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U.S. Department of State
96/05/15 Testimony: Foreign Affairs Budget
Office of the Spokesman

                       U.S. DEPARTMENT OF STATE 
                        Office of the Spokesman 
Text As Prepared                                    May 15, 1996 
                             STATEMENT BY 
                           Washington, D.C. 
                             May 15, 1996

	Good morning, Mr. Chairman, Members of the Committee:  I am here 
today to urge your support for the President's request for the State 
Department portion of the CJS account.  I am grateful for our close 
consultations in recent months.  And I appreciate your understanding of 
our compelling needs in a difficult budgetary climate. 
	Let me begin with some facts about what is a remarkably austere 
budget.  Our request to this subcommittee for the State Department and 
related agencies and accounts is $5.45 billion, almost $170 million less 
than last year's request.  It is the bare minimum we need to protect our 
nation's interests while balancing the federal budget in six years. 
	Our entire International Affairs Budget has fallen 51% in real 
terms since 1984.  At just 1.2% of the federal budget, it represents a 
tiny fraction of the amount our nation earns from exports, or of the 
amount our nation is forced to spend when foreign crises erupt into war.  
This small investment protects the interests of the American people and 
allows the United States to lead. 
	I come from a generation that clearly recognizes the imperative of 
American leadership.  Those of us who served in World War II understand 
that it was our global engagement during and after the war that 
safeguarded our freedom and carried us to victory in the Cold War.  We 
know that without our continued leadership, we cannot hope to protect 
future generations of Americans from the perils of a still dangerous 
post-Cold War world.  This is a central lesson of our century that must 
continue to guide us. 
	Consider what our diplomacy has accomplished in the last three 
years -- in many cases with bipartisan support:  We ended the fighting 
in Bosnia and eliminated the threat it posed to European security.  We 
are bringing former adversaries together through the Partnership for 
Peace, and we are moving ahead with the historic process of NATO 
enlargement.  We stopped the flight of Haitian refugees to our shores 
and gave that nation a chance to build democracy.  We achieved the 
indefinite and unconditional extension of the Nuclear Non-Proliferation 
Treaty.  We put North Korea's nuclear program on the road to the scrap 
heap.  We stemmed a destabilizing financial crisis in Mexico.  Our 
economic diplomacy has fueled an export boom, creating more than one 
million high-paying American jobs. 
	Three weeks ago, the President sent me on a mission to end the 
confrontation that drove so many thousands from their homes in Northern 
Israel and Southern Lebanon.  After difficult negotiations, we succeeded 
in producing an understanding that ended the intensive fighting and was 
designed to prevent renewed violence and harm to civilians on both sides 
of the border.  Prime Minister Peres said early on during our mediation 
effort that "only the United States can do this."  And he was right. 
	Now we will work to move Arab-Israeli negotiations forward.  There 
remains a real opportunity to use our leadership to complete a circle of 
peace which will necessarily include an agreement between Israel and 
Syria.  Our goal, as always, is to bring greater security and stability 
to all the people of the region. 
	Some of our achievements came about because we were willing to use 
our military strength.  But none could have been achieved without our 
diplomatic leadership.  Indeed, diplomacy is essential and cost-
effective because it gives us options short of force to protect our 
interests.  But we cannot sustain our diplomacy on the cheap -- unless 
we want to shortchange the American people. 
	Mr. Chairman, one of the most dramatic changes I have seen over 
the years is the erasure of the line between domestic and foreign 
policy.  The Clinton Administration recognizes that our strength at home 
is inseparable from our strength abroad. 
	The convergence of our foreign and domestic interests is clear in 
our response to the set of transnational security challenges we face, 
including proliferation, terrorism, international crime and narcotics 
and damage to the environment.  These threats respect no border, ocean -
- or committee jurisdiction.  They must be fought at home and abroad, 
and at every level of government.  As the flagship institution of 
American foreign policy, the State Department is responsible for leading 
and coordinating all U.S. government efforts to counter these threats 
beyond our shores.  We cannot fulfill that responsibility without 
adequate resources. 
	We must continue working to stop the spread of weapons of mass 
destruction, the gravest potential threat to the United States and our 
allies.  We must remember that we could not have achieved the 
unconditional and indefinite extension of the NPT without the 
involvement of our embassies in every region of the world, in countries 
large and small.  That is one reason why the United States still needs 
to maintain a diplomatic presence in virtually every country -- what I 
call the principle of universality. 
	This year one of our priorities is to conclude a treaty to ban 
nuclear testing -- a goal first set by President Kennedy 35 years ago.  
Our efforts received a significant boost from last month's meeting of 
industrialized nations in Moscow, where we forged a commitment with 
Russia and our G-7 partners to negotiate a Comprehensive Test Ban Treaty 
by September.   
	At the Moscow Summit, we also adopted a concrete program to 
prevent illicit trafficking in nuclear materials and a process of 
cooperation to dispose of plutonium no longer needed for defense 
purposes.  Russia agreed to join a treaty that bans the dumping of 
nuclear waste in the ocean and to improve safety at aging nuclear 
reactors.  Already U.S. assistance is helping convert Russian plutonium 
production reactors and procure highly enriched uranium from Kazakhstan.  
These urgent threats make our continued engagement with Russia and its 
neighbors critical despite the difficult transitions they are 
undergoing.  We simply cannot afford the luxury of walking away from 
these relationships where our security is at stake. 
	We can combat another proliferation threat by ratifying the 
Chemical Weapons Convention and working with allies and friends to bring 
it into force -- an effort that will require sustained work at posts 
from Tokyo to New Delhi and London to Pretoria. 
	Our regional nonproliferation efforts are also vital.  Since this 
Administration concluded the U.S.-DPRK Agreed Framework in October 1994, 
North Korea's dangerous nuclear program has been frozen in its tracks.  
The Korean Peninsula Energy Development Organization (KEDO) that we 
helped establish to implement the Framework has made significant 
progress.  Our KEDO contribution -- funded elsewhere in our 
International Affairs request -- is a small investment compared to the 
billions of dollars in contributions South Korea and Japan are making, 
or the immeasurable costs of a conflict in Korea.    
	Last week we reached an understanding with China that it will no 
longer provide assistance to unsafeguarded nuclear programs -- another 
significant step forward in our non-proliferation efforts.  The threat 
of sanctions authorized by Congress played an important role in this 
achievement -- and helped us to reach the result that sanctions would 
have been designed to bring about.  China also agreed on the importance 
of our continuing consultations on export control policies and related 
	The Clinton Administration has also led the international effort 
to prevent pariah states like Iraq, Iran and Libya from acquiring 
weapons of mass destruction.  Our funding for the International Atomic 
Energy Agency (IAEA) supports its vital work of detection and monitoring 
in North Korea, Iraq, and around the world. 
	We have also put new emphasis on the fight against international 
criminals, terrorists and drug traffickers.  The President's appointment 
of General Barry McCaffrey to spearhead our counternarcotics campaign 
will intensify our efforts at home and abroad.  The State Department is 
advancing the President's ambitious strategy to put international 
criminals out of business.   
	Last week at the U.S.-Mexico Binational Commission Meeting, we 
took important steps to strengthen our united stand with Mexico against 
criminals and drug traffickers.  We will help Mexico implement its new 
law making money laundering a crime.  We will strengthen our Border 
Crime Task Force.  We will move to control the precursor chemicals used 
to produce illegal drugs.  And we have made great progress toward fully 
implementing commitments for the extradition of criminal suspects, 
including the recent extradition of three Mexicans to the United States.   
	Our Administration is also working to protect the security and 
well-being of American citizens by putting environmental issues where 
they belong:  in the mainstream of American diplomacy.  Last month, I 
set out our global environmental priorities in a speech at Stanford 
University.  As I said then, the environment has a profound impact on 
our national interests in two ways:  first, environmental threats 
transcend borders and oceans to affect directly the health, prosperity 
and jobs of American citizens.  Second, addressing natural resource 
issues is critical to achieving political and economic stability, and to 
pursuing our strategic goals around the world.  
	Working with other government agencies, the State Department is 
fully integrating environmental goals into our diplomacy and making 
greater use of environmental initiatives to help promote peace in the 
Middle East and democracy in Central Europe.  We are using our Common 
Agenda with Japan and new partnerships with Brazil, India, the European 
Union other nations to leverage our resources.  We are helping American 
companies expand their already commanding share of a $400 billion market 
for environmental technology.  The funds that we are requesting 
elsewhere for sustainable development also help protect the ozone layer, 
combat climate change, and preserve the biodiversity which holds 
important benefits for American agriculture and business.  
	Mr. Chairman, let me now turn to the two main elements of our 
request to this committee -- our funding for international organizations 
and peacekeeping and our funding for State Department Operations. 
	This year, we are requesting just under $1.5 billion for 
international organizations and peacekeeping.  Among other things, this 
part of the budget funds our obligations to organizations such as NATO, 
the OECD, the IAEA, the WTO and the OAS.  For up to half a century, we 
have worked effectively on a bipartisan basis through these institutions 
to advance American interests in key regions and around the world.  
Today, a hallmark of this Administration's foreign policy is to ensure 
that each adapts to the challenges of a new era. 
	This part of the budget also begins to fund a plan to pay off over 
5 years our arrears to the United Nations as that institution undertakes 
necessary reforms.  In this respect, the request poses another basic 
question:  Will we abandon the institutions we created after World War 
II, leaving ourselves with little option but to face future crises 
	The United States has led in the UN for 50 years because it is a 
valuable tool for advancing our interests and our values.  The UN helped 
us mobilize the Gulf War coalition, deploy a force to support democracy 
in Haiti and impose sanctions against rogue states.  Its many programs 
and agencies care for millions of refugees, inoculate children and fight 
epidemics like AIDS and Ebola.  The UN Special Commission has helped 
expose Iraq's development of weapons of mass destruction.  The IAEA 
helps us prevent countries like North Korea and Iraq from developing 
nuclear weapons.  The Security Council has reinforced our condemnation 
of terrorism in the Middle East and of Cuba's shootdown of civilian 
aircraft.  The UN War Crimes Tribunals are overcoming great obstacles to 
hold perpetrators of atrocities accountable for their actions.   
	UN peacekeepers are helping us resolve the costly civil war in 
Angola and implement peace in Eastern Slavonia without having to put our 
own troops at risk.  Peacekeeping can be a cost-effective investment.  
In Mozambique, for example, the United States spent over $700 million 
helping victims of war and hunger in the ten years prior to 1992.  After 
a successful UN peacekeeping mission, our humanitarian aid is down to 
$18 million this year and U.S. companies have already signed contracts 
worth hundreds of millions of dollars. 
	At the same time, I think we agree that the UN has serious 
problems and that it is seriously in need of reform.  Last fall, I 
proposed a concrete agenda to the General Assembly.  I called for 
consolidating related agencies, eliminating or downsizing low priority 
activities, expanding the inspector general concept and more efficient 
management practices.  The President and I have made it clear that 
tangible progress is essential to sustain the support of the Congress 
and the American people for the UN.   
	The UN has taken important steps in the right direction.  An 
office with the functions of an inspector general is up and running.  
Just this week I met with Joe Connor, the former CEO of Price Waterhouse 
and now the Under Secretary-General for Management, who is shaking up 
the UN's management culture.  In December, the UN approved the first 
genuinely no-growth budget in its history, and it has since announced 
plans to eliminate 1,000 staff positions.  The Security Council has 
established rigorous guidelines for the approval of new peacekeeping 
missions.  Finally, the General Assembly has established High-Level 
Working Groups to recommend management, structural, and financing 
	Much more needs to be done.  But Mr. Chairman, our efforts to 
advance the cause of reform depend on our continued leadership at the 
UN.  We cannot reform and retreat at the same time. 
	Those who cavalierly say that we can walk away from our half-
century commitment to the UN are wrong.  I want to tell you candidly 
that these large arrears are doing great harm to our national interests 
across the board.   
	Nor can we continue to pass our financial obligations to future 
generations by building up massive arrears, especially for peacekeeping.  
When we do, we are not just shortchanging a bureaucracy in New York.  We 
are shortchanging our closest allies and friends, nations like Britain 
and Canada, who contribute the bulk of troops to peacekeeping missions 
and who have had to wait months and even years to be fully reimbursed by 
the UN.  These nations place their soldiers in dangerous situations, 
often at our request, on behalf of goals we support -- and they put up 
75% of the cost.  When we do not pay our promised share it diminishes 
our influence and our reputation as a nation that keeps its word. 
	Mr. Chairman, I also look forward to working with you on our 
request for State Department Operations.  I carefully reviewed Under 
Secretary Moose's testimony to this committee, and I endorse his 
evaluation of the dire needs of our Department -- as well as his 
expression of appreciation to this committee.  
	Our embassies and consulates provide platforms not only for our 
operations but for other federal agencies around the world.  Without 
them, we could not track down terrorists or counterfeiters wherever they 
hide.  We could not follow the situation of religious minorities or 
human rights issues or Americans held captive anywhere in the world.  We 
could not help build new opportunities for American business.  We could 
not prevent narcotics shipments or environmental crises.  The additional 
cuts to our budget that some in Congress propose are not a strategy for 
streamlining the Department, but for sidelining it as a force on behalf 
of American citizens and American leadership around the world.   
	Secretary Perry likes to say that in protecting our vital 
interests, our first recourse is diplomacy.  I certainly agree.  But if 
our diplomacy is to be an effective first line of defense, we must 
revitalize our platforms and our presence.  Just as our armed forces can 
be smaller in the 1990s because they are also smarter, the State 
Department can only function with fewer people and fewer posts if those 
people are better trained and those posts are better equipped.   
	In this era of diminishing resources, we have worked to strengthen 
our diplomacy by making it more efficient and effective.  Restructuring 
has made the State Department leaner across the board.  Administrative 
and middle management positions have been reduced significantly -- by as 
much as 25 percent for Deputy Assistant Secretary slots.  We are 
implementing new management tools, including the Overseas Staffing Model 
and our new interagency cost-sharing system, to rationalize our overseas 
staffing -- and I want to thank you,  
	Mr. Chairman, for your contribution in helping us make these 
important changes.  We have also cut over 2,000 full time employees 
since 1993, and the total cuts will rise to 2,500 by the end of FY '97.  
In order to increase efficiency and lower personnel costs, we have also 
downsized bureaus and Embassies.  At the same time, we have decreased 
our administrative expenses by $139 million.   
	I will tell you quite candidly that these reductions have been 
painful, for those leaving the Service and for those of us remaining, 
who have lost the benefit of their enormous talent and expertise.  But 
we have no choice given the budgetary constraints we all face.   
	As you know, Vice President Gore has led a major effort to 
reinvent government.  For our part, a Strategic Management team helped 
me come up last May with some 46 recommendations to maintain or increase 
our services to the American people at a lower cost.  For example, we 
are improving our services to the American people by setting up an 800 
number for consular crises and making travel information available by 
fax-on-demand and through the Internet.   
	We have built inter-agency teams here and abroad to pursue 
priorities such as expanding trade and combating crime more 
aggressively.  We are eliminating redundancy by combining administrative 
services like warehousing and printing with other foreign affairs 
agencies.  We are opening a child-care center and broadening our job-
sharing programs to make sure that we retain the most skilled and 
diverse workforce possible. 
	For these reforms to produce better diplomacy and faster services, 
however, we must upgrade our obsolete information systems, and aging 
physical plants as well as address critical staffing gaps.  Four years 
of flat budgets have taken their toll.  The increase of $37 million that 
we are requesting for State Department programs will allow a critical 
investment in information systems to go forward.  Better computer 
technology is essential for a more efficient State Department and more 
effective diplomacy in the information age.   
	As you know, USIA and ACDA have also undertaken rigorous 
management reviews and extensive streamlining.  You have heard from them 
directly during this budget process.  But let me say a few words about 
the USIA and ACDA budgets this subcommittee covers. 
	Over the past two years, USIA proposed and implemented a 
downsizing plan nothing less than draconian -- 1,200 positions, almost 
one-fourth of its staff, were eliminated in two years.  In addition, 
Radio Free Europe/Radio Liberty has cut some 900 positions as part of 
its consolidation process.  USIA continues to play an important role in 
fostering American ideals and international understanding -- missions 
that remain crucial to our foreign policy and are increasingly important 
to American citizens in an interdependent world.  USIA also contributes 
to the National Endowment for Democracy, which continues to play a 
critical role in supporting democracy and free elections around the 
	ACDA's mission to negotiate and monitor compliance with arms 
control agreements remains crucial to safeguarding our national 
security.  ACDA has played a pivotal role in securing the indefinite 
extension of the Nuclear Non-Proliferation Treaty, completing the 
Chemical Weapons Convention and conducting the negotiations underway on 
a Comprehensive Test Ban Treaty.  As the result of recent downsizing, 
ACDA is now smaller, with a more tightly-focused mission and a budget of 
just $48 million to carry out its essential work. 
	Mr. Chairman, the shutdowns and budget uncertainty of the last 
year have, in my judgment, damaged our international reputation for 
reliability and credibility.  Leaders and ordinary citizens in many 
parts of the world couldn't quite believe that the most powerful nation 
in the world was closing for a few days of furlough.  The shutdown was 
especially unsettling in the wake of our decision to close a number of 
posts that had served American interests for decades. 
	As we face increasing global economic competition and an array of 
threats that respect no borders, we cannot advance American interests by 
lowering the American flag.  Indeed, our global presence should be 
expanding, not contracting.  More Americans than ever are looking to us 
to facilitate their global plans, from investment incentives to vacation 
	Because of the budgetary pressures we face, I proposed to close 19 
embassies and consulates during 1995 and 1996.  And I must say that I 
was not happy about being forced to do so.  I know that Senator Hollings 
and others of you have also heard from constituents opposing our planned 
closures of consulates in places like Hermosillo and Matamoros, Mexico.  
As you know, Congress asked us to keep six of these posts open -- and 
they will remain open.  After some 30 closings since 1993, I strongly 
doubt that wholesale additional closings are in the interest of the 
world's greatest power.  But with further cuts, I may have no 
	Last year I warned that our diplomatic readiness was 
deteriorating.  I must report that many of our posts remain under 
critical strain.  Our Beijing Embassy, for example, has scarcely been 
repaired since 1979.  There is simply not room for other agencies to 
expand their offices.  Dust and sewer gas come in through the cracks and 
waft along the halls.  In Tajikistan, our staff have operated out of a 
hotel for four years, through a civil war and its aftermath. 
	In Sarajevo, our officers were sleeping beside their desks until 
just last month.  Menaced by nearby snipers and falling shells, they 
also struggled with a budget so limited that one officer bought his own 
computer and we had to ask visiting CODELS to bring in copier paper.  
Until very recently the post's communications system was a Rube Goldberg 
model -- I was amazed to see a satellite dish rigged on the roof of the 
Embassy using a barbecue grill when I visited in February.   
	Mr. Chairman, the dedicated men and women of our armed forces have 
the state-of-the-art communications technology they deserve.  The men 
and women of our foreign service deserve no less, especially in a 
country like Bosnia where some 30 American civilians have given their 
lives in the cause of peace. 
	Our people put themselves on the line for their country every day 
-- people like John Frese, one of our Diplomatic Security agents in 
Monrovia, Liberia who made repeated dashes through gunfire to rescue 
over 100 American citizens during the evacuation last month.  Our 
consular and passport officers in Chicago, Washington and Amsterdam 
worked late on Christmas Eve, while the government was shut down, to 
help return two American children who had been taken from their mother 
and put on a plane to the Middle East.  And five members of our Consular 
Flyaway Team gave up holidays with their families to assist and comfort 
the relatives of those killed in the American Airlines crash in Colombia 
last December -- also during the furlough. 
	The courage, ingenuity and dedication of our employees have 
allowed us to do more with less through the last four years of flat 
budgets and increasing demands.  But there comes a time, Mr. Chairman, 
when less really is just less.  We have reached that time.  We cannot 
safeguard our security and promote American interests without the full 
$5.45 billion in funding we request.  
	As I have said before, those who say they are for a strong America 
have a responsibility to help keep America strong.  That means keeping 
our institutions effective and our presence around the world robust.  
Anything less would shortchange our citizens -- the travelers and 
workers, students and business people who look to us to protect their 
security, promote their well-being and provide assistance wherever the 
American flag flies. 
	Thank you, Mr. Chairman.  Once again, I appreciate very much your 
cooperation and look forward to consulting with you and with the 
Committee in the days and weeks ahead. 
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