Statement of Administration Policy: H.R. 5114 - Foreign Operations, Export Financing and Related Programs Appropriations Bill, FY 1991

(Senate Floor)
(Sponsors: Byrd (D), West Virginia; Leahy (D), Vermont))

The Administration supports the passage of appropriations bills that are consistent with the Budget Summit Agreement (except as modified for defense by the Conference Report accompanying H. Con. Res. 310). The President's senior advisers will recommend that the President veto any appropriations bill that is not substantially in accord with that Agreement.

The Administration opposes the earmarking of $15 million for the United Nations Population Fund (UNFPA). The Administration has endorsed the approach used in the Smith amendment regarding family planning assistance in Romania, which was adopted on the House floor, and would consider other such alternatives. The Smith amendment keeps intact the Kemp-Kasten provision and the Mexico City policy. The President stated in his June 26th letter to Congressman Obey that he will veto this bill if either policy is changed.

The current language on El Salvador, including the language intended as a substitute for the House-passed Moakley-Murtha language, is unacceptable. The Administration is hopeful that compromise language acceptable to both the Administration and Congress will be crafted. Should the final bill, when it is presented to the President, contain either of these provisions on El Salvador or provisions similar to them, the President's senior advisers would recommend a veto.

The reduction of almost $500 million in the Economic Support Fund (ESF) is of particular concern. The Administration urges that funds for the ESF be restored by reducing unrequested and unwarranted increases of more than $750 million in AID programs, the Export Import Bank, International Organizations, and a number of other smaller programs.

There are several provisions in the bill that the Administration welcomes. The Committee has provided language to resolve the Egyptian debt issue — a matter of high Presidential priority. The World Bank has been fully funded, the provision in the House bill relating to the Paris Club negotiation process has been deleted, and there are several other provisions that give more flexibility to the President in conducting foreign policy.

The Administration urges that language allowing continued assistance to the Noncommunist Resistance in Cambodia be restored to the bill. Other important provisions of concern to the Administration are contained in this appropriation bill. Administration views on a number of these provisions are outlined in the attachment.

Attachment

(Senate Floor)

H.R. 5114 — FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED AGENCIES APPROPRIATIONS BILL, FY 1991

MAJOR PROVISIONS OPPOSED BY THE ADMINISTRATION

Amendments Seeking to Reverse the Mexico City Policy and the Kemp-Kasten Provision

The Kemp-Kasten provision states that "None of the funds made available to Population, Development Assistance may be made available to any organization or program which, as determined by the President of the U. S., supports or participates in the management of a program of coercive abortion or involuntary sterilization. "

Mexico City policy states that: "The United States does not consider abortion an acceptable element of family planning programs and will no longer contribute to those of which it is a part. Accordingly, when dealing with nations which support abortion with funds not provided by the United States government, the U. S. will contribute to such nations through segregated accounts which cannot be used for abortion. Moreover, the United States will no longer contribute to separate non-governmental organizations (NGO's) which perform or actively promote abortion as a method of family planning in other nations. With regard to the United Nations Fund for Population Activity (UNFPA), the U. S. will insist that no part of its contribution be used for abortion. The U. S. will also call for concrete assurances that the UNFPA is not engaged in, or does not provide funding for, abortion or coercive family planning programs; if such assurances are not forthcoming, the U. S. will redirect the amount of its contribution to other, non- UNFPA family planning programs. "

The Administration continues to support both the Mexico City policy and the Kemp-Kasten provision. Opposition to abortion as a method of family planning is an important matter of principle to this Administration. Consistent with that principle, the President has decided to disassociate the United States from foreign abortion advocates by making them ineligible to participate in the AID population assistance program. AID'S implementation of the Mexico City policy was upheld by the U. S. Court of Appeals for the Second Circuit on September 18, 1990. Using a segregated account or other complicated procedures to provide support for UNFPA would be perceived as a transparent bookkeeping transaction and would undermine U. S. opposition to coercive abortions.

The Administration opposes providing assistance specifically through the United Nations Population Fund (UNFPA) and the International Planned Parenthood Federation (IPPF) for the following specific reasons. Assistance provided through the UNFPA would violate the Kemp-Kasten amendment because the UNFPA supports or participates in the management of a program of coercive abortion or involuntary sterilization in China. If the U. S. provides any funds to the UNFPA, the U. S. would in effect be endorsing China's policy of coercive abortion. Assistance provided through IPPF would violate the President's continued advocacy of the Mexico City policy. Allowing this non-governmental organization, which performs or promotes abortion as a method of family planning, to become eligible for U. S. funding would undermine Administration principle and policy, and destroy the pro-life and pro-human rights character of U. S. population assistance programs.

El Salvador

The bill would withhold 50 percent of military assistance to the government of El Salvador unless the President certifies that the Farabundo Marti National Liberation Front (FMLN) has failed to meet certain conditions relating to good-faith negotiations. As currently drafted, the provision would destroy the best chance for a negotiated end to the war and would risk encouraging a new guerrilla offensive that may target American citizens, as well as Salvadorans. The FMLN would be encouraged to continue its intransigent position in the peace talks now occurring under the leadership of the Secretary General of the United Nations. This provision as drafted would permit shipments of lethal military assistance to the FMLN from outside El Salvador — a violation of the 1987 Esquipulas Accord. The Administration supports tough unequivocal provisions concerning the Jesuit murders, but the provisions with regard to the FMLN have been so diluted as to be meaningless.

The Congress and the Administration must come together on a principled bipartisan position regarding assistance to El Salvador that encourages all parties to negotiate a peace accord. It is critically important that the two Branches agree on an acceptable assistance package that sends a clear signal to all parties that the United States government is united in supporting a cease-fire and a negotiated settlement.

Reductions in the Economic Support Fund (ESF)

The Senate Committee bill cuts $500 million out of the $3. 6 billion request for the Economic Support Fund. Such reductions constrain our ability to support Central and South American democracies and to meet best-efforts pledges to key friends such as Portugal and the Philippines, which would complicate currently ongoing base-access negotiations. In a period of significant global change, adequate and flexible ESF resources are a particularly valuable tool of U. S. foreign policy in providing needed and timely assistance to countries of key interest to the United States. There are few foreign policy and national security interests that this shortfall in ESF would leave undamaged.

Unwarranted Increases in Other Programs

The Senate Committee bill provides for significant increases above the budget request in Functional Development Assistance, the Development Fund for Africa, Assistance for Eastern Europe, the Export-Import Bank, and International Organizations and Programs (IO&P) appropriations. These increases total over $750 million more than the President's request. The reallocation for these various programs and activities is inconsistent with meeting the most urgent priorities for our scarce foreign affairs resources. The ability of the President to carry out his foreign policy would be severely constrained by this shift.

Earmarkings in Foreign Military Financing (FMF). Economic Assistance. International Organizations and Programs (IO&P), Refugees Accounts, and Functional Development Assistance

The Administration must be able to respond to changing conditions in the newly emerging democracies and elsewhere. Therefore, the Administration opposes earmarking for programs or countries in these various accounts because it restricts the allocation of this assistance in a manner that may not be most appropriate in addressing foreign policy priorities. For instance, almost 90 percent of FMF is earmarked. Earmarks hamstring the President in allocating assistance, prevent the funding of more crucial, higher- priority programs, and impair the ability of the executive branch to respond to changing events.

Provision Relating to U. N. Sanction Against Iraq

The Administration opposes the provision requiring unilateral U. S. action against countries not in compliance with the U.N. sanctions against Iraq. The Administration has to date been successful, through multilateral diplomacy, in refuting Iraqi assertions that current Gulf tensions are based on an Iraqi-U.S. dispute rather than a dispute with the entire world. The Administration is concerned that this provision would undercut U. S. diplomatic efforts. If actions against sanctions violators should become necessary, this ought to occur on a multilateral basis through the U. N. Security Council.

International Development Association (IDA)
Lending to China

This provision requires that the President reduce the amount obligated for IDA by the U. S. proportionate share of any loans approved by the Board of Directors for China since January 1, 1990, for non-basic human needs. Withheld funds may be obligated only if the President certifies that it is in the national interest of the United States to do so. The Administration opposes this provision because it would reduce the President's flexibility and the ability to shape and limit overall lending to China. It could also result in a larger overall lending program than could be shaped with U. S. influence exerted on the lending process.

Aid to Cambodia

The Administration strongly opposes the Committee's action to end the program of assistance to the Cambodian Non-Communist Resistance that was approved by the House. The Administration is encouraged by the prospects of the U. N.-based plan and believes this assistance is crucial to our active efforts to keep pressure on the parties involved to accept a negotiated solution to the tragic conflict in Cambodia. The Administration accepts the language, sponsored by Mr.

Solarz in the House-passed bill, which provides conditional funding as follows: "The President shall terminate assistance under this section to any non-communist resistance organization that he determines is engaged in a pattern of military cooperation and coordination designed to assist the Khmer Rouge. "

EBRD: Reduced Funding and Withholding of Obligations

The Administration is opposed to the reduction of $13. 2 million in funding and to the restrictions imposed on the U. S. contribution to the EBRD. There is concern about the effect of such a provision on the President's ability to carry out his responsibilities under the Constitution with respect to the conduct of foreign policy. The Committee bill stresses the importance of assisting in the economic rebirth of Eastern Europe yet thwarts the Administration's efforts toward this end by placing unnecessary restrictions on the U. S. ability to participate in the EBRD. The provision of funds for EBRD should not be linked to Polish debt negotiations but should stand on its own merits.

Export-Import Bank

The Committee's increase in direct lending from $500 million to $750 million would increase the recipients' debt without contributing significantly to United States export capacity. United States capital goods exports grew by $58 billion over the last three years without significant changes in Eximbank authority.

An unrequested $25 million for the Bank's Interest Equalization Program (IEP) is another gimmick in the expansion of credit programs. The program is unnecessary because United States exports have grown dramatically in the absence of IEP. Further, the program is inefficient in that it increases the cost to the United States Government of providing credit to borrowers on competitive terms. Finally, the IEP expands the base of risky, long-term government liabilities.

Operating Expenses for AID

The Committee bill reduces the $448 million request for AID'S operating expenses by $13 million, but restores this amount by providing the agency authority to use up to $12. 5 million of program funds for operating expenses related to population programs. It also provides for up to $40 million or five percent of Development Fund for Africa funds being used to meet operating expenses. As well, it provides $1 million each for AID'S operating expenses and those of the Inspector General from Eastern Europe program funds. The Administration welcomes the Senate's recognition of the need to provide sufficient funding for personnel and financial management systems to enable the Agency to provide adequate levels of programmatic effectiveness and accountability. However, the funding should be provided in the appropriate operating expenses account.

Administrative Charges for Military Sales

The Administration opposes the provision to limit the availability of administrative charges for payment of the costs of security assistance administrative personnel because it would have a seriously disruptive effect on foreign military sales (FMS). This provision would disrupt acquisition and procurement activities, training, logistic support, and financial management at a time of rapidly evolving needs and requirements of major FMS purchasers. The FMS program is self-sufficient, requiring no significant subsidy. A spending cap could result in shortfalls having to be made up with appropriated funds.

Assistance to Eastern Europe

While welcoming the significant degree of flexibility in this bill afforded to the Administration regarding Eastern Europe, we note that the bill provides for only project- related assistance and does not provide for the possibility of balance-of-payments support. Balance of payments support may prove necessary as Eastern European countries undergo significant economic restructuring and adjust to the effects of the Persian Gulf crisis.

Human Rights Reporting

The Administration opposes the proposed provision on human rights because it would introduce unnecessary rigidity into the implementation of the foreign assistance program and the human rights provisions of section 502b. In practice the Administration seeks to bring about improvement in human rights conditions through warning of the possibility of a finding of a pattern of gross violations.

Assistance for Latvia, Lithuania, and Estonia

The Administration opposes this provision on the grounds that it could disrupt the sensitive discussions now under way between Moscow and the Baltic States. These discussions are intended to prepare for formal negotiations on the future status of Latvia, Lithuania, and Estonia. The provision of U. S. assistance to the Baltic States at this delicate moment could make it more difficult for these talks to reach a successful conclusion. In addition, while fostering the development of the private sector in the Baltic States is an important goal which the Administration supports, this proposal must be weighed against the large number of requests for U. S. assistance from other countries, many of which have a more immediate need for U. S. aid.

Proposed Language Regarding Sections 522. 555. and Other Provisions

Several provisions require that United States representatives to international bodies be instructed to vote for or against a particular position or otherwise be required to take particular positions in international negotiations. Such provisions must be construed as advisory only, since they would otherwise unconstitutionally interfere with the President's foreign affairs powers. Such provisions should be deleted, or, to avoid ambiguity and unnecessary disputes, clearly drafted as advisory only. As well, section 599B on Judicial Reform in El Salvador has language regarding establishing a Commission which raises serious constitutional questions.

Proposed Language Regarding Leveraging

Section 569, which is identical to section 582 of P. L. No. 101-167, forbids providing funds to foreign governments "in exchange for that foreign government or person undertaking any action which is, if carried out by the United States Government, a United States official or employee, expressly prohibited by a provision of the United States law." When the President signed P. L. No. 101-167, he observed that although the provision could be construed narrowly in order to avoid constitutional problems, "many routine and unobjectionable diplomatic activities could be misconstrued as somehow involving a forbidden 'exchange,'". He further said that, therefore, "this type of provision can chill U. S. diplomats in the proper discharge of their duties." Section 569 should be deleted.

Montreal Protocol

This provision mandates that $10 million of AID development assistance funds be used to support a fund to encourage global participation in the Montreal Protocol on Substances that Deplete the Ozone Layer. An interim financial mechanism, to operate from FY 1991 through FY 1993, was established by the Parties to the Montreal Protocol last June in London. It is anticipated that the fund will initially be established at $160 million, of which the U. S. share would be $40 million (25 percent) for the three-year period. Thus, the FY 1991 funding level would be about $13. 3 million, which has already been budgeted for and will be funded by the Environmental Protection Agency. The earmarking of $10 million of AID development assistance funds is therefore unnecessary and should be deleted.

Restrictions on Assistance to Zaire

The Administration opposes the limitations on the provision of military and economic assistance to Zaire. In the foreign military financing account, the Administration is not proposing to spend funds on new programs or for new or replacement end items, nor would funds be used for lethal systems. With regard to the international military education and training account, this training and exposure to the U. S. and our values is the most important part of our military assistance program. U. S. economic assistance is carefully controlled and monitored to ensure that no dollars flow directly to or through the government of Zaire and that projects benefit the poorest and neediest Zairians. We work through private and voluntary organizations, universities, and the private sector to the widest extent possible.

Excess Defense Articles

The Administration also opposes the requirement for notification before issuing letters of offer to sell excess defense articles as unnecessary. The requirement would apply even in cases involving relatively minor sales and could lead to an enormous number of additional congressional notifications.

Inter-American Investment Corporation (IIC)

The Committee bill provides no funding for the IIC. The request of $25.5 million is for payments to the IIC that are more than two years overdue. Unlike other multilateral development banks, the IIC cannot make lending commitments that are contingent on a member making a subscription payment at a later date. While governments are willing to agree to projects that are bn hold until the funding becomes available, the private sector — to which all IIC operations are directed — is not. At a minimum, $12. 5 million is needed to fund a minimum operating program and keep U. S. voting power just above the 20 percent level needed to maintain a veto over charter amendments.

Conditioning Aid to Kenya

The Administration opposes this provision which conditions aid to Kenya. One of the Administration's objectives in Kenya is to encourage greater political pluralism and respect for human rights, and the Kenyans have been engaged repeatedly on this issue. To underscore further our concern about human rights abuses, the Administration withheld disbursement of all FY 1990 FMF monies, pending improvement in Kenyan behavior. The Committee conditions, however, are likely to undercut rather than help these efforts. The Kenyan government tends to react defensively to public pressure and will likely dig in rather than move in the right direction.

Military Aid Limited to Democratic Governments

While the Administration sympathizes with the spirit of this provision, it strongly opposes its enactment into law. In an imperfect world, it can sometimes serve important United States interests, including our interest in the long-term trend toward democratic governments, to furnish assistance to countries having different forms of government than our own. Those interests are undercut by a requirement that the President choose between severing assistance relationships with a country or publicly criticizing its form of government by exercising a waiver authority.