74.1
19.0
0.5
10.8
113.6
633.2
644.0
ula
1,151.3
1,022.3
2,173.6
8,788.8
9,432.8
FY2006
Reg
.4
bb
7.3
0.5
0
l
63.3
12.8
59.2
19.2
99.4
10.9
ta
,163.5
587.9
598.8
1,166.2
1
2,329.7
To
10,048.0
10,646.8
FY2005
e
u
ces
ING
:
Dialog
T
feren
tern
s
n
g
Con
es
io
d
-W
izat
eepin
s an
tern
an
g
NT
n
BROADCAS
eacek
cracy
s
E
ti
’L
and Conferences
o
M
:
al Org
al P
ization
s
on
g
cas
n
NT
Program
ati
n
io
./I
ri
ti
at
ation
r Dem
s
ission
ns:
r Middle Eas
o
n
o
ip
PART
cas
PT
tio
t f
e
h
rop
ts
io
Broad
tern
tern
al Organ
m
g
ba
en
p
al
an
DE
en
u
DE
In
ter f
m
olars
E
on
E
o
pria
C
Com
en
n
ter
ch
Ap
Broad
em
o
s t
s to In
ation
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AT
Operat
t
ati
AT
n
al
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al
al C
at
dow
ted
g
g
d
a
T
prov
T
tio
tion
tern
on
t C
er Ex
on
tin
tin
tern
n
n
u
w
rab Sch
, S
n
, S
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