Tough negotiations ahead for Clinton budget proposal (03/09/97)

Tough negotiations ahead for Clinton budget proposal

by Michael Sawkiw Jr.
Ukrainian National Information Service

WASHINGTON - With the introduction of President Bill Clinton's budget on February 6, both the administration and Capitol Hill are prepared for tough negotiations. Of particular interest is the president's request for an increase in the international affairs budget (Function 150). According to leading pollsters, the majority of Americans believe the U.S. government spends nearly 20 percent of the federal budget on international affairs, when in reality the amount is approximately 1 percent.

Congress will now begin the difficult task of authorizing appropriations for Function 150. While acknowledging America's role as the defender and promoter of democracy, Congress faces a formidable challenge. For Fiscal Year (FY) 1998, the budget request for international affairs is $19.451 billion - an increase of $800 million from FY 1997.

This request includes the following proposed initiatives: funding for assistance to the new independent states (NIS) - $900 million (an increase of 40 percent over the FY 1997 request of $640 million); financing for the Partnership for Peace (PFP) program - $70 million; underwriting programs for the United States Information Agency (USIA) - $1.1 billion; and financing for the International Military Education and Training (IMET) program - $50 million. The above-mentioned programs all relate to categories under which Ukraine would receive financial assistance, whether directly or indirectly.

The request for Ukraine, under the funding for the NIS, remains almost steady at $225.5 million - an increase of only $500,000 from 1997. At the same time, there is a proposed 150 percent increase in funding for Russia (the level jumps from $95.4 million in FY 1997 to $241.5 million for FY 1998). The over-all increase for the NIS is a positive development over the trend of the past several years which was marked by decreasing international assistance.

The increase is divided among nine out of 12 NIS recipient countries. On the short end of the stick are Armenia, Belarus and Ukraine. For the last couple of years Armenia has received increasing amounts of aid; this year, $15 million below last year's $95 million was requested. Ukraine, a strategic ally of the United States received a meager .2 percent increase over last year's earmark of $225 million. All other countries received at least a 33 percent increase and an NIS average of 61 percent (excluding Russia which received a 150 percent increase and Tajikistan's 250 percent increase) in the presidential budget request.

All the programs for specific countries of the NIS will fall under two categories of assistance: the traditional technical assistance (i.e., support for democracy-building initiatives, macro-economic stabilization, etc.) and non-traditional programs under the Partnership for Freedom (PFF).

PFF will be constructed under the premise of increasing support for lucrative trade and commerce, anti-crime prevention programs, and the consolidation of past economic and political reforms. This initiative will be administered first in Russia and subsequently introduced to other NIS countries, including Ukraine.

To present the Clinton administration's position regarding the proposed 1998 budget request in the international affairs arena, Secretary of State Madeleine Albright testified before two House committees, the International Relations Committee, chaired by Rep. Benjamin Gilman (R-N.Y.), and the Subcommittee on Foreign Operations of the Appropriations Committee, chaired by Rep. Sonny Callahan (R-Ala.).

Secretary Albright mentioned the success of Ukraine's transition to a market-oriented economic system and lauded Ukraine's new democracy as "fundamental to Europe's future." Furthermore, in discussions about NATO's eastward expansion she noted that, "an enhanced relationship with Ukraine" must exist.

Republican leaders in Congress also agree that American leadership in world affairs is crucial for security and democracy. In an op-ed article in The Washington Times, Sen. Trent Lott (R-Miss.) argued that America must maintain its presence throughout the world, yet more efficient international spending techniques also are required. It was noted by the Senate majority leader that five former secretaries of state have endorsed plans to consolidate three foreign affairs bureaucracies - the United States Agency for International Development (USAID), United States Information Agency (USIA) and the United States Arms Control and Disarmament Agency (ACDA) - under the aegis of the State Department.

"The debate over the appropriate level of American spending on international affairs should be driven by American interests - not the self-interest of bureaucrats and federal grant recipients," stated Sen. Lott. Few Americans would find fault with that statement. Sen. Lott wishes to engage the administration in a dialogue about the rudimentary programs that ensure America's commitment to world peace and security.

At a briefing at the State Department on the FY 1998 international affairs budget, Secretaries Albright and Robert Rubin of the Treasury Department spoke on the proposed increased spending levels. Both acknowledged that the promotion of political stability worldwide must be accompanied by an American commitment to financial assistance.

In a similar vein, Richard Morningstar, ambassador to the NIS who also oversees technical assistance to Ukraine, outlined the principles on which President Clinton's budgetary requests are based in a telephone conference call with members of the Ukrainian American community. Taking into account the national security interests of the United States and the need to sustain economic growth in stable market democracies in the NIS, Ambassador Morningstar specifically noted that funding to Ukraine will focus on technical assistance and eventually will include the PFF program.

The PFF program will enable Ukraine to remove many of the impediments that hamper the reform process. According to Ambassador Morningstar, Western investment in the Ukrainian economy provides an opportunity for a substantial increase in trade and commerce, though tax reform and standard accounting practices need to be adopted.

In order to build upon the success of previous reform efforts, the PFF program would encourage U.S. firms to invest in Ukraine to promote sustained economic growth. Other areas of concentration under the PFF program include the expansion of law enforcement agencies to act as deterrents to crime and corruption.

Assistance for the new independent states
(in millions of dollars)

Country FY 96 Actual FY 97 Estimated FY 98 Request

Armenia 85 95 80

Azerbaijan 12 16.4 31.5

Belarus 5 5 4.9

Georgia 22 25.8 41.9

Kazakstan 33 34.8 52

Kyrgyzstan 19 18.4 36.5

Moldova 23 95.4 32.8

Russia 137 95.4 241.5

Tajikistan 4 4.4 15.4

Turkmenistan 4 4.5 6

Ukraine 225 225 225.5

Uzbekistan 19 21.1 32.5

NIS Regional 53 56.1 99.5

Total 541 625 900

**Assistance for the new independent states**
(in millions of dollars)
Country	FY 96 Actual	FY 97 Estimated	FY 98 Request
Armenia	85	95	80
Azerbaijan	12	16.4	31.5
Belarus	5	5	4.9
Georgia	22	25.8	41.9
Kazakstan	33	34.8	52
Kyrgyzstan	19	18.4	36.5
Moldova	23	95.4	32.8
Russia	137	95.4	241.5
Tajikistan	4	4.4	15.4
Turkmenistan	4	4.5	6
Ukraine	225	225	225.5
Uzbekistan	19	21.1	32.5
NIS Regional	53	56.1	99.5
Total	541	625	900

Appropriated/requested levels; does not reflect transfers and rescissions. International Affairs - Function 150, Summary and Highlights, Fiscal Year 1998, Office of Resources, Plans and Policy, Washington.

| Home Page |