Providing for consideration of the bill (H.R. 4818) making appropriations for foreign operations, export financing, and related programs for the fiscal year ending September 30, 2005, and for other purposes.

Mr. Chairman, I yield myself such time as I may consume.

I am pleased to present to the House today the funding recommendations of the Committee on Appropriations for fiscal year 2005 for foreign operations, export financing, and related programs. The bill provides important funding for programs designed to support the global war on terrorism, the battle against HIV/AIDS and other infectious diseases, and to support the national interests of the United States. In the wake of September 11, 2001, such funding for our critical friends and allies is more important than ever.

The committee recommends a total of $19,385,645,000 in new discretionary budget authority for fiscal year 2005. This represents a reduction of $1.932 billion from the President's budget request. On the other hand, the bill before us is $1.905 billion above the fiscal year 2004 enacted level when we exclude the supplemental appropriations. If supplemental appropriations are included, the recommendation represents a decrease of $19.287 billion over the 2004 level.

Having gotten those numbers out of the way, let me just say it is important that we know that this bill was developed in a bipartisan way, and I want to pay special tribute and give credit to the gentlewoman from New York (Mrs. Lowey), my ranking minority member, for the fine work that she has done on this bill and for engaging in a process that resulted in basic agreement on the components of this package, even if funding compromises happen to be found on both sides. Mr. Chairman, I believe this is the way the House of Representatives ought to work, and I think the gentlewoman from New York (Mrs. Lowey) and I have worked in a bipartisan fashion.

In preparing this legislation, we have three overriding priorities: first, supporting our allies on the war on terrorism; second, responding to the global HIV/AIDS pandemic; and, third, supporting innovative approaches to foreign assistance through the Millennium Challenge Corporation.

Let me summarize how this recommendation responds to those challenges. First, the President's budget request included important military assistance and counternarcotics increases for our allies in the global war on terrorism. That includes an increase of $350 million to equip the new Afghan National Army; an increase of $90 million for law enforcement and counternarcotics programs in Afghanistan; a new base program of $300 million for military assistance for Pakistan as they assist us in hunting terrorists along the Afghan border; an increase of $46 million for a total of $66 million for Poland, a major ally in Operation Iraqi Freedom; and an increase of $73 million, for a total of $2.22 billion for the State of Israel, which is our closest ally in the Middle East.

The committee recommendation includes full funding for these increases both through new budget authority and, in the case of Pakistan, use of $150 million of transfer authority.

The second priority in the President's budget request is one that we also met with an increase of $593 million to combat HIV/AIDS and related diseases, for a total of $2.2 billion. The committee recommendation fully meets that funding level. It includes a grant of $400 million for the Global Fund to fight AIDS, tuberculosis, and malaria, subject to conditions that improve the fund's accountability and efficiency. Together with the money that we expect that the House Labor Health and Human Services, Education and Related Agencies Subcommittee will include, that will mean over $2.8 billion will be available for HIV/AIDS programs around the world in fiscal year 2005.

The Global AIDS Initiative is making treatment and care available to a record number of people affected by the disease. In 2003, only 50,000 people in the developing world had access to the drugs that dramatically reduced the impact of AIDS and extend life for years. By next summer, 200,000 people will have access to these drugs; and over the next several years, millions of infected people will be treated through the use of the Nevirapine for pregnant women.

The third priority, of course, in the President's budget was a request for a $1.5 billion increase for the Millennium Challenge Corporation, for a total of $2.5 billion. Mr. Chairman, given our allocation, we could not recommend full funding for this initiative, important though it is and though I am very personally committed to it. However, to demonstrate our commitment to this important foreign assistance reform effort and to respond positively to

the President's proposal, the recommendation does include $1.250 billion for the Millennium Challenge Corporation. That is an increase of $256 million over last year.

As chairman, I have made the MCC a priority in this bill. I believe in the President's vision of a new form of development assistance where a country's commitment to fighting corruption, its commitment to reform, and its commitment to investing in its people is complemented by an assistance package from the United States, negotiated by the country in the form of a signed compact. We included the authorization that created the MCC in last year's appropriation bill, and the President can continue to count on me as a strong supporter.

In preparing this bill, we were also faced with decreases in some areas of the budget, including some key non-HIV/AIDS health programs, and in the development assistance account. We have restored those reductions and, in the case of development assistance, added funds for basic education. I believe our development assistance program is a key component of our national security strategy, and it is critical to a positive U.S. image in foreign countries.

Including funding for HIV/AIDS, this bill makes available $3.079 billion for health programs overall, and that is an increase of $600 million over last year's House-passed bill. Of this total, over $332 million will be made available to fight TB and malaria. These funds help to continue the global fight against malaria, which kills one person every 30 seconds, most of them African children. USAID implements a comprehensive approach against this disease supporting the purchase and distribution of malaria medicines, a search for a vaccine, and strong prevention efforts.

Basic education has become a signature issue for the gentlewoman from New York (Mrs. Lowey); so I will let her describe the details of our recommendation in that regard. Suffice it to say that I fully support her efforts to provide more educational opportunities to the impoverished youth of the world, especially women and children. This bill recommends $400 million for basic education activities. That is an increase from $326 million in fiscal year 2004. Report language accompanying the bill requires the Secretary of State to articulate an interagency strategy on the use of those funds so that we have a coherent, coordinated effort that can produce meaningful results in reducing illiteracy.

The bill also supports USAID's work to support microenterprise lending. Report language accompanying the bill references the fiscal year 2004 authorization ceiling of $200 million as the program level the committee expects in fiscal year 2005. It is also important that USAID continue to use the traditional providers of microenterprise lending and not rely excessively on contractors for implementing this program.

We continue an emphasis in our bill on helping developing countries build their capacity to participate in the international trading system. We have $517 million in the bill for trade capacity building, and that is the same amount as the House passed version last year.

Fiscal year 2005 is the final year of the President's Water for the Poor Initiative, announced in August, 2002, in Johannesburg, South Africa. In all likelihood, we will exceed the 3-year goal of spending $970 million on water projects. Report language urges the President to direct $50 million to water programs in Africa with $9 million targeted to programs in East Africa.

The committee continues its strong support for women's programs, provides that not less than $15 million in development assistance shall be made available to improve women's leadership capacity in recipient countries. This is an increase from the $11 million that we provided last year. In addition, from our Afghanistan assistance program, we set a goal of $60 million in fiscal year 2005 for programs for women and girls.

The committee recommendation also responds to emerging needs, such as the provision of an additional $50 million for assistance for Haiti. Following up on my amendment to the Defense appropriation bill that included $95 million in supplemental assistance for the victims of the violence in the Darfur region of Sudan, we recommend $311 million in this bill for humanitarian assistance for Sudan and for the refugees affected by that conflict.

Although there are no funds for Iraq in this bill, we continue our oversight responsibilities by mandating the continuation of an independent inspector general to audit the Iraq Reconstruction program. Without new authority, the inspector general will go out of business on December 28 of this year, 6 months after the Coalition Provisional Authority was disbanded. Section 573 of the bill provides for continued operations of the CPA Inspector General's Office operating under the supervision of the Secretary of State and providing that the $75 million previously appropriated for the IG is to be made available only to the IG for his continued audit and investigative work in Iraq.

We also provide the administration the authority they need to reduce Iraq's debt to our government so that the United States can negotiate an international debt reduction for Iraq. The sooner Iraq has financial stability, the sooner the government of Iraq can fund its own security and reconstruction needs. No new funds are provided for this purpose. Any funding for debt relief will come from previously appropriated funds.

The bill fully funds the President's request for export finance agencies to promote U.S. investment overseas and create jobs in United States export sectors. The bill provides $317 million for those agencies, which include the Export-Import Bank, the Overseas Private Investment Corporation, and the Trade and Development Agency. About $311 million of that $317 million is offset by collections.

Mr. Chairman, the United States leads the international fight against coca and poppy cultivation overseas. The narcotics industry has become a source of funding for terrorists, as well as, of course, a source of drugs worldwide. As part of the war on terror, the committee fully funds the President's request for the Andean Counterdrug Initiative at a level of $731 million for antinarcotics, interdiction, for development programs, and rule-of-law and institution-building programs in Colombia, Bolivia, Peru, and Ecuador.

Under the general anti-narcotics account, the bill fully funds anti- narcotics and law enforcement programs in Afghanistan at a level of $90 million, in Mexico at $40 million, and supports an existing program in Pakistan at $32 million.

To support continuing United States leadership in the world for humanitarian responses to refugee crises, we include $776 million for refugee programs, and that is $26 million more than the President requested.

We have $19 million, $1.5 million more than the request, for the Department of Treasury, to provide technical advisors to developing countries throughout the world.

The committee includes full funding of $20 million for the President's request for debt relief for countries who qualify under the Tropical Forestry Conservation Act and $75 million for multilateral debt relief for the poorest nations that receive assistance from the Heavily Indebted Poor Countries, or the HIPC, trust fund.

The committee supports contributions to the Multilateral Development Bank and includes $1.3 billion for such contributions. While the committee was not able to fund the World Bank incentive fund or all the arrears requested by the budget because of the budgetary restraints I mentioned earlier, we have provided full funding of the regularly scheduled contributions to these banks.

Finally, the committee has provided $323 million for voluntary contributions to international organizations and programs, a level $19 million more than the request. It includes $125 million to the United Nations Childrens Fund, or UNICEF, an increase of $5 million for this important organization.

We also have $107 million for the United Nations Development Program, or UNDP, and $7 million for the Fund for Victims of Torture. A total of $25 million is available through the United Nations Population Fund, or UNFPA, under the same ``Kemp-Kasten'' restrictions as exist in current law.

We have had to reduce this bill by $1.9 billion from the President's request, as I mentioned, Mr. Chairman.

Therefore, we did not or could not provide funding for a number of new and expanded initiatives requested by the President or brought to the committee's attention by committee members, other Members of Congress and outside groups.

The major reductions to the President's budget include, as I have already mentioned, a cut of $1.25 billion to the request for the Millennium Challenge Corporation; a reduction of $224 million for the World Bank Group, including the International Development Association; and a cut of $95 million in debt relief. There are other reductions to the President's request, but we tried to retain the base funding for most of the programs.

I believe this balanced bill provides important support for our most critical national security needs, while substantially increasing funding to respond to the global HIV/AIDS pandemic. It enhances our support for overseas development assistance and humanitarian assistance. It meets the high priorities of the President in these areas and accommodates congressional concerns as well.

As I have said, this bill was developed in a very bipartisan manner and should have broad support in the House. I urge a yes vote on this bill.

Before I yield the floor, I want to call the attention of the House to two matters that were inadvertently left out of the committee report. One matter involves the Surgical Implant Generation Network, based in Richland, Washington, which is the only organization in the world that provides, free of charge, an ongoing supply of training and orthopedic materials to surgeons in developing countries who repair fractures of the very poor.

The second matter involves the Vishnevskaya Rostropovich Foundation, a charitable organization based in Washington, D.C., that conducts a mass children's vaccination initiative in the Russian Federation.

I would urge the United States Agency for International Development to give strong consideration to funding proposals for these funding organizations.

Mr. Chairman, I include the following charts for the Record.

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Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I am pleased to yield 4 minutes to the gentleman from Michigan (Mr. Knollenberg), one of the very distinguished members of the subcommittee who has

made some very significant contributions to this bill and has been one of our most valuable members through the years.

Mr. Chairman, I yield 4 minutes to the very distinguished vice chairman of the committee, the gentleman from Mississippi (Mr. Wicker), who has also been a great member of this committee. I have had the opportunity to travel with him on a number of occasions and he has contributed greatly to the drafting of this bill.

Mr. Chairman, I yield 2 minutes to the gentleman from Florida (Mr. Crenshaw), another distinguished member of our subcommittee.

Mr. Chairman, I yield 30 seconds to the gentlewoman from California (Ms. Millender-McDonald).

Mr. Chairman, will the gentlewoman yield?

I thank the gentlewoman for her attention to this important issue. Children that are affected by HIV/AIDS are a group that tugs at the heart strings of all people. I have worked closely with USAID and the Global AIDS coordinator to develop an integrated, comprehensive approach to fighting this disease, and pediatric AIDS is a core component of that approach.

While I applaud the gentlewoman's intentions, I believe that in some circumstances, integrated treatment and care centers where both adults and children can receive attention would be more appropriate. However, I will be happy to work with the gentlewoman, the Global AIDS coordinator, USAID, and other concerned parties to ensure that orphans and vulnerable children receive proper treatment, care and support, as part of a comprehensive approach to fighting this disease.

Mr. Chairman, I yield the balance of my time to the gentlewoman from Texas (Ms. Granger).

Mr. Chairman, I ask unanimous consent that debate on this amendment and any amendments thereto be limited to 20 minutes, to be equally divided and controlled by the proponent and myself as the opponent.

Mr. Chairman, I am pleased to yield 2 minutes to the distinguished gentlewoman from New York (Mrs. Lowey), the ranking member.

Mr. Chairman, I am the only other speaker I have, if the gentleman is prepared to yield back the balance of his time.

Mr. Chairman, I yield myself the balance of my time.

The Sherman amendment is really not about Iran. It is about depriving the poorest countries in the world of development assistance for basic education, for health care, for HIV/AIDS prevention and treatment, and for environmental protection programs. It is about blocking the path towards achieving the Millennium Development Goals. I do not think this Congress wants to be remembered for this.

I know that Iran is a politically sensitive issue, and none of us believe that the World Bank should be making loans in Iran, but the funding contained in the foreign operations bill is for IDA, the concessional lending program of the World Bank which is designed to help the poorest countries of the world, with per capita incomes of $1 to $2 per day.

Mr. Chairman, Iran is not eligible to use the resources of IDA. The projects approved for Iran were funded by the IBRD, which is the market rate lending program of the bank. IBRD does not receive appropriated funds. There is no fungibility between IDA and IBRD resources.

So, Mr. Chairman, restricting the appropriations of funds to IDA will not affect Iran in any way. However, it will cut funding that supports development and health programs in sub-Saharan Africa and the poorest countries of Asia and Latin America. Over half of IDA resources are programmed for sub-Saharan Africa, and many of the programs would be supported on a grant basis, no longer just loans.

Diverting these funds into bilateral programs would deny six times, that is, again, six times, as much funding as the gentleman's cut. For every $1 of U.S. taxpayer money that goes into IDA, other donors and resources provide $6 of support. So if we cut this, we cut out six times as much of the money that goes to sub-Saharan Africa and other of the poorest countries of the world.

Mr. Chairman, I have already made what I think is a difficult decision to cut World Bank funding by $211 million below the request. Another $359 million cut would probably put U.S. leadership at risk at the bank, in addition to putting at risk billions of dollars of assistance for poor countries in Africa, Asia and Latin America.

To reiterate, Mr. Chairman, Iran is not eligible for IDA finances. IDA funding, which is the subject of this bill, the only source of funding that is in this bill for the World Bank, Iran is not eligible for any of those sources, and Iran would not be affected by a cut in funding to the IDA.

I urge my colleagues to oppose this amendment.

Mr. Chairman, I yield back the balance of my time.

Mr. Chairman, I move that the Committee do now rise.

Mr. Chairman, I yield myself the balance of my time. This has been an interesting discussion from the other side. But contrary to what the gentleman from Mississippi may have thought I would do, I do, indeed, rise in opposition to this amendment.

First of all, let me begin by saying I do not condone companies relocating overseas for tax purposes, but I will come back to that in a minute.

This is an interesting issue we are dealing with here today. We had this in the full committee not long ago as it related to outsourcing, but here we are talking about supporting U.S. exports and jobs. With this amendment, we are talking about punishing companies that are creating jobs here in the United States. We are going to punish them because they are creating jobs here.

Mr. Chairman, I will not yield. The gentleman from Vermont had 20 minutes. I am not going to use but a fraction of that, so I want to get my thoughts in here and do them all together here.

This is absolutely ridiculous. Why in the world are we talking about punishing companies that are creating high-paying export jobs, and giving that away to foreign competition by eliminating Export-Import Bank financing? But that is exactly what the amendment would do. It hurts workers in this country. It hurts the economy in this country.

And yes, of course, it hurts the shareholders in this country. But most of all it hurts the workers, because this only goes to companies that are exporting. We are talking about companies that are creating jobs here in this country in order to export.

Now, the gentleman named some companies in particular in his argument. Ingersoll-Rand I heard. I think we heard Nabors Industries, Noble Drilling Corporation, Weatherford International. But this amendment would prohibit any Ex-Im Bank loan or guarantee to any U.S. company, any U.S. company that is registered offshore.

Now, I do not have any percentage of how much U.S. Export-Import Bank loans would be affected by this amendment, but characterizing Ex-Im loans as corporate welfare and a giveaway from U.S. taxpayers is certainly not correct. I am not sure why the sponsors of this amendment do not recognize that exports means U.S. jobs. It is the exact opposite of outsourcing.

The fiscal year 2005 funding for the Ex-Im Bank would support U.S. exports valued at $12 billion. For every $1 of taxpayer money invested in Ex-Im's program, there have been historical returns, and this is not just this year, there have been historical returns of $15 in credit support for export transactions. Since Ex-Im Bank supports 85 percent of most transactions, this means that the actual export value is about 15 percent higher, raising the ratio to about $18 in total value of exports supported by every $1 we put into the Ex-Im program.

I do not think this is corporate welfare. The bank has an exceptional, I would say exceptional, repayment record, with losses running at 1.4 percent of disbursements over the 70-year history of the Ex-Im Bank. And while the Ex-Im Bank has done more and more each year for small businesses, even large companies cannot get private bank financing to go to some parts of the world or to compete with aggressive foreign financing.

While businesses may be able to exist without making that extra sale, Ex-Im Bank is here for that very reason, to keep U.S. exports strong, to hopefully grow them, and to help sustain U.S. jobs through exports. Eighty-six percent of the transactions of the Ex-Im Bank directly benefit small businesses, and that is because many small businesses benefit from the larger transactions of the bank.

Let me give a statistic that alone ought to cause Members to give pause about this amendment. Ex-Im Bank's top 13 users have over 35,000 suppliers in this country, most of which are small businesses. The reality is that small businesses benefit directly and indirectly from Ex-Im Bank-financed transactions.

By law, Ex-Im Bank finances only goods and services made here in the United States. Under this bill, if a U.S. company is cut off from using Ex-Im, the company would be confronted with either losing the export sale or being forced to use foreign financing and sourcing. In either case, the impact would be to reduce U.S. exports and jeopardize the jobs that are associated with those sales. Shutting off Ex-Im would remove one of the few government programs to help U.S. exporters and to keep export-related jobs here in the United States.

One more statistic. I have been able to find information on two of the companies that were mentioned.

Ingersoll-Rand has 28,000 employees here in the United States, not overseas. These are employees here in the U.S. Nabors Industries has 14,000 employees here in the United States. This amendment cuts off financing that helps to keep those jobs secure.

The U.S. Chamber of Commerce, which I know is not an organization that perhaps my colleague on the other side would put too much stock in, but I think they made a very important point in the letter that they wrote about this a couple of days ago to the Speaker. They made this statement, and I quote:

Measures such as Representative Sanders' amendment are poor substitutes for needed reforms of the U.S. Tax Code's archaic international provisions which currently put our corporations at a competitive disadvantage internationally and provide great incentive for them to leave this country.

That brings me back to my final point that I said at the beginning. The real issue here is the archaic Tax Code that the United States has. We are not even talking about 20th century. We are talking about 19th century. We have a Tax Code that is so archaic, we are virtually the only country in the world that taxes all income whether or not it has anything to do with being produced here in the United States. So, of course, it encourages companies to go offshore, to locate offshore their corporate headquarters. They are still paying the taxes on everything they make here in the United States, Ingersoll-Rand, Nabors, all of those pay the taxes on all the income that is made here in the United States, but they do not want to pay the taxes on a subsidiary they may have in South Africa or a subsidiary they may have in Japan or elsewhere, and so they locate their corporate headquarters offshore. It is because of the archaic Tax Code that the United States continues to have.

That is what we really need to be doing. That is what we really need to be reforming, is the Tax Code. We are in the 21st century, not the 19th century. That would make us more competitive in the world. Why do we have DaimlerChrysler and not ChryslerDaimler? We have DaimlerChrysler because of the Tax Codes of the United States. In order to avoid paying taxes on production done in Germany, it was necessary for them to become DaimlerChrysler, not ChryslerDaimler. Otherwise, they would have been paying taxes on everything they produced, every car they produced in Germany.

That is why this is so important that we continue to have Ex-Im Bank. It is a crutch, if you will, but it is something that we can do to help U.S. corporations export, and it helps American workers keep their jobs. Ex-Im Bank only goes to corporations for doing business producing here in the United States.

I urge my colleagues, in conclusion, to oppose this amendment. It hurts U.S. workers. It jeopardizes U.S. jobs. Now is not the time to further cut, to eliminate one of the few tools the U.S. Government has to support exports and export-related manufacturing jobs. I urge a ``no'' vote on this amendment.

Mr. Chairman, I yield back the balance of my time.

I thank the gentlewoman for yielding.

I certainly thank the gentlewoman from Connecticut for talking about this issue. As the gentlewoman knows, both the gentlewoman from New York and I feel very strongly about the Child Survival and Health Account and the good work that is done by this account in helping save children's lives and families and the poor people around the world. The vaccination programs, the health programs, the clinics, the education programs that are run through this are extraordinarily important.

I quite agree with the gentlewoman from Connecticut. Everything we can do to increase the amount in this account is certainly something that we intend to do. I appreciate her bringing it to our attention. We will do everything that we can to try to increase this account.

Mr. Chairman, I yield myself such time as I may consume.

I certainly will not take the 10 minutes. Let me just quickly make a couple of comments.

I appreciate the comments that have been made here by the gentleman from Georgia, the other gentleman from Georgia, and the gentleman from Indiana here. I share the outrage that people feel about somebody who is a murderer of a law enforcement officer in this country getting away to a country like Mexico and then being able to escape justice. That should not happen. We have extradition treaties with a number of countries; and almost all of them in many cases, I should say, since most other countries prohibit death penalties, they do prohibit extradition if death is an option as a penalty.

But this is a new wrinkle. This is a new wrinkle that was put in by the supreme court in Mexico, which ruled that if an individual faces life in prison without possibility of parole, that is equivalent, apparently is what the supreme court said, and I have not read the complete ruling. I am a little sympathetic to the government of Mexico, which I do not think anticipated this. They certainly did not suggest to us or to the State Department that they anticipated this ruling by the supreme court, and I think they are willing and trying to work with us to resolve that.

We want to see that all crimes that are committed on our soil are brought to justice. We want to see them brought to justice particularly when it is a law enforcement officer who is the victim of this kind of terrible crime. So I intend to work with the gentleman to encourage the State Department to make every possible effort in these cases.

But before I close, let me just make one other comment, that is, I think there is a danger here of mixing some apples and oranges here when we talk about this punishment of Mexico and then we talk about whether or not they are having any effect in solving the drug problem. I would point out that this bill also contains $731 million for the Andean Counter-Drug Initiative, that is, Colombia, Peru, Bolivia, Ecuador. Those are the countries where most of the raw materials for our drugs that are consumed in this country come from. But I am sure that the three gentlemen that have spoken here would not suggest we would today cut off that money because we have not been effective. That argument has been made by some on this floor, and I do not think it is a good argument. We should do that. The $40 million that we provide to INL, the international narcotics force that we have overseas, goes largely in Mexico to support the helicopter program, that is, to maintain and supply the helicopters that are used both in chasing down drug smugglers, that is, in small planes, and in eradication efforts.

So I think it is money that is probably well spent, and I would suggest it is not money we would really want to cut off here. And with that I appreciate the gentleman's comments.

I yield to the gentleman from Georgia.

Mr. Chairman, I move to strike the last word, and I yield to the gentleman from Texas (Mr. Paul).

(Mr. PAUL asked and was given permission to revise and extend his remarks.)

Mr. Chairman, I do.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, let me just say that I agree with the motivations of this amendment, but I absolutely have to oppose the substance of it. The reason I do so is because I think it is going to accomplish exactly the opposite of the intent of this amendment.

Proponents of this amendment are, as the gentleman suggested, upset at opposition the U.S. faced at the United Nations Security Council in getting an extension of a U.S. exemption under the jurisdiction of the ICC. We were successful for some time in getting that, but now it has failed because we have faced a public relations nightmare in the United Nations and elsewhere around the world.

Do we have a right to be angry and upset and outraged that we have not gotten this extension? Yes, I think we should be; and we should continue to press for an extension.

Many times this Chamber has supported the American Servicemembers Protections Act, and I have been among its strongest supporters. I believe it is crucial that the U.S. negotiate Article 98 agreements with as many countries as possible to prevent the possibility that they may be tried in an international criminal court, with little or no political accountability.

However, conditioning ESF assistance and cutting it off to nations that do not sign Article 98 agreements is not, in my opinion, the right response. It is a very, very heavy hand to the problem.

We have conditioned foreign assistance through FMF and IMF accounts to encourage countries to sign Article 98 agreements. The result of this amendment, if it were to pass, would be to cut off all aid to some of these countries: Jordan, at $250 million; Kenya, at $25 million; Lebanon, at $32 million; Ecuador, at $13 million; Cyprus, at $13.5 million.

I believe most of us believe trying to get a Cyprus agreement is very important. I think all of us believe that Jordan is extraordinarily important in our war against terrorism. But it would cut off our ESF assistance and I think it would do extraordinary damage to our relationship with Jordan. How are we going to explain to them what we are really trying to do in getting them to cooperate in the war on terrorism?

At a time when we are fighting the war on terrorism, reducing this tool of diplomatic influence is not a good idea. Nothing would make the opponents of the U.S. in the Security Council and the U.N. General Assembly happier than if we were to do that. They do not like us using foreign assistance to support U.S. strategic interests. So if we were to cut it off, it makes them happy on two accounts: It will have denied the U.S. the exemption in the first instance, and it will have reduced our influence around the world.

So I urge my colleagues to vote no on this amendment. If we accept it, the U.S. will be hamstringing itself, placing a straitjacket on its diplomatic tools, when we have a lot of U.S. national security objectives that must carry the same or equal weight as securing Article 98 agreements. I urge a ``no'' vote on this.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield 1\1/4\ minutes to the gentlewoman from New York (Mrs. Lowey).

Mr. Chairman, I yield myself the balance of my time.

Mr. Chairman, let me, in conclusion, just say that the majority leader made the point that we should be protecting our servicemen, and he is absolutely correct. And he made the point that we have provisions in the law that says countries cannot get military financing or military support if they do not give us an exemption to Article 98. But he also pointed out that we have an exemption in there. We have an ability that the President can have a waive for those countries.

This takes it, as the majority leader said, another step to economic support, and there is no waiver in there. This

means one of our key allies, and I keep coming back to Jordan, because I think Jordan is absolutely one of our key allies in this fight against terrorism, that we would have to cut off all the economic assistance to Jordan, because, for whatever reason, they have seen it in a different way and they have chosen, at least at this point, not to give us this exemption. I do not see how that helps us in the war against terrorism.

I hope we will defeat the amendment.

Mr. Chairman, I rise reluctantly in opposition to this amendment, and I yield myself such time as I may consume.

Mr. Chairman, I will not take the 5 minutes. Let me just say that the substance of the amendment really does not accomplish, as I think the gentlewoman knows, does not accomplish what she would hope to do, because if we read the amendment, it adds money in one spot and takes it out of the other spot. So it really has no impact at all on the amount of funding that would go to sub-Saharan Africa.

The gentlewoman wants to increase the amount of money from development assistance for sub-Saharan Africa. I think by and large we do very well in this bill on sub-Saharan Africa. It is a balanced bill. I think we have some very good increases there. Many of the things that the gentlewoman talks about that I fully subscribe to about the need for greater water resources, for helping farming in those areas, those are the things that we support and that are done in our legislation.

But I think that this would not be the right amendment, since it simply does not do what the gentlewoman would try to accomplish. So I would hope that she would withdraw her amendment; if not, I hope that we will defeat this amendment.

Mr. Chairman, there is no doubt that this must be the most popular appropriations subcommittee, because so many of us have come to the chairman and the ranking member on many of our issues. Really, it deals with world harmony and world peace and the United States largesse or generosity to the world.

It also has its criticisms; and I might say that, along with my appreciation for the gentlewoman from New York (Mrs. Lowey) and the gentleman from Arizona (Chairman Kolbe), I do want to acknowledge some concerns as I give applause.

First of all, I want to acknowledge the strong statement that was made as it regards to Sudan. So many of us have lent our voices to this issue. I

know many have traveled, and many will travel, to Sudan to look at the heinous and horrific acts occurring in Darfur, where Muslim is killing Muslim, where Arab Muslim is killing black Muslim, where women are being pillaged and killed. And we know for sure that there needs to be definitive peacekeeping.

We also know that the governor of Khartoum needs to act, and I would hope when we finish this bill we will have strong, pointed language that the killing must stop and that we will not allow this to be another Rwanda.

I also hope that we will strengthen the peace effort in Haiti, recognize that some of us are still concerned about the deposing of a democratically elected leader, but we want most of all for Haiti to be able to rebuild itself, and we look for those resources in this legislation.

I add my voice to the concern of the Dominican Republic and Haiti in terms of dollars to help reconstruct.

I also support amendments that are adding to the HIV/AIDS killer. As we know, the efforts in Thailand suggest that HIV/AIDS is still killing around the world, but I offer an amendment as well to recognize that it is important to provide U.S. aid to the starving countries around the world.

But, Mr. Chairman, I want to add, if you will, something to sustainable development, to provide resources so that farmers can be shown how to work in droughts in Arab communities so that they can provide for themselves around the world. This is an important step.

And lastly, Mr. Chairman, I hope that we will not underfund Pakistan when they are helping us in the war on terror. We should not vote against any amendment that cuts the resources for Pakistan.

Mr. Chairman, I rise in opposition to the amendment that was to be offered by Congressman Ron Paul, which seeks to strip Pakistan of necessary resources.

H.R. 4818, without the Paul amendment, allocates up to $200,000,000 to Pakistan in the form of direct loans and guarantees; enables unused funds (up to $150,000,000) appropriated under the ``Economic Support Fund'' and ``Foreign Military Financing Program'' to provide assistance for Pakistan; makes funds appropriated in title I and II of this bill available to Pakistan, as well as victims of war, displaced children and victims of trafficking; and finally, it allows funds allocated to Department of Defense to be expanded for crafting, packing, handling and transportation of excess defense articles to various countries, including Pakistan.

The funding provided in the bill, without the Paul amendment, will act as a tool in the global war against terrorism, as Pakistan has been

our partner in this effort. This assistance will create programs combating the spread of disease such as HIV/AIDS, and will continue to foster a much needed trusted relationship in that region of the world. Finally, our assistance will help educate the children of Pakistan, who will be the leaders of tomorrow. As chair of the Congressional Children's Caucus, I have witnessed how often we forget to provide for our children, who lose international attention and priority during times of active military engagement.

With our assistance, we have been able to witness Pakistan's economic trade and investment improvements, health care improvement, the promotion of democracy and human rights, increased education provision, and the further development of science and technology in Pakistan. By continuing to assist this nation, we will continue a true partnership that promotes world peace and security, and uncaps Pakistan's vast untapped economic potential to the benefit of both Pakistan and the United States.

The United States has enjoyed a strong relationship with the government and people of Pakistan since the founding of the modern state in 1947, and Pakistan has proven to be an indispensable ally during both the Cold War and the War on Terror.

Pakistan's strategically important location and unwavering support have played a decisive role helping to remove the Taliban regime from Afghanistan and the capture of hundreds of wanted al-Qaeda terrorists. Pakistan has suffered thousands of casualties and has been a victim of numerous terrorist acts on their own soil because of their steadfastness with our nation in the War on Terror.

Stripping assistance from Pakistan sends out the wrong message; such an act is disrespectful and most importantly it is dangerous. By choosing to single out and exclude Pakistan from access to our financial assistance, we show them how unappreciative we are for their efforts to aid us in the War against terrorism. Pakistan has been committed to assisting us in the effort to stomp out terrorism, and has proven this commitment by capturing hundreds of terrorists found in Afghanistan and all over the world.

Congressman Paul asserts that, ample evidence exists proving that Osama bin Laden is a current free resident of Pakistan, and highlights the ineffectiveness of their aid thus far. I ask you to question the validity of this intelligence. Is this the same intelligence used, which caused our nation to believe that Sadam Hussein was harboring weapons of mass destruction? I ask that you also reflect upon our own nation as to how effective we have been in capturing Osama bin Laden ourselves. Playing the blame game has no place here, and only acts to alienate and ostracize a valued ally in the War on Terrorism. Congressman Paul's amendment suggests that because Osama bin Laden may be currently at-large in Pakistan, we should strip our funding from a nation that has provided us with enormous amounts of aid in our effort to stomp out terrorism.

Finally, Mr. Chairman, I would like to urge my colleagues to remember the fact that we called upon the help of Pakistan during both the Cold War and the War on Terrorism, and in both instances they helped us. Without the knowledge of the future, it would be very unwise to cut off a country that we may need yet another time in the future. There is absolutely no reason to strain our ties with Pakistan by denying them the assistance needed.

Mr. Chairman, I rise to support the current bill and to applaud Chairman Kolbe and Ranking Member Lowey for their hard work and leadership in crafting an effective piece of legislation. However, in making appropriations for the entire nation, it is virtually impossible to have a complete assessment or to profess a complete breadth of knowledge of the regions that need the most assistance--because this is an ever-changing issue.

Thus, I have offered an amendment. I support H.R. 4818, but I also urge that not less than $5 million be appropriated for agricultural development in sub-Saharan Africa. This money would not only provide assistance to needy farmers and villages, but it would also strengthen infrastructure and encourage sustainable agriculture growth.

Providing small farmers and villages within the assistance and the resources necessary to plant, harvest, and distribute food crops is an essential component of development in Africa. In my amendment I propose doing much more than just giving small farmers money to buy farming products such as shovels, seeds, and livestock. I propose that we also improve infrastructure such as roads, irrigation canals, wells, and storage facilities. From this small investment, rural farmers will be able to reap profits for seasons and years to come. This is essence of sustainable development.

Mr. Chairman, without such measures toward systemic change, populations all over the world will continue to be faced food shortages. It is estimated that there are already 842 million undernourished people in the world, 798 million of which lived in developing countries and 34 million of which live in developing countries. It is clear that this is an issue that affects both poor and rich countries.

The African continent, however, is undeniably the hardest hit. The continent claims 24 of the 34 countries experiencing food emergencies. The sub-Saharan African region is feeling the brunt of this crisis with some 207 million people in 1999-2001 facing and experiencing food shortages. That amounts to nearly 26 percent of the sub-Saharan population facing inadequate access to nutritious food supplies.

Such widespread hunger plays a crucial role in sub-Saharan African societies. There are implications for education. When a child does not have the proper nourishment in his breakfast, it is impossible to expect him to perform well in school. There are implications for public health. When a mother's body is ravaged by the effects of HIV/AIDS, it is impossible to expect that anti-retroviral drugs will ameliorate her situation when food is a requirement for taking such powerful drugs. There are implications for peace and security. When a young man's meager wages are not enough to help provide for his family, it is implausible to expect that he will not go to whatever lengths necessary to secure some sort of food for his family. Mr. Chairman, the United States is invested in improving the state of education, health, and peace in sub-Saharan countries. This will not be possible without providing for improvements in rural agriculture by providing assistance to small farmers.

Those living in poor, rural areas are the most vulnerable. They comprise 70 percent of the continent's population and are the most in need of agricultural development because their livelihoods are dependent on agriculture.

Small farmers produce the food that feeds the men, women, babies, and the elders living in the small villages scattered across the arid landscape of Africa. If we neglect Africa's rural population, we neglect Africa's backbone. If we provide these farmers with the necessary resources to shore up inefficient and antiquated infrastructure we open the door to alleviating a host of other problems that plague almost 70 percent of Africa's rural population that depend on agriculture.

My proposal would allow for the development of small-scale irrigation, water and drainage, post-harvest storage, crop intensification, crop and livestock diversification, and rural infrastructure. Such improvements to infrastructure would encourage sustainable development and lead to a decrease in food shortage in the short and long run.

The Special Programme for Food Security of the Food and Agriculture organization of the United Nations (FAO) along with other international NGOs is already making headway in Africa and other continents to reduce the food shortage crisis. We must acknowledge the benefits of agricultural improvement and its subsequent benefits for other areas of life for those living in rural communities and villages.

Mr. Chairman, for the reasons stated above, I support H.R. 4818 with the principles set forth in the amendment that I offer.

Mr. Chairman, I offer an amendment.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, as I start, I want to acknowledge the very hard work and I believe a commitment of the chairman of this committee to the point that I am about to make, as well as the historic commitment of the ranking member, because I have worked with her over the years on this question of sustainable development, the opportunity for many who are undernourished and struck by famine to sustain themselves.

Many of my colleagues are aware of the relationship of my congressional district to Congressman Mickey Leland. Many of my colleagues knew of his passion and commitment to Ethiopia and the famines that occurred in the 1980s. In fact, Mickey Leland lost his life in 1989 when he died on the side of an Ethiopian mountain trying to carry food resources to the famine-stricken individuals in Ethiopia. Ethiopia, along with other sub-Saharan nations in Africa, have suffered famine now for many, many cycles since his tragic death.

What we see here is an example of a farmer in sub-Saharan Africa trying to survive. He is not asking for food; but as we look at this arid background, he is working with a sickle, if you will, dealing with lack of irrigation, all representing the crisis of famine in sub- Saharan Africa.

So each time we have a cycle of a drought, lack of water, what we will find is teams and teams of teeming groups of Ethiopians and others going to feeding stations simply to survive.

In my most recent visit to Ethiopia, the cycle of drought and famine were again very present. We went into many parts of the country and visited enormous, large sites of families who had left their farming sites because they could not farm, there was no water, there were no tools, and they were not able to survive. They simply were in sickness- infested feeding camps with volunteers and USAID workers and others doing the very best that they could; but they kept coming, because we have not been able to provide the necessary resources for sustainable development.

This amendment is small in nature, but it is $5 million being put into the development assistance to help those in sub-Saharan Africa. It is to help them with small-scale irrigation, water and drainage, postharvest storage, crop intensification, crop and livestock diversification, and rural infrastructure such as in the special program for food security of the food and agriculture organization of the United States.

It is shameful that we have not authorized the Foreign Assistance Act of 1961 since 1987. So these dollars will simply help put life, water in the ground, irrigation resources, so that we can follow that old admonition that if we give a person a fish, they eat for a day; if we give them a rod, a fishing rod, they eat for a very long time.

We realize that through the FAO our distinguished colleague, Eva Clayton, has been working with the FAO now, and we realize that part of the problem is a lack of infrastructure. Constraints to agricultural development in Africa, says the President, and the continent's poor agriculture performance is water. Africa uses only 4 percent of its renewable water reserve for irrigation as compared to 17 percent in Asia. Only 7 percent of Africa's arable land is irrigated, against 37 percent in Asia. We need to have USAID have a separate and enhanced resource for food security. It is important to note that we can make a difference, and this amendment simply attempts to do so.

So I would ask my colleagues to take a hard look at this farmer in this picture. He represents and is symbolic of many others throughout the various countries in sub-Saharan Africa. My colleagues will find out that famine goes hand in hand with the drastic conditions of drought. Drought comes in a very frequent time frame in this area.

In speaking with the President of Ethiopia, speaking with USAID, they declared that Ethiopia, for example, only had $4 million set aside to help a farmer farm better, to get more enhanced farming skills and tools, to irrigate the water. So I believe that this mere attempt to respond to FAO, the works of Tony Hill, the chairman and president, and our colleague, Eva Clayton, and in the memory of Mickey Leland to realize that sustaining the farmers will help to stamp out hunger.

I would hope that we would be prepared to support such an amendment.

Mr. Chairman, let me conclude by simply saying Ethiopia's famine threat continues to increase. I simply hope that we will find in our hearts the ability to support this amendment in order to save lives.

Mr. Chairman, I rise to support the current bill and to applaud Chairman Kolbe and Ranking Member Lowey for their hard work and leadership in crafting an effective piece of legislation. However, in making appropriations for the entire Nation, it is virtually impossible to have a complete assessment or to profess a complete breadth of knowledge of the regions that need the most assistance--because this is an ever-changing issue.

I have an amendment at the desk. Again, I rise to support the current bill and offer an amendment that speaks to the problems of sustainable development and subsistence farming in Africa and other needy regions. I urge that $5 million be appropriated for agricultural development in sub-Saharan Africa and taken from the Economic Support Fund found in Title II.

Funds requested in this amendment to be administered by USAID are clearly authorized under the Foreign Assistance Act of 1961.

This money would not only provide assistance to needy farmers and villages, but it would also strengthen infrastructure and encourage sustainable growth.

Mr. Chairman, developing and developed countries around the world are experiencing food shortages. There are an estimated 842 million undernourished persons, 798 million of which live in developing countries, 34 million of which live in countries in transition and 10 million of which live in industrialized countries.

Africa is undeniably the hardest hit of all continents, which claims 24 of the 34 countries experiencing food emergencies. The sub-Saharan African region, though, is facing the brunt of this crisis with some 207 million people in 1999-2001. That amounts to nearly 26 percent of the population facing inadequate access to nutritious food supplies.

Those living in poor, rural areas are the most vulnerable. They comprise 70 percent of the continent's population and are the most in need of agricultural development because their livelihoods are depending on agriculture.

Small farmers produce the food that feeds the men, women, babies, and the elders living in the small villages scattered across the arid landscape of Africa. If we neglect Africa's rural population, we neglect Africa's backbone. If we provide these farmers with the necessary resources to shore up inefficient and antiquated infrastructure we open the door to alleviating a host of other problems that plague almost \3/4\ of Africa's population.

My proposal would allow for the development of small-scale irrigation, water and drainage, post-harvest storage, crop intensification,

crop and livestock diversification, and rural infrastructure. Such improvements to infrastructure would encourage sustainable development and lead to a decrease in food shortage in the short and long run.

Right now, only 7 percent of arable land is irrigated, and groups like FAO is working with governments and U.N. and NGO partners to protect and restore agriculture-based livelihoods in crisis countries through the supply of essential inputs, including improved seeds, tools, fertilizer, veterinary medicines and vaccines, livestock feeds and irrigation, fishing and agro-processing equipment, as well as through crop and livestock pest and disease control campaigns, the immediate rehabilitation of essential agricultural infrastructure, and putting in place natural disaster prevention mechanisms.

In addition, members of the House International Relations Subcommittee on Africa have recognized the importance of the issues to be addressed by this proposal.

We must help these people whose lives depend on the fruits of subsistence farming. Furthermore, these farmers are severely under- trained and lack proper irrigation technologies and other resources to create more arable land options. Therefore, Mr. Chairman, for the reasons stated above, I ask that my colleagues support the Jackson-Lee Amendment.

In conclusion, Mr. Chairman, I would like to add the following for the Record:

background on ethiopia

Over 80 percent of Ethiopia's 57 million people live in

rural areas, where most of them are engaged in subsistence

farming or pastoralism. Altitudes in Ethiopia vary greatly.

The lowlands are characterized by dry, sometimes drought-

stricken, areas occupied mainly by nomadic or semi-nomadic

pastoralists. In the mid-altitude areas such crops as maize,

cotton, sorghum and legumes grow. The high-altitude areas are

most suited to wheat, barley and coffee cultivation. The

staple cereal crop in Ethiopia--teff--grows in mid- to high-

altitude areas as does chat which is grown for commercial as

well as domestic use. Ethiopia has the highest cattle

population in Africa, with large herds providing status to

their owners.

Since the 1970s, Ethiopia has been periodically struck by

drought, and many areas consistently suffer from erratic and

unpredictable rainfall. Pressure on the land is very high,

with an average landholding per household in mid- to high-

altitude areas of only about 0.2 to 0.6 hectares. Households

are typically large with an average of seven members. The use

of family planning is not yet widespread in the country, and

in rural areas, especially in Muslim communities, early

marriage is very common. Girls are often married or committed

to marriage at between eight and 12 years of age. Health

facilities are limited and sparse and many people die of

preventable diseases such as malaria, cholera and typhoid as

well as malnutrition.

Mr. Chairman, I concede the point of order.

Mr. Chairman, I reserve a point of order.

Mr. Chairman, I am prepared to make my point of order unless the gentlewoman wishes to speak further.

Mr. Chairman, I rise in opposition to the amendment; and I yield myself such time as I may consume.

Mr. Chairman, I count myself among the Fund's strongest supporters. Last year, I worked with my colleagues on both sides of the aisle to increase the U.S. contributions to the Fund from the President's request of $200 million to $550 million.

Not including funds in the bill under discussion, the United States has made available nearly $1.2 billion of the Fund's $3.4 billion in pledges and contributions through 2004.

However, this is a global disease, and we must have the commitment of many partners to fight it. That's why Congress requires that other donors match the U.S. funds, at a 2:1 ratio. Unfortunately, other countries have not contributed enough this year for the entire U.S. contribution to be released--we have nearly $190 million waiting for other donors to step up to the plate. The Committee took this fact into account in making its recommendation.

I must note that it is more than unfortunate that some in the AIDS community continue to scold the United States for not giving more to the Global Fund. Their time would be better spent encouraging other donors to contribute and to improving the Fund's operations.

Of the more than $3 billion that the Fund has approved in grants, only $428 million has even made it out of the Global Fund's account. That means nearly $2.6 billion in committed funding is simply sitting in the Global Fund's account.

The Committee has recommended provisions in this year's bill to help the Fund improve its disbursements. I can only ask that others begin to take a hard look at the Fund's operations, rather than blindly call for more money, more money. We need the Fund around for the long-term, and improving its operations is the only way to maintain public confidence in it.

If other countries step up to the plate, and provide sufficient contributions to allow more from the U.S. than Congress appropriates, and if the Fund improves its operations, then we will take these developments into account for future years.

Mr. Chairman, I make a point of order against the amendment because it proposes to change existing law and constitutes legislation on an appropriation bill and, therefore, violates clause 2 of rule XXI.

The rule states, in pertinent part, ``an amendment to a general appropriation bill shall not be in order if changing existing law.'' The amendment includes an emergency designation under section 251 of the Balanced Budget and Emergency Deficit Control Act of 1985 and as such constitutes legislation in violation of clause 2 of rule XXI.

I ask for a ruling from the Chair.

Mr. Chairman, I yield 4 minutes to the gentleman from Wisconsin (Mr. Obey), distinguished ranking member of the full committee.

Mr. Chairman, I yield 4 minutes to the distinguished gentlewoman from New York (Mrs. Lowey), ranking member of the subcommittee.

Mr. Chairman, I am pleased to yield 4 minutes to the gentleman from Florida (Mr. Young), the distinguished chairman of the Committee on Appropriations.

Mr. Chairman, I yield 3\1/2\ minutes to the distinguished gentleman from California (Mr. Berman).

Mr. Chairman, I yield 1\1/2\ minutes to the distinguished gentleman from California (Mr. Issa).

(Mr. ISSA asked and was given permission to revise and extend his remarks.)

Mr. Chairman, I am pleased to yield 2 minutes to the distinguished gentleman from Michigan (Mr. Dingell).

(Mr. DINGELL asked and was given permission to revise and extend his remarks.)

Mr. Chairman, I yield myself the balance of the time.

Mr. Chairman, I want to say at the outset that I have the greatest respect for the gentleman from California (Mr. Lantos), the sponsor of this amendment; but I believe that adoption of the amendment would be a serious mistake and it will undermine our relations with one of our major allies in the Middle East.

This amendment is being proposed at the very time when the governments of Egypt and Israel are coordinating plans for Israel to withdraw from Gaza. In order for a withdrawal to be successful, both countries must cooperate on security and intelligence matters; and Egypt must be prepared to help ensure that terrorist organizations do not gain power in Gaza. Discussions, cooperation, and coordination on these matters are already occurring at the highest level of both governments.

I cannot imagine that at the very time that Israel and Egypt, after years of an admittedly cold, frosty peace, are finally engaged in serious discussions on military and on intelligence cooperation, that this Congress would choose this moment to disrupt this cooperation by cutting military assistance for Egypt.

As has already been indicated, the administration does strongly oppose this amendment, and part of the letter from Secretary Powell has been quoted in opposition to this amendment. I will include the entire letter in the Record at this point, but let me quote from one section of that letter.

In it the Secretary says: ``In Egypt we have an ally that can help us in war and in peace. Our credibility in this relationship depends to a great degree

upon being a reliable provider of assistance to the Egyptian military.

``A transfer of funds from the military assistance account to the economic account will damage the credibility of our bilateral relations at a very sensitive moment in the region, one that has witnessed Egyptian engagement in and support of our regional objectives.''

I include the full text of the letter for the Record.

The Secretary of State,

Washington, DC, July 14, 2004.

Hon. Jim Kolbe,

Chairman, Foreign Operations, Export Financing and Related

Programs, Committee on Appropriations, House of

Representatives.

Dear Mr. Chairman: I ask for your support on the subject of

a possible amendment to the Fiscal Year 2005 Foreign

Operations Appropriation bill that proposes to reduce our

annual military assistance to Egypt by 25 percent and to

reprogram it for economic assistance. We understand that the

House may consider this amendment July 15. This matter is of

urgent concern, as I believe that any changes to the Egypt

military assistance account would seriously undermine the

strong U.S.-Egypt partnership that has been built since the

1979 Camp David Accords and that continues to be one of the

foundations for achieving U.S. foreign policy goals in the

Middle East.

As you know, U.S. military aid to Egypt is a cornerstone of

the Camp David Accords. The Administration is opposed to any

amendment that would modify our commitment to the parties as

contained in that agreement. This commitment is the

foundation of our efforts to promote peace in the region, to

combat terrorism, and to advance interoperability with the

Egyptian military. In addition, a $325 million reduction in

military assistance, as proposed, could lead to the

cancellation of approximately $2.2 billion in total contract

value; these contracts all go towards the purchase of U.S.

products.

Our military assistance to Egypt has contributed to

regional stability in an area that had previously been the

scene of military conflict against Israel. This calming of

tensions has enabled us to develop a strategic partnership

with Egypt that has contributed to a broad range of U.S.

objectives in the region, including the Global War on

Terrorism, the stabilization and reconstruction of Iraq, and

more recently, efforts to stop the humanitarian crisis in

Darfur, Sudan. Egypt has also undertaken a critical

initiative to work with Israel to support the Israeli

withdrawal from the Gaza Strip through the reorganization

and training of the Palestinian security services.

On a bilateral military-to-military level, our assistance

has helped to modernize the Egyptian military, thereby

creating a defensive force that is interoperable with, and

capable of supporting, U.S. security goals in the region. We

also continue to train Egyptian military officers through the

International Military Education and Training Program and to

conduct joint training exercises, thereby ensuring that our

militaries both understand and support each other at critical

moments. This Egyptian capacity has enabled the Egyptian

military to participate in international peacekeeping

operations, to help us successfully prosecute Operations

Enduring Freedom and Iraqi Freedom, to enable our craft to

safely transit the Suez Canal, to enable our planes to

traverse Egyptian airspace, and to provide our tankers with

invaluable access to Egyptian facilities.

In Egypt we have an ally that can help us in war and peace.

Our credibility in this relationship depends to a great

degree upon being a reliable provider of assistance to the

Egyptian military. A transfer of funds from the military

assistance account to the economic account will damage the

credibility of our bilateral relations at a very sensitive

moment in the region, one that has witnessed Egyptian

engagement in and support of our regional objectives. I hope

you will oppose this amendment.

Sincerely,

Colin L. Powell.

Again, I have great respect for the author of the amendment. However, this is not the time to make a cut of more than 40 percent of military assistance. Even if we were so inclined, now is not the time to take that kind of action that would disrupt our ongoing efforts to facilitate the withdrawal of Israel from Gaza. I urge the House to reject this amendment.

Mr. Chairman, I yield back the balance of my time.