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
To the top of this page.