STATE DEPARTMENT BRIEFING ON U.S. AID BUDGET

The following excerpt is from the U.S. State Department website: Special BriefingState Department and USAID Officials Washington, DC February 13, 2012 MR. VENTRELL: Our briefers have to get up to the Hill in about 40-45 minutes (inaudible). This session is on background. We have State and AID officials, so since there’s a mix, let’s just call this Administration officials. (Inaudible). I’ll let the three of them introduce themselves very briefly, and then I’ll moderate the questions. So let’s go ahead. You want to start? SENIOR ADMINISTRATION OFFICIAL ONE: Sure. I’m [Senior Administration Official One]. I’m [position withheld]. SENIOR ADMINISTRATION OFFICIAL TWO: [Senior Administration Official Two], [position withheld]. SENIOR ADMINISTRATION OFFICIAL THREE: [Senior Administration Official Three], [position withheld]. MR. VENTRELL: Okay. Do any of you have any remarks you want to say before we go for questions, or we just want to go? Okay, Josh, you look like you’re ready to begin. Dig in. QUESTION: Okay. Can we talk about the fact that Europe, Eurasia, South Central Asia – I’m looking at page 11 in the briefing book, where it says assistance to those countries will be zeroed out. SENIOR ADMINISTRATION OFFICIAL ONE: Well, right. QUESTION: Let me finish. And democracy funding, 115 million zeroed out. And migration and refugee assistance, minus 250 million, which is all in the OCO, which is -- SENIOR ADMINISTRATION OFFICIAL ONE: So let me explain the – Europe – and this is Europe and Central Asia money and the democracy. Those are – we’ve traditionally funded assistance in Europe, Eurasia, and Central Asia in a separate account. This year, we are taking those funds and we are funding those programs in our normal assistance accounts – economic support funds, the INL programs, and global health programs. So if you look at the tables in the back, you’ll see those countries funded. We’re discontinuing that account. That account was set up – it had morphed over time but it originally – 20 years ago when the Berlin Wall fell, it was a separate set of accounts that were set up for that region. Twenty years have gone by, several countries have graduated into market democracy, into the international institutions – the EU, NATO – and we felt it was time to sort of normalize the assistance for those countries in the regular budget so that we no longer have a separate carve-out. So there is money in the budget for those reasons. The same thing with Democracy Fund. The Democracy Fund is something that Congress always provides us as a distinct account. We have put the democracy money into the Economic Support Fund account. We do this every year. So it looks like it’s a zeroing out, but it really isn’t a zeroing out. You have to kind of go into the depth of the budget to sort of get that. On humanitarian assistance, you’re right. Most of that reduction from 2012 is in the refugee assistance account. We feel the $4 billion, roughly, that we have in total for humanitarian assistance in the food aid account, the refugee accounts, and the disaster assistance accounts are sufficient to allow us to do what we have to do. Plus I would just say two other things: One, a portion of the Middle East Incentive Fund is – we anticipate it could be used to deal with humanitarian emergencies in that region owing from the transition. We’ve already spent about $150 million over the last year in humanitarian assistance to Libya and in other places. So that’s a place we can sort of stretch the main accounts. And we also have some money in the Feed the Future program that goes for more traditional development food aid programs. That will also help us stretch the account. So I think we’re in pretty good shape on those accounts. QUESTION: Thanks. A very quick follow-up. So the 250 from the migration and refugee assistance, that was all in the OCO, right? And then -- SENIOR ADMINISTRATION OFFICIAL ONE: Well, in 2012, it was split between the base budget and there was a few hundred million dollars that was put in the OCO. QUESTION: Yeah. SENIOR ADMINISTRATION OFFICIAL ONE: As the Deputy Secretary said, we’re – our OCO proposal for 2013 is very much like it was last year. It’s purely Afghanistan and Pakistan and Iraq. It doesn’t have any of the humanitarian assistance in the OCO. So the – for all of you to get an apples to apples comparison from 2013 to 2012, you’ve got to look totals to totals, because we’re – our methodology is different. QUESTION: So practically, is there going to be a scale-down of migration and refugee assistance in those three countries? SENIOR ADMINISTRATION OFFICIAL ONE: No. I think we have the flexibility to use the existing set of accounts to deal with humanitarian issues in those countries. QUESTION: I’ll let someone else. MR. VENTRELL: Other questions? Go ahead. QUESTION: Can I ask you something about the Kerry-Lugar number going down to about 10 – from 1.5 to 1.1? I’m just trying to understand now – wasn’t it supposed to be 1.5 (inaudible)? SENIOR ADMINISTRATION OFFICIAL ONE: Sure. The authorization bill, the Kerry-Lugar-Berman bill you refer to, authorized up to $1.5 billion over five years. This was the bill that was enacted in 2010. For the first couple of years, we have requested $1.5 billion. The Congress – and through the negotiation over the budget, we never got that high. And so given the budget constraints, given the fact that we’re under caps, and the fact that we really had to look very hard at our spending, we have since decided to request something a little bit lower than the 1.5. We did the same thing last year. So we’re at about 1.1 billion for Kerry-Lugar – for the non-military assistance program. It just means that to get to the $7.5 billion of what we refer to as Kerry-Lugar-Berman funding, it’s just going to take us a little bit longer. But we still have a very, very robust commitment to Pakistan. In addition to the 1.1, there is money in military assistance, the traditional foreign military assistance, which is part of a multiyear agreement. And as the Deputy Secretary said, even though we have our challenges with the government right now, we wanted to make sure that the budget reflected the nature of the program, its importance to our security, importance to our efforts in that region. So a $2.5 billion Pakistan budget, which includes those two things plus the Pakistan Counterinsurgency Capability Fund, is a – is really, I think, a strong statement of support for what we’re doing there. QUESTION: So just to follow up, you’re saying that the Kerry-Lugar, the 7.5 billion, is now going to take longer than five years? SENIOR ADMINISTRATION OFFICIAL ONE: Well, it’s going to. That’s an authorization bill. That wasn’t an appropriation. So we’re – if we’re not requesting nor are we receiving from the Congress the full 1.5, it’s going to take us a little bit longer. But an assistance program at over a billion dollars is still – it’s still one of the largest recipients of assistance in our budget. And so -- QUESTION: I’m sorry. How much did you get last year? I’m looking for it. SENIOR ADMINISTRATION OFFICIAL ONE: We had about $1 billion in non-military assistance for Pakistan in 2012. QUESTION: So if you’re asking for the 1.1, do you anticipate that it’s going to be a lot less than that, or you think you’ll get -- SENIOR ADMINISTRATION OFFICIAL ONE: We’ve been having – the Pakistan levels have been hovering around that level for the last few years, so I’m pretty confident that that’s sort of the sustained level that we’re going to get if the Congress, although, as the Deputy Secretary said, this is a proposal. We’re going to have a – we have a lot of negotiation to do, so we’re going to make the best argument we can and we’ll have to work out with the Congress ultimately what the final appropriation’s going to be. MR. VENTRELL: Go ahead. QUESTION: Hi. Lisa Friedman with ClimateWire. Thanks. The climate change funding that Administrator Shah mentioned – the priorities seem very broad. Can you talk about what this is going to fund, and is this new money? SENIOR ADMINISTRATION OFFICIAL ONE: Well, it’s a sustaining – it’s a sustained commitment we have to climate change programs in the developing world. I’ll saying something, and I’ll ask [Senior Administration Three] to amplify. When we began the Global Climate Change Initiative, we were doing so around the Copenhagen commitments we made a few years ago. And we’ve largely met those, the $6 billion in climate financing – this is over a period of years. So now we’re into a sort of sustained level of effort on climate dealing from – everything from clean energy to resiliency to forest – sustainable forestry and other things. So this is a continuation of programs that we funded, and whether – I don’t know what your definition of new money is, but it is an allocation we have as part of our overall budget that’s part of our overall tax that’s going to go for the programs – I don’t know, [Senior Administration Official Three], if you want to say anything about -- SENIOR ADMINISTRATION OFFICIAL THREE: Well, it’s just – [Senior Administration Official One] is exactly right. This is not – these are not new programs. They’re continuations of the same strategies that we’ve had, focusing in three areas: adaptation, clean energy, and sustainable landscapes. We’re still focusing on things like the RED commitment, although as I think one of the things that will become clear when you go into the details is that commitment is probably going to have to stretch another year to meet that billion dollars, given the envelope we’re working under. And – but it’s the same commitments in the same three categories. And obviously, the State and AID piece is just one piece of the total. There are also the contributions through Treasury to the – to climate-related World Bank funds. SENIOR ADMINISTRATION OFFICIAL ONE: So if you add the Treasury direct funding and you add our direct funding, we’re at – almost at $769 million worth of climate funding in the total U.S. Government budget. MR. VENTRELL: Go ahead, Elise. QUESTION: I have a couple of things. So Burma – this is like the – when was the last time you gave kind of non-emergency -- SENIOR ADMINISTRATION OFFICIAL ONE: We’ve been doing – Burma. We’ve been doing programs in Burma for the last few years. This is – we’re trying this year in the 2013 budget to keep the levels at sustained and a higher sustained level, given the fact that there’s an opening there now. And I imagine assistance from humanitarian accounts in other parts of the budget over – when we’re in actual 2013, the numbers will grow a little bit. So we’re really trying – as late as those breaking developments were in our budget process, we’re trying to make sure to keep the number as high as (inaudible). QUESTION: Okay. And then on the Middle East and North African Incentive Fund, so you just arrived at the 770 kind of, not randomly, but it doesn’t look like you have any kind of ideas on any -- SENIOR ADMINISTRATION OFFICIAL ONE: Right. So let me explain a little bit more about this fund, because it’s an important part of the budget. First of all, the 770 million – I forget who asked the Deputy Secretary whether it was new versus moving around. There is 70 – 70 million of it is programs that are the – it’s the Middle East Partnership Initiative and a small USAID program called OMEP – Office of Middle East -- SENIOR ADMINISTRATION OFFICIAL THREE: Office of Middle East Partnerships. SENIOR ADMINISTRATION OFFICIAL ONE: -- Partnerships. Those have been funded previously in the past. That’s 70 million. Seven hundred million is, I would say, quote, new money. It’s money that we have, through the various tradeoffs in the budget – have identified to allow us to help with the democratic transitions in the Middle East. A little bit of background is helpful here. We came to the Middle East change without any resources dedicated to this in the budget. So over the last year, since last January, we have reprogrammed, carved out, made available almost $800 million for the response. That includes some of the Egypt money from their reprogramming out of their pipeline, the new Middle East response fund in 2011, a similar fund in 2012. All the humanitarian assistance is a – there’s a – our effort to respond to the transitions over the past year have been robust. We needed a way in 2013 to sustain – have a sustainable way to fund these things. You’re right. There’s nothing magic about 700 million. It’s not allocated way in advance. I wouldn’t know how to allocate that right now. But there’s a few key points that I would make. One is we’re trying to recast the relationship with these new governments in a way that we haven’t done before. We want to focus more on economic growth; we want to focus more on democratic transitions. And the budget for the Middle East region historically has not been focused on those things. It has been largely security assistance related. And we needed to expand the envelope, if you will, of funding to that region to allow us to do those things which were not being done in the past. And two is -- QUESTION: So you’re not doing it within the individual country? SENIOR ADMINISTRATION OFFICIAL ONE: No. This is over and above the bilateral programs to places like West Bank-Gaza and Lebanon and Tunisia and Egypt. This is additional money that we would then allocate as we work with those new governments to secure public commitments, commitments on reform, to allow us to do – and help them achieve the goals that we’ve – that’s in all of our interests. So this is a new account, it’s a new fund, it’s an addition to everything else we’re doing in the region. It doesn’t come at the expense of any of the preexisting agreements we have with Israel and Jordan. So -- QUESTION: Well, far be it from us to get ahead of ourselves, but I mean, if you look at the money that, like, ended up being spent in Libya, for instance, when – once the international community stepped up its action against Libya, I mean, if something were to happen in another one of these countries – say Syria for instance – would the money come from this account or would that be – I mean, your 700 million can go to Syria, like in a (finger snap). SENIOR ADMINISTRATION OFFICIAL ONE: Correct. It could – we could use this fund for places like Syria, and we actually are worried about what our response is going to be when Syria breaks one way or the other. And that’s going to be dependent on timing. If we need to do something in Syria this fiscal year, we’re going to have to use the resources we have in 2012. However, the resources we have in 2013 through this fund, if we have it appropriated by Congress, can be – finance part of the response. And it – and – but more importantly, it’s available to us to be more proactive and add more sustainable bilateral relationship. So you’re right. Syria could be a big draw. I would hope it’s not 700 million big, and I would hope that our response to whatever happens in Syria is coordinated with the international community, much like our response was to Libya. And – but that’s what this fund is there for, for Libya, for Syria, for Yemen, for Tunisia, for Morocco. I mean, if there are transitions going on around the region, we want to have the ability to affect this proactively and in a more sustained way than reprogramming money, which is what we had to over the last year. Go ahead. QUESTION: Just on the West Bank that you mentioned, the numbers are slightly lower this year. I’m just wondering, first of all, why that is and if there would be any change based on the makeup of the government of Hamas (inaudible). SENIOR ADMINISTRATION OFFICIAL ONE: The two primary reasons why West Bank is down is, one, we had a very robust police training program in the West Bank. Most of that was equipment, heavy training. That is sort of tailing off, and now we’re into more sustainment and rule of law, which is more – which is cheaper than the equipment. So a large chunk of the reduction is just to reflect programmatic reality to the West Bank. And there is a reduction in the amount of cash transfer that we are proposing for 2013. This year, we’re – we were planning on doing $200 million. Next year, the proposal is $150 million. We think the economic situation is slightly better, so it means we can give a little bit less. But obviously, when we get to 2013 and we have to work with the Congress on the allocations, we’ll have to assess where that is a year from now. QUESTION: And the makeup of the government? SENIOR ADMINISTRATION OFFICIAL ONE: Even the makeup of the government. QUESTION: And so, I’m sorry – just in terms of the numbers, so looking here at the FF money, and that’s – SENIOR ADMINISTRATION OFFICIAL ONE: That’s the cash transfer, and the -- QUESTION: So then – so we’re talking about the training with stuff, right? SENIOR ADMINISTRATION OFFICIAL ONE: That’s the – in the (inaudible) – the INL portion of the budget. So if you – there’s an account table for the INL in that, too, and you’ll see similar reductions. QUESTION: Okay. QUESTION: Can I ask you a little bit more about INL? So we have old money and we have a overall $500 million increase. And then on this page, on 164, we have 350 million more for Iraq and about that same amount reduced for Afghanistan and Pakistan. So what’s going on here? Is the calculation that we don’t – that drug – SENIOR ADMINISTRATION OFFICIAL ONE: No. QUESTION: -- (inaudible) is not as important in Afghanistan? SENIOR ADMINISTRATION OFFICIAL ONE: No. No, well – okay. So not to overly technicalize this, but to put the Afghanistan and Pakistan budgets in context, you’ve got to look at the base and the OCO together. QUESTION: So it was switched to the base? SENIOR ADMINISTRATION OFFICIAL ONE: Right. So there’s INL money and counterdrug money in OCO for Afghanistan, for example, and you’ll see it goes up. For Iraq, the police program is part of this transition near our – starting with the program in 2012, that’s about $500 million. We are planning to strengthen that program in 2013. It’ll be a bigger program, more advisors. That accounts for the big – for the increase from 2012 to 2013. But to do an accurate apples to apples comparison in Afghanistan and Pakistan, you’ve got to glue the two things together. I know it gets complicated. QUESTION: You’re saying that it’s going up overall? SENIOR ADMINISTRATION OFFICIAL ONE: Yeah. The drug programs, rule of law programs in Afghanistan, and particularly in Afghanistan because a lot of that is transition-related programs that DOD is not going to do any more work starting today. So you’ll see when you do an apples to apples – and we can help you with it offline, if you like – you’ll see those numbers grow. So the – looking at the one chart in the one part of the book doesn’t really tell the whole story. So I know it’s confusing, but that’s the way the budget is constructed. We’ll have to help you glue the pieces together. MR. VENTRELL: (Inaudible.) QUESTION: Yes. Can you just follow up on Kerry-Lugar? You said last year, you guys asked for and received $1 billion. How much have you guys received and spent, year to date? SENIOR ADMINISTRATION OFFICIAL ONE: I will have to get back to you on the actual expenditures. The money has not moved as quickly as we would want, owing to various difficulties on the ground and with the government, but we’ll have to get back to you with the status of those funds. QUESTION: And if I can just ask about these numbers, 1.1 was Kerry-Lugar, and 800 million is the (inaudible) fund. SENIOR ADMINISTRATION OFFICIAL ONE: Right. QUESTION: And what’s another 300 million – SENIOR ADMINISTRATION OFFICIAL ONE: That’s the foreign military financing portion. So those are the three main components of our assistance programs – the ESF, the – I’m sorry, the nonmilitary assistance piece, the foreign military finance piece, and the PCCF are the three components of our assistance to Pakistan. MR. VENTRELL: A couple more. Andy? QUESTION: Just a quick one on the numbers for Sudan and South Sudan on economic support. South Sudan obviously still has a lot more, but it seems to be trending down against last year, while Sudan itself is trending slightly up. What’s the rationale there? SENIOR ADMINISTRATION OFFICIAL ONE: We spiked in 2012 funding for South Sudan, given the fact that this is a big year of transition, it’s a new government. And in the – all the tradeoffs we had to do, given the caps, we felt we could come down a little bit and still maintain very, very high levels to South Sudan. I don’t have the number right in front of me, but I know it’s multiple hundreds of millions of dollars. SENIOR ADMINISTRATION OFFICIAL THREE: Two hundred million -- SENIOR ADMINISTRATION OFFICIAL ONE: Right, and then that’s augmented with funding from other accounts. And on the regular part of Sudan, we’re trying to build – we’re in a different world now in Sudan. We’ve got two separate countries. We have issues in Darfur and other things we still have to do, so we felt we had to sort of strike the balance between the two countries. And so that’s the main part of the difference. QUESTION: Will there be any component – and this is my ignorance here, but is debt relief part of that equation or not? SENIOR ADMINISTRATION OFFICIAL ONE: I’ll address – SENIOR ADMINISTRATION OFFICIAL THREE: It’s funded. There is a – I don’t know the exact number, but there is a significant number in Treasury. The department actually has an account for debt relief. And you’ll notice, I think that spikes this year, like, from low double digits to 300 or – 200-300 million, and that is mostly if not all for Sudan debt relief. SENIOR ADMINISTRATION OFFICIAL ONE: So you – the Treasury Department can give you more details on that. QUESTION: Just a minor detail. The Israel aid is just a teeny bit higher. Is that just in keeping with the agreement under the MOU? SENIOR ADMINISTRATION OFFICIAL ONE: That’s the 10 – yes, that’s the 10-year agreement. QUESTION: Okay. QUESTION: Is it correct – and I think it is, isn’t it, that the only country that received IMET funds last year but is not this year is Guinea? SENIOR ADMINISTRATION OFFICIAL ONE: There were a handful of IMET countries. Again, not very – these are not very big programs. There were a handful of IMET countries, right. Let me look. QUESTION: I think it’s the only one. SENIOR ADMINISTRATION OFFICIAL ONE: Yeah, Guinea-Bissau is the one – the only one that we zeroed out. QUESTION: And then every year it comes up and every year (inaudible). Why does the East-West Center keep getting money? QUESTION: Why does the International Coffee Organization -- QUESTION: Well, that actually makes sense, but the East-West Center – every year, you guys come out and want to cut its funding, and every year it goes up to the Hill and it ends up getting more money than they – than anyone had ever asked for. SENIOR ADMINISTRATION OFFICIAL TWO: East-West Center funding level for 2013 is consistent with the funding level that was in the President’s request for 2012, and -- QUESTION: Yeah. It was also jacked up by the Hill. SENIOR ADMINISTRATION OFFICIAL TWO: It was increased in the appropriations process by the Hill. We continue to believe that it does offer good programs. They’re – at this funding level, it’s likely that we will see greater focus to their programs in Hawaii, and that they will probably be closing down their headquarters operations here in Virginia. But they will continue to provide the educational programs that we’ve been -- QUESTION: Is that something that – really? That’s something that they’re going to do? They’re going to shut down their office? SENIOR ADMINISTRATION OFFICIAL TWO: That’s why there are considerations for the lower level of funding. QUESTION: Okay. All right. QUESTION: One last one. I’ve got a quick one on the PEPFAR funding, if I could, for USAID. Could you just talk us through what this increase (inaudible) for what it is relative to last year, and how that’s going to break down for medication versus prevention? SENIOR ADMINISTRATION OFFICIAL THREE: I actually don’t think I can. SENIOR ADMINISTRATION OFFICIAL ONE: Right. I think -- SENIOR ADMINISTRATION OFFICIAL THREE: To do that -- SENIOR ADMINISTRATION OFFICIAL ONE: I know that Dr. Goosby was going to do a more detailed set of briefings on the PEPFAR program. They can get into some of that detail. The one thing I would add to what the Deputy Secretary and to what Raj said at the press briefing earlier is, yes, while the global health number is down below 2012, these are really cases of programs that are outcome-driven in terms of how we arrived at the number, and sort of taking advantage of their successes. Unit costs are coming down, they’re becoming a lot more efficient, they were able to treat more people at lower cost, and so we are able for – it’s rare in the budget world to have a program or set of programs that have measurable efficiencies where we can actually do a lot more with a little bit less money. So I think it’s important to note, as you get into this, that the budget, even though it’s slightly down from 2012, still maintains the commitment on the 6 million treatment goal, still maintains our Global Fund commitment, still maintains our commitment to the -- PARTICIPANT: To GAVI. SENIOR ADMINISTRATION OFFICIAL ONE: -- to GAVI, the vaccine institution, still maintains robust funding for malaria and maternal child. So it’s – so the numbers don’t tell the whole story. I think Dr. – Ambassador Goosby can give you chapter and verse on the bilateral and country splits and kind of what their considerations were. MR. VENTRELL: Shortly -- one last question, then we’ve got to get our briefing -- QUESTION: The Administration’s pivot to Asia Pacific, are there ways we can quantitatively see this in the budget? SENIOR ADMINISTRATION OFFICIAL ONE: The budget – again, it’s one of those things where I think the story is better told on the diplomatic side, where we have a number of – we’re reengaging with Asia on – in several regional and multilateral institutions. The numbers are slightly below 2012 for the region, but I have to say most regions are slightly down, maybe with the exception of the Middle East, because the budget was that tight. So there are lots of other things that we’re doing in that region with respect to Indonesia, with respect to multilateral institutions that complement the priority that you’ll see out of the DOD strategy. SENIOR ADMINISTRATION OFFICIAL THREE: I also – just to add to that, I think what you’re going to see increasingly in that region is, for certain countries like India, moving from assistance to trilateral cooperation. So our strategy with India is going to increasingly be looking at working with the Indians on mutual development goals which may not all be in India; may be in third countries. And I know our Feed the Future Initiative has already started working with India on such a program similar to one we have with Brazil and Mozambique. So I think – and there are other countries, like Indonesia is starting up its own aid agency now. So I think you’re going to start seeing more of that in – and Asia is going to be probably leading the way along with the two summits on Latin America on that effort. MR. VENTRELL: Okay. Thank you all.