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Hearing of the House Foreign Affairs Committee - Foreign Assistance Reform in the Next Administration: Challenges and Solutions

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Location: Washington, DC

Hearing of the House Foreign Affairs Committee - Foreign Assistance Reform in the Next Administration: Challenges and Solutions

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REP. ILEANA ROS-LEHTINEN (R-FL): Thank you so much, Mr. Chairman. I'm also pleased to welcome our witnesses, particularly our former college, Chairman Kolbe, who served as one of the most respected members of Congress on issues involving foreign aid programs. We're so pleased that you rearranged your schedule in order to be with us, Chairman Kolbe.

As the chairman has pointed out, despite efforts over the years to reform our foreign assistance program over the years -- and these changes have been attempted by truly great members of Congress, such as Senator Hubert Humphrey and several former chairmen of this committee, including Dante Fascell, Lee Hamilton, Ben Gillman, and Tom Lantos. We essentially have not reformed the 1961 Foreign Assistance Act in any meaningful way since 1973. And I commend the chairman of our committee, Mr. Berman, for committing to the task of both authorizing our assistance and over hauling our foreign assistance statute, which is now close to 50 years old.

And to reform and update the 1961 Foreign Assistance Act would entail addressing a range of really difficult issues. We would need to look at the categories of assistance, their objectives and their associated programs. The Congress would have to focus on addressing questions concerning aid for development and whether the concepts underlying these, which go back to President Kennedy's day, are relevant today and whether they are still effective.

We would need to consider the many, many restrictions, the directives, the earmarks that have been placed on our assistance programs. Some say that would raise concerns among many members, and not just inside Congress, but outside as well, who see policy prescriptions as vital to specific efforts and programs that we most care about. We would have to look at ways in which our foreign aid agencies and offices implement and oversee their particular programs. What we have today is something like a bowl of spaghetti with lines of authority and often uncoordinated pursuits of objectives that are difficult to follow.

We would need to look at the organization and the structure of foreign aid agencies and offices and consider in a detailed manner questions having to do with personnel, with procurement, with contracting, with evaluation. And I credit Secretary of State Rice for trying to address much of this on her own through the creation of the Office of the Director for Foreign Assistance at the State Department two years ago. However, that effort might not achieve the coordination and the evaluation of our assistance that we would all like to see, and there have been no congressional engagement in the creation of that new office.

Some have proposed the creation of a new Cabinet level Department of Foreign Development, but the question is whether a new centralized agency would simply follow in the path of AID. AID was originally set up as a centralized agency in '61, but as demands changed, some of its programs were taken over or supplemented by spin-off agencies and entities and projects. So Cabinet level status for a foreign development agency probably would not be enough to prevent the eventual spin-off of aid programs as a response to the need for specialized expertise in areas such as infectious diseases, trans- national threats, trafficking in persons, cyber crime and similar areas.

Therefore, I would like to ask our distinguished panelists what do you view as an alternative structure to respond to current and emerging challenges, dynamics, needs and priorities? A recent commission established by the Congress to look at such questions, the Help Commission, was unable to agree on this issue. But the Help Commission did prepare a draft bill that provides the basis for discussion today, and it places the onus on the President to develop a reorganization plan that would include the development of a new foreign assistance agency if the need is there, the abolition of USAID if appropriate, the termination of functions of certain agencies as maybe necessary, the transfer of new foreign assistance programs, the functions, to each covered agency, and the consolidation and streamlining of the Department of State.

So I welcome the panelist's remarks on these proposals. And finally, I would like -- I know that Chairman Kolbe has spent so much of his time in Congress dealing with entitlement programs, and that may very well confront us with some difficult choices in the coming years. We may not have much in the way of available funds for foreign aid in the future, but if other programs place pressures on our overall budget -- and one overarching goal must be to ensure that our foreign aid is neither wasted nor lost through corruption. And all of us know how difficult it is to defend foreign aid programs when instances of waste or fraud arise and they become there for us all to see.

So any effort to reauthorize or reform our foreign aid program must have as an assurance that the program is indeed effective, and that's what the taxpayers want to know. And any such efforts would have to be constantly evaluated, and this oversight is such a necessary part. And maybe this can be accomplished through an independent agency for evaluations.

So I welcome all of your thoughts, and I hope that we are able to succeed in your efforts, Mr. Berman, of truly looking at foreign aid, to tie it to results, and that funding would go to those topics and those issues and those programs that work the best for America's taxpayers. Thank you.

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REP. ROS-LEHTINEN: Thank you so much, Mr. Chairman. It really is impressive. I guess I don't know what the word is --

MR. OFFENHEIMER: (Laughs.)

REP. ROS-LEHTINEN: -- but it's this chart. Yes, it makes spaghetti look simple. This is unbelievable. The foreign assistance legislation objectives and organizations is frightening. The chairman is willing to undertake this reform is going to be a daunting challenge for us, but I welcome it.

I wanted to ask Chairman Kolbe as a former appropriator, former chairman of the subcommittee on foreign operations -- what were your greatest concerns with committees like us when we came about with programs about foreign aid funding policy measures that were supported by the Committee of Authorization? Because as we undertake this great adventure to reform, to move a reform bill, we have to work with the appropriators, and if we want to begin the process of passing this legislation to reform or replace the Foreign Assistance Act of '61, where do you think would be our logical first steps? And if we were to get it through the House, working with the appropriators, how can we build support for this program in the Senate? So much of the work that we do here unfortunately doesn't seem to get over to the other side, including our great PEPFAR bill, which was greatly supported. And also the concerns of groups and supporters of specific foreign assistance programs that have serious concerns on behalf of the aid directives that we put out, the policies that support these programs. How do you see this in a practical way playing out as we begin the process now but really build up for greater action next year?

MR. KOLBE: Well Ms. Ros-Lehtinen, that's a big question with lots and lots of possibilities for the answer, but let me start by saying quite frankly, I don't think you're going to have a lot of success unless you start with the administration on board on this.

By that I mean you can lead on, the Congress can lead but the administration better be there as cheerleaders and playing in the band along the way because otherwise it's just not going to succeed. This is going to be heavy lifting and it's going to require a real team effort between the administration, the next administration, whoever that might be, Republican or Democrat. It's going to require real heavy lifting on both sides to make this kind of thing happen.

My recommendation would be to start with taking the Foreign Assistance Act, that spaghetti bowl that you are looking at, the Foreign Assistance Act, and looking at ways in which it can be simplified, that you can eliminate half, more than half of those lines, consolidate some of those things, simplify the structure of it, the way in which it, rather than trying to create a whole new agency. That's why not that I differ with the idea of the importance of development with my colleague, it's just that I think having been at this game long enough, I think there's -- I know the practical problems of trying to do what, of restructure the whole thing, an entire new agency and a new cabinet level agency. I think that's going to be tough to do.

So I would start with finding, simplify the thing, the things that we were, many of us have talked about here today. And then I would, in terms of how you're going to build that support over the Senate to get this done, again the administration's going to be critical to that. You're going to need the media support, you have strong media support on a lot of other issues, and you're going to have to work with the members of the Senate over there.

It is tough, as we know, the Millennium Challenge Corporation is the best example of that that we have where we, you passed it here as an authorized and we passed it on the floor of the House, got over the Senate and Senator Lugar just couldn't get it done over in the Senate, just couldn't move over there. And so it came back to us and said how about doing this on the Appropriation Bill? And we said well only if we're going to work in cooperation with authorized committees on this. And we did and I think the results show a bill that was well-drafted, carefully thought out and I think frankly it proved in the time it took, after it passed the House and before it came onto the appropriation bill we made a lot of modifications to it, so I think it improved it, so that process does improve it.

Sometimes that is the only way that you can do this.

REP. ROS-LEHTINEN: Thank you so much. In my remaining minute, maybe we can have the good doctor respond to the Chairman's question.

MR. RADELET: To the first question? Thank you, I will, I'll do so quickly.

Just to reinforce a couple of the ideas on this question on how you allocate your funding. You articulated the need, but that needs to be balanced by what we can do well. And that brings us to our monitoring and evaluation programs which are very, very weak. I think to get at that issue of how we balance what issues we attack, we really need to fundamentally address how we monitor and evaluate our programs so that we can understand what it is we do well and what it is we don't do well.

And we're not in a position to do that. We actually evaluate a lot of programs individually, but we don't bring them together and look at them systematically across programs to figure out what it is we do best. That's part of the answer.

The other part of the answer is then to work with our partners more carefully because what it is that we don't do well we want to make sure that somebody else is doing well. We don't need all of the 33 bilateral agencies in there trying to dig wells or trying to do maternal and child health or whatever it is, we want the agency that can best provide that support to do that, and for others to do something different.

So I think it's a combination of monitoring evaluations and working cooperatively with our partners.

Thank you.

REP. ROS-LEHTINEN: Thank you.

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REP. ROS-LEHTINEN: Thank you, thank you Mr. Chairman.

And we had talked a little bit about this but I wanted to get some more concrete answers about it, the S Process by which the Department of State sought to reorganize and streamline our U.S. foreign assistance programs by categorizing countries based on certain indicators and requesting funding in line with the graduation strategies rather than setting country levels first then deciding what the funding priorities in each country would be.

That was widely criticized by Congress, by NGOs, by other stakeholders. What was the problem in the concept or in its implementation and what are the lessons that we can learn from that failed exercise?

MS. BRAINARD: I think the stand-up process in many respects has given us a lot of important lessons. I think it was a kind of first pass attempt at reform without doing anything legislatively. And we should take some lessons from that, partly I think that it will not be enough to work within the authorities of the State Department. I do believe Congress needs to get a piece of it.

I think to some large degree that the biggest flaws have to do with the process, with the actual implementation and they had a lot to do with a kind of top down, Washington out approach, partly I think because Ambassador Tobias felt that he was under the gun, he had a very short period of time, and so the vast amount of knowledge and operational capability in the field wasn't taken into account. There's very little consultations that were done with recipients. And very few, I think from everything I've heard here on the Hill as well.

So to some degree, the notion of strategically prioritizing is not one that we should throw out with the bathwater if you will. But I think it needs to be done in a deliberate manner, it needs to be done with Congress, it needs to be done with the field.

MR. : I think some of the problems were partly in concept and partly in implementation.

Some of the concept was good. Trying to bring some rationality to the organization makes sense, trying to develop a strategy makes sense. But brining only a few programs, only some of the programs together as opposed to a broader reorganization was a problem. And only brining those into state I think was a problem as well.

So it was far too limited I scope and I think bringing it into the State Department was a mistake.

I like the concept of having strategy, but it wasn't a strategy that they came out with to address some of the big questions that we've talked about in terms of goals and objectives. So the strategy needs to go a little bit further than what they did.

In terms of implementation, as Dr. Brainard, said, they did not consult with very many people. This was done internally with the State Department, there was very little consultation actually within the executive branch much less with Congress or with the public. And as a result, I think they ran across many problems that they could have dealt with had there been much more of a consultative process.

I do like the idea in some countries of having more general resources available that can be determined by that country. But you've got to deal with the legislative underpinnings to make that work because what they ran up against was that the concept was inconsistent with the legislation so you can't just do this in house partially without dealing with the membership here to make that work.

So I think one of the big lessons about that is that partial marginal reforms won't get this done. We have to actually think bigger and bring in the coalition that we've been talking about.

REP. : Thank you again Mr. Chairman for the opportunity to ask a couple more questions to our panel for their forbearance.

In terms of our involvement in the Middle East and let me say this, I think we need to continue to be involved in the Middle East and I think the 9/11 commission report was very clear that we need to enter into war trade agreements with struggling third world countries within the Middle East itself, but let me just go beyond the Middle East and go to the other Islamic countries south of Southeast Asia.

Are we doing enough in terms of our system today to those countries that are not oil rich, that are not you know, involved in the direct turmoil of the conflict within the Middle East, are more observers of the outside where we see the influence of Wahabists from Saudi Arabia being exported to places like Bangladesh and to Pakistan and to Indonesia, et cetera. Are we doing enough in terms of our investment, both in capital as well as in human fund, to help create a better atmosphere in those countries towards the United States?

I know in post-tsunami, post-9/11 and then post-tsunami, 2004, I had the opportunity to see the strength of our soft power within Sri Lanka. And I know that we were very helpful not only there but in certainly in India but at least asking if they wanted assistance, but in Bangladesh and Indonesia and other countries. Did we do enough back then, although we did get great credit, I think did we do enough and are we doing enough now?

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