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


                   ON THE RECORD BRIEFING
                             BY
            SECRETARY OF STATE WARREN CHRISTOPHER
                             AND
                L. CRAIG JOHNSTONE, DIRECTOR
             OFFICE OF RESOURCES, PLANS & POLICY
                             ON
        THE STATE DEPARTMENT'S 1996 BUDGET SUBMISSION

                      Washington, D.C.
                      February 6, 1995



SECRETARY CHRISTOPHER:  Good morning.  Just a few words
about procedure here.  I'll be making a brief statement on
the budget and then taking just a couple of questions
because the South Koreans are here today and I'll be going
up there for lunch with the new Foreign Minister, Mr. Gong,
and will be taking some questions up there.  After I've
finished, Craig Johnstone will be here to give you more
detailed information on the budget and will answer the
detailed questions that you might have.

As I said, I'm here to give you an overview of the l996
International Affairs budget, which funds the State
Department and the related international affairs agencies.
I'll be joined by Craig Johnstone, who will take you through
all the details.

By any measure, this new budget is an austere budget.  Since
l984, the International Affairs budget has been reduced by
45 percent in real terms.  It now represents around one
percent of total Federal spending, notwithstanding the
extraordinary array of challenges, some of them new
challenges.  Our l996 spending request of just over $2l
billion is essentially what we're spending in the current
Fiscal Year.

We've been tough-minded in putting this budget together.  I
believe the resources that we are requesting are the rock-
bottom minimum that we need to defend and advance America's
interests.

Last November's elections certainly changed many things, but
they were not a license to lose sight of our global
interests or to walk away from our commitments around the
world.  This budget does maintain our commitments.
Approving it will be a stern test of our nation's
willingness to dedicate the resources necessary to protect
the security and protect the prosperity of the American
people.  It is essentially a test of our commitment to lead.

Just consider what the world would be like without American
leadership.  In the last two years alone we would have had
four nuclear states in the former Soviet Union, instead of
one, with Russian missiles still targeted at our homes.  We
would have had a full-throttled nuclear program in North
Korea; no GATT Agreement and no NAFTA; brutal dictators
still terrorizing Haiti; very likely, Iraqi troops back in
Kuwait; and an unresolved Mexican economic crisis, which
would have threatened stability on our border.

For the coming year, I have identified five specified areas
of opportunity for American foreign policy, as you all know.
I'd like to mention each of them and describe how each of
them is supported in this new budget.

First, we must maintain the momentum to open new markets.
To do so, we'll begin to implement the Uruguay Round
Agreement and the free trade commitments we have here in the
Western Hemisphere as well as in the Asian Pacific region.
American companies and workers must be able to take
advantage of these opportunities, and this budget requests
some $900 million to promote export and investments through
programs run by the Ex-Im Bank, OPIC, AID, and other
agencies.  In the last two years, these efforts have
supported over one million high-paying jobs.

Second, we will continue to build a new European security
structure.  Secretary Perry will be discussing our overall
commitments to NATO, but I want to emphasize that our budget
provides $85 million to help countries participate in the
Partnership for Peace -- of course, a key element in
extending NATO's reach to the new democracies to the East,
as well as in laying the groundwork for NATO expansion.
Through the $480 million program that we have requested in
the Seed Program, we maintain our assistance for democratic
and economic reform in Central and Eastern Europe.

This budget also requests $788 million in support of
democratic reform in Russia and the other states of the
former Soviet Union, with more than half going to so-called
New Independent States other than Russia.  This investment

in Russia and the other states of the former Soviet Union
remains the least expensive investment that we can make for
our long-term security.  Russia's indiscriminate and
excessive use of force in Chechnya has certainly dealt a
setback to reform in that country, but it has not altered
our fundamental interest in helping Russian reformers build
a nation that finally is at peace with itself and its
neighbors.

Our third area of opportunity in the coming year is
advancing peace and security in the Middle East.  This
budget maintains our commitments there by allocating $5.24
billion to sustain our effort at a time when the peace
process stands at a decisive moment.  Our critical support
for that peace process in the Middle East simply must not be
allowed to falter.

Fourth, we will intensify our efforts to stop the
proliferation of weapons of mass destruction.  This budget
meets that threat.  Among other things, it supports the Arms
Control and Disarmament Agency.  It provides assistance to
the International Atomic Energy Agency, an organization
that's vital in our program to halt the nuclear program in
North Korea, and it replenishes the non-proliferation fund
which we use to combat nuclear smuggling, to enforce export
controls, and to ensure missile dismantlement.

Fifth, the budget will help us intensify the fight against
global terrorism.  It provides a foundation for an intensive
campaign against narcotics trafficking.  It more than
doubles our funding to fight against international crime.
Taken together, this budget requests $240 million for these
vital efforts.

Of course, this budget, in addition to the five areas of
opportunity, covers a number of other important foreign
policy objectives.  I'll just mention a few of them here
today.

The budget makes a $1.5 billion commitment to democracy
around the world.  In addition to our support for reform in
Central and Eastern Europe, the former Soviet Union, we
provide $220 million for countries in transition, such as
Haiti, Angola, and Cambodia.  We believe that this support
can make a vital difference in the pursuit of democracy and
stability in these countries in transition.

This budget also supports international peacekeeping.  As
I've said before, where our vital interests are at stake, we
must be prepared to defend them alone.  But sometimes by
leveraging our power and resources, by leading through

alliances and institutions, we can achieve better results at
a far lower cost to our national treasure and in human life.
Of course, if we can do that, that's a sensible bargain that
I know the American people will want to support.

We strongly oppose the efforts in Congress that threaten to
remove peacekeepers from vital troubled areas of the world
and threaten to leave the President with an unacceptable
choice when a crisis occurs, a choice only between acting
alone and doing nothing.

The Administration has made a commitment to address a number
of long-term threats to the future of the nation -- threats
that were too often ignored to our detriment -- threats such
as environmental degradation, unsustainable population
growth, and the endemic poverty that feeds instability and
blocks prosperity.

Among other efforts, the budget that we have before us today
funds programs to curb air pollution, to improve basic
education, and to implement health initiatives for women and
children that were agreed to in the Cairo Summit.

All told, this budget requests just over $1 billion for
global population and environmental programs.

Our ability to advance these interests of course depends
upon equipping the men and women who serve in our
international affairs agencies, giving them the skills and
resources they need to do the job.  Like our soldiers, they
must be prepared to fight for America's interests.

Clearly, no American wants to live in a world in which
nuclear weapons have fallen into the wrong hands, a world in
which America has retreated from economic leadership, a
world in which the post-Cold War momentum toward peace and
freedom has been reversed.

We believe -- I believe -- this budget meets the minimum but
essential test.  It sustains our intensive, effective
engagement on behalf of these vital interests around the
world.  I'll be making that case to the Congress and the
American people.

I appreciate this opportunity to give you this capsule
summary of the directions of our new budget.  As I say, I'll
take just a few questions.  If you have more detailed
questions, Craig (Johnstone) will be giving you a fuller
account of what the budget does and be prepared to answer
those questions.

QUESTION:  Mr. Secretary, could you talk for a second about
the $763 million cut in peacekeeping programs?

SECRETARY CHRISTOPHER:  The reason for that is that the cut
takes into account last year's supplemental.  The amount
that has been budgeted for this year takes into account the
anticipated expenditure for this year.  The reason for the
difference, or the disparity, is because of the number that
you're seeing there, and which reflects that amount of the
cut, takes into account the supplemental.

QUESTION:  On that, then, will the amount -- in bringing in
all these categories -- will the amount for peacekeeping
remain about level from the current year?

SECRETARY CHRISTOPHER:  It will be the amounts that we have
mentioned there.  The Congress has never been willing to
have a contingency fund.  So, in the past, we've had to deal
with supplementals where it became necessary to spend more
money as the year went along.

If there are no supplementals this year, the budget will be
-- the figure you used, I believe, was $763 million less.
On the other hand, there are a number of contingencies ahead
and there could conceivably have to be supplementals.

For example -- and Craig can correct me on this -- I think
it's correct to say that this budget funds UNPROFOR for the
first six months of the new Fiscal Year.  So if UNPROFOR
were to go longer than a year from March, and that were to
be regarded as in our interest, then we would have
supplemental obligations there.  I mention that only to
illustrate the fact that this budget is our best estimate of
what the costs will be for the forthcoming year.  As I also
said, Congress has never been willing to fund a contingency.

QUESTION:  Mr. Secretary, can you talk about any cuts in
specific country accounts?

SECRETARY CHRISTOPHER:  Carol, the country-specific numbers
will not be available for several days.  We'll be briefing
them at a later time.

I've given you the overall numbers for Russia and the New
Independent States.  I think I've said before, there will be
no cuts for Egypt or Israel.  I cannot be more specific than
that at this time.

Lee.

QUESTION:  Can you tell us, even though you oppose
Congressional efforts to reduce peacekeeping activities, did
you take into account at all the feeling on Capitol Hill
toward peacekeeping when you drew up this budget?

SECRETARY CHRISTOPHER:  Lee, if I could quarrel just a
little bit with your premise.  I certainly am supportive of
efforts to make international peacekeeping more efficient.
I'm supportive of efforts to be very selective about the
peacekeeping we undertake; to ask the hard questions in a
way that they were not at a prior time.  But what I objected
to on Capitol Hill -- and strongly object to -- is taking
steps that would gut the program and would leave the
President in the future will only the choice of going alone
or doing nothing; because I still think there are great
opportunities to share the burden, in the right
circumstances, with other countries.

Those factors were all taken into account as we tried to
estimate what the most likely cost of the current
peacekeeping endeavors will be for the future year.

I'll take one more.

QUESTION:  Does this budget foresee closing any overseas
missions -- diplomatic missions?

SECRETARY CHRISTOPHER:  We are committed to closing
additional overseas missions, as the Vice President said in
his statement the other day.  I believe we are committed at
the present time to closing 15 missions overseas.  When I
use "missions," I mean a facility of one kind or another.

Thank you very much.  Craig will be here.

MR. JOHNSTONE:  Thank you very much.  I wanted to run
through the budget with you.  I wanted to tell you first of
all what it is that you have in front of you.  We have
passed out to each of you two packages:  one including the
Secretary's statement with a few checklists on what is in
the budget; secondly, a budget which is drawn in two
different forms.  The first page that you have there is a
budget by objective, which is the way that we actually
compile our budget internally.  In the subsequent pages,
what you have in front of you is a budget by appropriation
line item, which is the way that it is delivered to Capitol
Hill.

It is more coherent and I think a little bit sounder to go
through the budget by objective, so I thought I'd just cover
very quickly some of the items in this budget and then take
your questions.

First of all, under the Promoting Prosperity, as the
Secretary said, we have about $900 million -- in fact, $901
million --devoted to it, and that includes the financing for
Ex-Im Bank, OPIC, TDA and PL-480 Title I.  Although this
represents a decrease from last year, the overall program
levels that will be funded under the budget for OPIC, TDA
and Ex-Im Bank are not decreased this year.  The decrease
essentially has been offset by reflows; that is to say,
businesses pay back into these accounts, and that accounts
for the differences in the funding.

The Newly Independent States:  the funding that we have for
the NIS states, including Russia but now refocused on the
Ukraine, Georgia and the other independent states of the
Soviet Union is up somewhat from last year's levels,
reflecting in fact some of the reforms that have been taking
place in the countries outside of Russia within the NIS
category.

Central and Eastern Europe is up $120 million in our 1996
request.  That is actually for two reasons.  One is that it
reflects a $60 million sum which has been set aside for
Bosnia reconstruction, and the balance of that increase is
to fund an increased effort in the southern tier countries.
As we begin the process of wrapping up our programs in the
northern tier countries -- that is, primarily in Poland --
and moving into the southern tier in a more aggressive way
and supporting reform and reformers in those countries,
there is a need for additional funds before the funds begin
to lower in the northern tier countries.

The Other Countries in Transition category funds regional
democratization programs in Africa, Latin America and Asia,
as well as whole country programs in Haiti, Cambodia and
Angola.

Looking down through the budget at the principal differences
with last year, under Sustainable Development you will see
that there has been an increase in the budget category of
$440 million.  That can be entirely attributed to an
increase in the payments of arrearages to the multilateral
development banks.

There is a redistribution of funds within the bilateral
programs and some of our multilateral programs in the sense
that we have increased the total amount of funds for
population growth and for the global environment in this
funding category by modest amounts.

Population Growth has been increased essentially to take
into account the commitments made at the Cairo Conference;
the Global Environment funds, to meet the pressing needs of
biodiversity, the depletion of the ozone layer and global
warming issues.

In the Promoting Peace category, the levels for the Middle
East Peace Process remain largely unchanged.  There is an
increase in military assistance for Jordan which has gone
from $7 million to $30 million in this budget category.
Otherwise, the Middle East Peace Process is funded at the
$5.243 billion level out of the overall budget level of $6.6
billion.

Peacekeeping Programs was addressed by the Secretary, and he
got it right on.

The Non-Proliferation and Disarmament line you will notice
has also gone up in this year by $62 million.  That funds
part of what we are trying to achieve with Korea, the
establishment of KEDO, the organization to oversee the
change in the nuclear status of North Korea, as well as
increased funding for the Non-Proliferation Fund which is
designed to counter in part nuclear smuggling.

A big increase in appropriate levels, but not necessarily in
request levels for Counter-Narcotics, Crime and Anti-
Terrorism.  There, the Secretary announced in Boston the
Administration's new initiative on crime, and this helps to
fund that new initiative.

Humanitarian Assistance I think remains largely unchanged
from last year's levels -- pretty much a straight line.  The
Advancing Diplomacy section -- that is to say, the support
for our people overseas and for our infrastructure, which
essentially makes it possible to conduct our foreign policy
this year -- is in fact slightly less than it was last year,
owing primarily to a decrease in requirements for
broadcasting services within the USIA budget.

That in a nutshell, and I'll be glad to get into any
specifics that you'd like to, with the exception that
country numbers will not be available for a couple of days
yet.

QUESTION:  Where do you account for the debt forgiveness for
Jordan?

MR. JOHNSTONE:  The debt forgiveness for Jordan is carried
under the multilateral development banks, IMF and debt
reduction number.  The total amount in the supplemental is
$275 million, carried in the FY-1995 estimate column.

QUESTION:  You've gone down here just about $80 billion --
excuse me, $81 million --

MR. JOHNSTONE:  $81 million.

QUESTION:  $81 million from your '95 estimate to your '96
estimate -- and I don't know how that compares to '94 -- but
basically you're going down in real dollars.  With inflation
taken into account, what is the decrease from last year to
this?

MR. JOHNSTONE:  I haven't run an inflationary deflater on
it.  This is our projected spending level for 1995.  It
includes the supplemental request for 1995 in this request.
We're not, of course, sure that we're going to get all of
the supplementals there, so it's still a little early to
really make the year-to-year comparison.

But by and large this is a stay-flat budget; but not
allowing for inflation, you're absolutely right.  If you
figure the inflationary level -- and I don't know what it
would be; two-and-a-half, three percent, something in that
order -- then you could make the calculation.

This reflects a number of cuts, in point of fact, and I can
assure you that the budget requests of all of the individual
agencies was substantially higher than this level; so we did
some pretty stringent cutting of this budget when we put it
together.

QUESTION:  Would it be fair to say that the budget in fact
is going to take a decrease according to the inflation?

MR. JOHNSTONE:  The year-to-year 1995 estimates to 1996
request, yes, it would be fair to say that.

QUESTION:  Under Sustainable Development, as you pointed
out, the largest increase was for multilateral banks -- our
contribution.  Given the Mexican bailout program that was
announced last week, are those estimates likely to change?

MR. JOHNSTONE:  The Mexican bailout program is not a budget
line item and doesn't appear in this.  The effort to bring
economic stability to Mexico does not appear as a budget
line item in here, so it doesn't have an impact on these
numbers.

QUESTION:  May I ask you to play handicapper for a second.
Can you tell us the likelihood of asking for a supplemental
for peacekeeping for this year?

MR. JOHNSTONE:  That is for 1996, because we have a request
in here of $672 million for a supplemental for 1995.  It's
still too early to say.  I think if there are no new
operations required over the course of the next 18 months

and if UNPROFOR wraps up after six months of the new Fiscal
Year -- that is to say, after a year and a few months from
now -- then these numbers should obtain.

If there are requirements for new operations or if UNPROFOR
has to be extended beyond that time, then additional funds
would be required.

QUESTION:  Will we be up to date then at that point with our
assessments?

MR. JOHNSTONE:  Yes.

QUESTION:  In the back there's a -- under Advancing
Diplomacy, there's a $119 million cut in information
exchange programs.  It excludes NED -- is that -- or maybe -
- what is it --

MR. JOHNSTONE:  Yes.  The NED is carried in a different line
in the budget up under Building Democracy.

QUESTION:  Is that primarily broadcasting?

MR. JOHNSTONE:  That is primarily broadcasting, yes.

QUESTION:  In regards to Cuba, you don't put any budget
authority money.  Do you mean that you want to close all the
broadcasting to Cuba?

MR. JOHNSTONE:  No.  The broadcasting for Cuba funds have
been consolidated into the overall broadcasting category.
There's no intent to close the broadcasting for Cuba.

QUESTION:  Last year the Congress, they put some conditions
-- ten percent conditions about Greece and Turkey; but I
realize that this year your budget resolution, you already
put before the Congress voluntarily this ten percent
condition.  Is that the Administration policy to put that
situation --

MR. JOHNSTONE:  No.  The ten percent requirement was not in
the budget request that went up in 1995, and was nonetheless
included in the congressional request levels.  The request
for 1996, though we don't have specific numbers, will
include for Turkey, for example, a certain level of economic
assistance and will include the last payment of our FMF loan
guarantee program which related to weapons purchases by the
Government of Turkey.

QUESTION:  Can I just clarify on Mexico.  Any number here
does not reflect the Mexican bailout relief --

MR. JOHNSTONE:  No.  The guarantee for Mexico is exactly
that.  It's a guarantee which doesn't have a budget line-
item impact on this budget.

QUESTION:  On this budget, or on Treasury's budget --

MR. JOHNSTONE:  That's correct.

QUESTION:  If you're down 45 percent in about 12 years from
where you were, I don't see how you can call this a
strengthening of the U.S. role in international affairs.  I
mean, there are huge numbers of unmet needs, and nobody
knows that better than you, and you call this a
strengthening of the U.S. role in international affairs.  It
seems to me you're -- you know, you don't even have enough
to get by.

MR. JOHNSTONE:  We would stand by the Administration's
request level in terms of being a solid and constructive
budget that will make it possible for us to meet the
leadership requirements for our country and the world.  Is
it everything that we could have hoped for?  It's never
everything that you could have hoped for; but on the other
hand, it is a budget that will make it possible for us to
exert the kind of leadership around the world that we think
is necessary to have.

Yes, there are still post closings that are required, and,
if you think that post closings are not desirable in this
day and age, then this is a budget which forces us to take
some post closings.

On the other hand, I think this long trend that you see here
of decline -- now we have a process of leveling off here in
this budget request which I think is a very healthy process,
both in terms of the supplemental requests for 1995 and the
1996 request amount.

QUESTION:  Could you tell me the amount of the fund which
will be allocated for KEDO and its projects from the federal
budget and the State Department budget?

MR. JOHNSTONE:  I think within this budget as a whole, there
is $22 million set aside for KEDO-related activities.  It
isn't just KEDO but for the entire Korean issue.  I'm not
aware of what it is that's in the other budgets in the
federal budget.

QUESTION:  You mean the light-water project?

MR. JOHNSTONE:  The KEDO -- that is to say, our non-
proliferation efforts in North Korea are treated in a number
of different budgets.  There is a $22 million

component in this budget.  We'd have to get back to you with
anything that exists within any other budget.

QUESTION:  Of this $763 million cutoff from peacekeeping
programs, do you know how much will be cut from Operation
Provide Comfort?

MR. JOHNSTONE:  Operation Provide Comfort is not a
peacekeeping operation; it's a humanitarian assistance
effort.  This budget has a line item for Provide Comfort in
the budget, and you know Provide Comfort was paid for last
year out of the Department of Defense budget.  The total
cost of Provide Comfort is something in the order of $30
million, and in this budget this year we are picking up that
requirement that used to be a Department of Defense
requirement under our Office of Disaster Assistance.  The
total for that budget will go from $170 million last year to
$200 million this year because of the Provide Comfort
provision.

QUESTION:  I'm a little confused about this cut in
peacekeeping, because if you combine the supplemental for
Fiscal '94 and the '95 money, you get about 1.3, is that
right?  And then this year's, if you combine the '96 request
with the '95 supplemental request, you're not talking about
all that different then, are you?  I mean, the numbers we're
talking about is a couple hundred million, really.

MR. JOHNSTONE:  When we go up for the supplemental request
at this time of the year, the supplemental relates to 1995;
the new money is 1996.  We have $672 million then of funding
that is being requested as a supplemental for 1995.  That
brings in fact the 1995 request levels much closer to the
1996 request level.

QUESTION:  I mean, I'm a little unclear.  Since you have to
go through this supplemental process every year, it seems to
me, how do you know you're not going to need another
supplemental in '96?  I mean, can you really predict that at
this --

MR. JOHNSTONE:  You certainly don't know that.  That is to
say, if you operate off the assumption that the Congress
likes us to operate on, on this budget, you will only budget
those items that you already know about.  These peacekeeping
funds are a little bit like disaster assistance in the sense
that ideally you would have a set of money at the beginning
of the year and then you'd draw it down according to
disasters.

The Congress has not seen fit to appropriate the contingency
funds for peacekeeping, so we have to do it this way.

QUESTION:  Again, on the peacekeeping.  It's a little
strange, where you've done it to me.  You're only budgeting
the Bosnia mission through six months?

MR. JOHNSTONE:  For six months of Fiscal 1996, which means
all of the rest of '95 plus six months of 1996.

QUESTION:  So, undoubtedly, you're going to need to ask for
more on that.  Why did you understate it like that?  I don't
understand the rationale.

MR. JOHNSTONE:  We tried in the course of the last three
years, with the Congress, a number of different formulas for
how you go about funding peacekeeping.

Clearly, what would be the best mechanism for funding of
peacekeeping would go to something like the way that one
would fund humanitarian assistance and set up a contingency
fund for peacekeeping.  So far the Congress hasn't seen fit
to approve any kind of contingency fund.  So we're pretty
much stuck requesting monies on the basis of existing
expectations for existing missions, which always runs the
risk of underfunding the program.

QUESTION:  Your expectation the is that the Bosnia
peacekeeping mission will only be six more months?

MR. JOHNSTONE:  At this stage -- where that's over a year
away -- it's almost impossible to tell.  So that was just a
swag that was taken as being a number with the recognition,
and very up front, telling the Congress that we'll have to
come back and ask for more money if that turns out not to be
the case.

QUESTION:  For example, if you're renovating your house, you
don't want the contractor to come to you with half the
expenses he thinks it's going to be and then come back later
for the other half.  Don't you think Congress would be
better to get the bad news up front and deal with it, rather
than six months down the road?

MR. JOHNSTONE:  I think in a very practical sense, though,
if the contractor were to come to you with half the expenses
and say how the expenses were developed and say that if
things change from the conditions on that half expenses, you
would have to have more money to complete the job, that
would be a perfectly acceptable way of doing business.
That's the way that we've been forced to do business with
the Congress on peacekeeping funds.

QUESTION:  Why do you have such a high increase for ACDA?

MR. JOHNSTONE:  It really is to fund the Chemical Weapons
Convention implementation (and START II verification).  I
think ACDA's bottomline budget is a straightline budget.
You can refer that to -- I don't know if anybody is here
from ACDA.

The Chemical Weapons Convention implementation is now funded
in this budget category where it has not in the past, and
that accounts for the plus-up.*

_________
*  The Chemical Weapons Convention implementation is now at
   increased funding in this budget category.  This, plus
   funding of $14 million for Cobra Dane for Start II veri-
   fication, account for the plus-up.
_________

QUESTION:  Two quick questions.  On Poorest Country debt
restructuring, there's quite an increase.  I was wondering
what that's for and how much borrowing that's supposed to
leverage?

Also, how much and where is the global environment facility
located in the budget?

MR. JOHNSTONE:  The global environment facility is located
under the Multilateral Development Banks section of the
budget.  It was in the budget last year as well, and was
appropriated last year.

QUESTION:  How much are you asking for this year -- $100
million?

MR. JOHNSTONE:  (TO STAFF)  Are we at $100 million this year
on request level?  A hundred and ten million.  I think $90
million was appropriated last year.

To go back to your original question, in terms of the debt,
that really funds two kinds of programs.  One is for the
poorest of the poor nations, and Paris Club rescheduling --
there's an increase there -- plus also funding for nature-
for-debt swaps in Latin American.  I can get you the exact
numbers if you like.  David, if you would get the exact
numbers on that score.

QUESTION:  On the 45 percent real cut -- where does that
come from?  Mainly military assistance, development
assistance?

MR. JOHNSTONE:  I'll tell you, it comes from a number of
categories.  But the principal categories relate to what we
call security assistance.  That is to say, ESF funds.

It used to be -- and, in fact, at many times and many
different iterations in the past I've been called upon to
reprogram funds for contingency circumstances when they
arise for geopolitical concerns.  ESF Funds today are almost
non-available for the purposes of meeting short-term
contingencies.  They have essentially dried up over the
years.

This budget will restore a little bit of funding flexibility
to the ESF account.  More, perhaps, might be needed in
future years.

QUESTION:  How many State Department posts does this
envision closing in the coming year?

MR. JOHNSTONE:  This would envision closing l5.

QUESTION:  Beyond whatever closed last year?

MR. JOHNSTONE:  Yes.

QUESTION:  And do you have the list?

MR. JOHNSTONE:  I don't think the list has been determined
yet.

QUESTION:  Can you give some examples of what you're
thinking about?

MR. JOHNSTONE:  This would fall to the State Department
side, not the Function l50 side; but I don't believe that
they've yet formulated a list and I don't think are in a
position to talk about it yet.

QUESTION:  Are you also contemplating closing any Bureaus?

MR. JOHNSTONE:  I think under the Vice President's
initiative it was agreed that one Bureau would be closed.

QUESTION:  What is the U.S. position on seven-ten ratio
between Greece and Turkey in this budget?

MR. JOHNSTONE:  I beg your pardon?

QUESTION:  Seven-ten ratio between --

MR. JOHNSTONE:  It will be maintained in this budget.

QUESTION:  How much are you proposing in Economic Support
Funds for Turkey?

MR. JOHNSTONE:  The individual country numbers won't be
available until later this week, sorry to say.  There will
be some, but I can't tell you what the number is yet.

QUESTION:  Two really quick clarifications:  The '95
estimate on peacekeeping of $l.3 billion -- that does
include the $672 million supplemental for '95?

MR. JOHNSTONE:  Yes, it does.

QUESTION:  Okay.  And the other one was:  On Mexico and the
loan guarantee, you said that it's not a line item.  Would
it be a supplemental in the event that additional money is
required to meet the IMF obligation of $l8.7 billion?

MR. JOHNSTONE:  I'd have to take that and get back to you on
it.  I'm not sure exactly how that would be -- any
contingencies with respect to Mexico would be funded.

QUESTION:  You don't have numbers for countries, but do you
have anything about regions.  It's going to be...

MR. JOHNSTONE:  Those will be available also a little later
this week.

QUESTION:  Last budgeted --

QUESTION:  Which Bureau are you considering cutting?

MR. JOHNSTONE:  We haven't yet begun the process by
identifying the Bureau.

QUESTION:  This budget will keep the U.S. current on its
peacekeeping and U.N. dues, is that right?

MR. JOHNSTONE:  This will bring us current on our
peacekeeping obligations.  It does not yet bring us current
with respect to U.N. dues.  We have a multi-year program
that will achieve that objective, but this budget will not
yet do that.

QUESTION:  And that is assumed?  Part of that ongoing
process of paying up there is assumed and it is included in
this budget?

MR. JOHNSTONE:  I think the U.N. dues begins in Fiscal l996,
if I'm not mistaken -- the first tranche of payment on U.N.
dues.

QUESTION:  This pays for --

MR. JOHNSTONE:  Fiscal '97 -- sorry.

QUESTION:  This pays our '96 obligations to the U.N. but
does not pay what we owe them for past arrears?

MR. JOHNSTONE:  That's right.  And the beginning of the
repayment schedule will be l997.

QUESTION:  And you also cite an increase to the multilateral
development banks.

MR. JOHNSTONE:  Strictly to pay the arrearages.

QUESTION:  Right.  Will that cover all the arrearages that
we have there now, or is that a payment?

MR. JOHNSTONE:  No, no.  That is a payment toward covering
the arrearages.  I think the arrearages are to be paid up by
the end of Fiscal l998.

QUESTION:  (Inaudible) is that a 25 or 3l percent
assessment?
When you say we're going to be current, is that using --

MR. JOHNSTONE:  We based on budget on the basis of a 25
percent assessment.

QUESTION:  I see, okay.

QUESTION:  Thank you very much.

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