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U.S. DEPARTMENT OF STATE
OFFICE OF THE SPOKESMAN
1996 BUDGET SUBMISSION
FEBRUARY 6, 1995

            DEPARTMENT OF STATE 1996 BUDGET SUBMISSION


                Statement by the Secretary of State


     As America stands at the threshold of a new century, we
face a challenge that recalls the opportunities and dangers
that confronted our nation at the end of the First and
Second World Wars.  Then, as now, two distinct choices lay
before us:  either to claim victory and turn inward, or to
provide American leadership to build a more peaceful,
democratic, and prosperous world.  After World War I, our
leaders made the first choice and we and the world paid a
terrible price.  No one can dispute that after the Second
World War, Harry Truman, George Marshall, Dean Acheson,
Arthur Vandenberg -- and most of all the American people --
wisely and courageously made the second choice.

     The imperative of American engagement and leadership in
the world is a central lesson of this century.  American
engagement and leadership are just as imperative today
because we confront an interdependent world in which the
line between our concerns at home and our interests abroad
is increasingly blurred.  The prosperity of our
entrepreneurs, workers and farmers relies on their ability
to gain access and compete in the global marketplace.  The
security of every American will be directly affected by the
success or failure of democratic reform in the former Soviet
empire.  And the safety of future generations depends on
keeping weapons of mass destruction from falling into the
wrong hands.

     The critical test of our leadership is our willingness
to dedicate the resources necessary to protect the security
and prosperity of our people.  Our budget request
demonstrates our determination to shape a world conducive to
American interests and consistent with our core values -- a
world of open societies and open markets.

     By any measure, the resources we are requesting are the
bare minimum we need to defend America's vital interests.
Since 1984, the International Affairs budget has been
reduced by over 45% in real dollars.  Our spending request
will remain essentially level with what we will be spending
in FY 1995, notwithstanding the extraordinary array of
challenges we confront in this increasingly interdependent
world.

     It represents barely one percent of federal spending.
Yet the benefits it provides in making the American people
more secure and prosperous are enormous.  The funding
provided by this budget supports the additional jobs created
by exports, the greater security guaranteed through our
alliances and our non-proliferation efforts, cleaner air and
water, and less crime in our streets.  The investment of
resources made through this budget will advance our nation's
most fundamental interests now and in the future.

     Our efforts over the past two years demonstrate vividly
that effect.  Russian missiles are no longer targeted at the
United States.  Now, we have only one nuclear state in the
former Soviet Union, not four.  We have reached an agreement
to halt and ultimately dismantle North Korea's nuclear
program.  And we have achieved the most far-reaching trade
agreements in history -- which means more opportunities for
American businesses and more jobs for American workers.

     I have identified five key areas of opportunity for the
United States in 1995:  developing the most open global
trading system in history; building a new European security
order; achieving a comprehensive peace in the Middle East;
combating the spread of weapons of mass destruction; and
fighting international narcotics trafficking, terrorism, and
crime.  The FY 1996 budget will continue to provide the
funds we need to pursue these critical goals.

     First, we will sustain the momentum we have generated
toward the more open global and regional trade that is so
vital to American exports and good American jobs.  We will
work to implement the Uruguay Round of the General Agreement
on Tariffs and Trade and ensure that the new World Trade
Organization upholds vital trade rules and disciplines.  We
will move ahead with implementation of the Summit of the
Americas action plan to conclude, by 2005, negotiation of a
free trade agreement for this hemisphere.  We will continue
working with Japan and our other Asia Pacific Economic
Cooperation partners to achieve the goal of open trade and
investment in the Asia-Pacific region by 2020.  This budget
recognizes that our economic strength at home and abroad are
mutually reinforcing.  And it helps provide us the resources
to implement and enforce these agreements so that they
benefit American companies and workers.

     In our second area of opportunity, we will take
concrete steps to build a new European security
architecture.  NATO remains the anchor of our engagement in
Europe and the linchpin of transatlantic security.  During
this year, we will examine with our Allies the process and
objectives of NATO expansion, and by the end of the year, we
intend to share our conclusions with members of NATO's
Partnership for Peace.  We have designated $85 million of
our FY 1996 budget to help countries participate in the
Partnership, and to help potential new members of NATO
prepare for the obligations they will assume if they join
the Alliance.

     Our third area of opportunity is advancing peace and
security in the Middle East.  We have witnessed a profound
transformation in the landscape of the Arab-Israeli conflict
-- one that would not have been imaginable just a few years
ago.  On the Israeli-Palestinian track, we must continue to
make progress in the implementation of the Declaration of
Principles.  On the Israeli-Syrian track, we must maintain
our steady engagement as the negotiations enter a crucial
phase.  Our leadership and partnership have been
indispensable to the progress thus far, and will remain
vital elements of any future agreements.  The process stands
at an historic threshold.  It must not be allowed to falter.
This budget designates $5.24 billion to continue our efforts
to bring lasting peace to the Middle East.

     Our fourth area of emphasis for 1995 is fighting the
spread of weapons of mass destruction and their means of
delivery.  With the demise of the Soviet Union, the
proliferation of these weapons poses the principal direct
threat to the survival of our country and our allies.  Our
global and regional strategies for 1995 comprise the most
ambitious non-proliferation effort in history -- beginning
with seeking the indefinite and unconditional extension of
the Non-Proliferation Treaty.  This budget dedicates $166
million to fund the Arms Control and Disarmament Agency, to
provide voluntary assistance to the International Atomic
Energy Agency, and to replenish our Non-Proliferation Fund,
which supports our efforts to combat nuclear smuggling,
enforce export controls, and ensure missile dismantlement.

     The fifth area of particular focus for 1995 is
combating international terrorists, criminals, and drug
traffickers.  These scourges ruin lives, destroy property,
threaten the survival of emerging democracies, and wreak
havoc in many societies, including our own.  The Clinton
Administration is aggressively fighting these threats at
home.  But we recognize the global dimensions of these
threats, and we are actively mobilizing the cooperation of
other nations to defeat them.  This budget funds major anti-
narcotics efforts in Latin America and Asia.  It will
continue our fight against global terrorism and form the
basis for a new and intensive campaign against international
crime and narcotics trafficking.

     The budget we are presenting will support these five
key areas of opportunity for 1995.  It will also help us
advance a whole range of other issues that serve America's
foreign policy objectives.  In particular, it serves the
following mutually reinforcing goals:

Promoting Prosperity

     The Clinton Administration knows that today, America's
prosperity is inextricably linked to the growth and
integration of the global economy.  We are working
aggressively to open markets to American exports, to level
the playing field,  and to help our companies compete and
win.  Exports have been the driving force in America's
economic recovery.  Over the past two years, our export
promotion efforts have created more than one million high-
paying American jobs.

     In FY 1996, we are requesting $900 million to promote
trade and investment opportunities for U.S. businesses.
Programs funded under this budget include the export
financing operations of the Export-Import Bank, the
insurance and guarantee programs of the Overseas Private
Investment Corporation, the agricultural market development
program of the Department of Agriculture, and the market-
entry activities of the Trade and Development Agency.  The
programs of the U.S. Agency for International Development
(USAID) also support broad-based growth and create markets
for American goods.

Building Democracy

     The Clinton Administration's commitment to support
democracy and defend human rights reflects America's ideals.
That commitment also reinforces our interests.  It rests on
a sober assessment of our long-term interest in a world
where stability is reinforced by accountable government and
disputes are mediated through peaceful dialogue; a world
where information flows freely and the rule of law protects
not only political and human rights but the essential
elements of free market economies.

     Over the last several years, the growing movement
toward political freedom around the world has had profoundly
positive implications for the United States.  The democratic
transformation of Central Europe, and the birth of
democratic institutions in Russia, for example, made
possible the end of the Cold War, a vastly diminished threat
of nuclear war, and the emergence of new partners in
security and trade.

     In the Western Hemisphere, all but one nation are now
led by elected governments, accountable to their citizens.
As a result, tensions have declined, violent conflicts have
been resolved, and market reforms have led to impressive
economic growth.  And Latin America is now the fastest
growing regional market for American exports.

     In Asia, our treaty alliances are stronger than ever
before now that each of our allies is a democracy.  And in
Africa, we have seen that participatory democracies are far
more likely to avoid the man-made humanitarian disasters
that touch our conscience and require large infusions of
resources from the international community.

     Support for democratic and market reform in Russia and
the other New Independent States is an important aim of our
foreign policy.  A stable, democratic Russia is vital to
build a more secure Europe, to resolve regional conflicts
and to fight proliferation of weapons of mass destruction.
An unstable Russia that reverts to authoritarianism or
slides into chaos would be a disaster -- an immediate threat
to its neighbors, and, with its huge nuclear stockpile, once
more a strategic threat to the United States.  This budget
request sustains our strong commitment to democratic and
market reform in Russia and the states of the former Soviet
Union, as well as in the states of Central and Eastern
Europe.

     The FY 1996 budget also includes funds to consolidate
democracy and reform in critical countries moving through
delicate transitions: Haiti, Cambodia, and Angola.  In
Haiti, where the United States mobilized and led the
international effort that ousted the brutal dictatorship and
restored the democratically elected government, continued
U.S. support is essential -- even as we shed some of the
direct burden.  Finally, the budget funds many of our
regional efforts to strengthen good governance, the rule of
law, and credible elections in Africa, Latin America and
Asia.


Promoting Sustainable Development

     The end of the Cold War gives us an opportunity and a
responsibility to focus on international issues that were
always important but often ignored:  unsustainable
population growth, environmental degradation, mass movements
of refugees, and endemic poverty.  These problems pose
immediate threats to emerging democracies and to global
prosperity.  Left unresolved, they will have long-term
consequences our nation cannot escape.

     That is why supporting sustainable development is an
important part of our diplomacy.  Our programs enable us to
address conditions that contribute to instability in the
post-Cold War world and to minimize the need for
reconstruction assistance and long-term relief.

     Supporting the developing world's efforts to alleviate
chronic conditions of poverty serves U.S. interests.
Approximately $1.4 billion of this budget will fund
bilateral and multilateral programs that will, among other
things, promote economic growth and free market economies;
improve basic education; lessen the suffering and increase
the survival of children; and treat and prevent HIV/AIDS.
By helping nations to emerge from poverty, we can help them
become our stable partners in diplomacy and trade.

     The budget also provides the means to address
environmental issues of growing concern to all Americans.
Threats like air and water pollution transcend national
boundaries.  When tropical forests in South America burn,
the increase in greenhouse gases and decrease in
biodiversity harms not just that continent -- it harms the
United States.  And when countries in Asia use illegal
chlorofluorocarbons in refrigerators and aerosol
propellants, the resulting damage to the ozone layer affects
not just their citizens but Americans.  The Administration's
budget funds $378 million in bilateral and multilateral
programs to address these problems.  This includes $320
million for bilateral U.S. Agency for International
Development (USAID) programs in Asia, Latin America and
Africa and $58 million for cooperative multilateral
programs.

     With strong American leadership, we took a significant
step toward confronting the problems of unsustainable
population growth at the International Conference on
Population and Development in Cairo last year.  Now we must
implement the program of action agreed to at Cairo, which
includes family planning and closely related health efforts,
child survival and educational activities for women and
girls.  The budget requests $635 million for bilateral and
multilateral population programs to fulfill our commitments
to that action program.

     These global issues are beyond the capability of any
one country, even the United States, to address alone.  A
number of multilateral organizations have assumed key roles
in this global effort.  The World Bank, the International
Monetary Fund, and UN agencies such as UNICEF, among others,
are indispensable in mobilizing international support on
behalf of sustainable development.  This budget would meet
current requirements and make a contribution to accumulated
arrearages, thereby enhancing our leadership role and
providing a basis for urging others to bear a greater
burden.

Promoting Peace

     Ensuring the security of our nation remains our
principal obligation.  We must do so by building strong
alliances; preventing, containing, or resolving regional
conflicts; curbing the proliferation of weapons of mass
destruction; and combating narcotics, terrorism and crime.
This budget funds all of these important efforts.

     Maintaining American leadership requires that we be
ready to defend our interests with force when necessary.
When our vital interests are at stake, we will always be
prepared to defend them alone.  But sometimes, by mobilizing
the support of others, by leveraging our power and
resources, and by leading through alliances and
institutions, we will achieve better results at lower cost
in human life and national treasure.

     That is why we believe -- as has every Administration
in the last half century -- that international peacekeeping
can be an important and effective tool in our overall
national security strategy.  This budget meets America's
treaty obligation to fund peacekeeping missions that have
been approved, with our necessary assent, in the UN Security
Council.

     We have worked over the last two years to ensure that
peacekeeping missions have clear objectives, that money is
not wasted and that tough questions about scope, cost and
duration are satisfactorily answered before new missions are
approved.  We have also worked hard to improve our
consultations with the Congress on these issues.  In
response to our efforts, and to those of the Congress, the
UN has established an independent office with the functions
of an Inspector General.  The UN's new Under Secretary-
General for Administration and Management is aggressively
pursuing a broad agenda for reform.  And we are committed to
reduce our share of assessed peacekeeping costs to 25
percent as of October 1995.

     We do not look to the UN to be effective where the
swift and decisive application of military force is required
to defend our vital interests.  But peacekeeping can, under
the right circumstances, support efforts to mediate
disputes, demobilize belligerents, monitor cease-fires,
provide humanitarian relief, and create conditions in which
new democracies can succeed.  When emergencies occur, it has
given us an option that falls between the unacceptable
extremes of acting alone and doing nothing.

Providing Humanitarian Assistance

     The FY 1996 budget harnesses the will and capacity of
our nation to respond to famine, natural disasters, and the
displacement of peoples from their homes.  This assistance
is integral to our overall development strategy because it
not only provides relief, but helps victims of violence and
disaster return to the path of recovery and sustainable
development.  Last year our assistance helped dispossessed
refugees from Rwanda, the people of war-torn Bosnia, and
individuals fleeing oppression in Cuba.  Our assistance to
Haiti demonstrates that humanitarian aid can be more than a
palliative; it is helping an entire society emerge from
crisis and prepare to resume the development process.  Our
FY 1996 budget requests $1.7 billion for humanitarian
assistance.

Advancing Diplomacy

     The United States' ability to achieve success in the
five areas of opportunity that I have identified for 1995,
as well as the other objectives of our foreign policy,
depends on the dedicated men and women who serve our
nation's international affairs agencies.

     Our diplomatic posts around the world serve as sentries
for the American people.  They confront short- and long-term
threats to the security of our citizens.  They protect
Americans travelling abroad.  And they seize opportunities
to advance prosperity and create jobs for American
businesses and workers -- consistent with what I have called
"the America desk."

     Indeed, we have seen a fundamental change in the
conduct of American diplomacy since President Clinton took
office:  Promoting the interests of American companies and
workers is a central element of our foreign policy, and our
posts around the world are on the front lines of that
effort.  American companies that do business overseas know
that just as I sit behind the America desk at Foggy Bottom,
so do our energetic ambassadors and diplomatic
representatives abroad.

     It is therefore essential to the vital interests of the
United States that we equip our international affairs
personnel with the skills and resources they need to do
their jobs.  Just as we must have the best prepared armed
forces to meet any direct challenge to our nation's
security, we must also have the best prepared diplomatic
service to address the threats and seize the opportunities
that affect the well-being of every American.  These public
servants must have access to modern communications
technology.  They must work in facilities that help, not
hinder, their productivity.  They must be trained in the
diplomatic disciplines of the future, from commercial
promotion to helping to cope with international crime,
terrorism and narcotics.

     Over the last several years, the Department of State
has seen a dramatic increase in its worldwide
responsibilities with more than 20 new posts in the New
Independent States and elsewhere.  It has also upgraded
commercial promotion, accommodated growing consular and
passport workloads, and strengthened security at our
borders.  And the State Department provides the support and
infrastructure platform for all U.S. government presence
overseas, as well as the policy direction.

     Consistent with the National Performance Review, the
State Department and the other international affairs
agencies have begun to reform their organization, to
streamline operations and decision-making, and to
consolidate their administrative support services.  Since
1993, the State Department has closed 17 posts, reduced full-
time employment by 1100, and improved passport and consular
services to the American public while reducing staff by 27%.
The Department's strategic management initiative, underway
since September 1994, will enable us better to match our
resources to highest priority U.S interests.

     In 1994, USAID eliminated five bureaus and 90
headquarters units and closed five overseas missions.
Another 16 will be closed by the end of FY 1996.  The U.S.
Information Agency has consolidated all U.S. Government non-
military overseas broadcasting, which will generate savings
of $400 million by 1997.  Consolidation of support services
with the State Department will further reduce costs.

     Clearly, our long-term interests are ill-served by
responding only to the crises of the day.  The challenge of
diplomacy is to anticipate, and to prevent, the crises of
the future.  If we are successful, we can dedicate greater
resources to the urgent challenges of domestic renewal that
the American people demand we meet.

     The FY 1996 budget continues the Clinton
Administration's efforts to realign our priorities, to
reorient our spending, and to restructure our institutions.
It will ensure that our commitment to international
leadership continues to advance our national interests.  And
all of its parts are linked by a single, unifying theme:
investing in the security and prosperity of the United
States.

                         Warren Christopher

February 6, 1995

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