Foreign Policy Agency Reorganization in the 105th Congress

Foreign Policy Agency Reorganization in the 105th Congress

97-538 F
CRS Report for Congress
Received through the CRS Web
Foreign Policy Agency Reorganization in the 105th
Congress
Updated May 28, 1998
Susan B. Epstein, Larry Q. Nowels, and Steven A. Hildreth
Foreign Affairs and National Defense Division
Congressional Research Service ˜ The Library of Congress

ABSTRACT
Reorganization of the foreign policy agencies has been debated by both the 104th and 105th
Congresses. H.R. 1757, among other things, would require consolidating the Arms Control
and Disarmament Agency (ACDA) and the U.S. Information Agency (USIA) into the
Department of State. It would require that the U.S. Agency for International Development
(USAID) be reorganized and would come under the authority of the Secretary of State. This
report provides background on the foreign policy agency consolidation issue, discusses
foreign policy implications, and tracks legislation. It will be updated as legislative action
occurs.

Foreign Policy Agency Reorganization in the 105 Congress
th
Summary
On April 18, 1997, the Clinton Administration announced a plan to reorganize
the foreign policy agencies. The two-year plan would require significant internal
restructuring of the State Department, and eliminate two other agencies—the Arms
Control and Disarmament Agency (ACDA) and the U.S. Information Agency (USIA)
whose functions and personnel would be absorbed by State. It would integrate
ACDA into State within the first year, and USIA into State by the end of 1999. The
implementation process would begin after a 120-day planning period. The U.S.
Agency for International Development (USAID) would remain a separate agency
with its own appropriation, but would be brought under the direct authority of the
Secretary of State.
Administration interagency task forces have reviewed and analyzed the possible
options for consolidating and restructuring the potentially affected agencies.
Reportedly, a draft of the official reorganization plan is currently under review within
the Office of the Secretary.
Congress debated reorganization of the foreign affairs agencies in the context
of the foreign relations authorization legislation. Many elements of the Senate bill
closely follow the House version. The conference report includes: 1) establishing
the Broadcasting Board of Governors as an independent agency and 2) requiring
USAID to reorganize with the Administrator reporting to the Secretary of State.
The House passed its version of the Foreign Relations Authorization Act of
FY1998 and FY1999 (H.R. 1757, introduced on June 3, 1997) on June 11, 1997.
The Senate passed its version on June 17, 1997. Conference began July 29, 1997, but
stalled because of a contentious international family planning provision in the House
bill. Without further movement on H.R. 1757, efforts were made near the end of the
first session to attach a modified agency consolidation authority to other legislation,
including the District of Columbia appropriations bill (H.R. 2607) which passed the
Senate on November 9. The revised agency consolidation text in H.R. 2607 reflected
resolution of House/Senate disagreements between the two reorganization proposals
worked out during preliminary conference meetings on H.R. 1757. A final legislative
attempt to combine foreign affairs agency consolidation with International Monetary
Fund appropriations, U.N. arrearage payments, and abortion-related restrictions on
international family planning programs collapsed on November 13 in the face of
White House opposition to the abortion provisions.
On March 10, 1998, a conference report for H.R. 1757 was filed which includes
reorganization provisions agreed to in November 1997, as well as U.N. arrearage
payment, U.N. reform authorization, and revised abortion funding language. On
March 26, the bill passed by voice vote in the House. The Senate passed the
legislation on April 28, 1998 with a 51 to 49 vote. The President has stated he will
veto the bill primarily because of the abortion provision.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background and Political Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Context for Debate in the 105th Congress on Reorganization . . . . . . . . . . . 2
Shaping the President’s 1997 Initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Role of Congress in Agency Consolidation: Procedural Issues . . . . . . . . . . . . . 4
Congressional Consideration under Presidential Reorganization Authority . 5
Implementation through Normal Legislative Process . . . . . . . . . . . . . 5
Current Legislative Status of Reorganization Authority . . . . . . . . . . . 6
Mandatory Elements of House and Senate Plans . . . . . . . . . . . . . . . . . . . . . . . . 7
The Administration’s Proposal and Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Implications for U.S. Foreign Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Implications for Agencies and their Functions . . . . . . . . . . . . . . . . . . . . . 11
State Department and Foreign Policy Management . . . . . . . . . . . . . . 11
USIA and Public Diplomacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ACDA and International Security . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
USAID and U.S. Development Assistance Policy . . . . . . . . . . . . . . . 17
Reorganization Chronology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Foreign Policy Agency Reorganization in the
105th Congress
Introduction
On April 18, 1997, the Clinton Administration announced a plan to reorganize
the foreign policy agencies. The two-year plan would require significant internal
restructuring of the State Department, and eliminate two other agencies — the Arms
Control and Disarmament Agency (ACDA) and the U.S. Information Agency (USIA)
whose functions and personnel would be absorbed by State. It would integrate
ACDA into State within the first year, and USIA into State by the end of 1999. The
implementation process would begin after a 120-day planning period. The U.S.
Agency for International Development (USAID) would remain a separate agency
with its own appropriation, but would be brought under the direct authority of the
Secretary of State.
The House passed its version of the Foreign Relations Authorization Act (H.R.
1757, introduced June 3, 1997) on June 11. Division A of H.R. 1757 consists of
provisions for the consolidation of the foreign affairs agencies. As reported, the
legislation included a somewhat different reorganization plan, crafted largely by
House International Relations Committee Chairman Gilman, than proposed by the
President. During floor debate, the House rejected an amendment by Congressman
Hamilton that would have provided fewer requirements and greater presidential
flexibility than the Gilman plan. Prior to final passage and in the face of a possible
veto, the House approved compromise reorganization language, worked out between
Congressmen Gilman and Hamilton, that is acceptable to the Administration.
The Senate Foreign Relations Committee marked up and ordered reported its
version of the Foreign Relations Authorization Act (S. 903) on June 13, producing
a consolidation plan that also diverges in several key ways from the President’s
initiative. Provisions that would move more of USAID into the State Department
and require the budget for development assistance programs to pass through the
Secretary of State are elements especially opposed by the Administration. Senate
floor debate on S. 903 produced no significant changes to the Committee-endorsed
consolidation plan.
House and Senate conferees met in late July to work out differences between the
bills, but did not come to final agreement, mainly because of a contentions
disagreement over an international family planning provision in the House version
of the bill. Without further movement on H.R. 1757, efforts were made near the end
of the first session to attach a modified agency consolidation authority to other
legislation, including the District of Columbia appropriations bill (H.R. 2607) which
passed the Senate on November 9. The revised text reflected resolution of
House/Senate disagreements between the two reorganization proposals worked out

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during conference meetings on H.R. 1757. In particular, the modified language
accommodated, to some extent, Administration concerns regarding Senate provisions
moving USAID closer to the State Department. Nevertheless, a final legislative
attempt collapsed on November 13 when House leaders proposed to combine three
top Administration priorities — foreign affairs agency consolidation, International
Monetary Fund appropriations, and U.N. arrearage payments — in a new legislative
package with international family planning abortion-related restrictions. The White
House said it would veto any legislation containing the family planning conditions,
and House leaders abandoned plans to vote on the measure during the final two days
of the session.
On March 10, 1998, a conference report for H.R. 1757 was filed. In addition
to the reorganization provisions that were agreed to in November 1997, the
conference report includes (among other provisions) authorization of appropriations
for the State Department and related agencies, U.N. reform and payment of U.S.
arrears to the United Nations, and international population funding restrictions. The
legislation passed by voice vote in the House on March 26. The Senate passed the
legislation on April 28, 1998 with a vote of 51 to 49. The President has stated he will
veto the bill, primarily because of the abortion funding language.
Background and Political Context
Context for Debate in the 105th Congress on Reorganization
Following a contentious debate in the 104th Congress, capped by President
Clinton’s veto of legislation requiring the termination of one of three foreign policy
agencies, the context surrounding congressional consideration of the Executive’s
most recent reorganization proposal has changed significantly. Not only is the
current plan a Presidential initiative, rather than one imposed by Congress, but it has
also been a key element in a complex, inter-related set of broader foreign policy
issues — the Chemical Weapons Convention, U.N. reform and arrearage payments,
and international affairs budget levels — discussed by Congress and the Executive
branch during 1997.
Shaping the President’s 1997 Initiative
Since late 1996, many close foreign policy observers had anticipated a White
House initiative to consolidate U.S. foreign affairs agencies. Although the
Administration rejected congressional proposals in 1995 to reorganize these
bureaucracies, key Executive officials, primarily in the State Department, continued
to believe that the merger of ACDA, USIA, and USAID with the Department would
make for more coherent U.S. foreign policy decision-making and make better use of
scarce resources. Moreover, many believed that in the absence of a White House
plan, Congress would once again target the foreign policy agencies for
reorganization, possibly in ways that even consolidation proponents within the
Administration would oppose. Some argued that in order to protect Presidential
prerogatives to structure the executive branch, the White House should construct a
plan in advance of proposals that might emerge early in the 105th Congress.

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Indication that agency consolidation issues were under consideration came
during the January 8, 1997, confirmation hearing of Secretary of State-nominee
Madeleine Albright. In response to several questions, she told the Senate Foreign
Relations Committee how “important [it is] for us to have an effective and efficient
foreign policy mechanism.” The Secretary-designate stated that she had an “open
mind” on the question of consolidation and pledged to discuss the issue further with
the Committee.
In the ensuing weeks, however, the reorganization issue reportedly became
embedded in a broader agenda of State Department and White House national
security priorities that required congressional attention in early 1997. At the top of
the Administration’s list was gaining quick Senate approval of the Chemical
Weapons Convention (CWC) before the pact went into force, with or without U.S.
ratification, on April 29, 1997. The CWC was strongly opposed by Chairman Helms,
and had been bottled up in the Senate Foreign Relations Committee for months. The
State Department had also begun a vigorous campaign in late 1996 to raise concerns
about the adequacy of U.S. foreign policy and diplomatic funding resources, a
strategy setting the stage for an FY1998 $19.45 billion (up 6.3%) International
Affairs budget request submitted on February 6. A third high-priority item on the
White House’s early 1997 foreign policy agenda was congressional approval of about
$1 billion to clear U.S. arrears at the United Nations and for peacekeeping
contributions, an initiative many in Congress wanted tied to U.N. management,
organizational, and financial reforms.
Although none of these issues were explicitly linked with one another, it was the
view of many close congressional and White House observers that if the President
expected Congress to consider his priority proposals, especially CWC, the
Administration must be prepared to work with lawmakers on advancing key
congressional issues, such as U.N. reform, submission of certain arms control treaties
to the Senate, and foreign affairs agency consolidation. Labeled as a coincidence,
movement on the CWC and reorganization issues began almost simultaneously. On
April 17, while the Senate leadership announced that it would schedule debate on
CWC for the following week, the White House was preparing its statement, made the
next day, that it would merge USIA and ACDA into the State Department, and bring
USAID directly under the guidance of the Secretary of State.

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Agency Consolidation Debate in the 104th Congress
Throughout 1995 and into 1996, both the Administration and Congress
considered options to reorganize the structure of U.S. government foreign policy
agencies. At issue was how best to tighten the foreign policy budget while
maximizing the effectiveness of inter-agency coordination in working toward
common foreign policy goals in an ever-changing post-Cold War world. Critics of
U.S. foreign policy management practices charged that these agencies at times
maintained conflicting agendas, housed duplicative functions and bureaus, and
often did not give proper emphasis to national priorities, such as promoting U.S.
economic trade and economic interests abroad.
After the White House rejected the outlines of a State Department plan to
consolidate the agencies — a proposal strongly opposed by USAID, ACDA, and
USIA — Senate Foreign Relations Committee Chairman Helms announced his own
initiative on March 15, 1995. The original Helms plan would have eliminated all
three agencies, and created what Senator Helms characterized as a “new,” more
effective State Department with some of the functions of the eliminated agencies
merged into it. An “America Desk” would have been established in the State
Department to ensure that all U.S. foreign policy contributed to American national
interests.
With continued White House opposition, Senate democrats successfully
blocked debate on Foreign Relations Committee-reported legislation (S. 908) that
followed Chairman Helms’ plan. Following several months of negotiations, Senate
leaders reached agreement (which was adopted by the full Senate on December 14,
1995) on a compromise proposal to consolidate U.S. foreign affairs agencies. The
agreement, however, did not require the Administration to abolish agencies, but
mandated $1.7 billion budget savings in program and operating expenses.
A House reorganization bill (H.R. 1561) that like the initial Helms proposal,
also abolished USAID, USIA, and ACDA, folding their functions into State with
newly-created Under Secretary positions, had already passed on June 8, 1995.
Ultimately, House and Senate negotiators agreed on a plan to abolish one agency,
to be selected by the President, but widely assumed to be ACDA. The President
also had to certify: 1) that his own foreign policy consolidation plans would save
$1.7 billion over four years, and 2) that the preservation of the remaining two
agencies was important to U.S. national interests. President Clinton, however,
vetoed the bill (H.R. 1561) in early April 1996, for a number of reasons, including
agency consolidation requirements that he said jeopardized the President’s ability
to manage his own executive agencies. The House could not override the veto, and
the issue did not resurface in the 104th Congress.
Role of Congress in Agency Consolidation: Procedural
Issues
At the outset of the White House initiative to consolidate the agencies, it was
clear that Congress would have some degree of influence over the shape of the plan,
as well as the power to approve or reject it. With several options available to

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Congress and the executive branch in the approval and implementation procedure for
agency reorganizations, it was unclear exactly how the process would unfold.
Because the plan includes the creation of new State Department positions, such as
Under Secretaries for Arms Control and International Security and for Public
Diplomacy, at a minimum, Congress must amend the State Department Basic
Authorities Act (P.L. 84-885, as amended) to enact these and other organizational
changes. For the broader details of reorganization, several scenarios and options
were available to the President and lawmakers.
Congressional Consideration under Presidential Reorganization
Authority
An early option preferred by the White House was the reinstatement of a
currently dormant presidential authority to reorganize the executive branch.
Although such authority ultimately requires Congress to approve the President’s plan,
it provides for far less direct congressional involvement than through the normal
legislative process. With the objective of achieving greater efficiency in government,
Congress, since the 1930s has granted the Chief Executive authority to issue
executive orders and, since 1939, plans proposing reorganizations within the
executive branch. This authority has been issued for temporary periods of time, and
renewed by Congress periodically. The most recent reorganization authority expired
in 1984, and Presidents Reagan, Bush, and Clinton did not ask for its reinstatement.
At the time of its expiration in 1984, the reorganization authority (see 5 U.S.C.
901-912) provided that, once the President submitted his plan, Congress must adopt
a joint resolution within 90 calendar days of continuous session for it to become
effective. Although the President could modify his own proposal within the first 60
calendar days of continuous session after its submission, Congress could not amend
the Chief Executive’s plan — lawmakers could only vote up or down on the
recommendation. One potential problem with this approach is that it largely would
take the issue out of the hands of the most active proponents for consolidation in the
104th Congress. Under the statute that expired in 1984, such reorganization plans
were not referred to the committees of policy jurisdiction — in this case, the House
International Relations and Senate Foreign Relations Committees — but to the House
Government Reform and Oversight and Senate Governmental Affairs panels.
Implementation through Normal Legislative Process. Without reorganization
authority, the proposed foreign affairs agency consolidation would proceed through
normal legislative process. In recent years, the Departments of Energy, Education,
and Veterans Affairs were created in this fashion. Under one possible scenario that
appeared plausible in May, following the Administration’s 120-day review process,
the President would draft the necessary legislation to implement the reorganization
and submit it to Congress for consideration, probably in September or October 1997.
Congress could then choose to deal with the legislative proposal as either a separate
bill or incorporate it into omnibus foreign policy legislation as it did in the 104th
Congress (H.R. 1561). Timing for the latter option, however, was awkward since the
House and Senate Foreign Relations Committees were about to act on omnibus foreign
affairs authorization bills, action that would come well in advance of the anticipated
submission by the President of his formal plan.

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Current Legislative Status of Reorganization Authority. Legislation adopted
by both the House and Senate, but not yet finalized, combines elements of both
approaches outlined above. The bills grant the President authority to draft and submit
to Congress a foreign affairs reorganization plan, but do not necessarily require
Congress to vote on the proposal prior to its implementation. At the same time, H.R.
1757, as approved in both bodies, legislates certain mandatory elements that must be
contained in a presidential plan.
Under the House bill, the President must submit his proposal within 60 days after
the enactment of H.R. 1757, and may continue to amend the plan during the following
60 days. The reorganization would be effective either on the date(s) the President
decides to abolish ACDA, USIA, and IDCA,1 and reorganize USAID, or on October
1, 1998 in the case of ACDA and IDCA, and October 1, 1999 in the case of USIA and
USAID. Prior to implementation, Congress could pass legislation rejecting the
President’s plan, but with a veto likely, lawmakers would need a two-thirds majority
to sustain their objections to the consolidation proposal. In the absence of congressional
votes, the President’s reorganization plan would automatically take effect on the
schedule noted above.
Following the Senate’s timetable, the President would transmit a reorganization
plan to Congress on October 1, 1997, or within 15 days after enactment of the
legislation, whichever is later. Like the House proposal, the President could modify
his submission, although there would be no 60 day limit within which revisions could
occur. The consolidation plan would become effective either upon a Presidential
determination (but not earlier than 60 days after sending the plan to Congress), or on
October 1, 1998 for ACDA, IDCA, USAID, and functions of USIA, and on October
1, 1999 for the abolishment of USIA. As with the House proposal, Congress could
reject the reorganization plan, an action that would likely face a Presidential veto.
Otherwise, the plan would become operative when the President decided or on the
dates specified in the legislation.
Text passed by the Senate on November 9, 1997 in H.R. 2607 was included in
the conference report for H.R. 1757 filed on March 10, 1998. It reflects conference
agreement on House/Senate consolidation plans, follows the House requirement for
submission of a reorganization plan 60 days after enactment, but like the Senate, sets
no time limit to Presidential modifications of his proposal. ACDA and IDCA must
be abolished by October 1, 1998, USIA by October 1, 1999, and changes effecting
USAID must be in place by October 1, 1998. Similar to both House and Senate
proposals, the President could implement his plan earlier, although not sooner than
90 days after submitting his reorganization proposal to Congress. Like earlier
legislation, the President would not need explicit congressional approval of the plan,
although Congress could adopt legislation rejecting the plan. This, however, would
likely face a veto.
1 The International Development Cooperation Agency (IDCA) was created in 1979 to
be the overall coordinator of U.S. development assistance policy. Although the agency
continues to exist, it has functioned in an extremely minimal capacity for the past 18 years
and has frequently been a target for elimination.

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Mandatory Elements of House and Senate Plans
Although legislation approved by both the House and Senate permits the President
to shape much of the reorganization proposal according to plans developed by
Executive branch working groups, lawmakers have established a series of items that
must be included in any consolidation scheme drafted and submitted to Congress by
the President. Several of the Senate-passed mandatory reorganization elements closely
follow the House plan, but with the addition of a few key directives, especially those
affecting U.S. international broadcasting activities and USAID.
! ACDA. The House plan would require that ACDA be abolished by October
1, 1998, that its functions be transferred to the Secretary of State, and that the
Department of State create an Under Secretary for Arms Control and
International Security. The Senate proposal also would require that ACDA be
abolished by October 1, 1998, its functions transferred to the Secretary of State,
and the Department of State create an Under Secretary for Arms Control and
International Security. Text of the Conference Report reflects the House and
Senate provisions.
! USIA. The House bill would require that USIA be abolished by October 1,
1999, its functions transferred to the Secretary of State, that the International
Broadcasting Bureau maintain a degree of independence, and that the
Department of State create an Under Secretary for Public Diplomacy. The
Senate also would require that USIA be abolished by October 1, 1999, its
functions transferred to the Secretary of State, and the Department of State create
an Under Secretary for Public Diplomacy. The Senate differs from the House
by establishing the Broadcasting Board of Governors as an independent entity
by October 1, 1999. The Conference Report language would not transfer
international broadcasting functions to the Secretary of State, but would keep
it as a separate entity in the executive branch. The conference report includes
the Zorinsky Amendment and Smith-Mundt language prohibiting public
diplomacy programs unique to the USIA from operating domestically.
! IDCA. The House proposal would require that IDCA be abolished by October
1, 1998, and its functions transferred to another agency or agencies. The Senate
version would require that IDCA be abolished by October 1, 1998, and its
functions, including the allocation of economic assistance funds to USAID,
be transferred to the Secretary of State. IDCA functions regarding OPIC are
to be transferred to USAID. Other IDCA functions, and those of USAID, would
be transferred to another agency or agencies as specified by the President’s
reorganization plan. The Conference generally follows the Senate-passed bill.
! USAID. The House would require that USAID be reorganized by October 1,
1999, that it report to and be under the direct authority and foreign policy
guidance of the Secretary of State, and, at a minimum, the functions of its press
office and certain administrative functions be transferred to the Department
of State. The Senate would require that USAID be reorganized by October 1,
1998, the USAID Administrator serve under the direct authority of the Secretary
of State, the Secretary of State assume responsibility for coordinating (including

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the design of overall aid and economic cooperation strategy) all U.S. economic
assistance programs, and, at a minimum, the functions of USAID’s offices of
legislative affairs, and press and public affairs be transferred to the Department
of State.2 The conference agreement mandates USAID reorganization by
October 1, 1998; requires the USAID Administrator to report to and be under
the direct authority and foreign policy guidance of the Secretary of State;
establishes the Secretary of State as the coordinator of all U.S. economic aid
programs, including “approving” (but not “designing,” as in the Senate bill)
overall aid strategy; and transfers USAID’s press office and certain
administrative functions to State, as proposed by the House.
The Administration’s Proposal and Actions
While Congress debated legislation concerning certain aspects of a consolidation
of U.S. foreign affairs agencies, the Clinton Administration was in the process of
developing details of a comprehensive plan to what it considers will “adapt Cold War
policy structures to the post-Cold War policy agenda.”
Description
The Administration states that sustainable development, nonproliferation and
public diplomacy are more central than ever to American foreign policy. The foreign
policy apparatus should reflect that, pulling the best people and practices from each
agency to carry out U.S. foreign policy through the coming era. After a 120-day
planning period, which concluded in late August, the Administration plan would phase
in over a two-year time period the integration of ACDA and USIA, and partial
integration of USAID into State. The Administration proposes completion of its reform
plan by the end of 1999, with the promise of a streamlined and more effective foreign
policy structure before the 21st century.
Within the first year, ACDA would be fully integrated into the State Department’s
Political-Military Bureau (PM). The new Under Secretary for this bureau would also
carry the title of Senior Adviser to the President and the Secretary of State for Arms
Control, Nonproliferation, and Disarmament. This official would attend and participate
in all relevant meetings of the National Security Council and the Principals Committee
or its equivalent. The new Under Secretary would communicate with the President
and members of the NSC on issues of arms control, nonproliferation and disarmament
through the Secretary of State. This official would lead the interagency process on
nonproliferation issues, and work closely with the NSC staff in managing the arms
control policy process.
Also within the first year, USIA’s Legislative and Public Affairs offices would
be fully merged into State. Until the completion of the reorganization, the Administrator
of USIA would also function as the Under Secretary of State for Public Diplomacy.
2 The Senate bill further includes a non-binding sense of the Senate that OMB should
apportion all funds for U.S. foreign assistance programs, including those administered by
USAID, directly to the Secretary of State instead of to the head of other Federal agencies.

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USAID would be placed under direct authority of the Secretary of State; its
appropriations, however, would remain separate.
During the second year of implementation of the Administration proposal, USIA’s
Administrative functions, the Information Bureau (Broadcasting) and Educational and
Cultural exchanges would become integrated into the State Department. USAID’s
press office would be integrated into State. Later in the process, the two agencies would
seek to improve coordination of the regional bureaus. Beyond that, the USAID
Administrator and Secretary of State would attempt to further reform both agencies
to eliminate duplication between USAID’s and State’s functional bureaus.
Actions
Early in the summer, a number of committees were established by the
Administration to evaluate various options for implementation of the reorganization
plan. Overseeing the entire operation was the Reorganization Steering Committee.
It consisted of the Deputy Secretary of State, Mr. Strobe Talbott, Administrator of
USAID, Mr. Brian J. Brian Atwood, Director of USIA, Dr. Joseph D. Duffey, and
ACDA Director, Mr. John D. Holum, and was chaired by the Secretary of State.
The main work was carried out by a Core Team and specialized task forces. The
Core Team included senior level representatives from the affected agencies, and was
chaired by Patrick Kennedy, Acting Under Secretary of State for Management. This
committee reported to the Steering committee, synthesizing options and making policy
recommendations.
Eight specialized task forces were formed which included representatives from
each of the agencies involved, as well as labor union representatives. The eight task
forces were: 1) arms control and nonproliferation; 2) public diplomacy; 3) press
operations; 4) legal operations; 5) legislative operations; 6) development coordination;
7) management and administrative functions; 8) State Department reinvention. The
Task Forces analyzed the issues and built a plan with options. A full time planning
committee was established to focus and bring together the work done by eight task
forces. The planning committee relayed the information to the Core Team.
Reportedly, the task forces transmitted their conclusions to the planning team
in mid-August. A draft of the Administration’s official reorganization plan was
reviewed by the core team and the heads of all the organizations involved. By October
1997, a detailed, but unreleased implementing plan was at the Secretary’s desk. As
of December, the Administration’s reorganization plan was at the Secretary’s desk.
The Administration has stated they are seeking ways to keep up the reorganization
momentum, in view of the fact that the 105 Congress di
th
d not provide reorganization
authority during the first session. On December 19, 1997, Secretary Albright announced
that ACDA Director John Holum would be “double-hatted” as Acting Under Secretary
of State for Arms Control and International Security Affairs.
Implications for U.S. Foreign Policy

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One of the primary goals of reorganizing the foreign policy agencies is to eliminate
duplication, a frequent source of criticism from Congress. Currently each agency
maintains parallel, duplicative operations, such as legislative affairs, administrative
bureaus, and press offices. Additionally, some agencies have similarly structured
regional or functional bureaus. By eliminating the duplication, it is argued, a more
effective, streamlined U.S. foreign policy mechanism would result. Eliminating
duplication and merging similar functions into one agency also would likely improve
the coordination among foreign policy regional and functional bureaus, thereby
improving the efficiency in U.S. decision making and response to world events.
Budget savings was a primary force driving foreign policy agency consolidation
during the 104th Congress. The Congressional Budget Office had estimated that $3
billion could be saved over a five-year period with the congressional reorganizing
proposal; the Administration asserted that the Vice President’s National Performance
Review (NPR) initiative would save as much while keeping the agencies independent.
While budget savings are expected to eventually result from a reorganization of
agencies, the Clinton Administration did not expect savings to be significant in the
early years of plan implementation. Some in the executive branch claimed that budget
savings were not viewed as the top priority in implementing the White House plan;
reorganizing to achieve a more effective foreign policy apparatus was the key objective,
they stated.
Merging most foreign policy activities under the State Department was expected
to give the Secretary access to a wider array of foreign policy tools, such as international
broadcasting, economic assistance, international exchanges, and international speakers
programs. The needs and costs of U. S. overseas posts and embassies were likely to
be more transparent after a reorganization. The Secretary would be able to respond
more quickly to moving resources and skilled staff to posts where most needed.
Further, consolidating agencies would reduce the number of voices (simplify the
message) advising the President on any given issue, allowing the President to determine
and better execute a foreign policy that is in America’s best interest.
Some foreign policy experts, however, were concerned that the reorganization
of the foreign policy agencies into the Department of State would further encumber
an agency already burdened with too many layers of management and where too many
decisions end up on the Secretary’s desk. Integrating the ACDA and USIA would
further hamper the conduct of foreign policy, they argued, because the Secretary of
State would have too many issues to manage. Also, many who follow specific foreign
policy activities, such as international broadcasting, international exchange programs,
and foreign aid, were concerned that those functions would become less efficiently
and effectively managed because political-military-focused managers would be making
decisions about priorities, resource distribution, and program funding. To some, this
raised the question of whether the programs would be able to maintain the level of
credibility they currently enjoy. They wondered whether the State Department could
be reformed adequately and quickly enough to administer the many new programs
merged into it.3
3 On August 8, 1997, Secretary of State Albright sent a memorandum to all employees
(continued...)

CRS-11
A few issues were not addressed in the Administration’s reorganization plan.
For example, the State Department’s role in coordination of U.S. government agencies
that administer trade and economic issues, international exchange programs that are
managed by U.S. government agencies outside of the foreign policy agencies, and
refugee issues were not raised.
Implications for Agencies and their Functions
Arguments for reorganizing the foreign policy bureaucracy suffer from a seeming
contradiction. On the one hand, the State Department is heavily criticized for
management weaknesses. On the other hand, reorganization proposals would likely
require the Department and the Secretary to deal with a wide span of control and
additional responsibilities. Nevertheless, many believe that State Department reform
would only occur when driven by the integration of other agencies and their functions
into State.
State Department and Foreign
The State Department, established
Policy Management. Proponents of
in 1789, has a mission to advance and
foreign policy agency reorganization,
protect the worldwide interests of the
including Senator Helms, former
United States and its citizens. Currently
Secretary of State Eagleburger, former
the State Department represents
National Security Advisor Scowcroft, and
American interests on behalf of 50 U.S.
others have raised a long list of perceived
government agencies and organizations
shortcomings in the Department of State
operating 249 posts in over 180 countries
and the foreign policy organizational
around the world. The Department
structure. Criticisms of the State
employs an estimated 18,869 full time
Department include: 1) poor
staff, down from 19,110 in FY1996. The
management structures with too many
FY1997 budget for State is about $4
layers that impede efficient policymaking;
billion. The FY1998 budget request is
2) too many disputes funneling directly
$4.25 billion.
to the Secretary of State, creating decision
making overload at the top; 3) too much
energy devoted to diplomatic reporting; 4) an elitist attitude among many staff
(particularly in the foreign service); 5) an archaic information system that is not
compatible with those at ACDA, USIA, or USAID; and 6) a lack of coordination in
regional and functional bureaus that undermines consistent policy direction.
Many on both sides of the consolidation issue agree that the Department suffers
from weak management and has been unable to divest itself of Cold War operational
standards and adopt a revised set of mission priorities. While the State Department
has made some foreign policy downsizing efforts in response to recent budgetary
pressures, the changes have been mostly quantitative with little noticeable change in
3(...continued)
of ACDA, State, USIA, and USAID stating that, as a first step in the reorganization process,
Under Secretaries and Assistant Secretaries would take on greater responsibility in an effort
to decentralize the demands of the Secretary of State.

CRS-12
State’s policy or management structure, and, according to the General Accounting
Office (GAO), it has no strategy for future downsizing efforts.4
On their face, many of these views of State Department management deficiencies
appear to weigh against merging other agencies with the Department. Critics of
merging other agencies into the Department argue that well-functioning organizations
should not be moved into what they view as a dysfunctional agency; that only after
the State Department fully implements reforms and integrates new policy priorities
should the idea of a “super” State Department be given serious consideration.
Proponents of consolidation, however, counter that the goals of reducing the
duplication of functions and achieving better policy coordination can only be achieved
by merging currently independent agencies with the State Department and bringing
their missions more directly under the authority of the Secretary of State. They believe
that the continuing independence of key foreign affairs agencies contributes to the
fractured decision making process and weakens the position of the Secretary of State
and ambassadors around the world. Supporters also contend that management reforms
within the State Department would be pursued in conjunction with the agency
consolidation and would be integral to the success of the effort. Moreover, they
contend that the consolidation of external agency responsibilities into the Department
will force State to incorporate “non-traditional” yet important foreign policy initiatives
into its priorities.
Clinton Administration officials acknowledge that the Department’s restructuring
is critical to the broader reorganization process. At a White House briefing, the
National Performance Review Senior Policy Advisor stated that “reinvention at the
State Department is an a priori qualification for doing any other consolidations of other
agencies...we’ve got a reinvigorated State Department that will, hopefully, start dealing
with its core problems.”
5
Officials maintain that State’s reform effort will be phased in simultaneously as
agencies are integrated into State. It is believed that State Department reform will
continue to evolve long after the two-year implementation period of the overall
reorganization plan. While details of the Administration’s proposal are lacking,
integrating ACDA and USIA into State will expand the agency horizontally, increasing
the number of bureaus and under secretaries. A new bureau for arms control and
international security (covering ACDA’s activities) and a new bureau for Public
Diplomacy (covering USIA’s operations) would be established. State’s regional and
functional bureaus would remain, but would need better mechanisms for coordinating
their activities within State and with USAID. Thus, the Secretary of State, it is argued,
would acquire the ability to coordinate, to establish accountability, and to have direct
access to officials working on all aspects of foreign policy. Although consolidating
4 State Department: Options for Addressing Possible Budget Reductions, General
Accounting Office, August 1996.
5 White House briefing on Foreign Policy reorganization by Dr. Elaine Kamarck,
National Performance Review Senior Policy Advisor, and Mr. Michael McCurry, White
House Press Secretary, April 18, 1997.

CRS-13
agencies is expected to result in some positions being eliminated, reductions in force
(RIFs) at the Department are not being discussed at this time.
On August 8, 1997, Secretary Albright outlined in a memo to staff in all four
agencies the “first step” in the reorganization process—to diffuse demands placed at
the top in the Department of State by increasing the responsibilities of the Under
Secretaries and Assistant Secretaries at State. According to the August 8th memo and
followup explanatory memo, the Under Secretaries will serve as the main policy
advisers to the Secretary and will function as a “corporate board” on long-term resource
and strategic planning matters. Assistant Secretaries are to be the main policy makers,
implementers, and issue leaders.
USIA and Public Diplomacy.
The U.S. Information Agency was
Most public diplomacy experts agree that
established in 1953 to help present the
broadcasting and international exchange
American culture and U.S. government
programs are comparatively inexpensive
policy to foreign publics. In 1978
and safe ways to promote U.S. interests
Congress merged the State
and democratic values around the world.
Department’s Bureau of Education and
Supporters of the reorganization proposal
Cultural Affairs into the USIA which
believe that putting international
primarily focused on international
broadcasting in the State Department
broadcasting. Its current authorized
would strengthen the link between these
staff size is 7,008—3,337 domestic
activities and U.S. foreign policy
positions, 744 Americans overseas and
objectives.
2,927 foreign nationals. Its FY1997
budget is $1.059 billion, and has
A number of concerns have been
requested $1.077 billion for FY1998.
raised with regard to proposals to fully
integrate the U.S. Information Agency
into the Department of State. One issue addressed is USIA’s mandate required by
the Smith-Mundt Act of 1948 and Zorinsky Amendment that bar the USIA from
operating domestically and propagandizing U.S. audiences, on grounds that such
activities might influence local politics. About 80 percent of USIA’s employees come
under this law. This restriction would be in conflict with many Department of State
activities; State’s activities currently involve providing domestic press and audiences
with foreign policy information, as well as sponsoring forums and town meetings on
behalf of the State Department.
The House plan addressed this issue by establishing a new Under Secretary for
Public Diplomacy and requiring that it be the responsibility of that Under Secretary
to ensure that this bureau prohibit any attempt to influence the opinion of the American
public. The Senate version also created a new Under Secretary for Public Diplomacy,
but did not specifically address concerns regarding the Smith-Mundt law. The
conference report includes language which would continue to apply Smith-Mundt and
Zorinsky laws to USIA-type programs after consolidated into State.
Another concern is whether international broadcasting’s credibility with foreign
publics in promoting democracy and the U.S. perspective will be weakened if it is
administered by the State Department. Some question whether the selection of news
stories to be aired and editing of reports would be affected by ongoing State Department
activities, such as the Secretary’s travel plans to a particular region, imminent trade

CRS-14
agreements, or U.S. government actions to gain cooperation from a foreign government.
Some observers believe State Department management of U.S. international
broadcasting could invite foreign governments to blame the Secretary of State for airing
broadcasts viewed by them to be unfavorable.
The House plan asserted that preserving the independence of U.S. international
broadcasting would have continued to be the responsibility of the Broadcasting Board
of Governors and the Director of the International Broadcasting Bureau as determined
by the Foreign Relations Act of FY1994/95. The Senate bill addressed broadcasting
credibility by establishing the Broadcasting Broad of Governors as an independent
entity within the Executive Branch, effective October 1, 1999. Furthermore, the BBG
would have been required to report to Congress within 90 days after enactment of the
Act (and every 80 days thereafter) on Radio Free Europe/Radio Liberty privatization
efforts, as required by December 31, 1999 by the Foreign Relations Authorization Act
of FY1994/95 (P.L. 103-236). The conference report agrees with the Senate version.
Similarly, some question whether international exchange programs, such as the
Fulbright Program, would continue to emphasize cross-cultural understanding or
whether they would be diverted to promote political-military goals of U.S. foreign
policy. Some contend that particularly the long-term nature of international exchanges
in building relationships could be compromised if resources that might have been
devoted to exchanges get diverted to shorter-term crises. Furthermore, many
nongovernmental organizations (NGOs) support international exchange activities of
the U.S. government. NGOs may not have the trust or be as welcome at State as they
were by USIA, some fear. Neither bill specifically confronted this concern.
Another issue needed to be addressed was the differing communication systems
and operations of each agency. Since USIA’s mission is to provide information, it
maintains an “open” information system, available to foreign publics. The State
Department, on the other hand, keeps a secure communication system. Some experts
claimed that keeping both public and secure aspects within one computer system would
weaken the secure part. Two separate computer systems may be necessary if the
agencies are fully integrated.
Responding to the view that consolidation would reduce expensive duplication,
USIA agreed that consolidating travel offices, security systems, personnel support and
overseas warehouses with State would make sense. However, USIA asserted it has
already undergone, more than any other foreign policy agency, a massive restructuring
and streamlining effort. Beginning in 1994 USIA consolidated the international
broadcasting activities, generating a savings of $400 million since 1994. During those
same years, USIA dismantled its Bureau of Policy and Programs and created the Bureau
of Information, 30 percent smaller and more customer-oriented. Additionally, USIA
has restructured the Bureau of Educational and Cultural Affairs, delayering it and
consolidating offices that manage international exchange programs.

CRS-15
ACDA and International
ACDA was established as a small
Security. For the past thirty-five years,
agency in 1961 to be an independent
ACDA’s mandate has been to serve as
advocate for arms control with direct
“the central organization charged by
access to the President. Over the past
statute with primary responsibility” for
few years, ACDA and State have
arms control under the direction of the
worked closely to eliminate
President and Secretary of State (P.L. 87-
unnecessary duplication. Currently,
297; 75 STAT 631). ACDA was
ACDA employs about 250 people; this
envisioned as a quasi-independent
number has been declining for several
advocate for arms control, and its
years and ACDA will continue to
Director designated the principal adviser
downsize. Its FY 1998 budget request
to the President, the Secretary of State,
is for $46.2 million, including $42.1
and the National Security Council (NSC)
million for ongoing activities and $4.1
on arms control issues. This could
million for new activities related to the
change if it is eliminated and its
CTBT, CWC, and NPT.
functions brought more directly under
the authority of the Secretary of State.
ACDA’s supporters credit the small agency with key arms control victories and
contributions to U.S. national security since its creation. Today, they maintain that
its independent advocacy role and expertise is more important than ever before.
ACDA’s critics tend to place less emphasis on the agency’s roles and successes in
arms control. They argue the need to reshape a Cold War organization to better focus
on the new arms control challenges of the post Cold War era.
Since its inception, ACDA was charged with carrying out the following primary
functions:
“the conduct, support, and coordination of research for arms control and
disarmament policy formulation;
the preparation for and management of U.S. participation in international
negotiations in the arms control and disarmament field;
the dissemination and coordination of public information concerning arms control
and disarmament; and
the preparation for, operation of, or as appropriate, direction of U.S. participation
in such control systems [on-site and remote monitoring activities] as may become
part of U.S. arms control and disarmament activities.” (P.L. 87-297. Arms Control
and Disarmament Act, September 26, 1961, as amended.)
ACDA has pursued these goals with mixed success under Democratic and
Republican Administrations. A small agency, ACDA has had to contend with the larger
bureaucracies and priorities of the Departments of State, Defense, Commerce, Energy,
and the intelligence community. Currently, the Clinton Administration’s arms control
priorities are articulated and led by ACDA. These include continued reductions of
strategic nuclear arms, negotiating an end to producing fissile material for nuclear
weapons, strengthening the Nuclear Non-Proliferation Treaty and its safeguards,
ratifying and implementing the Comprehensive Test Ban Treaty, implementing the

CRS-16
Chemical Weapons Convention, enhancing compliance with the Biological Weapons
Convention, and negotiating a global ban on antipersonnel land mines.
6
A key concern raised by some is whether these priorities might be affected by
the Administration’s proposed foreign policy agency reorganization plan, which
abolishes ACDA and integrates its functions into the Department of State. Initially,
the ACDA Director will wear two hats as the Under Secretary of State for Arms Control
and International Security Affairs. These positions will later be merged as Under
Secretary and Senior Advisor to the President and Secretary of State. According to
the White House, ACDA’s technical and policy expertise, its verification, compliance,
and legal functions will be preserved.
A major result of the proposed merger is that it would expand the power of the
Secretary of State. The Director of ACDA will come under the direct authority of the
Secretary of State, as well as various ACDA functions such as press, public, and
legislative affairs. In addition, ACDA’s lead in preparing for and managing U.S. arms
control negotiations will be assumed by the Department of State. On April 29, in a
public meeting of the foreign policy agency heads, ACDA Director, John Holum,
argued that this reorganization would “materially strengthen the arms control non-
proliferation and disarmament missions,” largely because Secretary Albright is “deeply
committed” to these missions. And, in an April 18, 1997, White House briefing, Vice
President Gore’s senior advisor on reorganization gave assurances that an independent
arms control advocacy role with direct access to the President would be preserved.
On December 19, 1997, Secretary of State Albright announced that ACDA Director
John Holum would also serve as the Acting Under Secretary of State for Arms Control
and International Security Affairs.
The consolidation of the arms control agenda under the authority of the Secretary
of State likely will have several implications. One is that in the absence of an
independent agency-level advocate for arms control, arms control issues likely will
compete more directly with broader foreign and national security policy goals. While
arms control objectives could still play a predominant role in some aspects of U.S.
foreign relations, the Secretary of State would have more ability than at present to
prioritize such objectives in directing U.S. relations with another country. The
difference, relative to today, is that the opportunity for independent arms control
advocacy would not necessarily be raised before the President in the final decision
making process. In some instances, the case for arms control might not necessarily
be made by the Department of State, but rather by the Departments of Defense, Energy,
Commerce, or even the intelligence community.
A related implication is that the role of arms control in U.S. foreign policy will
depend more directly on the viewpoint of the Secretary of State. Where there is a deep
commitment on the part of the Secretary, arms control and disarmament could assume
primacy among competing foreign policy priorities. The reverse is also true. In the
past, ACDA has taken unpopular positions on issues in the interagency process, but
6 Statement of the Hon. John D. Holum, Director, ACDA, Subcommittee on
International Operations and Human Rights, Committee on International Relations, March
5, 1997.

CRS-17
which later became central to U.S. foreign and security policy. ACDA’s record has
been mixed, however, in large part because of the personal relationships between
ACDA Directors and Presidents. Because the Secretary of State generally has a closer
relationship with the President than the ACDA Director, a Secretary with strong arms
control priorities would be more likely to get White House support for various
initiatives than the head of a small agency.
The proposed change also has operational implications. As the State Department
assumes control of preparing for and managing international negotiations, a number
of transition challenges are inevitable. If ACDA’s personnel, expertise, and functions
are transferred effectively, then the effects on current and prospective negotiations
are likely to be minimal. If, however, the transition is rocky, and senior ACDA expertise
leaves government service during the merger with the State Department, progress on
negotiations could be affected. Whether such as result would have any real affect on
the substance of the negotiations, however, probably cannot be determined at this point.
Some arms control advocates will undoubtedly be concerned, however, that progress
not be slowed or affected by this transition.
Questions are likely to be raised about the ability of the State Department to absorb
highly technical and skilled arms control personnel. This concern has been raised
before. Critics charge that the State Department has not been effective in integrating
highly specialized and technically oriented expertise. The concern in this instance goes
further, not just regarding the issue of whether ACDA’s expertise can be effectively
merged during the transition, but whether the Department of State in the years ahead
can or will maintain that level of specialized arms control expertise. Absent such
expertise at the Department of State, these specialized roles might be assumed by larger
agencies with such expertise, such as the Departments of Defense and Energy.
USAID and U.S. Development
Established in 1961, the mission
Assistance Policy. With USAID
of USAID is to promote long-term,
remaining an independent agency but
sustainable development abroad,
placed under the direct authority of the
helping countries grow economically,
Secretary of State, it is anticipated that
strengthen democratic institutions,
initially there will be very little change
protect the environment, stabilize
in the way the agency operates and how
population growth, and deal with
it implements U.S. development
disasters and other humanitarian
assistance policy. At present, only
requirements. Currently, USAID has
USAID’s press office is slated to be
programs in about 100 countries,
consolidated with State, although the
although the Agency has announced
White House says that State and USAID
plans to reduce that number to 75 by
will explore further options for
the year 2000. Agency staff totals
coordinating or merging other
about 7,820, down from over 10,700 in
administrative and program services in
1993. The current level includes 2,394
the coming two years.
American direct hires, about 755 of
which work overseas. In addition,
USAID currently exists under the
USAID has about 5,400 American and
authority of Executive Order 12163,
foreign national contractors.
Administration of Foreign Assistance
and Related Functions, and through

CRS-18
International Development Cooperation Agency (IDCA) Delegation of Authority No.
1 of October 1, 1979. IDCA was created in 1979 as a small agency intended to serve
as the overall coordinator of U.S. development aid policies and programs. USAID,
which had been established in 1961 within the State Department, continued in existence
after 1979 within IDCA. In practical terms, however, IDCA functioned to a very
limited extent. After the IDCA Director appointed by President Carter left in 1981,
no one has been named to fill the position. Instead, USAID Administrators have served
in dual capacities as agency head and acting IDCA Director. The President’s
consolidation plan calls for abolishing IDCA, but reconstituting USAID as an
independent agency.
Although USAID has remained independent of the State Department since 1979,
the two have maintained a somewhat ambiguous association with the USAID
Administrator always operating under the foreign policy guidance of the Secretary
of State. In practice, it appears that USAID’s relationship with the State Department,
both in Washington and in the field, has rested less on organizational lines of authority
than on informal personal relationships between the Secretary and the Administrator,
their chief deputies in charge of regional and functional bureaus, and U.S. ambassadors
and USAID mission directors posted around the world. Most observers believe that
having USAID fall under the direct authority of the Secretary of State will have little
or no effect on how the agencies interact, and that coordination will continue to be
driven more by the personal relationships of senior officials. What remains to be seen
is whether the White House proposes to continue USAID as an independent agency
through law, as USAID anticipates, or through a delegation of authority by way of
the Secretary of State.
During 1995-96, USAID and its Administrator, Brian Atwood, vigorously opposed
merging the agency into the State Department, based largely on two grounds: the unique
nature of USAID’s mission as a development agency and the achievements of agency
management reforms since 1994 that have not been matched by State Department
administrative improvements. In defending their position, USAID officials emphasize
the different nature of missions and problems dealt with by the State Department and
USAID: State more often focuses on resolving short-term crises through diplomacy
and political government-to-government relations while USAID, in pursuing its
development strategies, requires a long-term, sustained effort to achieve results that
might be compromised by State Department needs to divert resources for crisis
management. USAID officials have further noted that for nearly three years the agency
has been heavily engaged in organizational reforms and participating as an
“experimental laboratory” in the Vice President’s National Performance Review.
USAID has closed 26 overseas aid missions, terminated relations with governments
that were uncooperative development partners, and attempted to create a results-
oriented accountability system against which the agency and Congress can measure
results.
While still defending USAID’s position as an independent agency, during the
most recent round of interagency negotiations over consolidation plans, Administrator
Atwood reportedly argued that whatever the outcome on the merger question, three
elements of USAID operations must be protected: 1) USAID must continue to receive
its development assistance funding directly and control its own budget rather than
having the appropriations passed through the State Department; 2) USAID procurement

CRS-19
and other administrative systems must continue for aid projects instead of using State’s
processes; and 3) the stature of the senior official heading U.S. aid programs and the
development aid mission itself — whether it be within or outside the State Department
— must not be downgraded. Based on the consolidation outlines released thus far
by the White House, it appears that not only will USAID remain independent, but that
Administrator Atwood’s three requirements have been accommodated. Nevertheless,
the outcome of the Administration’s working groups and legislation under consideration
by Congress could alter the preliminary arrangements reached in early 1997 regarding
USAID’s relationship with the State Department.
According to current plans, there will be only one minor change for USAID during
the initial stage of the consolidation proposal: some portions of its small press office
of about 10 staff, with an annual budget of roughly $670,000, will merge with State’s
press bureau. But in subsequent phases of the reorganization, the White House says
that other issues will be considered that could possibly have more significant impact
on USAID programs and operations.
Among the most important issues for future consideration would be efforts to
better coordinate USAID and State Department regional and functional bureaus. The
creation in 1993 of State’s Global Affairs Bureau, a unit that oversees the Department’s
policy formulation of, among other things, international environment, population, and
democracy building issues, established a parallel and somewhat overlapping office
with USAID’s Global Bureau. The USAID global unit sets aid policy on these same
issues and administers large amounts development assistance resources. Reportedly,
there have been continuing disagreements between State and USAID on policy
prioritization and aid funding allocations, especially in the areas of the environment
and population. Whether to consolidate and where to locate State Department’s refugee
and USAID’s disaster offices has also been an issue in the past. On regional issues,
7
USAID administers U.S. aid programs in Eastern Europe and the former Soviet Union,
but a special advisor to the Secretary of State plays the lead role in policy formulation
and exercises extensive guidance for implementing aid programs in the region. These
are some of the most likely areas Administration officials may examine over the next
two years in search of further ways to eliminate duplication between the two agencies.
The reorganization text in H.R. 1757, as passed by the House is generally in line
with the White House’s April proposal for USAID. The bill abolishes IDCA
immediately and permits the President to determine how IDCA responsibilities will
be redelegated. USAID reorganization must occur by October 1, 1999, or sooner if
the President chooses. Consistent with White House intentions, the legislation requires
USAID to transfer its press office and certain unspecified administrative functions
to the State Department, and come under the direct authority and foreign policy
guidance of the Secretary of State. Bipartisan agreement on the final reorganization
provision in H.R. 1757 came after an earlier contentious debate over text that appeared
to move USAID more closely under control of the State Department. As introduced,
7 USAID contends that a transfer of refugee programs from State to its own Office of
Foreign Disaster Assistance would result in a staff reduction of 25 and a savings of about
$20 million. Similar arguments could be made for shifting USAID’s disaster office to
State’s refugee bureau.

CRS-20
H.R. 1757 transferred IDCA functions directly to the Secretary of State and moved
several other USAID functions, including non-specialized procurement, travel and
transportation, facilities management, and security operations, to the State Department.
The House early in the debate had defeated (202-224) an amendment by Representative
Hamilton to remove these and other reorganization provisions opposed by the
Administration. Later in the debate, however, the House, under a Gilman/Hamilton
bipartisan agreement, revised the USAID provisions accommodating Administration
concerns.
Unlike the House provision and the White House plan, legislation passed by the
Senate places the State Department in much more direct control of USAID policy
making, funding allocation decisions, and personnel management. Specifically, the
bill:
! Transfers IDCA functions to the Secretary of State, except for those relating
to the Overseas Private Investment Corporation which remain with USAID.
! Allocates assistance funds previously apportioned to IDCA to the Secretary
of State.
! Requires the reorganization of USAID to occur no later than October 1, 1998,
one year earlier than planned by the Administration.
! Transfers to the State Department press affairs functions, as proposed by the
White House, as well those of public affairs and legislative affairs.
! Grants the Secretary of State direct authority to coordinate all U.S. economic
aid programs, projects, and activities, including the design of broad assistance
strategy and the arbiter for resolving policy, program, and funding disputes
among U.S. government agencies.
! Requires USAID to detail its personnel, upon request, on a nonreimbursable
basis to the Department of State.
The modified reorganization legislation that passed the Senate on November 9
as part of H.R. 2607, and became the text for the House/Senate conference agreement
for H.R. 1757, generally follows the Senate proposal regarding USAID, but
accommodates a few key Administration concerns. Only the press office and certain
administrative functions, as proposed by the White House, would transfer to the State
Department While the Secretary of State would still coordinate U.S. economic
assistance policy, as the Senate recommended, the Secretary would “approve,” but
not “design,” overall aid and cooperation strategy. Nevertheless, the revised text still
requires USAID reorganization to occur one year earlier — by October 1, 1998 —
and directs that aid funds currently allocated directly to USAID by way of IDCA, be
apportioned to the Secretary of State.

CRS-21
Reorganization Chronology
04/12/96 —
President Clinton vetoed H.R. 1561, legislation authorizing U.S.
foreign policy programs for FY1996/97. Among reasons for rejecting
the bill, the President cited the requirement to abolish one foreign
affairs agency and to submit a reorganization plan saving $1.7 billion
over four years.
04/18/97 —
The White House announced plans to reorganize U.S. foreign policy
agencies, affecting the State Department, the Arms Control and
Disarmament Agency (ACDA), the United States Information Agency
(USIA), and the Agency for International Development (USAID).
05/01/97 —
A 120-day Executive branch review period began during which
working groups would draft specific elements of a consolidation
proposal.
06/03/97 —
Representative Gilman introduced H.R. 1757, the Foreign Relations
Authorization Act, FYs 1998/1999. Division A of H.R. 1757 outlined
foreign affairs agency reorganization authority. (Previously, the House
International Relations Committee had marked up and reported similar
legislation (H.R. 1486, H. Rept. 105-94); H.R. 1757 included the
reorganization elements of H.R. 1486.)
06/04/97 —
During floor debate on H.R. 1757, the House rejected (202-224) an
amendment by Representative Hamilton to give the President more
discretion over developing a reorganization plan.
06/11/97 —
The House agreed (voice vote) to an amendment to H.R. 1757 by
Representatives Gilman and Hamilton revising portions of agency
consolidation to accommodate Executive branch concerns. The House
passed H.R. 1757 (voice).
06/13/97 —
The Senate Foreign Relations Committee reported S. 903, the Foreign
Affairs Reform and Restructuring Act of 1997 (S. Rept. 95-28).
Division A included provisions reorganizing foreign affairs agencies.
06/17/97 —
The Senate incorporated the amended text of S. 903 into H.R. 1757,
and approved H.R. 1757 (90-5).
07/29-30/97 —House/Senate conferees met on H.R. 1757, but did not finalize.
11/09/97 —
The Senate passed H.R. 2607, after amending it to include modified
text reflecting preliminary House/Senate conference agreements on
foreign affairs agency consolidation. The House subsequently deleted
the reorganization issue from H.R. 2607.
11/13/97 —
Efforts by House leaders to introduce new legislation combining foreign
affairs consolidation with IMF funding, U.N. arrears authorization, and

CRS-22
international family planning restrictions related to abortion, collapsed
in the face of a Presidential veto threat.
12/19/97 —
Secretary of State Albright announces that ACDA Director John Holum
will also be Acting Under Secretary of State for Arms Control and
International Security Affairs.
03/10/98 —
Conference Report on H.R. 1757 is filed.
03/26/98 —
Measure passes in House by voice vote.
04/28/98—
Measure passes Senate by a vote of 51 to 49.