Jack Lew on the FY10 State Budget

Talks about the "three pillars" of smart power ... but USAID is still missing an Administrator


The State Department’s Deputy Secretary of State Jack Lew was over at the HFAC last week for the hearing on Building Capacity to Protect U.S. National Security: The Fiscal Year 2010 International Affairs Budget. You can read the whole thing here (pdf). The hearing page plus webcast link is here. Note that you need Real Player to watch these committee videos. Long excerpts below:

This budget -- a total of $53.9 billion, of which $48.6 billion is for the State Department and USAID -- is a 9 percent increase over the total FY 2009 funding level, including supplemental appropriations. It reflects the Obama Administration’s commitment to fiscal discipline and transparency by shifting funding for predictable and recurring programs, previously funded in emergency supplemental appropriations, into the FY 2010 request.

Five Smart Power Funding Objectives

First, we must build the civilian capacity within the Department of State and USAID necessary for 21st Century missions.

Our diplomatic and development missions have evolved. Foreign and civil service personnel deploy alongside the military in Afghanistan and Iraq, reaching far beyond embassy walls to connect with citizens and communities whose support we enlist to suppress insurgency and drive out enemies like the Taliban and al-Qaeda. […] Our diplomatic and development teams are increasingly posted in situations that resemble military conditions rather than traditional diplomatic assignments. We simply cannot spread our workforce thinner and thinner without increasing the risk that while we address a current hotspot we are missing an opportunity to prevent the next crisis or engage in such a way as to build new and capable partners.

The FY 2010 budget requests $283 million to support adding over 740 new Foreign Service personnel at the Department of State, a significant step toward achieving a 25 percent increase in State Foreign Service personnel over four years. I want to call special attention, however, to our efforts to rebuild USAID, where, as many of you have noted, human resources have significantly eroded over the past decade, even as we have ramped up development activities and our expectations of our lead development institution. The FY 2010 request includes a 45 percent increase in USAID operations to support adding an additional 350 new permanent USAID Foreign Service Officers and related capital improvements under the Agency’s Development Leadership Initiative. The FY 2010 budget puts the USAID on a path to double its Foreign Service officers by 2012. The budget also would provide the resources needed to train the expanded workforces of both State and USAID with the language, diplomatic, development and managerial skills necessary for their mission, and allow us to increase civilian presence and leadership in places like Afghanistan, Pakistan, and Iraq.

We must not only expand our reach but improve our management and oversight capacity. We see contract reform as a critical component of that effort. In FY 1990, USAID employed nearly 3,500 permanent direct hires administering $5 billion a year in assistance. As of FY 2008, USAID employed about 2,200 permanent direct hires administering $13.2 billion in assistance. USAID’s ability to provide strategic direction and appropriate oversight is clearly challenged at this level. This diminished workforce has resulted in contracting out more and more programs and activities, bundling activities under large mechanisms, and in many cases, higher overall costs.

The only way to reverse this trend is to increase the core of foreign and civil service staff whose full time and sole responsibility is to serve their mission. Foreign and civil service officers on the ground need to be developing objectives, working with locally based organizations, providing oversight, and making decisions about how resources are utilized. We have announced our intent to double foreign assistance by 2015. This can only be accomplished if we have the people on board to drive the program.

The State Department has long needed greater capacity to respond quickly to stabilize situations at times of conflict or crisis. These situations may be caused by political or natural disasters, but they share a common need for a rapid civilian response. Our military men and women are often called upon to respond to situations for which they were not trained and where a civilian presence would be more effective. The military has done an extraordinary job, but it cannot -- and should not -- handle these situations alone. In order to build the capacity to deploy civilians rapidly, we are requesting $363 million for the Civilian Stabilization Initiative. This will expand our total response team to over four thousand persons and greatly increases our ability to prevent and respond to conflict with an immediately deployable civilian counterpart to the U.S. military, ready and able to help stabilize countries in the transition from war to peace.

Included in that request is $40 million for a Stabilization Bridge Fund, which will provide the Civilian Responders immediate resources for critical transition and stabilization programs to reduce the need for long-term deployments of military forces or peacekeepers. Separately, we also request $76 million for a Rapid Response Fund to help stabilize turmoil in new and fragile democracies, such as what we saw during Kenya’s most recent election, where a quick infusion of resources can help reconcile competing interests and support the will of the people. In order to increase personnel and conflict response capacity, we also need the tools and infrastructure to enable our overseas personnel to do their jobs.

The FY 2010 budget includes $2.095 billion to construct safe, secure, functional new embassies; a strengthened American presence in critical emerging areas; and expanded and secure global classified and unclassified information technology networks. These resources also support efforts to improve the efficiency of diplomatic and development operations, including modernizing antiquated software systems; integrating State and USAID information technology; participating in e-government initiatives that promote transparency, accountability and citizen engagement; upgrading reporting and financial management systems, and consolidating State and USAID administrative platforms.

Smart power means using all of the tools available to reach out to the world, and the FY 2010 budget requests $1.13 billion for public diplomacy and educational and cultural exchanges, providing the resources required to engage and influence people around the world, advance understanding of our country’s principles and values, and facilitate the formation of strategic partnerships through the exchange of people and ideas. These programs connect people to people -- exchanging knowledge, information, and expertise, and bring people together around shared values. Public diplomacy programs often help build the sustainable relationships with local communities that become foundations of our development programs. And in a world in which 60 percent of the population is under the age of 30, our youth programs are among the most critical investments we can make. Extracurricular programs, educational opportunities, and exchanges help divert at-risk youth away from the influence of violent actors, and the use of innovative new media greatly expands our reach into this critical population.

Read the full testimony here.

Jack Lew concluded his testimony talking about the State Department leading a whole-of-government process to design and implement a new strategy. He also pointed out that State and USAID account for about 70 percent of official U.S. development assistance but that "we are just two of the nearly 20 U.S. agencies involved in providing foreign aid." He says, "We must care more about strategy, unity and results than we do about turf. We must be able to look at a country, a function, or an objective, and be able to identify everything that the U.S. government is doing in that area -- not just State. To meet the challenges of a world being bound closer together, we need a government that is working closer together."

He also emphasized the need to speak with one voice: "Our partners abroad have sometimes received mixed messages from the array of agencies working in international affairs, each of which has its own rules of engagement. Our ability to get results on the ground will depend on our ability to field coordinated teams, both in Washington and around the globe."

Looks good -- remains to be seen if State gets everything on its wish list from Congress this year. One observation though – given that development is one of the “three pillars of smart power,” where is the new USAID Administrator? It’s almost four months since the new administration took office and USAID still has an Acting Administrator. I understand that there is a review conducted on foreign assistance as a whole, but I just think it’s going to be difficult to continue to make a vigorous case for development as one of the three pillars of smart power if you can’t fill that slot.

I noticed that Deputy Secretary Jack Lew not the Acting Administrator Alonzo Fulgham signed a Joint Statement of Collaboration for USAID’s three-year, $24 million, Energy Efficiency and Capacity Building project in Pakistan early last month. I guess we’re back to my original post on this: What’s going to happen to USAID? Jack Lew?

Back in December, TPM also speculated that Jack Lew will spearhead a long-overdue reorganization of the Foggy Bottom bureaucracy, saying "You don't hire a guy like Jack Lew to preside over the status quo." Stay tuned...