Prepared Statement for the House International Relations Committee:
10:00 AM, Wednesday, March 7



Mr. Chairman, members of the committee, I am pleased to have this opportunity to testify before you for the first time as Secretary of State, in support of President
Bush’s budget request for FY 2002.

I know many of you quite well – some from my days as National Security Advisor, others from my time as Chairman of the Joint Chiefs of Staff.

And some of you are not only new to me but new to the Congress – and I welcome you and look forward to working with you, as I look forward to working with all of
you on this committee and with this 107th Congress.

I know that it is traditional for Secretaries of State to come before this committee at this time of the year and to devote most of their presentation to outlining the
Administration's foreign policy -- a sort of around-the-world perspective.

I would like to break that mold if you don’t mind and instead concentrate on a subject very dear to me and, I know very dear to you – the dollars for State Department
operations particularly and for Function 150 in general.

I will be pleased to discuss with you my recent trip to the Middle East and to Europe, and to answer any questions you might have with respect to President Bush’s
foreign policy, and I am sure you will want to ask such questions.

But the resources challenge for the Department has become such a grave one, such a serious impediment to the conduct of America’s foreign policy, that I feel I must
focus on that challenge in my opening statement. I would be doing a disservice to you, the authorizers of our foreign affairs budget, if I did not do so.

Mr. Chairman, in January at my confirmation hearing I told the members of the Senate Foreign Relations Committee that I was very concerned about the State
Department’s budget.

At that time, I did not have the required information to make a reasoned statement about what was needed to alleviate my concern, I just knew I had deep concern. 
When an agency or a department is under-resourced for as long as the State Department has been, you can feel it in your bones.

Now I have the required information and I’m ready to talk.

But let me briefly put what I’m going to say in context. 

In January, at that same hearing before the Senate Foreign Relations Committee, I said that President Bush would be a leader who faithfully represents to the world the
ideas of freedom and justice and open markets.

The President has many ways he can do this, many different methods through which he can show the world the values of America and the prosperity and peace those
values can generate.

His recent personal visit to Mexico to talk with President Fox is one of those methods.

Working out the means of cooperation and trade with a neighbor such as Mexico, however complex and difficult some of the underlying issues may be, is an undertaking
full of promise for the future. President Bush knows how important such foreign policy efforts are and that is why we went to see President Fox.

And, as you know, I returned just last week from visits to Israel, Egypt, Jordan, Syria, Saudi Arabia, Kuwait, and the West Bank, as well as to Brussels on my way home
to participate in a meeting of the North Atlantic Council and to talk with some of my counterparts in Europe.

As you also may know, I was able to have a talk with Russian Foreign Minister Igor Ivanov as well, while I was in Cairo.

Such trips by his Secretary of State are another of the methods the President has at his disposal to represent American values and interests in the councils of state
around the world.

But the most important method by which the President presents America to the world, the most important method by far, is through the thousands of people who labor
away at such representation every day of the week in almost every country in the world.

I am of course speaking of our front line troops in the State Department, as well as those here in America who support them.

I am talking about the Foreign Service officers, the Civil Service employees, and the Foreign Service nationals who make up the Department of State.

Theirs is the daily drudgery of foreign policy, punctuated by the thrill and excitement of diplomatic success ranging from the minor to the sublime, from the courteous
handling of a visa application to the inking of a treaty limiting conventional arms in Europe.

Mr. Chairman, there are no finer people chipping away at tyranny, loosening the bonds of poverty, pushing the cause of freedom and peace, on the US government
payroll.

And it is a mystery to me how they have continued to do it over the years with so little resources.
Many of you have visited Camp Bondsteel in Kosovo where our GIs are stationed. It is a superb, first-class facility put in overnight to make sure that our troops are
taken care of. But if you visited some of our dilapidated embassies and other facilities in the region, you would wonder whether the same government was taking care of
them. The same bald eagle is clutching the arrows and the olive branch, but in many of State’s buildings that American eagle is very ill-housed.

Also at Camp Bondsteel there are excellent capabilities with respect to information technology, including the capability to send unclassified e-mails. In many of State’s
facilities there were no such capabilities.

Now since the time that construction was begun on Camp Bondsteel, with the help of this committee and of the Congress as a whole, and with the good work of former
Secretary Albright and her dedicated people, we have made great strides in our unclassified information technology at State.

I want to thank you, Mr. Chairman, and all the members on this committee, for what you have done to get this ball rolling.

Many of you were active in steering the Admiral James W. Nance and Meg Donovan Foreign Relations Act – our authorizing legislation and an important counterpart to
the later appropriations bill – through this committee and ultimately to floor passage.

In that regard, I want to single out Representative Chris Smith, the bill’s House sponsor, and Representatives Cynthia McKinney and Ben Gilman, its co-sponsors, for
their very active involvement.

I know you will be shepherding similar authorizing legislation through this committee soon, and we at the State Department look forward to working with you on it.

And I want to thank all the Members of this committee for the attention you have shown to our foreign policies and for your active encouragement of many of your other
colleagues to support the resources needed by State Department programs and people.

My hope is that, in the first year of the Bush Administration, you will work with us to continue this good progress we have made, and to see that our operations and our
foreign affairs are put back in balance with everything else we do in the world.

For example, now that we have made such strides in our unclassified information technology, we have to continue those strides by gaining broad-based Internet access. 
At the same time, we have to begin work to create classified Local Area Network capabilities, to include classified e-mail and word-processing.

Mr. Chairman, as you well know, some of our embassies in addition to lacking up-to-date information technology are not as secure as they should be -- and so we have
people who are not as secure as they should be.
But again thanks to the House and Senate’s attention to this matter, we are beginning to get a handle on it.

I understand that when the FY 99 emergency supplemental was being put together, we did not have the sort of robust buildings program that was needed to meet
security needs. We had to prove that we could ramp up to such a program and then manage it.

Let me just say that in the two and a half years since the bombings in Kenya and Tanzania, we are well on the way to doing just that.

We provided an immediate stand-up of facilities in Dar Es Salaam and Nairobi and within twelve months replaced each with more secure interim facilities that will be in
place until the new replacement facilities are finished.

We broke ground on those permanent facilities in August.

Likewise, we just completed construction in Kampala, Uganda and our people have moved in just 15 months after construction began.

We will also move into a new embassy in Doha, Qatar in early June of this year.

Other new construction projects where we have broken ground include Zagreb, Istanbul, and Tunis.

Ground-breaking for Abu Dhabi will occur this spring.

In addition, we've funded over 1200 individual perimeter security upgrades with over 50 percent now completed.

But we are still not moving quickly enough nor efficiently enough.

And I want to work with you and the other members of Congress to gain your confidence so that we can move faster and eliminate some of the barriers that cost money
to overcome.

In that regard, we are carefully studying construction costs.

I know that we can do better in adapting the best practices of industry and smart engineering techniques and technologies to embassy construction.

The hundred-foot set-back, for example, can sometimes be overcome by better and smarter construction.

Blast protection remains the same but the dollar costs are significantly lower because acquisition of land is exorbitantly expensive. If we can provide the same degree of
security through a better built wall that has only, say, a fifty-foot set-back, then that's what we are going to do.

And we believe better overall management is also achievable so that construction delays don't eat up precious more dollars.

Better overall management includes bringing on board an experienced operations executive to manage the Overseas Facilities Program, as recommended by the
Overseas Presence Advisory Panel. It also includes realigning the Foreign Buildings Office from within the Bureau of Administration to a stand-alone organization
reporting directly to the Undersecretary for Management – requiring, of course, consultation with the Congress. And I hope I’ll have your support on that.

The combination of strong leadership, realignment of the function, and an industry panel to assist with identifying best practices from the private sector, along with
implementation of other OPAP recommendations, will greatly improve the management of the overseas buildings program. 

I have asked one of the Army's finest engineers, retired Major General Charles Williams, to head this effort. He is an expert at reducing costs while delivering high
quality and I've no doubt he will offer us new ways to execute and to manage our embassy construction. 

As a result, we may be able to reduce that hundred-million-dollar price tag on new embassy construction. I am committed to working with you and the appropriators on
this issue. 

Mr. Chairman, in the past we have not in all cases done the best we could to see that our overseas personnel were as secure as they should be -- but together, you and I
can change that. Together, we can continue this very positive effort we have begun to pull the State Department into the Twenty-First Century.

And that is what we are after in the President's Budget for Fiscal Year 2002 -- to continue this very positive forward momentum.

The President’s request of about $23.9 billion – a five-percent increase over this year – will do just that. 

We are providing increased funding, for example, toward our steadfast commitment to the safety of our men and women serving overseas.

These dollars will allow us to continue to address our infrastructure needs including the construction of new, secure facilities and the continuing refurbishment of existing
ones.

These dollars also provide the means to improve security operations -- including the hiring of additional security officers who are essential to the prevention and
deterrence of terrorist attacks against our embassies, such as those that occurred in Nairobi and in Dar Es Salaam.

We will not be deterred by such attacks from doing our job in the world -- but we will take measures to protect our people.

The President's Budget also provides funds for modernizing -- and in some cases acquiring for the first time -- the required information technology for the conduct of
foreign affairs.

These dollars will allow us to modernize our secure Local Area Network capability, including e-mail and word-processing. Likewise, they will allow us open access
channels to the Internet so that our people can take full advantage of this enormously important new means of communication and research. This access will also
increase communications and information sharing within the foreign affairs community.

Mr. Chairman, this development alone has the potential to revolutionize the way we do business.

Take for example the great products turned out by the Foreign Broadcast Information Service, or "FBIS" as we call it. 

No longer will an ambassador or political or economic officer in one of our embassies have to wait for the bound copies to arrive by courier or mail at his desk or office,
often delaying the hottest, most recent news.

Switching on the computer, accessing the Internet, and clicking on the FBIS account puts the latest news from in-country and regional newspapers and periodicals at
your fingertips almost instantly.

Similarly, clicking onto your e-mail account allows you to query any subject matter expert in the system as swiftly and securely as modern technology permits.

When I arrived in the Transition Office at State in December of last year, the first thing I put on the table behind my desk was my computer with access to my e-mail
account.

I didn't want to be out of touch for an instant.

We are talking of course about unclassified communications. But unclassified communications are a considerable part of our everyday routine. 

As you know, we need secure methods of communications also. And with the President's Budget we will continue installing these secure methods everywhere we need
them.

The Department of State intends to exploit fully the ongoing technology and information revolutions.
Our long-term investment strategy and ongoing acquisition of new technology will continue to address the many information needs of our foreign policy professionals.

I have personally committed to this transformation and the President's Budget for 2002 is the next step toward fulfilling that commitment.

I have also personally committed to reinvigorating the Foreign Service -- an arm of our professional public service apparatus every bit as important as the Army, Navy,
Marine Corps, Air Force, or Coast Guard.

To do this, we need to hire more of America's brightest and most talented young people who are committed to service.

And we will only be successful if we change how we recruit, assess, and hire Foreign Service Officers. And we are doing that. We also need to be smarter about how
we market the State Department if we are to win the fight for talent.

Funding alone will not solve our human resource challenges. We must create a place of work that can compete with our higher paying private sector competitors for the
very best young people America has to offer.

And I assure you we will, by providing a career that rewards innovation, recognizes achievement, and demands accountability and excellence. With your help we will
win the fight for talent and that victory will be reflected every day in America’s foreign policy.

The President's Budget provides the dollars to hire a significant number of new foreign service officers so we can establish a training float -- a group of FSOs that will
begin to relieve some of the terrible pressures put on the conduct of America's foreign policy by the considerable shortage of FSOs we are currently experiencing.

Mr. Chairman, there are other areas of the President's Budget that I want to highlight in addition to embassy security, construction and refurbishment; information
technology; and hiring of new people for the Foreign Service.

There are the program areas that must be funded to advance America’s foreign policy interests overseas – the backbone of our foreign affairs.

These are programs aimed at restoring peace, building democracy and civil societies, safeguarding human rights, tackling non-proliferation and counter-terrorism
challenges, addressing global health and environment issues, responding to disasters, and promoting economic reform. 

For example, the Budget expands counterdrug, alternative development, and government reform programs in the Andean region.

The Budget provides for military assistance to Israel to help meet cash flow needs for procurement of U.S. defense systems, and to demonstrate our solid commitment to
Israel's security.

The Budget fully funds all 2002 scheduled payments to the Multilateral Development Banks and the U.S. commitment to the Heavily Indebted Poor Countries debt
reduction initiative.

The Budget increases funding for Migration and Refugee Assistance -- to give crucial and life-sustaining support to refugees and victims of conflict throughout the world.

The Budget reflects the Bush administration’s leadership in promoting the protection of human rights, for example, in combating impunity for crimes against humanity in
Sierra Leone.

The Budget increases resources for combating global HIV/AIDS and trafficking in women and children, and for basic education for children.

With respect to HIV/AIDS and other global infectious diseases, I want to thank Representatives Sherman and Gilman, as well as Representatives Leach and Lee, for
your attention last year to the plus-up of funds for HIV/AIDS.

I will also point out that when the plus-ups were made for HIV/AIDS, the billpayers were important accounts such as Foreign Military Financing. What we really
needed was an overall increase.

And when Members went to conference on the bill that is what we got – an overall plus-up with FMF funding restored. That development is worth thanking all of you
for again – because that action helped provide the full resources that are vital to these programs.

The President’s Budget for 2002 also provides money to support peacekeeping operations around the world, such as those in Bosnia and in Kosovo.

The Budget also supports political and economic transitions in Africa, with emphasis on those countries, such as Nigeria and South Africa, that have a direct bearing on
our national security and on those countries that have demonstrated progress in economic reform and in building democracy.

Building democracy and civil societies remains a top priority of this administration, so our Budget also supports short- and long-term programs to support democratic
elements in countries where alternative voices are silenced. Toward this end, the Budget increases funding for U.S. international broadcasting to support the free flow of
information by providing accurate information on world and local events to audiences abroad. 

It also sustains our efforts to remove landmines in former war-ravaged countries -- landmines that kill and maim children and innocent civilians.

The Budget supports our efforts to reduce risks posed by international terrorism, and to halt the spread of weapons of mass destruction by supporting stronger
international safeguards on civilian nuclear activity and by helping other countries to improve their controls on exports of potentially dangerous technology.

The Budget also provides increased funding for the Peace Corps, another group of bright and talented individuals committed to service. The Peace Corps has more than
7000 currently serving volunteers addressing a variety of problems in the areas of agriculture, education, the environment, small business, and health matters.

Mr. Chairman, before I conclude my prepared statement, let me call your attention to several areas upon which I want to place special emphasis.

In addition to what I have already highlighted with respect to the money for the Andean region, you know that much of that money is directed at Plan Colombia.

We are asking for money to continue and expand programs begun with the $1.3 billion emergency supplemental in FY 2000.

Colombia is the source or transit point of 90 per cent of the cocaine and over 50 percent of the heroin that arrives in America. Those percentages are increasing, by the
way.

Neighboring countries, such as Bolivia and Peru, have conducted effective coca eradication programs, but maintaining their successes will require vigilance and U.S.
support.

The Bush administration believes strongly that any successful counterdrug strategy in the region must include funding to bring greater economic and political stability to
the region and a peaceful resolution to Colombia's internal conflict.

We must capitalize on the ground work of programs funded thus far, including the expansion of Andean eradication and interdiction programs, sustained alternative
development programs, and continued attention to justice and government reform initiatives.

In addition, the President's Budget requests funding for Ecuador, Brazil, Venezuela, and Panama, to strengthen their efforts to control drug production and the drug
trade. Our efforts must be regional in scope and this money keeps them so.

Mr. Chairman, I also want to emphasize our efforts to de-layer the bureaucracy at State to promote a more effective and efficient organization for the conduct of our
foreign policy.

We have begun an initiative to empower line officers -- the true experts in most areas -- and use their expertise to streamline decision-making and increase
accountability.

The current organization sometimes complicates lines of authority within the Department and hinders the development and presentation of a coherent foreign policy, and
thus mars its effectiveness.

I ask your help on this serious matter. When I want to carve out needless and even hurtful pieces of the current organization, I will need your support. I won't do it
unless I am certain it is necessary, but when I do it I will look for your assistance and backing.

I feel very strongly about this effort. Throughout the last four years I have seen up close and personal how American business has streamlined itself. This streamlining
is sometimes ruthless; it is sometimes hard; it is almost always necessary. We need to do the same thing at the State Department.

Mr. Chairman, consistent with the effort to reduce subsidies that primarily benefit corporations rather than individuals, our Budget for international affairs will include
savings in credit subsidy funding for the Export-Import Bank.

As you know, the Export-Import Bank provides export credits, in the forms of direct loans or loan guarantees, to U.S. exporters who meet basic eligibility requirements
and who request the Bank's help.

The President's Budget proposes savings of about 25 per cent in the Bank's credit subsidy requirements through policy changes that focus the Bank on U.S. exporters
who truly cannot access private financing, as well as through lower estimates of international risk for 2002.

These changes could include a combination of increased risk-sharing with the private sector, higher user fees, and more stringent value-added tests.

These efforts at redirection anticipate that the role of the Export-Import Bank will become more focused on correcting market imperfections as the private sector's ability
to bear emerging market risks becomes larger, more sophisticated, and more efficient. 

Mr. Chairman, there is one more issue I want to highlight here.

I want to stress the urgency of releasing $582 million in arrears payments to the United Nations and lifting the cap on peacekeeping payments so we can pay at the rate
we agreed at the UN after more than a year of negotiation.

If we do not deliver on our end of this commitment, we will halt the momentum for UN reform and accumulate new arrears. 

I also want to work with you to allow payment of the third and final tranche of arrears. This includes de-linking the agencies and organizations involved so that bad
performers have only themselves to blame and those agencies and organizations not affected by benchmarks can receive their arrears now. 
Mr. Chairman, members of the committee, I believe we have an historic opportunity with this Budget to continue -- and even to speed up a little – the refurbishment of
our foreign policy organization and, ultimately, of our foreign policy itself.

I believe this is as it should be for what we are doing, finally, is redressing the imbalance that resulted from the long duration -- and necessary diversion of funds -- of the
Cold War.

For over half a century we found it absolutely imperative that we look to our participation in that titanic struggle for ideological leadership in the world as the first and
foremost requirement of our foreign policy and our national security.

Now, the Cold War is over. Now, as all of you have recognized, we are involved in spreading the fruits of our ideological triumph in that war. Now, we have need of a
more sophisticated, a more efficient, a more effective foreign policy. Indeed too, a more traditional foreign policy -- with the exception that there is nothing traditional
about the information and technology revolutions nor about the speed with which they are bringing the potential for a wider and more prosperous freedom to the entire
world.

Now is the time to provide to the principal practitioners of that foreign policy the resources they need to conduct it.

Thank you, and now I welcome your questions.