22 May 2003
Source: http://usinfo.state.gov/cgi-bin/washfile/display.pl?p=/products/washfile/latest&f=03052105.clt&t=/products/washfile/newsitem.shtml


US Department of State
International Information Programs

Washington File
_________________________________

21 May 2003

Senate Panel Authorizes Millennium Challenge Account

(But votes not to have a separate governing body) (710)
Kathryn McConnell
Washington File Staff Writer

Washington -- A Senate panel May 21 adopted a bill to establish a
supplemental U.S. foreign aid account but stripped it of a Bush
administration provision that would have required it to be managed by
a new corporation governed by a board of directors.

The Foreign Relations Committee also approved a bill authorizing
appropriations for a package of foreign aid programs and the U.S.
Agency for International Development (USAID) for the fiscal year
beginning October 1 (FY04), adding an amendment offered by Senator
Christopher Dodd, a Democrat, that would add Caribbean countries to a
list of African countries targeted for assistance by the Global Fund
to Fight AIDS, Tuberculosis and Malaria.

Senators Chuck Hagel, a Republican, and Joe Biden, a Democrat,
sponsored the amendment making the proposed foreign aid Millennium
Challenge Account (MCA) the sole responsibility of the secretary of
state. They said a new bureaucracy, the proposed Millennium Challenge
Corporation, would weaken the State Department's ability to
effectively manage foreign aid.

The Millennium Challenge Corporation would undercut the secretary's
"power and leverage" with foreign aid and development assistance,
Hagel said.

The MCA is a major Bush administration proposal that would
dramatically increase available U.S. foreign aid funds and channel the
additional money to countries that adopt market-based policies, govern
justly and invest in their own populations.

The senators specifically opposed the administration's proposed
inclusion of the secretary of the Treasury and director of the Office
of Management and Budget (OMB) on the corporation's board. "OMB, in
particular, does not have the expertise or experience to make foreign
policy," Hagel said.

The committee also approved an amendment offered by Democrat Jon
Corzine that would set aside 10 percent of MCA funds for assistance to
"bridge countries," or countries that are close to, but do not fully
meet, the fund's criteria for aid.

Both bills now go to the full Senate for debate. The House of
Representatives also must approve its own versions of the MCA and
foreign aid authorization bills. Final versions of both bills must be
passed by the House and Senate before being sent to the president for
signature or veto.

The committee voted to reduce by $300 million to $1,000 million
funding for the MCA in FY04, saying that the program needed time to
become established and effectively distribute its funds. The panel
also voted to cut $31 million from the administration's requested $731
million to fight drugs in the Andean region.

The committee approved two new funds requested by the administration
-- the Complex Foreign Contingencies Fund and a Famine Fund. It also
approved authorization of a $15 million Radiological Terrorism Threat
Reduction Act and a Global Pathogen Surveillance Act.

The Complex Foreign Contingencies Fund would support peace and
humanitarian intervention operations to prevent or respond to foreign
territorial disputes, armed ethnic and civil conflicts, and acts of
ethnic cleansing, mass killing or genocide.

The Radiological Terrorism Threat Reduction Act would authorize the
secretary of State to provide contributions and technical assistance
to the International Atomic Energy Agency (IAEA) to deal with the
threat of radioactive materials being dispersed by conventional
explosives, or "dirty bombs."

The foreign aid measure includes the authorization of appropriated
funds for humanitarian assistance and reconstruction efforts in and
around Iraq.

It would authorize continued funding for programs focusing on
strengthening and preserving democratic institutions and processes,
and conflict resolution in transition countries.

The measure includes the authorization of an additional $70 million
over the administration's request for the Freedom Support Act to aid
countries of the former Soviet Union and a $40 million increase in
funding for Eastern European and Baltic states under the Support for
East European Democracy (SEED) Act.

The measure authorizes increased funding of international military
training, peacekeeping, nonproliferation, anti-terrorism and demining
programs. Peacekeeping would get a $6 million increase over the
administration's request and nonproliferation, anti-terrorism and
demining would get a $100 million increase.

The bill would authorize funding for the Inter-American Foundation,
African Development Foundation and the Asian Development Fund.

The bill would make permanent a provision that foreign aid can be
provided through nongovernmental organizations (NGOs) as well as
through government bodies.

(The Washington File is a product of the Bureau of International
Information Programs, U.S. Department of State. Web site:
http://usinfo.state.gov)