S. 955 -- FOREIGN OPERATIONS, EXPORT FINANCING,
AND RELATED OPERATIONS APPROPRIATIONS BILL, FY 1998
(Sponsors: Stevens (R), Alaska; McConnell (R), Kentucky)

The Administration greatly appreciates the strong support for foreign operations programs that the Committee bill provides. The bill will significantly support the maintenance of U.S. leadership, and, therefore, the Administration supports Senate passage of the Committee bill. The Administration would strongly oppose any floor amendments that would reduce the funding provided or that would constrict the President in carrying out U.S. foreign policy.

Funding Provisions

The Administration welcomes the Committee's action to provide the full amount of funding for regular programs (excluding multilateral development bank (MDB) arrears) called for by the Bipartisan Budget Agreement. The Administration also supports the Committee bill's provision of $220 million in MDB arrears under special provisions of the budget agreement. These special provisions would allow the full $315 million requested for arrears to be appropriated for FY 1998, and the Administration continues to seek that outcome.

Not all programs in the bill are at the levels requested by the Administration. Reductions (excluding arrears cuts) are made in assistance to the New Independent States, the World Bank's Global Environment Facility, international organizations and programs, the Peace Corps, the development foundations, peacekeeping operations, international military education and training, and international narcotics control. None of the requested funds have been provided for the African Development Fund, the Middle East Development Bank, and the Enhanced Structural Adjustment Facility of the IMF, nor has transfer authority been provided for AID's Development Credit Authority. Each of these programs is important, and in subsequent stages of appropriations action, the Administration will continue to seek full funding of these accounts at the requested levels.

Authorizations

The Administration has requested that the Congress pass authorization legislation necessary for obligation and expenditure of the requested funds. The Committee bill has not provided authorization authority for the IMF's New Arrangements to Borrow (NAB), the International Development Association (IDA), the European Bank for Reconstruction and Development (EBRD), the Asian Development Fund (ADF), the Inter-American Development Bank (IDB), the IMF's Enhanced Structural Adjustment Facility (ESAF), nor for Commodity Credit Corporation (CCC) debt reduction and P.L. 480 debt buyback/swaps. The Administration would like to work with the Congress to provide such authorities in a timely way.

Earmarks

The Administration continues to object strongly to funding earmarks, which are especially numerous in the NIS account and for development assistance. In recent years in particular, the increasing use of such earmarks and sub-earmarks has interfered with carrying out foreign policy and with implementing programs effectively. We need flexibility to address the rapidly changing political, economic, and human rights circumstances in recipient countries, and to ensure that our aid dollars go to nations and sectors that are reforming properly.

Policy Provisions

Apart from the earmarks, the bill contains a number of provisions supportive of U.S. foreign policy, such as continued support for KEDO, treatment of international family planning programs, and the expanded ability to provide some assistance to Azerbaijan, for which the Administration is grateful.

Provisions Affecting the Middle East. The Administration strongly opposes the treatment of Egyptian ESF and FMF in the Committee bill. The inclusion in the bill of a specific funding level for one of the Camp David partners, Israel, but not for Egypt is harmful to our ability to play the role of honest broker in the Middle East peace process. Egypt is a strategic partner in the peace process and has played a critical role in moving the parties toward an eventual settlement. While we strongly support assistance to Jordan, we believe that funding this assistance through cuts in funding for Egypt would damage the overall interests of the United States in the Middle East. Further amendments to condition assistance to the region or tie the President's hands in his conduct of the Middle East peace process would be strongly opposed by the Administration.

Restrictions on Aid to Russia. Similarly, the assistance to Russia provided in the Committee bill, though less than the Administration is seeking, is in our national interest. The Administration, therefore, strongly opposes the Iran-related conditions on assistance to Russia. Cutting or restricting aid to Russia would hurt the reformers in Russia, particularly at a time when economic reform is moving ahead thanks to a new, young, dynamic cabinet. Our assistance to Russia is targeted to support private entrepreneurship and democratic reform at the grassroots level. It is in the U.S. national interest to see Russia reform, and it would be a mistake to suspend the assistance that supports this reform.

War Criminals. The Administration is deeply committed to the goal of section 573 of the Committee bill, namely, bringing indicted war criminals to justice in front of the Tribunal in The Hague. We want to work with Congress on any legislation to advance that goal and have provided suggested language modifications to the Subcommittee, but we must oppose this proposed legislation as it is currently drafted. Section 573 would undermine the leverage and flexibility needed to push the Bosnians, Croatians, and Serbians toward implementation of key aspects of the Dayton agreement and the creation of a single Bosnian state.

Infringement on Executive Authority. Several sections of the bill would require the United States to use its "voice and vote" to take particular positions in international organizations. The Constitution, however, commits to the President the responsibility for formulating the position of the United States in international fora. Therefore, these sections would, if enacted, be construed as advisory.

Amendments. Of the many amendments that will be debated by the Senate when this bill goes to the Floor, we are aware of two in particular that the Administration would support. One amendment would restore OPIC, IMET, TDA, and democracy-building programs for Pakistan. We firmly believe that allowing these programs to operate in Pakistan is in the U.S. interest and that once restored, they will be a key factor in strengthening our relationship with an important country in a vital part of the world. We also support an amendment that would suspend for two years the annual drug certification process so that a thorough inter-agency review can develop and implement a new multilateral strategy to stem the flow of illegal narcotics.

Additional Administration concerns with the bill as reported by the Committee are contained in the attachment.

In summary, the bill reflects bipartisan support for achieving many security, economic, and humanitarian goals abroad. With a limited number of modifications, the bill would warrant the strongest possible Administration support.

Attachment

ADDITIONAL CONCERNS
S. 955 -- FOREIGN OPERATIONS, EXPORT FINANCING,
AND RELATED OPERATIONS APPROPRIATIONS BILL, FY 1998 (AS
REPORTED BY THE SENATE FULL COMMITTEE)

The Administration looks forward to working with the Congress to address the following concerns:

Key programs affecting the security and foreign policy of the United States have been prohibited or severely restricted in the Committee bill.

• International Narcotics Funding. The conditioning of international narcotics funding on receipt of a report requiring detailed information from agencies beyond the control of the Department of State, in addition to subjecting all of the bureaus' funds to notification, would need to be revised later in the appropriations process.

• Transfer of Military Equipment. The provision requiring a specific understanding of the use of certain military equipment prior to its transfer to Indonesia is unnecessary. The Administration already has in place an effective policy that, for human rights reasons, precludes the sale to Indonesia of small arms, riot control equipment, and armored personnel carriers and correctly focuses on equipment that could have direct human rights ramifications.

• African Crisis Response Initiative. The deletion of funds for the African Crisis Response Initiative would halt our promising efforts, in coordination with other donor countries, to increase African peacekeeping capacity, which is designed to reduce the burden on U.S. resources caused by major African crises.