[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR
2021
_______________________________________________________________________
_______________________________________________________________________
HEARINGS
BEFORE A
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
___________
SUBCOMMITTEE ON STATE, FOREIGN OPERATIONS,
AND RELATED PROGRAMS
NITA M. LOWEY, New York, Chairwoman
BARBARA LEE, California
GRACE MENG, New York
DAVID E. PRICE, North Carolina
LOIS FRANKEL, Florida
NORMA J. TORRES, California
HAROLD ROGERS, Kentucky
JEFF FORTENBERRY, Nebraska
MARTHA ROBY, Alabama
NOTE: Under committee rules, Mrs. Lowey, as chairwoman of the full
committee, and Ms. Granger, as ranking minority member of the full
committee, are authorized to sit as members of all subcommittees.
Steve Marchese, Craig Higgins, Erin Kolodjeski, Dean Koulouris,
Jason Wheelock, Jean Kwon, Marin Stein, and Clelia Alvarado
Subcommittee Staff
___________
PART 3
Page
Department of State, Foreign
Operations, and Related Programs........
1
United States Agency for International
Development.............................
3
Export and Finance Agencies...........
83
U.S. Department of the Treasury
International Programs..................
167
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Printed for the use of the Committee on Appropriations
U.S. GOVERNMENT PUBLISHING OFFICE
43-523 WASHINGTON : 2021
COMMITTEE ON APPROPRIATIONS
NITA M. LOWEY, New York, Chairwoman
MARCY KAPTUR, Ohio KAY GRANGER, Texas
PETER J. VISCLOSKY, Indiana HAROLD ROGERS, Kentucky
JOSE E. SERRANO, New York ROBERT B. ADERHOLT, Alabama
ROSA L. DeLAURO, Connecticut MICHAEL K. SIMPSON, Idaho
DAVID E. PRICE, North Carolina JOHN R. CARTER, Texas
LUCILLE ROYBAL-ALLARD, California KEN CALVERT, California
SANFORD D. BISHOP, Jr., Georgia TOM COLE, Oklahoma
BARBARA LEE, California MARIO DIAZ-BALART, Florida
BETTY McCOLLUM, Minnesota TOM GRAVES, Georgia
TIM RYAN, Ohio STEVE WOMACK, Arkansas
C. A. DUTCH RUPPERSBERGER, Maryland JEFF FORTENBERRY, Nebraska
DEBBIE WASSERMAN SCHULTZ, Florida CHUCK FLEISCHMANN, Tennessee
HENRY CUELLAR, Texas JAIME HERRERA BEUTLER, Washington
CHELLIE PINGREE, Maine DAVID P. JOYCE, Ohio
MIKE QUIGLEY, Illinois ANDY HARRIS, Maryland
DEREK KILMER, Washington MARTHA ROBY, Alabama
MATT CARTWRIGHT, Pennsylvania MARK E. AMODEI, Nevada
GRACE MENG, New York CHRIS STEWART, Utah
MARK POCAN, Wisconsin STEVEN M. PALAZZO, Mississippi
KATHERINE M. CLARK, Massachusetts DAN NEWHOUSE, Washington
PETE AGUILAR, California JOHN R. MOOLENAAR, Michigan
LOIS FRANKEL, Florida JOHN H. RUTHERFORD, Florida
CHERI BUSTOS, Illinois WILL HURD, Texas
BONNIE WATSON COLEMAN, New Jersey
BRENDA L. LAWRENCE, Michigan
NORMA J. TORRES, California
CHARLIE CRIST, Florida
ANN KIRKPATRICK, Arizona
ED CASE, Hawaii
Shalanda Young, Clerk and Staff Director
C O N T E N T S
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Witnesses
Page
Boehler, Adam, Chief Executive Officer, U.S. International
Development Finance Corporation................................ 106
Prepared statement........................................... 108
Answers to submitted questions............................... 143
Green, Hon. Mark, Administrator, U.S. Agency for International
Development.................................................... 5
Prepared statement........................................... 8
Answers to submitted questions............................... 48
Hardy, Thomas, Acting Director, U.S. Trade and Development Agency 86
Prepared statement........................................... 89
Answers to submitted questions............................... 130
Mnuchin, Hon. Steven, Secretary, Department of the Treasury...... 169
Prepared statement........................................... 171
Answers to submitted questions............................... 190
Reed, Kimberly, President and Chairman, Export-Import Bank of the
United States.................................................. 95
Prepared statement........................................... 97
Answers to submitted questions............................... 160
Submitted Material
Fortenberry, Hon. Jeff, a Representative in Congress from the
State of Nebraska, letter of June 20. 2019 to Gene Dodaro,
Comptroller General, GAO....................................... 81
STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS FOR 2021
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THE DEPARTMENT OF STATE, FOREIGN OPERATIONS AND RELATED PROGRAMS BUDGET
REQUEST FOR FISCAL YEAR 2021
[Clerks Note: Secretary of State Mike Pompeo did not make
himself available to present the Fiscal Year 2021 Budget
Request for the Department of State, Foreign Operations and
Related Programs to the committee.]
Tuesday, March 3, 2020
UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT BUDGET REQUEST FOR
FISCAL YEAR 2021
WITNESS
HON. MARK GREEN, ADMINISTRATOR, UNITED STATES AGENCY FOR INTERNATIONAL
DEVELOPMENT
OPENING STATEMENT BY CHAIRWOMAN LOWEY
The Chairwoman [presiding]. The Subcommittee on State,
Foreign Operations, and Related Programs will come to order.
Administrator Green, thank you for joining us today. I
really do want to thank you for your stewardship of USAID
during very difficult times, and for the dedication of our
development professionals. USAID helps the world's most
vulnerable, assists in recovery from natural disasters and
humanitarian crises, and supports countries' efforts to
strengthen governance, rule of law, and human rights. This
isn't just the right thing to do. It strengthens our national
security and advances American interests.
And you certainly have your work cut out for you. There are
more than 70 million refugees and displaced people around the
world, which is fueled by conflict, natural disasters, and
climate change. Ebola continues to simmer in the Democratic
Republic of Congo, while the novel coronavirus outbreak
threatens to become a pandemic. Despite significant progress on
our development priorities, we are currently off track to meet
the U.N. Sustainable Development Goals by 2030. Our development
and humanitarian efforts are our best hope to tackle these
issues. This is why Congress has disregarded this
administration's last three budget requests, instead providing
sufficient resources to effectively and efficiently fund some
of our most critical foreign policy priorities.
The administration's fiscal year 2021 budget request
includes funding for several development initiatives that we
support, such as women's economic empowerment, investments to
strengthen emerging private sectors, and global health
security. However, the administration cannot be successful in
these initiatives if we under or defund the basics, which is
exactly what the proposed 20 percent cut to our foreign
assistance programs would do. For example, if enacted, this
request would cut basic education by 66 percent and family
planning by 59 percent. Now, the administration certainly
cannot seriously believe that millions of women can achieve
economic empowerment if they are unable to read, write, do
math, or control the timing and number of children they have.
Any benefit from an increase in global health security
would surely be offset by the proposed 34 percent cut to all
other global health programs. Instead of requesting funding and
implementing policies to ensure USAID can be successful, the
administration seems intent on putting every possible barrier
in your way. This is certainly true of the expansion of the
Global Gag Rule, the Kemp-Kasten determination against UNFPA,
and unfair stigmatization of multilaterals as wasteful and
working against U.S. interests.
The administration's multiple policy reviews have also led
to program delays and suspension of assistance. This
subcommittee has always believed that our national security is
strongest when defense, diplomacy, and development are equally
funded. Without robust funding for development and humanitarian
programs, the U.S. will fail to maintain our position as a
leader on the global stage. This will not only harm the world's
most vulnerable, it puts U.S. lives at risk and reduces our
influence. We cannot and will not allow this to happen.
So, again, I want to thank you for testifying today, and I
look forward to your discussion and our discussion. And before
we move to your testimony, let me turn to Mr. Rogers, the
ranking member, who is committed to these issues and has worked
very hard as a partner. Please go forward with your opening
statement. Thank you.
OPENING STATEMENT BY RANKING MEMBER ROGERS
Mr. Rogers. Thank you, Madam Chair, and welcome, Mr.
Ambassador. We appreciate your being here to discuss the budget
and the spending plans and a review of your work at the Agency.
Let me start by once again acknowledging the good work that you
are doing at USAID and the collaborative manner in which you do
it. These are not easy times to be engaged in international
development. The challenging operating environments from
insecurity continue to mount as do the needs of those we aim to
help.
I salute your dedicated cadre of development professionals
that too often are working in or near very dangerous
circumstances. Your leadership and experience, especially
having served as an ambassador, and, coincidentally, in this
body, comes at a critical time because you are already keenly
aware of the risks our Foreign Service officers face in
carrying out their duties. In these uncertain times, I want you
to know that I am grateful for your leadership at USAID, and
you have my support for whatever that means.
Turning to the matter at hand, the President's budget
request for fiscal 2021 is nearly a 20 percent cut from the
fiscal 2020 enacted budget. I suspect this proposed cut will be
handled in a manner similar to prior years. I look forward to
working with the chairwoman in the weeks ahead on a bill that
provides more appropriate levels of funding to address the
serious global challenges that we are confronted with this
year.
However, there are a few notable improvements in parts of
the budget that deserve mention, including prioritized funding
for the Indo-Pacific Strategy, countering Chinese, Russian, and
Iranian malign influence, and a focus on strengthened
engagement with the private sector. I hope you will address
these topics as we go along this morning, as well as how you
see the role of USAID in Afghanistan as we enter this new
chapter of our engagement there. I am also interested to hear
more about how USAID has and will respond to the coronavirus
outbreak. As you know, we have been working hard on a
supplemental appropriations bill to help in this regard, and I
hope and trust we will pass that through the House this week.
I was chairman of the full committee when we worked on the
Ebola outbreak in West Africa and also when Zika hit. Having
shepherded the supplementals to address those outbreaks through
the Congress, I knew when I became chair of this subcommittee
that I wanted to create a pot of funding that could be tapped
quickly to address an emerging health threat abroad. That is
how we ended up with the emergency reserve that you were able
to draw from last week for your initial response. I am sure
that the months ahead will not be easy in combatting this
current outbreak, but I hope you will keep us informed and let
us know what we can do to help in this global effort.
There are more priorities that I will address when it comes
time for questions. So in closing with this opening statement,
let me once again thank you and the men and women of USAID for
your hard work and your commitment to service. We thank you. I
yield.
The Chairwoman. Thank you, and I will be calling on members
based on seniority of the members that were present when the
hearing was called to order. I will alternate between majority
and minority, and each member is asked to keep their questions
to within 5 minutes per round. But first, Administrator Green,
we will be happy to place your full testimony into the record.
If you would like to proceed by summarizing your oral
statement, that would be fine. Proceed as you wish, and I want
to make sure you leave enough time to get to everyone's
questions. Thank you.
OPENING STATEMENT BY AMBASSADOR GREEN
Mr. Green. Thank you, Madam Chair, Ranking Member Rogers,
and members of the subcommittee. I do welcome this opportunity
to summarize my testimony, but also to express my appreciation
for your ongoing support, particularly for the men and women
professionals of USAID all around the world. As you have noted,
they are working often in very trying circumstances.
The President's fiscal year 2021 budget requests
approximately $19.6 billion for USAID. It is an effort to
balance fiscal responsibility here at home with our leadership
role and national security imperatives on the world stage. I
would like to begin by discussing some of the latest
developments on a few of our more pressing issues, like the
DRC, where USAID continues to lead the U.S. government's
response to the Ebola outbreak. There is solid progress to
report. There were no new confirmed cases last week, the first
time that has happened since the response began. To be clear,
the outbreak is not over. Ongoing security threats could still
unravel the progress, but, nonetheless, there is reason to be
optimistic.
Of course, one of the administration's very highest
priorities is taking on the threat posed by the coronavirus.
Last month, Secretary Pompeo announced that the U.S. government
will contribute up to $100 million to help stem the spread of
the disease internationally. That includes $37 million, as was
referenced, from USAID for work in affected countries. These
resources are at work in a range of activities, including
surveillance, lab testing, and public messaging campaigns. We
are also sending out personal protective equipment to a number
of countries. There is still much we don't know about the
disease, but it is worth noting that USAID has invested more
than $1.1 billion in global health security since 2009. Those
investments have helped improve the capacity to prevent,
detect, and respond to emerging disease threats like the
coronavirus.
From natural crises to manmade crises, there is Yemen, in
many ways the world's largest humanitarian disaster.
Interference by the Houthis has forced us to plan for a partial
suspension of programs in the country's north, the harassing of
aid workers and imposing numerous obstacles to service
delivery. We cannot tolerate our assistance being impeded or
diverted. The Houthis must take action to end the interference,
or else we will be forced to limit where and what we provide.
In northwest Syria, recent operations by Syrian and Russian
security forces have displaced nearly 1 million from Idlib and
Aleppo. A recent Security Council decision means, in effect,
that U.N. agencies can no longer use one of the only three
entry points into northeastern Syria, dangerously constricting
our humanitarian lifeline.
On a brighter note, last October, USAID signed its first
bilateral agreement with Venezuela in decades. It enables us to
expand our support to independent media, civil society, the
National Assembly, and the government of Interim President Juan
Guaido. It will also allow us to provide additional support
once a democratic transition occurs. The request for Venezuela
includes $205 million from ESDF and Global Health funds for
that important work. We are all hopeful that we get to that day
when such funds can be expended and invested.
On a related note, I want to thank the subcommittee for its
support of our work in Colombia. The visit by your staff to our
mission was deeply appreciated by our teams there.
In the Sahel, security conditions continue to deteriorate.
The U.N. estimates in Burkina Faso, for example, 4,000 people
have been displaced every single day since the year began.
USAID is providing humanitarian assistance to those in need,
trying to help stabilize violence-affected areas, and also
counter extremist messaging.
I want to take a moment and highlight two successes as we
talk about some of the challenges. There are great
opportunities and progress that we can report on. In India, we
hope to soon welcome the establishment of a new U.S.-India
Development Foundation that will enable us to serve in a more
catalytic role, and help the government more effectively
mobilize domestic resources towards areas of ongoing need. In
Albania, there is similar progress. Prime Minister Edi Rama
told me last November Albania doesn't need more money. It needs
more technical assistance and knowledge as it takes on
corruption. We hope to soon see a U.S.-Albania Transparency
Academy, which will help foster a culture of transparency and
accountability in the country's governing institutions.
Our ongoing work to bring transformation to the Agency is
becoming more tangible than ever. With your support, we have
now legally established the Bureaus for Resilience and Food
Security, Humanitarian Assistance, and Conflict Prevention and
Stabilization. We hope they will soon be joined by the proposed
Bureau for Policy, Resources and Performance, the concept note
for which it is still waiting congressional concurrence. It is
the most important remaining piece of our transformation, and I
look forward to continuing to work with you to answer any
questions that you might have.
Religious freedom isn't merely an American value, as we all
know. It is a human right. Sadly, religious plurality and the
freedom to openly practice one's faith remains under threat in
many countries. We are continuing to support communities in
northern Iraq and across the Middle East as they recover from
ISIS brutality. The request includes $150 million to maintain
and expand that work. We use those resources to assist
communities of all faiths that face discrimination or
persecution wherever it occurs.
We are also committed to helping countries struggling to
provide high-quality education for their children and youth.
Madam Chair, given your announced retirement plans, I wanted to
take a moment to offer a note of admiration. Throughout your
time in Congress, you have promoted the transformative power of
education. You have also paid special attention to children
living in conflict and crisis situations, and you have worked
tirelessly to provide them with access to educational services.
Your work has created tools and rallied resources that provide
hope and regeneration at great risk. You may be stepping away
from Congress, not yet, but your legacy will live on through
the millions of people whose lives you have lifted. It is only
one of the reasons you will always be my favorite Jewish
mother.
Members, I appreciate your support, your guidance, your
counsel. And, Madam Chair, again, it has been an honor to
appear before you. Thank you, and I welcome your questions.
[The prepared statement of Ambassador Green follows:]
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The Chairwoman. Well, thank you very much, Mr. Ambassador.
First of all, I appreciate your very kind words. As you know,
this has been really an opportunity to serve and to do many
good things, and it has really been a special opportunity for
me to work with you. We are fortunate to have a person with
your integrity, your commitment, and your knowledge in this
position, and there are still many more months left. We could
do a lot of things together. So thank you again for your kind
words.
Now, I have many concerns as does this committee----
Mr. Green. So much for the efforts. [Laughter.]
The Chairwoman. So I will begin with Afghanistan because it
has been 17 years, I believe. Isn't that correct? I am very
concerned that the recently-signed peace agreement with the
Taliban could undermine the more than $30 billion this
subcommittee has provided since 2002 to help promote the rights
of women and girls, strengthen institutions for good
governance, and increase access to quality education. Now,
under the peace agreement, can you share with us what is
USAID's role? Will our programs continue? Will there be any
significant changes to USAID programming or presence? I have a
second part, but I will let you respond to the first.
Mr. Green. Thank you, Madam Chair. I can't tell you that I
know all the terms of the peace agreement yet, and obviously we
are the front end of it. I think Secretary Pompeo has put it
very well. We are at the moment of opportunity for the people
of Afghanistan and their leaders. What I can tell you from the
USAID perspective is that in addition to focusing on the
conditions necessary for peace and applying the lessons that we
have learned from these years, we are dedicated to implementing
the goals in our country's strategy, including women's
empowerment and educational opportunity, particularly higher
education opportunity.
As we have spoken many times, the future of Afghanistan,
the sustainable, bright future for Afghanistan, is dependent
upon increasing the role of women in the economy, in community
leadership, and obviously that is very hard to do if those
educational opportunities go away. So we continue to be
dedicated to those goals.
The Chairwoman. Now, can you assure us that the investments
made to strengthen the rights of women and girls and increase
access to education can be maintained? For example, the
subcommittee has demonstrated strong bipartisan support for the
American University in Afghanistan. Will our assistance to AUAF
continue under the peace agreement?
Mr. Green. Let me break that apart, if I can, into two
pieces. First, in terms of overall the goals that we have
shared, women's empowerment and educational opportunity, what I
can guarantee for you is that we will continue to pursue those
goals. We can never guarantee the outcomes. We can guarantee
the effort. With respect to AUAF, as we have talked about
before, AUAF has been operating under an extended cooperative
agreement, the terms of which run out in May. However, they
have been granted a no-cost extension, which takes them into
the summer, and they have been invited to compete for
competitive funding, which is out there. It is procurement
sensitive, and I am not even sure of all those who have
applied. But I can tell you that the goals of higher
educational opportunities remain as important to us today as
they ever have been.
The Chairwoman. I just wonder if the administration, in
orchestrating this peace agreement, is consulting with you at
all. Are they looking for any assurance that there may be
actions that have to be put in place to preserve the
extraordinary progress that has been made? Have you been part
of any kind of discussions?
Mr. Green. What I can tell you is that we have staff who
have been assisting our special envoy. So we have certainly had
the opportunity to express or to remind diplomatic
representatives of the work that we have all been doing. And I
know in the brief conversations that I have had, that there is
very much the sense that the work that we have been performing
over the years has made a difference and is worth continuing to
pursue. What precisely it looks like in the months and years
ahead, I don't know for certain. I do know that we are going to
continue to pursue that same strategy and those same goals that
we have been talking about for some time.
The Chairwoman. Thank you very much. I look forward to
continuing that dialogue. I would like further assurance that
these programs will continue. Mr. Rogers?
Mr. Rogers. Thank you, Nita.
Mr. Rogers. Colombia, our anchor, our best partner in the
region. A secure and stable Colombia is vital to our own
national security. In fact, Presidents Trump and Duque met just
yesterday at the White House, but they need our help. There is
no doubt about it. They are being swamped by a mass exodus from
Venezuela, their neighbor. I am told that there are now 4\1/2\
million Venezuelan refugees and migrants living abroad,
including 1.7 million in Colombia alone, a reported 2,000
refugees crossing the border every day. Are those numbers
accurate?
Mr. Green. As far as we know, those numbers are accurate,
and they are projected to go to as high as 6 million by the end
of this year.
Mr. Rogers. Well, the President is almost desperate, Duque,
in his request for help. Ongoing political, human rights, and
socioeconomic developments in Venezuela compel growing numbers
of children, women and men to leave for neighboring countries
within Latin America and the Caribbean, and, of course, they
share a very long border with Colombia. Is there extra help
that we can get to them to deal with this growing problem?
Mr. Green. Congressman Rogers, I think you have put your
finger on it very well because it is two different things. So
there is the support that we continue to provide for both
Venezuelans, who are residing in Colombia and have gone
throughout the region, as well as support for the host
communities as they deal with the burden of those migrants who
have come over. But separately, it is also important for us to
deal with Colombia as our close ally and their own development
challenges.
And so we have invested heavily in some programs that I
know President Duque is extraordinarily pleased with and very
supportive of. For example, he often points to a land titling
project we did. I used to be a real estate attorney. Nobody
ever thanked me for title work before, but the work that we
have done in a city of 1 million people in Colombia created the
first-ever fully titled, fully land-tenured community, and that
creates tremendous opportunities for economic empowerment,
particularly for marginalized communities of women.
But we are not only trying to help Colombia deal with the
cost of those who have fled there from Venezuela. We are trying
to help Colombia as our development partner and diplomatic
partner strengthen their economy, bring about peace and
reconciliation, bring governance to largely ungoverned rural
areas. So it is important on both fronts, and it is work that
we are absolutely dedicated to. And, again, I want to thank the
members of the committee for the great support that you have
shown and the special attention. Your staff has traveled down
to Colombia, met with Colombians as well as some of the
Venezuelans who have fled over, and we really appreciate the
support and counsel.
Mr. Rogers. Well, Colombian President Duque says the very
existence of the region is at stake here. Is he overstating the
problem?
Mr. Green. I think it is one of the most underappreciated
challenges in our hemisphere. When we talk about the challenges
of displaced communities, I think most Americans think of the
far corners of the world, but this is our neighborhood. And you
are exactly right, the Venezuelans who have fled, 4\1/2\
million-plus, on their way to 6, many have gone through
Colombia. They are not just going to Colombia. They are going
to many other countries, Peru and Ecuador, and, in some cases,
up to the Caribbean. It imposes tremendous cost, and it has an
impact upon the provision of social services, access to
education, food security, and economic growth.
So it is very important that we continue to focus on this
region, both on the humanitarian side, but also looking for
ways to build some resilience in these communities because at
this point, we don't see that tide, if you will, of forced
migrants slowing down. It is 2,000, 3,000 to 5,000 per day at
some points, and those are enormous costs and have real impact.
So we need to focus on both.
Mr. Rogers. Thank you.
The Chairwoman. Mr. Price?
Mr. Price. Thank you, Madam Chairwoman. Good morning, Mr.
Green. Glad to see you. I appreciate your being here today. And
I want to start by remarking that I feel we are in a particular
position to appreciate your good work, to value your good work,
on our bipartisan House Democracy Partnership. Our mission is
to work collaboratively to strengthen parliamentary
institutions in developing democracies, as you very well know.
We simply could not do what we do without the National
Democratic Institute, the International Republican Institute.
They are funded directly, of course, through the National
Endowment for Democracy, but they are often funded in the
countries we are working with through grants and cooperative
agreements with USAID.
When we are in these countries, we also, of course, see
broader evidence of your good work and your engagement, the
contributions you make to almost all of our 24 partners. And as
you might expect, we may have some specific ideas about the
treatment of these countries in your budgets, and we will be
wanting to work with you on that. We do look out for these
countries, and we value their transition to democracy and
sometimes how fragile it can be.
Speaking of which, I want to ask you about Central America.
When a country is in bad shape where citizens are fleeing for
their lives, it seems that it would be in our national
interests to try to address the root causes of this out
migration, and to fund programs, often through your agency,
that seek to do that. But that isn't what we've seen in this
administration. Since March 2019, this administration has cut
or withheld almost all foreign assistance, including
humanitarian assistance, to the Northern Triangle countries--
that would be El Salvador, Honduras, and Guatemala--despite
Congress continuing to appropriate this funding. So obviously
one issue is the merits of the case. The other is contravening
congressional intent.
It is my understanding that of the $1.66 billion Congress
has appropriated to this region since fiscal 2018, the
administration has invested only $200 to $300 million, often
accompanied, as I am afraid we are all aware, by the
President's punitive rhetoric. So I want to ask you about that.
There have been over the years a lot of advocates, bipartisan,
all over the ideological spectrum. Most famously, I suppose,
General Kelly when he was commander of SOUTHCOM. There have
been a lot of advocates for this kind of support for these
countries, this kind of home country support to address the
conditions that often prompt out migration.
So I want to ask you about that, of course, but I also want
to ask you to take a few steps back, and maybe this will help
us understand what is going on here. What would you say more
generally about the potential of foreign assistance in these
situations? Foreign aid can do some things. Other things it
cannot do. Humanitarian development and economic assistance,
what is the potential, in Central America or anywhere else, to
address the root causes of people fleeing the country, out
migration?
So we are concerned about these cuts. I am very concerned
about these cuts, but also concerned about the general
proposition that we are overlooking a potential that foreign
assistance gives us to deal with a critical international
issue. So that is what I would invite you to reflect on.
Mr. Green. Thank you, Congressman. Very quickly, on HDP,
thank you. I think that the HDP partnership is a very important
one. I will say very quickly just to plant the seed, we have a
number of countries that are emerging into democracy, and they
often lack a couple of things that we sometimes assume are
there. Number one, transparency. They may not have any
experience in transparency, and I think we can help strengthen
that much to their benefit. But secondly, separation of powers,
and you and I have spoken about this. There is not enough
investment in legislative oversight. State, USAID, we tend to
deal with the chief executive, the executive branch. I am a big
fan of HDP because it is an important program in that area.
Secondly, when it comes to the displacement challenges,
there are a couple of parts to it. Number 1 is root causes, you
are correct. And we have been working, while we are in this
pause, from development assistance into the Northern Triangle,
to develop methods for better calibrating the geographic
sources from which out migration is coming so that when we are
able to get back to full work when the administration is
satisfied that we have strong and willing partners in our host
country governments, that we can better focus some of those
programs.
But the other piece that you are focusing on or that you
are pointing to, I think, is the challenge that is perhaps not
addressed enough by all of us. I don't know that we have got
all the answers. So as Chairwoman Lowey pointed out so well in
the opening comments she made, we have got 71 million displaced
people in the world, and we have a generation that is growing
up displaced either in camps or in displaced villages, and I
truly worry about their connectivity to the world around them.
So we have to look at such things obviously as nutrition and
health, education and how we provide education in these
disparate settings, but also, more broadly, connectivity.
How do we help young people connect to the world around
them so that as they grow up, they are ready to contribute to a
more stable, peaceful, prosperous world? It is a daunting
challenge, and I can't tell you I have got all the answers, but
it is what is causing all of us to think a great deal and
reflect upon what tools can be developed. So you are right that
we have got not just in the Northern Triangle, but in many
places of the world, a couple of sets of challenges. Addressing
the root causes that often drive people, which is often
insecurity, lack of opportunity, oppression, conflict, but also
those who are in motion, how do we help them so that we aren't
locked into cycles where people become vulnerable to the worst
kinds of exploitative forces in the years ahead? So that is
something that is causing us to think of a great deal, to
reflect, and we look forward to working with you on it because
I think it is a daunting generational challenge for us.
Mr. Price. Thank you. Thank you, Madam Chair.
The Chairwoman. Thank you. Mr. Fortenberry?
Mr. Fortenberry. Thank you, Madam Chair, for holding this
important hearing. Administrator Green, Congressman Green,
Ambassador Green. I never know what to call you, but welcome to
the hearing. Thank you for obviously what is a long and
distinguished career in public service. I think you have one of
the best jobs in government. It is tough. It is difficult.
Sometimes it is hard to explain because there is honestly a lot
of fragmentation. There is a lot of variation to the types of
problems that we have. The United States continues to lead the
world in terms of humanitarian relief, and, frankly, charitable
generosity, and you are at the point of that. So I am grateful
for that.
I want to point something out to you. I wrote to the
Government Accountability Office coming up on about a year ago
and asked them to basically do a mapping strategy for all the
food security and assistance programs that America has that we
are engaged in in terms of multinational organizations, as well
as touching upon the myriad of nongovernmental organizations
that touch this space. As you are quite aware, food security is
the foundation for stabilization as well as human flourishing.
So I would like you to address that question, how well food
security through our myriad of important programs, whether it
is Feed the Future, Food for Peace, the variety of other
outreach efforts that you have through the micro types of
programs that are there, are being fully integrated and
socialized as, again, that foundational piece of your work. So
that is just a broad comment.
Second, and I would like you to comment on it, but
secondly, the same thing goes with conservation and
biodiversity. As we are moving forward in this century,
emphasizing the need for environmental security is absolutely
critical. A holistic approach that includes persons and things
in place-based strategies is absolutely essential, in my mind,
to your work. Again, please address how well we are doing.
There is a new idea floating out there that is tactile. It is
real. Individuals and communities can embrace it. It is the
planting of trees as a way to stop deforestation, again provide
stabilization for biodiversity and address the issue of carbon
in the atmosphere. And finally, if we have time, I want to talk
to you a little bit about Northern Iraq and your efforts there.
Mr. Green. Thank you, Congressman. Any one of the topics
you have raised, I think, might be the topic for a good hearing
unto itself. First off, on food security, it allows me to point
out that on this subcommittee and at USAID, we have the great
privilege of working in an area in which every administration
in modern times has created important tools. And Feed the
Future, which was created during the Obama administration, is a
marvelous tool that we are all very excited about. We have
continued to prioritize investments in food security through
Feed the Future with the Global Water Strategy as well,
nutrition priority countries, and resilience-focused countries.
All of those tools come together.
In terms of how we are thinking about it, in the
transformation process, we have recently launched a new Bureau
for Resilience and Food Security, recognizing that food
security is not simply a matter of providing food stuffs. It is
also building some of the resilience to help communities
withstand future shock. Plus on top of it, the greatest
opportunities in most parts of the world for economic growth
for surging economically are in the food security area. If you
don't get food security right, it is very, very difficult to go
very far and to provide opportunities for your young people. So
in the transformation process, we are elevating it and making
sure that resilience goes along with food security.
Conservation and biodiversity, you and I share a great
passion. I am a big supporter of the CARPE Program, which is
our longest and largest biodiversity program, as well as the
DELTA Program. But not only is it important for the goal of
pursuing biodiversity in and of itself, which we elevate in our
metrics, but I also want to point out that those efforts at
combating wildlife trafficking are particularly important right
now.
If you look at where in recent years the most dangerous
infectious outbreaks come from, almost all of it has some
linkage to zoonotic causes. So tackling wildlife trafficking is
not only a good conservation measure. It is a good health
measure, and it is increasingly important. So, again, it is
going to be elevated and prioritized in our work going forward
because it is also a matter of health security.
The Chairwoman. Ms. Frankel? Thank you.
Ms. Frankel. Thank you, Mr. Green, for being here. I want
to add my compliments to your organization. I have traveled all
over the world. I have met with many of your workers, the NGOs
that you fund, and I just add the compliment. So don't take----
Mr. Green. My job is usually to get out of their way, quite
frankly. They are talented.
Ms. Frankel. So don't take my questions personally today.
First, I think I will start with a story, and then I want to
ask you a question relative to that because I actually had a
visitor in my office a couple months ago. Her name was Celeste.
She was 31 years old. She was a mother of two children from
Mozambique. And I am not sure I met her or somebody who knew
her, but here is the story. She had lost her husband to AIDS in
2017 and turned to the Mozambique Association for Family
Development for help when she discovered she was HIV positive.
The clinic set a routine for her, and she told me that if it
wasn't for these visits, she wouldn't be alive. There is a
however to this. Apparently when there was a cut from this
clinic's money because of the expanded gag rule, it shut down,
and basically she had no place to go.
So my first question, because I think people maybe don't
understand this, and maybe you could explain it. I know that
Federal money is not allowed to be used for abortion. Is that
right? So we are not going to argue with that. I don't agree
with that, but I am not going to argue that today. In the past,
other Republican administrations have had what is known as its
gag rule, which would affect organizations that did family
planning.
My understanding is under the Trump administration, with
what I call its abortion obsession and its desire to placate
the very extreme right wing of Americans who are obsessed with
abortion, that now the whole gag rule is now applied to all
healthcare money, and so that it is not just in family
planning, but also in healthcare. So if you could just explain
that, if that is true, and what is the size of that amount of
money that is being affected?
Mr. Green. Thank you, Congresswoman. So it does apply to
basically all healthcare funds, but I think the important thing
to remember is it doesn't reduce healthcare funding one dollar.
So the overall funding that is provided for our global health
work is not reduced by the PLGHA.
Ms. Frankel. Well, it is attempting to be reduced here in
your budget by a very significant amount, which I would hope
you disagree, but I am not going to put you on the spot. The
fact of the matter is, I guess the question is, is there any
data now that you have that indicates whether or not all these
NGOs or these clinics that have been defunded have been
adequately replaced, because I just gave you an example of a
clinic in a small village that was doing all the healthcare for
the village. It has been defunded. Have there been
replacements?
Mr. Green. So let me answer that with a couple of points.
So first off, you began by referencing PEPFAR and the important
AIDS work that is being done.
Ms. Frankel. Yes.
Mr. Green. Some of that obviously I will defer to
Ambassador Birx for. But I know that she has said publicly that
under the budget request, all those who are on ARTs, there are
sufficient resources for that to continue. Secondly, on the
question you are posing of all of the organizations for which
PLGHA is applicable, the vast majority have agreed to the
conditions that are at the heart of PLGHA. And those that have
not, obviously it is on us then to endeavor to make sure there
is a smooth transition to the continued provision of those
services.
I know that there is an overdue report to you and to this
committee. It is overdue by a ways, and it is in the
interagency process. We will, as we have done before, make sure
we report to you completely and accurately what the numbers are
to help address your question.
Ms. Frankel. All right. Are we going to have a second round
of questions? OK.
The Chairwoman. Yes.
Ms. Frankel. OK. Thank you, and I yield back. I will ask my
other questions later.
The Chairwoman. Mrs. Roby?
Mrs. Roby. Good morning. Thank you, Madam Chair, and thank
you, Administrator Green, for your testimony before our
committee today. And I know that the chairman already asked
about Afghanistan, but it is very, very important to me as
well. And throughout my time in Congress, as you know, I have
had the opportunity to visit Afghanistan 8 times, and looking
forward to my ninth trip coming up.
The time that I have spent in Afghanistan has been truly
impactful for me, both as a member of Congress, but personally.
And the purpose of our trip, of course, is to spend time with
our troops, and we usually try to schedule this trip in and
around Mother's Day to be with our female troops on that
special day who are away from their families. But we also have
the unique opportunity to spend time with Afghan people, and
especially Afghanistan women, in various regions throughout the
country.
And whereas, again, I know this has already been brought up
in terms of the AUAF, but as we look towards peace in Afghan
and we hope for, of course, a conflict-free future, the path
forward needs to be thoughtful and methodical. We cannot lose
the gains that we have made, especially as it pertains to
women's rights. So I am going to give you yet another
opportunity as it relates to USAID, what does the future of
humanitarian aid to Afghanistan look like? And so not to repeat
the questions that have already been asked, but looking at a
long-term strategy towards ensuring stability in that region.
And, again, I think probably the best word that we can use as
it relates to these incredible gains that have been made is
that they are very fragile. And so I will let you address that.
Mr. Green. Thank you, Congresswoman, and thank you for the
attention that you have paid in your travels. You know, I think
Secretary Pompeo has put it pretty well. There are challenges
obviously even with the signing of the peace deal. Progress has
been made. Right now we have a real opportunity, and we have to
call upon the Afghans to seize the opportunity obviously. More
specifically to your questions, humanitarian assistance, we
will continue to provide humanitarian assistance. I think we
all recognize that humanitarian assistance is treatment, not
cure, so we are all hopeful for the day where it is not
necessary. It is necessary right now, and we will continue to
provide that as we can.
More importantly is the development assistance and helping
secure, lock in the tremendous progress that has been made in
terms of women's empowerment, economic empowerment involvement
in communities, and educational opportunities. That is
something that is very important to us, and we will continue to
work in that area. We have also been working in the region to
help secure MOUs to try to build some regional energy markets.
There are real possibilities there. It is very hard for a
country like Afghanistan to really seize its future with the
limited electrification and energy, the connectivity that is
there. So that is something that is important to us as well.
But we all want to see success, and we all want to build on the
progress that has been made.
Mrs. Roby. And last year you gave us an overview of the
current transformation project being undertaken at USAID, and I
understand one component of the transformation process would be
to reevaluate how a country's socioeconomic progress is
measured. So as it relates to Afghanistan or anywhere else,
what are the markers that would be used to determine a
country's success? In other words, what kind of metrics does
USAID, and we have talked about this one-one-one before, use to
make future funding decisions? And I think that is really
important, particularly as it relates to outcomes, not just
inputs.
Mr. Green. Right.
Mrs. Roby. You know, we can talk all day here about what we
are doing and what we are investing, but I think it is
important for us as we speak back to our constituents to be
able to talk about outputs. My time is running out, and maybe I
will save this for round two, if you want to just put that in
your back pocket, and I will revisit this in the next round.
The Chairwoman. Thank you. Ms. Meng?
Ms. Meng. Thank you, Madam Chairwoman, Mr. Ranking Member,
for holding this hearing, and thank you to Administrator Green
for being here and for your work. There are currently more
people who have been forcibly displaced than at any other time
in our history, 70.8 million according to UNHCR. At least a
whole generation of children have been born and will live their
formative years in refugee camps.
In light of this, I am particularly concerned to once again
see that the President's budget includes plans to decouple
refugee programming from the diplomatic efforts of the State
Department by transitioning almost all MRA money to the
International Humanitarian Assistance Bureau, even though this
was expressly forbidden in the fiscal year 2020 SSFOPS
appropriations. Two questions. One, how do you envision the
balance between the diplomatic and developmental roles required
in U.S. engagement on these refugee issues? And two, what is
your ideal breakdown between PRM and a future IHA when it comes
to the use of the MRA money?
Mr. Green. So in places all around the world, we work hand-
in-glove with the State Department. There really isn't an
issue. We each have roles to play. We each have capacities to
play. Obviously, State has the diplomatic lead, and it should,
and in each place where we work, the chief of mission is
obviously the State Department. And so the goal, I think, for
all of us is to make sure that there is integration, that it is
seamless, that there isn't duplication.
Our role is operational. Our role is not only to move
money, but to measure results and to make sure that we are
nimble enough for changing needs. So I don't really see an
issue. It has worked quite well, and we continue to work on
better integration. I will let you pose some of this to the
State Department, but I think both sides right now are
comfortable with the approach that we are taking to make sure
that there isn't either a seam or an overlap.
You know, I think the challenge is increasingly that what
we are seeing are communities in motion, and sometimes the
distinction between internally-displaced persons and refugees
is a relatively artificial one, and it is a moving target. And
so I think what both State and AID are trying to do is to make
sure that we are appropriately postured for the terribly
complicated nature of these quickly-emerging challenges. So
that is sort of how we view it.
Ms. Meng. Are there any risks to doing this? We were told
during the rollout of the budget that there are plans to co-
plant or co-locate the departments?
Mr. Green. We are co-located in most places, so I guess I
am not sure I see either an issue or a risk. Again, we both
have roles to play, and, you know, we are not in places without
State Department approval, and we fall under chief of mission
authority.
Mr. Meng. Thank you. I wanted to follow up a little bit. We
started talking about youth. Whether here in the U.S. or
abroad, young people have long been at the forefront of
building peace in their communities by creating youth-wide
movements, organizations, and networks to mitigate negative
effects of conflict and to prevent recurring cycles of
violence. Inclusive peace processes are proven to more
holistically address the root causes of violence and lead to
more sustainable peace. Especially in countries in conflict, it
will be the young people who bear the burden of sustaining the
peace over generations. What kind of outreach is USAID doing to
ensure that organizations led by and serve young people are
engaged in conflict prevention strategies?
Mr. Green. I think you put your finger on a really
important topic and challenge and opportunity. So I have just
returned from a visit to Tunisia, my second time there
personally. I was there in a previous capacity. But as we know,
it was young people in Tunisia that essentially led to the
crafting of the most progressive constitution in the Arab
world. And so I took the opportunity to meet with youth
representatives several years later and say, OK, what do you
think and where are you, and it was great to see that they had
not lost their dedication and enthusiasm. They saw that there
were some practical challenges that needed to be worked on. My
money is on them because that energy, I think, will carry
Tunisia forward, but it is that kind of involvement that I
think is a good model for many places in the world.
For most of the displaced challenges that we are talking
about, you are dead on. I mean, it is young people who we have
to point to for the future. They are the ones that, if we fail
to provide them with tools and experience, will be locked into
cycles, and we won't get to where we need to be, so I think it
is very important. Finally, something else that I don't think
gets perhaps enough attention is we talk about the challenges
that we see from the Chinese model, for example, of development
and assistance. I worry a great deal that young people may not
even realize that their future is being mortgaged in terms of
debt distress, but oftentimes loss of natural resources and
biodiversity. So it is important that we involve young people
up front early on so that they get to help realize their
birthright and claim that future that you are pointing to.
Ms. Meng. Thank you. I yield back.
The Chairwoman. Thank you. We are going to begin a second
round, and we will continue as long as you are gracious enough
to give us your time. Thank you.
I would like to continue on the Mexico City issue. It was
February 2018 that the administration indicated that its 6-
months' assessment was too early to determine the policy's
impact, and that a complete report would be provided by
December. I am still waiting for that assessment. Meanwhile,
the administration has issued ``clarifications'' to the policy
that make it even more problematic for overseas partners. So,
first of all, when can I expect this assessment?
And in June 2019, The Lancet published a study on previous
implementations of the Global Gag Rule, and found that
abortions went up by 40 percent in countries dependent on USAID
health programming, while contraceptive use when down 12
percent. So how can the United States continue to implement a
policy without knowing its effect?
Mr. Green. Thank you, Madam Chair. First off, you are
overdue for that assessment. The 6-month report that you
pointed to, because it caught many programs or projects
midstream, that is why we all felt it was too early to fully
understand the impact of the new policy. The next report is
overdue, and it is in the interagency, and I will do my best to
get it to you as soon as we have it available. You are
certainly due that.
With respect to the second part of your question, the
administration is confident that we can continue to meet our
global health goals at the same time that we prevent taxpayer
money from directly or indirectly supporting organizations that
perform or actively promote abortion as a method of family
planning. And, again, the report is due to you, but it hasn't
reduced dollars, and as far as I know, we have not had material
disruptions in services. But, again, that report is due to you.
The Chairwoman. I know you are carrying out the policy, and
you probably didn't make the policy, but do you think those who
did are aware that abortions have gone up 40 percent?
Mr. Green. I am afraid I can't answer as to what they might
be aware of.
The Chairwoman. Thank you. Let's talk a minute about the
coronavirus. We are all closely watching the global spread of
coronavirus. Disease outbreaks are becoming more frequent. The
committee has tried to partner with the administration to
ensure that there are funding and flexible authorities to
robustly respond. Can you share with us what role, if any,
USAID is currently playing in the coronavirus response, and how
have USAID investments better prepared countries to respond to
such disease threats, and where do gaps remain?
Mr. Green. Thank you for the question. So as a general
matter, over the years, we have made a range of investments
that I think have built the capacity for surveillance,
detection, and processing in many parts of the world. In
particular, I would point to the university networks that we
have invested in that help on animal surveillances. As we have
discussed, one of the great challenges that we are seeing is
how many of these dangerous infectious diseases are zoonotic in
origin. So they are emerging from trafficked wildlife, and so
that is something that is of attention or of concern to us.
But I do think, as a general matter, the investments that
we have all made have built the capacity to detect and to
treat. I also think the public messaging networks that have
been created are important. We oftentimes underappreciate how
important those are. We see it, for example, in the Ebola
setting. So much of what we need to do in interventions and in
the case of coronavirus and, God willing, eventually a vaccine,
require clear messaging to the public so that they are coming
forward or that they take the appropriate precautions. Part of
what we invested in is that, making sure that we have those
networks that are set up.
You can see, I think, the success that we have had and the
role that we have played in combating the Zika virus, H1N1 flu,
West Africa Ebola, and, knock on wood, the winding down of the
current Ebola outbreak. But with the case of the coronavirus,
there is obviously a great deal that we don't know. And as we
see outbreaks, large outbreaks, occur outside of China, for
example, in Iran, that creates obviously real challenges for
all of us because it becomes a multipolar outbreak source. And
so we are working very hard to make sure that we are able to
provide PPE, but also boost the capacity of labs in various
parts of the world so that we are better prepared.
The other piece to it, you know, that we will all be
thinking about hopefully soon are the secondary implications.
So these outbreaks could destabilize health networks, health
systems. We are concerned that they might sort of set back
development progress that has been made. The other area that we
are concerned about are the risks that some of the countries
where we know there is the outbreak are potentially
underreporting and not living up to the international health
regulations. Those are challenges for us. So in these early
days, we know there are a number of challenges out there. We
are working closely, particularly with the State Department, to
make sure that our resources are applied to the challenge, but,
again, there is a lot we don't know.
For the Trump administration very obviously, as we all
know, the high priority is protecting Americans here at home,
and I think you can see that in the early steps that the
administration has taken and the team that they have assembled.
And we look forward to continuing to support the work of the
administration in this.
The Chairwoman. Well, I am glad to hear you are involved
because, if I am not mistaken, in January 2020 when the task
force was announced, it didn't include USAID or the Defense
Department, which were the two primary players in the Ebola
response in West Africa. So I think my time is almost up, but I
am glad from your remarks that you are being included in the
discussion.
Mr. Green. To be clear, we are not members of the White
House Task Force, but we certainly----
The Chairwoman. Is that a mistake?
Mr. Green. So we are not members of the White House Task
Force, but I can tell you that we are contributing in the
interagency and making sure that our assets are brought to
bear.
The Chairwoman. Does the White House understand when they
create a task force, if they leave a critical agency out of it,
or doesn't it make any difference? Are you still putting in
your 2 cents----
Mr. Green. I would never say it doesn't make a difference.
I will say that----
The Chairwoman. But you can correct them and say, ah, you
forgot about me.
Mr. Green. So, again, and we continue to do things first
off, for ourselves. We are organizing ourselves and posturing
ourselves so that we are better organized to be able to
contribute. And secondly, we continue to provide information to
particularly the State Department, members of the task force,
and we work pretty closely with CDC anyway. I have regular
phone calls with Dr. Redfield, so the information flows are
solid. They are good.
The Chairwoman. I get it. Well, I am delighted. Even though
you weren't made a formal part, I am glad they are taking
advantage of your expertise. Thank you. Mr. Rogers?
Mr. Rogers. The U.S. Indo-Pacific strategy, your efforts,
our efforts to improve market access, promote fair, free, and
reciprocal trade, and help countries resist coercive economic
practices. We have provided $2.9 billion from State and AID to
Indo-Pacific nations for development and economic growth since
the start of the Trump administration. But on the other hand,
there is China. Over the last 15 years, China has fueled one of
the most dramatic and geographically far-reaching surges in
official peacetime lending in history. China's massive Belt and
Road Initiative symbolizes Beijing's new role as a provider of
development and export credits and development financing of all
sorts, spanning roughly 80 countries. It can claim to cover
more than two-thirds of the world's population. It could
include Chinese investments approaching $1 trillion, seven
times what the U.S. spent under the Marshall Plan. Seven times.
It intends to strengthen hard infrastructure with new roads
and railways, soft infrastructure with trade and transportation
agreements, even cultural ties with university scholarships and
other people-to-people exchanges. The most distinctive feature
of the Belt and Road is its lack of transparency. Few outside
the Chinese government and development agencies that do that
lending, and the governments and state-owned enterprises that
do the borrowing, know what the loan terms are. By limiting
outside scrutiny, the Initiative's lack of transparency will
give Chinese companies an edge in risky markets, and it allows
Beijing to use large projects to exercise political influence,
an un-American type of program. Understanding that the U.S.
response has to come from different agencies, lots of them,
what is AID's role and your strategy to counter this China
model?
Mr. Green. Great question. So, first, I think, as a general
matter, part of what we are trying to do is help partner
countries understand the bargain involved in the very different
models that are out there. So the model that we offer our
assistance partners is one of self-reliance. We want to help
countries undertake the reforms and make the commitments that
are necessary to become self-reliant, and that is what we offer
at the end of that journey together. China and other
authoritarians offer something very different. They want
dependency, just the opposite of what it is that that we offer.
And so our job, part of it is to make clear that distinction.
Secondly, in more specific terms, we have some tools,
particularly in the Indo-Pacific area, that we have provided to
partner countries to help them objectively evaluate some of the
deals that are being offered to them so that there is an
objective understanding of the consequences. So it may be, you
know, a cash fix up front, but the long-term consequences in
terms of loss of assets and debt distress are significant. On
top of that, reference was made to the indicators that we use
to help guide our investments and to also guide the diplomatic
discussions that we have with our counterparts. In this year's,
what we call, road maps, we have provided a debt distress
indicator to help understand how close a country is coming to
what the World Bank would point to as significant distress, and
make sure that that is out on the table and in public for the
discussions that we have.
Further, USAID's role in all of this is to help take on the
enabling environment. So what is it that stops American
companies from investing in many of these countries? It is
usually not capital. Capital is there. Capital is available. It
is rule of law. It is regulatory predictability. It is the kind
of transparency that you pointed to. So in the work that we do,
we have tried to strengthen those aspects of governing
institutions, very confident that if we are able to make those
changes and reforms and strengthen it, that American business
investment will take off. Market-based investments will take
off. And, you know, we all know that market-based economics are
the key to realizing the future for many of these countries.
And so those are the reforms that we undertake.
Finally, in terms of the Indo-Pacific itself very
specifically, we are increasing our presence. We are adding
U.S. Direct Hires. I am planning on heading to Australia soon
to do a development dialogue with our friends in Australia. We
hope to have a Senior Development Advisor there which will help
us as we coordinate investments and reforms in the Pacific
Islands and in the region. So we are increasing our presence,
doubling down on our enabling environment work, and also
hopefully doing a better job in helping partner countries
understand the costs and the benefits of the various models.
Mr. Rogers. Thank you.
The Chairwoman. Mr. Price.
Mr. Price. Thank you. Mr. Administrator, I want to first
thank you for your answer to my question in the first round,
which had to do with the cut off of funds to the Central
American triangle countries that are designed to address the
forces behind out migration. I want to give you a chance to say
anything more you want to say about that, but then I do want to
turn to another issue. But I do appreciate those reflections on
the potential of foreign assistance to address the root causes
of out migration. Such aid is, of course, going to be limited.
Even under the best of conditions it will be limited, so it has
to be targeted effectively. What I didn't hear you say, that it
was helpful to cut it off completely or almost completely,
which is what the administration has done in Central America.
It is hard to see how that is constructive or helpful, and it
is also important, I think, to note how hard it is going to be
to start it up again.
I appreciate you are anticipating that it will be started
up again, but the implementers, mainly nonprofits, tell us that
the cutoff has prompted distrust in affected communities. It
has prompted an erosion of cooperative ties, and they are not
going to be repaired overnight, so I appreciate your comments
on the potential of such funding. And I am bound to observe
that when you compare this funding to $13 billion being
diverted from U.S. defense programs to build a border wall, and
that border wall does nothing to address asylum seekers, who
are, after all turning themselves in, the money we are talking
about for these home country efforts is far less than 10
percent of that misbegotten wall funding.
Now, let me turn to a critical country in our hemisphere
that I am sure we have a lot of discussion going on about what
on earth we do about the current lack of functioning government
in Haiti. What is the potential here? What is the ability of
USAID and other donors to carry out programs in Haiti? If we
take a sober look at what is happening there, helping Haiti
promote citizen responsive governance, including our work at
HDP with the parliament, it is just not feasible in the current
impasse. Both houses of the parliament, with the exception of a
small fraction of the senate, have, in fact, lost their
mandates because there have not been timely elections. So what
is USAID doing to assess the problem, to fix the problem?
No other country is in a position to take the lead in this
Haitian situation. How do you assess the difficulties in
governance, just basic governance, holding timely elections,
other such functions? And what is your assessment of what we or
anybody else can do about it?
Mr. Green. Thank you, Congressman. I have made a couple of
trips to Haiti during my tenure, most recently just weeks ago,
and it was obviously disturbing to see the violence that was
taking place, disrupting the ability for kids to go to school
for weeks on end, the ability for small businesses to get parts
necessary to move forward. Yeah, deeply, deeply disturbing. So
a few thoughts.
First, the good news is there are a number of heroes in
Haiti. Small organizations, many are faith-based, not
necessarily all, but some of the hospitals that I have seen and
small schools that I have seen, even under trying
circumstances, creating opportunities. I want to do everything
I can to ensure that resources are available to build on this
work, because right now with the dysfunction in the government,
it is the people, it is the everyday families that are
suffering terribly. And I think we are all deeply worried about
a lost generation in Haiti.
Secondly, there are seeds for hope. I visited a small
banana farm, if you will, where they were doing some
mechanization. But there was a wonderful cooperative in which
they were training everyday Haitians to take on all the aspects
of upgrading the operation so that the fruit can be exported
into the international stream of commerce, which is the future
to be able to export. The frustration of that day is they got
ready to show me the operation of the farm, and only one of the
lines was working because the violence had disrupted the truck
traffic necessary to get the parts for the other lines. And so
I saw both the hope of the future and just the frustration of
the present.
I have met with President Moise, and I expressed my deep,
deep concern about the dysfunction in the government. And, you
know, in the short term, we are bound and determined to do some
humanitarian assistance, again, treatment, not cure. I can't
promise you that we can always get humanitarian assistance
everywhere we would like to because of the security situation,
but we want to build upon some of these heroes I referred to.
And finally, as I indicated to a number of people, I think
the only way that you begin to restore people's faith in
government there is you need some kind of special prosecutor on
corruption. Until people see a couple of the big guys, using
that term, behind bars for corruption, I think it is really
hard for people to have a lot of faith in their government. And
so we are looking at the opportunities and ways that we can
play a constructive role in that. Haiti is our neighborhood. We
are not going to give up. We refuse to give up. Haiti matters
to us. It is a country of great interest, concern. There are so
many linkages. But it is challenging work, to say the least.
Mr. Price. Thank you for those comments, and I couldn't
agree more about the corruption issue and how central that is
to building trust. Let me just say--my time has expired--but I
would just make the comment that governance is basic to
everything else. And I remember very well urging Secretary
Clinton after the earthquake that attention be paid to the
literal collapse of not just the buildings that house the
government, but the near collapse of the government itself. And
so I think you will have the support of this subcommittee as
you address that aspect, that critical aspect of what we all
agree is a devastating situation. Thank you.
The Chairwoman. I would just like to take the privilege of
the chair because I appreciate my colleague's remarks regarding
Haiti. This has been an obsession of mine, and most frustrating
because we can't seem to do anything. I hate to say it, but
when I look back, and I was there, I think it was at least 50,
60 years ago, with Papa Doc. I hate to say that. At least
people weren't getting killed on the street. I would really
like to work with Mr. Price and my other colleagues, and with
you.
I recently met with Ambassador Sison again, and before
that, we have had other capable people from USAID and from the
State Department working on Haiti. We don't have terrorists
there yet. It is right here as a neighbor. Well, there are many
things that are frustrating to me. I won't say it is the most,
but it is among my top, and I would like to work with you, and
Mr. Price, and others to see, I am not sure if it is more
money, or more people. But we have had the best people focus on
Haiti, and we can't seem to make a change, and people can't
live decently. The crime is everywhere.
And yet I had an experience within a group where I was
complaining about Haiti, and one person raised their hand. She
said I am part of a group, a medical group, in Haiti, and we
are doing excellent things, so it is all not bad, but we
understand the huge challenge. And I would like to say for
myself, Mr. Price, and others, who really are desperate to try
and find some solutions that work, we would like to work with
you. And I am not sure if it is money, money and focus. We have
tried everything, so I just want to say I agree with you, my
good friend, Mr. Price, and I know many of us feel the same
way.
Mr. Green. Madam Chair, I will just say that the committee
has been extraordinarily helpful. We have met with staff, had
bipartisan meetings with staff actually before and after my
recent trips, and I think there is broad bipartisan support
looking for answers and willing to try most anything. We look
forward to continuing that conversation. We all recognize how
important this is.
The Chairwoman. Thank you. Mrs. Roby?
Mrs. Roby. Thank you, Madam Chair. So I will go back to the
question where we left off. So under the transformation plan,
what are the markers that would be used to determine a
country's success? In other words, what metrics will USAID use
to make future funding decisions?
Mr. Green. Thank you. So what we try to measure are, and I
think you put your finger on it, we are not measuring inputs.
We are not even measuring outputs. We are measuring outcomes.
We have 17 third-party metrics that we use that measure both a
country's capacity in each of the key areas that we work on and
are identified by our stakeholders, but also a commitment
because if our host country partners are not willing to put
their own skin in the game and undertake reforms, then, quite
frankly, we are largely wasting our time. And so what we try to
do is to plot where countries are. It is not perfect. There
aren't perfect metrics out there, but we try to use it to guide
our discussions.
In a perfect world, what we hope to do is to have our
investments prioritized according to those metrics. I
understand that there will always be superimposed directives
and priorities, whether it comes from the administration or it
comes from Congress, and that is simply the way the process
works. None of those, however, is a problem in terms of the
broad way that we proceed. The most important thing that we get
from our metrics, not just how it guides our investments, but
it guides our discussions.
And I found, when you sit down with your host country
partners, and you have, for lack of a better term, honest adult
conversations and say, look, you know, we are not saying we got
all the answers, but this is what we see, and this is how we
think we can be helpful, in almost every case I am aware of,
the host country partners say, great, let's sit down and see
what we can craft together. So we are interested in outcomes
instead of outputs, not simply looking at the programs, but how
they build the capacity of a country to eventually take these
challenges on themselves.
We add to it, I think, a prioritizing of domestic resource
mobilization, helping them more effectively and efficiently
capture their own revenues. Again, it is their country. They
need to put investments into these areas. Otherwise, they
become, for lack of a better term, a dependent, and no country
wants to be that, nor should want to be that. So we are really
trying to move in a direction in which our host country
partners see us as honest friends walking along a journey with
them.
Mrs. Roby. Thank you, and thank you for the work that you
do. And, Madam Chair, I yield back.
The Chairwoman. Ms. Lee?
Ms. Lee. Thank you very much, Madam Chair, and thank you
for being here. Good to see you. I come from the State of
California where, unfortunately, childhood poverty rates are
the highest in the country, if you can believe that, from the
Golden State of California. My district is one of the highest,
so it is a moral disgrace, and that is what we are dealing with
across the way. So thank you again.
I apologize if these questions are redundant, but let me
ask you, first of all, and I will try to put all the questions
together. The budget cuts in HIV/AIDS funding through PEPFAR.
This has been bipartisan. We are trying to achieve an AIDS-free
generation by 2030, yet you have cut it by, I guess, $1.5
million below the 2020 enacted amount. I don't know what in the
world could be the justification for this, but I would like to
hear your answer on that. And also the Global Fund
contributions. You know, we have a 33 percent limit in terms of
our share. Now it is down in this budget to 25 percent. Of
course, that is going to affect not only our contribution to
the Global Fund, but to the operations throughout the world.
Second, I want to ask you about, and we have talked a
little bit about this, about Gambia. We were there with
Congressman Price and our House Democratic Partnership in The
Gambia, and we recognized that they really have a new
government, great possibilities. They need USAID's presence.
And we know there is a regional effort, but we talked to many
people there, and we have talked a little bit about this. And I
want to see some presence, some footprint of USAID in The
Gambia. I think we have a real opportunity there, and I don't
see anything in the budget creating that. And so I would like
you to talk a little bit about that, if we do move ahead, to
try to ensure a presence of USAID in The Gambia.
And then let me just ask you about the administration's
peace plan as it relates to UNRWA. You know, the administration
ended all humanitarian and development assistance to the
Palestinians last year, and we know, though, that UNRWA had a
70-year U.S. relationship with the United States. But also we
know that not 1 cent of UNRWA funding passes through the PA.
Can you kind of explain what is going to take place now under
this new peace plan and as it relates to Palestinian
assistance? What is going to happen as it relates to the
funding for schools and hospitals and humanitarian assistance,
and does this administration intend to restore aid to the
Palestinian people? So thank you very much.
Mr. Green. Thank you, Congresswoman. A lot of topics to
cover. So on PEPFAR and the Global Fund, first, I think it is
important to note that we remain the largest contributor to the
global AIDS effort, as you know. In terms of the specifics on
the PEPFAR front, earlier I was asked a question, and
Ambassador Birx has indicated that under this budget, the
resources are sufficient to continue. All those who are on ARTs
will continue to receive ARTs. Beyond that, to be honest, I
should defer to her as the leader of the PEPFAR program.
One area that I think is exciting, that you and I both
think is exciting, is the huge commitment we have now made to
GAVI, which I think provides some long-term answers on a number
of global health fronts. This is the largest-ever multiyear
commitment. We are very proud of that, and I think it is
something that we can celebrate. Second, on The Gambia----
Ms. Lee. But we shouldn't reduce it to 25 percent because
that is going to mean our leverage ability for the Global Fund
goes down.
Mr. Green. Right, and that is separate from GAVI obviously.
Ms. Lee. Yeah.
Mr. Green. On The Gambia, you and I have spoken. I share
your concerns, and so we are looking at that. Now, there are
some potential restrictions because of trafficking in persons
and it is something we are looking at closely. And, again, you
and I have discussed that. I share your prioritizing because we
have real hope in moving away from an authoritarian past, and
we certainly don't want to lose it, and if we do, things don't
get better. We know things get worse. So that is something that
we are looking at.
Ms. Lee. OK. Well, as this bill moves forward, I would like
to work with you and Price and our chairwoman to see what we
can do in this bill as it relates to Gambia and USAID.
Mr. Green. Great.
Ms. Lee. OK.
Mr. Green. No, no, most certainly.
Ms. Lee. OK. Thank you.
Mr. Green. On UNRWA, that is better addressed to the State
Department. UNRWA related to the State Department. On the peace
plan, what I can say is in terms of our West Bank Gaza
presence, we have no plans to close it. We are trying to
continue our presence there. The 45 local staff that are part
of their presence are currently involved in helping USAID
programs in other areas and other missions. And we are hopeful
for a day when the work can resume as part of the peace plan.
Ms. Lee. Thank you, Madam Chairwoman.
The Chairwoman. Mr. Fortenberry.
Mr. Fortenberry. Thank you, Madam Chair. My children's
great-great-great great-great-grandfather was Haitian, and when
I met with the Haitian president, I told him that, and he said,
welcome home. I missed the fullness of the discussion in this
regard, but clearly it is important to a lot of members.
Haitian culture, Haitian history is so inextricably intertwined
with America. I think there are 11 million Haitians, people of
Haitian origin in the United States. Multiple school groups,
church groups have connectedness to various projects there, and
yet the problem is so vexing of governance, criminality, a lack
of seemingly sustainable economic dynamics.
Madam Chair, if I could be presumptuous and suggest
something. Perhaps we should invite Ambassador, the excellent
ambassador, Sison here. And, Mr. Administrator, if you might be
able to join in that conversation, to just start unpacking
layer by layer. We have a huge amount of resources there. We
have done so for a very long time. It just deserves more than 3
minutes here. Perhaps I can talk to the chair afterward about
that idea.
Mr. Green. I share your love of Haiti. You know, first off,
one of the things that always move me when I go to Haiti, and
you travel around and you see the buzz of activity----
Mr. Fortenberry. There is a joy on the street there. It is
amazing.
Mr. Green. Very much so.
Mr. Fortenberry. Yeah.
Mr. Green. So the problem isn't with the Haitian people.
Mr. Fortenberry. Yeah.
Mr. Green. As I point out, certainly Haiti has been struck
by numerous natural disasters, as we all know. But when people
protest, they are not protesting the hurricanes, right? They
are protesting an entirely unresponsive government, a
government that refuses to get itself in order to deliver even
the most basic of services. A quick story. My last trip down
there, I was at a dinner with a number of Haitian business
leaders, and in the middle of the dinner, one of the leaders
got up and walked out. And then they leaned forward and said he
had just gotten a phone call to say his brother-in-law been
kidnapped. I mean, that is just sort of the daily life that we
are seeing there, and we cannot rest with that happening.
Mr. Fortenberry. I appreciate your comments, and I am sorry
to expedite along here, but my time is just so short. If the
chair would consider my request, I would be happy to talk to
you afterwards about that. I think some type of working group
to get us beyond just the touchpoints in the hearing. In the
last omnibus bill, by the way, there is some language that we
got included that tries to get you to look more seriously at
the border crisis issue with the Dominican Republic, which is
one of the underlying factors of disruption of the economy. So
let's put that on the side for another day.
I want to return back to the food security piece and
Government Accountability Office request that I look at this
mapping strategy as to how our programs, the other important
food security programs costs, World Food Program, can be
possibly better integrated to ensure that we are a force
multiplier to go to the heart of what this transformational
idea is in terms of stabilization and human flourishing. So I
want to get you a copy of that. I would appreciate it if Chair
Lowey and Ranking Member Rogers would look at this as well. If
I could include it in the record of this hearing, I would be
grateful, Madam Chair. Again, it is the letter that I sent to
the Government Accountability Office.
The Chairwoman. With pleasure, without objection.
Mr. Fortenberry. Thank you, Madam Chair. And finally, let's
turn to the issue of northern Iraq quickly. We have been there
together. In this past budget, not in report language, but in
bill language, we were finally able to get what you and I have
talked about in terms of security. Conceptually, that the
ethnic religious minority community ought to be integrated into
the national security structures of the Iraqi government. It is
clear language. It is pointed to that. We are in dialogue with
the Defense Department now. I want you to be aware of that. Can
you give me an idea of where we are in terms of economic aid,
and then as we move forward on the security component, which
would be potentially implemented obviously in strong solidarity
and partnership with the Iraqi government, but also by other
international partners, how it could lead to sustainability for
the hundreds of millions of dollars that we are spending there
in terms of stabilization? Could I get your update on that,
please?
Mr. Green. Great. Thank you, Congressman, and I do remember
the trip we took together, and your follow-up on the security
front is deeply appreciated. As we discussed then and recently,
it is very hard for us to succeed in the goals that we have of
creating an opportunity for those in Northern Iraq, religious
and ethnic minorities from Yazidis to Chaldean Catholics, to
come back, or to at least stay and see it as their home, if we
don't get security right.
Even in the challenging environment that we all see, there
are investments coming in, and we have had some sessions
recently on the ground in which we have seen investors come in.
I just recently met with a businessperson, who is looking to
invest in a bottling and canning operation in the region, so
there are opportunities. There is interest. If the environment
is secure, if the government realizes that these are not really
minorities, but, in their terms, component communities, part of
the whole, there is every reason to believe that this can
recover some of that wonderful tradition and mosaic of
ethnicities and faiths that has been something we all admire in
northern Iraq.
The Chairwoman. Ms. Frankel?
Ms. Frankel. Once again, thank you for your service. I do
want to note that the administration has paid some attention to
women's economic empowerment in regards to there are a couple
of pieces of legislation, the WE ACT. There is a new Women's
Global Development Prosperity Initiative. But I just want to
say that, you know, there is an old expression, don't cut off
your nose to spite your face. It is all well and good that the
administration would seek to change property laws in countries
or find capital for women's businesses, but when you are
cutting the budget to educate girls, there are 130 million
girls in this world who are out of school. So this budget is
asking to cut hundreds of millions from education.
And the other thing is, women have to be and girls have to
be healthy to be successful. This budget proposes a billions of
dollars cut to global health, which gets me back to our initial
discussion of the Global Gag Rule, which I think I let you
slipperly slide by. And I want to just read something so people
understand what it is and how damaging it is because it is not
really about Federal funding of abortion. It is about keeping
girls and women from access to full healthcare and to truthful
information from the healthcare providers.
``The Global Gag Gule is one of the most deeply damaging
policies ever enacted on foreign assistance funding. The gag
rule blocks U.S. Federal funding for nongovernmental
organizations that provide abortion counseling or referrals,
have a gate to decriminalize abortion, or expand abortion
services, even when those activities are funded independently
of USAID. Reinstated by President Trump shortly after he took
office in 2017, the newly-expanded version of the gag rule
targets organizations working on any program funded by U.S.
global health assistance, including programs that expand access
to contraceptives, reproductive healthcare, HIV testing,
treatment, and prevention, efforts to fight malaria, and public
health programs working to improve child and maternal health
outcomes.'' And this, I will agree with those who say,
``represents the most dangerous version of an already-damaging
legislation ever stated.''
And just to give an example so that people are clear, we
don't allow Federal funding of abortion. That is another issue.
But if you go into a clinic, like I mentioned before, in a
small village in Mozambique where people get their general
healthcare, if a woman who is pregnant even asks the question
where can she get abortion, she is not allowed to be told that,
or this clinic loses its funding. Even if there happens to be a
pamphlet lying on a table that actually doesn't mention
abortion, but actually mentions the name of another healthcare
clinic or organization that actually gives abortion referral
that does abortions, they lose their funding. So, again, I want
everyone to be clear about this obsession that is hurting
millions and millions of women all over the world now.
I am going to ask you a question. You don't have to defend
this policy. I am not asking you to do that. I don't think you
can. But I do want to ask you about the Women's
Entrepreneurship and Economic Empowerment Act, which identified
key barriers to women's economic empowerment, including child
marriage, female genital mutilation, access to education,
gender-based violence. It unfortunately did not mention
healthcare, but that is for another day. Could you just tell us
whether or not, given especially these suggested cuts, do you
have the staffing and training needed to conduct the gender
analysis that is required, and to really get into sort of the
meat and potatoes of the legislation?
Mr. Green. Good question, and thanks for your great support
of the gender work that we are all talking about. So the
President's National Security Strategy recognizes that gender
empowerment, women's empowerment is a national security matter.
And feel as though we have, in the last couple of years, gotten
some new exciting tools from WE ACT, to WGDP, to Women Peace
and Security. And so we are excited about it.
And just in the first year of WGDP, 12 million women have
been touched and new opportunities created. So we can always do
more, but we believe we have the resources necessary to
continue on with this work. And we are excited to partner with
you and to show you some of the early results, but to keep it
going because it is a, I think, one of those great bipartisan
areas where there is a very bright future.
Ms. Frankel. And, Madam Chair, I want to just add one
thing. A lot of people don't understand why we care on this
committee and in Congress about healthcare in other parts of
the world. Why would we care if somebody in the village has
access to healthcare? Why do we care if a woman has access to
contraception? Because you know what? If there is no better
example of how we are all interconnected is this coronavirus.
And when you look at the spread of disease and the spread of
terrorism, what we know and is pretty clear, which is why you
are in the business you are in. And I thank you again because I
think this is such an important part of our government, is that
when countries are more prosperous, when they are healthier,
they are safer and the world is safer. And with that, I hear
the knocking of the paddle there, and I yield back.
The Chairwoman. Thank you, and I will yield to Ms. Meng.
Ms. Meng. Thank you, Madam Chair. Last week, the GAO
published a report on diversity at the State Department, which
indicated that under multiple administrations, there has been a
failure to ensure that our Foreign and Civil Service reflects
our country's diversity. Between 2002 and 2018, the proportion
of racial or ethnic minorities working at State full time has
only increased by 4 percent, and those in the Civil Service has
decreased by 1 percent. This issue is exacerbated as members of
the Foreign and Civil Service rise in their careers.
The report did not include USAID's workforce, but I wanted
to ask a couple questions. One, can you tell us whether USAID's
efforts toward a more diverse and inclusive workforce have made
more progress than those at the State Department? Two, has
USAID allocated funds to expand recruitment to minority
communities, and what types of steps are you taking to
diversify?
Mr. Green. Great question. So I have not read the GAO
report, and I am not going to comment on other agencies. What I
will say is building a more diverse workforce and, perhaps even
more importantly, creating more career opportunities for that
diverse workforce, is a very high priority for me personally
because I think part of the strength of our Agency and American
leadership is to project leadership that reflects America, and
so it is a high priority.
Our hallmark program for this is the Donald M. Payne
Development Fellowships, and I certainly would invite members
of the committee to accept Don Payne fellows. They are always
looking for opportunities, and we would be very happy to work
with you on that. But on top of that, I will say that, and I
think, Madam Chair, you know me well enough. I don't like
pointing to the past where things have been, where I have seen
problems coming in. This is a problem I saw when I first
arrived at USAID, and it is no one person or administration. It
goes back some years.
We are doubling the number of people who are involved in
administration of EEOC complaints to make sure that everyone is
comfortable and we have a respectful, inclusive workplace. We
have tried to create new standards of employee conduct, and we
have been training around that. We have tried to create a
single point of entry for those who feel as though there have
been problems of lack of inclusivity or harassment so that it
is easier for people to come forward and report. It is a work
in progress. But I will say when I arrived, it was an area in
which I felt as though we were lacking. We are not there yet,
but I hope and believe that we are making some progress.
Ms. Meng. Thank you. Different topic. According to UNICEF,
roughly half the schools in low-income countries lack adequate
drinking water, sanitation, and hygiene. Lack of privacy and
sanitation results in inadequate menstrual hygiene and causes
millions of girls to stay home from school each month. What are
the advances the global community have made in the area of
menstrual hygiene, and what more can be done by USAID and
others to ensure that girls are able to simply attend school
and stay in school?
Mr. Green. Great question, and I know it is a particular
concern of yours, and I appreciated that you have always raised
the issue as something for us to look at closely. So on one
level, we now endeavor to include in our humanitarian emergency
response materials appropriate menstrual hygiene materials
because we know that is often lacking in those emergency
situations. But, more significantly, to your point, you are
right that a lack of menstrual hygiene materials and
understanding is an important indicator of gender equity. And
so we are working to create opportunities to approach the topic
in schools, in particular.
I am aware of a pilot program we undertook in Ghana that
had significant outcomes in improving for young girls and women
not only improved self-worth and a sense of independence in
being able to pursue opportunities, but actually and, perhaps
more importantly, help young men in terms of image and outlook.
And I think those are projects that should be expanded because
I think, again, it is hard to get at full economic opportunity
for young women if they are held back in this way. So you are
right to raise it. It is something that we are trying to
bolster because we think it makes a difference.
The Chairwoman. Mr. Rogers.
Mr. Rogers. Mr. Ambassador, we thank you for giving us
plenty of time here today with you, and thank you, most
importantly, for the work that you are doing. We are trying to
put together on the Hill a supplemental appropriations bill for
the coronavirus matter. What do you need? In addition to your
regular budget, what do you need, besides that, to help fight
this matter through?
Mr. Green. Thank you for the question, and my team will
work with yours. I think one of the important things to
recognize when it comes to the broad response is that the
coronavirus outbreak is going to create tremendous burdens on a
number of healthcare systems, and so I think we need resources
to help strengthen and replenish those. I think also we need to
recognize that this is going to be a development setback in
many countries, and so making sure that there are adequate
resources to help bolster the secondary impacts.
I think also the most obvious, additional resources to
train healthcare workers to both the ability to test and
diagnose for the coronavirus. I think additional resources to
help health facilities. And I think, in some ways, most
importantly, resources to help convey clear, accurate
information to the public. What we have seen with various
outbreaks over the years, and the coronavirus being the most
challenging because it is global right now, covering obviously
every continent but Antarctica, is combating some of the
misinformation that is out there.
We have seen some powers, such as Russia, quite frankly,
put out lots of misinformation on the coronavirus in an effort
to cause mischief. Whatever we can do to provide clear,
accurate information on what it is and what it isn't, on the
importance of coming forward, on making sure that people have
trust in their healthcare facilities, I think that is a really
important part of the long-term solution on this. So there are
a number of ways in which we believe we are part of the long-
term answer.
Mr. Rogers. We thank you for your testimony here today, and
we wish you good luck.
The Chairwoman. In conclusion, and I thank you for your
last comment because it is a perfect segue to an issue which we
haven't talked about this morning, and that is USAID Countering
Malign Kremlin Influence framework. The Russian government, as
you said, is pursuing efforts to undermine democracy, interfere
with elections in the United States and in Europe, and fanning
the flames of nationalism in Europe. Last year, USAID rolled
out its Counter-Malign Kremlin Influence Development framework.
I would be interested to know something about it because I know
almost nothing. How has the framework impacted USAID
programming in the region in results to date? How is USAID
supporting regional programs in Europe, including in Central
Europe, to address disinformation and rising nationalism? How
much funding does USAID devote to civil society and other
regional programs in Central Europe?
And once again, the administration is proposing significant
cuts to bilateral development aid to countries like Ukraine,
for which the administration proposes a 42 percent cut;
Georgia, for which the administration proposes a 54 percent
cut. So how can you explain to us and assert that the
administration is serious in pushing back against Russia while
proposing cuts to countries such as these that are on the front
line of Russian aggression? I know the hour is late, but there
has not been any discussion, and many of us are very, very
concerned, especially with the elections coming up here. Thank
you.
Mr. Green. Thank you, Madam Chair. I have actually had a
couple of trips to Europe recently. I was at the Munich
Security Conference, and then prior to that took my first trip
to the Balkans and was in North Macedonia, Albania Kosovo, and
Bulgaria. And in each of those areas, we spoke a great deal
about the Countering Malign Kremlin Influence framework. So
what we are trying to do regionally and, in some cases, country
by country, is develop economic independence so that they are
less dependent upon, for example, Moscow, for energy sources.
Also in some cases, like Ukraine, help strengthen their ability
to protect against cyberattacks.
In the region, a lot of our attention is now in bolstering
transparency in government. One of the best ways that we can
think of to counter these influences is to create transparency
so citizens are aware of influences, and they are able to push
back. I point to, for example, the U.S.-Albania Transparency
Academy that we are preparing to launch. We hope it will be not
only what the prime minister there is asking for in terms of a
tool to fight corruption and malign influences, but perhaps
even a model for the region.
Another tool that we are working on that I think holds
great promise, we often talk about the importance of creating
independent, trustworthy media, and that is important. I think
we need to go one step further because the other side isn't
playing by the media rules that, you know, we believe in. I
think it is also media literacy, and it is helping citizens to
recognize disinformation, misinformation, malign influences in
the media process. That is something we are attempting to
strengthen and we will continue to build. So we have a lot of
work to do, but we remain committed to countries like Ukraine
and their stated goal to look more westward. And we will do
everything we can to make sure that they have the tools and
resources to pursue that.
The Chairwoman. Let me just say in conclusion as I close
the hearing, this is a very personal interest of mine. I am
passionate about it. And perhaps I can have a roundtable where
the people who are working on this issue could come and brief
us because I know many of us are concerned about this. So
perhaps, first, you can do a memo for us just giving us a
better idea of exactly what you are doing, where you are doing,
and then we can follow up with a discussion.
But as I close this hearing, I want to thank the committee.
I want to thank you for your time.
This concludes today's hearing, and the Subcommittee on
State, Foreign Operations, and Related Programs stands
adjourned. And thank you so much for appearing before us.
[Material submitted for inclusion in the record follows:]
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Wednesday, March 4, 2020
EXPORT AND FINANCE AGENCIES BUDGET REQUEST FOR FISCAL YEAR 2021
WITNESSES
THOMAS HARDY, ACTING DIRECTOR, U.S. TRADE AND DEVELOPMENT AGENCY
KIMBERLY REED, PRESIDENT AND CHAIRMAN, EXPORT-IMPORT BANK OF THE UNITED
STATES
ADAM BOEHLER, CHIEF EXECUTIVE OFFICER, U.S. INTERNATIONAL DEVELOPMENT
FINANCE CORPORATION
OPENING STATEMENT BY CHAIRWOMAN LOWEY
The Chairwoman. Good afternoon. The Subcommittee on State,
Foreign Operations, and Related Programs will come to order.
Chairman Reed, Acting Director Hardy, CEO Boehler, thank
you all for joining us today.
Unfortunately, the administration has once again signaled
its ill-advised and irresponsible approach to foreign affairs
by proposing a nearly 20 percent cut to foreign assistance at a
time when actors do not share our values. China and Russia are
increasingly influencing foreign development assistance. This
proposal, if implemented, would be disastrous with no coherent
strategy.
The budget request demonstrates that the administration
does not grasp the impact of global development on our own
national security nor the benefit of efforts that promote
economic growth while engaging American companies.
Though the administration touts increases to private sector
engagement in global development, the budget proposes
exorbitant increases to some programs while cutting or even
completely eliminating others that are proven to have a
substantial role in engaging the private sector to invest in
risky emerging markets.
The administration's proposed shutdown of the U.S. Trade
Development Agency is one example of the lack of understanding
by the administration and I, clearly, do not support this
proposal.
USTDA facilitates opportunities for U.S. companies that
promote sustainable development across the globe and levels the
playing field, thereby increasing exports for American
companies of all sizes and jobs for American workers.
Further, the agency has secured a $111 return on investment
for every dollar spent. That is $111 in U.S. exports for every
dollar in invested in emerging markets.
It does not make sense, in my judgment, to hold USTDA's
ability to provide such results which achieves strategic
foreign assistance objectives and, indeed, put America first.
EXIM Bank also supports these priorities and helps American
companies and small businesses export abroad through financing
support and also by reducing the risk for U.S. goods and
services to compete in overseas markets.
In fiscal year 2019, nearly 90 percent of EXIM's
transactions supported small businesses. This promotes job
creation and global competitiveness for local American
businesses, and now that EXIM is reauthorized through 2026 and
has quorum restoring EXIM to its full financing capacity, I am
interested in strengthening its ability to ramp up support for
U.S. business overseas.
I have been proud to support the United States
International Development Finance Corporation along with
colleagues from both sides of the aisle.
However, I am concerned that a 288 percent--you hear that?
Two hundred eighty-eight percent increase for a consolidated
account line that includes the DFC's Equity Finance Program may
be too much too soon.
The DFC has only been operational for three months and for
this committee to further invest in a new institution we must
see evidence of success, which will take time. Building a
sustainable institution must be done strategically and with
consideration to lessons learned through past efforts, the
context of evolving markets and related needs, and data-driven
programming.
The President's budget proposal focuses on the short term
and would both hurt American businesses and damage our local
standing. This is particularly concerning now as the spread of
coronavirus has disrupted markets and the potential for future
shock exists.
Fortunately, this committee recognizes that strong
sustained U.S. leadership combined with a global effort that
leverages private sector resources towards sustainable
development helps open global market opportunities.
The complementary efforts of USTDA, EXIM, and DFC are
critical to this process. This is why I would like to see all
of them succeed, which requires adequate resources and
thoughtful policy.
As chairwoman, I have every expectation that we will
produce a bill that maximizes each taxpayer dollar while
maintaining responsible investment in export and financing
efforts that promote U.S. businesses while supporting
sustainable global development.
Before we move to your testimonies, let me turn to Mr.
Rogers, the ranking member, for his opening statement.
OPENING STATEMENT BY RANKING MEMBER HAL ROGERS
Mr. Rogers. Thank you, Madam Chair.
Mr. Boehler, Chairman Reed, ActingDirector Hardy, welcome
to the Subcommittee on State and Foreign Operations. This
hearing involves important agencies of the government that are
at the junction of development policy and commercial diplomacy.
Nearly two decades ago, a distinguished American diplomat
wrote that the position of the United States as, quote, ``The
best place in the world to do business, the most reliable in
which to buy, the most lucrative in which to sell, and the
safest and surest in which to invest or raise capital. It is
the cause, not an effect, of American global leadership,'' end
quote.
He went on to say that protecting and expanding the U.S.
role as the world's supplier and customer of choice for goods
and services, ideas, capital, and entrepreneurial energy should
be a foreign policy objective second only to security homeland.
That statement is even more true, I think, today. The
global economy has undergone a dramatic transformation in
recent decades with U.S. competitors using comprehensive
national strategies to promote trade and investment through
robust export and project finance, extensive technical
assistance, and strong political backing from their national
governments.
We need look no farther than China's ambitious Belt and
Road Initiative with its aggressive use of government financing
for infrastructure development in emerging markets to see the
clear relationship between commercial diplomacy and U.S.
national security. The Congress supported creation of the new
U.S. International Development Finance Corporation in large
measure because of the growing geoeconomic challenge from
China.
Another motivation was the realization that a more
strategic approach was needed to address key U.S. development
priorities such as more effectively partnering with the private
sector to expand economic opportunities in frontier markets.
I look forward to discussing the changes in the DFC's
program funding for this fiscal year including financing of
equity. I am glad to see that another important tool of our
economic statecraft, U.S. Export-Import Bank, has a fully
functioning board at last and a new long-term authorization
because export credit agency financing is a powerful instrument
used by other countries to gain competitiveness for their
industry.
In the absence of competitive private sector loans,
financing from EXIM is often the critical factor in completing
the deal. This is particularly true of smaller U.S. companies
who may need assistance with supply chain finance.
Technical assistance, grants from the U.S. Trade and
Development Agency such as for feasibility studies and
technology training visits, is also a critical element of their
ability to help U.S. companies build relationships with clients
in challenging markets.
Despite the proposed elimination of USTDA in the budget
request, key stakeholders continue to praise its technical
assistance as an important tool to neutralize destructive
practices by U.S. competitors.
We appreciate the role all of your agencies play in helping
to strengthen U.S. commercial competitiveness and advance our
national interests abroad.
We look forward to your testimony, and I yield back.
The Chairwoman. Unfortunately, we are called to vote, an
important part of our responsibility, and I want to apologize
in advance that I am going to have to stay on the floor because
the supplemental will be coming to the floor.
One of my colleagues will return and she will have the
pleasure of hearing your testimony with my other colleagues. So
I am going to adjourn.
Mr. Rogers. Recess.
The Chairwoman. Oh, recess. I am going to recess and--did
you vote?
Ms. Frankel. No.
The Chairwoman. Some of our colleagues are on the floor now
and are voting and coming back here.
Thank you again in advance for appearing before us and I
look forward to reading your testimony.
Thank you.
[Recess.]
Ms. Lee [presiding]. OK. The hearing is called to order.
Thank you very much for being here. I will be calling on
members based on seniority of the members that were present
when the hearing was called to order and I will alternate
between majority and minority. Each member is asked to keep
their questions within five minutes per round.
Acting Director Chairman Reed, Boehler, we will be happy to
place your full testimonies into the record. So if you would be
kind enough to summarize your oral statement. I want to make
sure that we leave enough time for everyone's questions.
So we will begin with Acting Director Mr. Hardy and then
Chairman Reed and finishing with CEO Boehler.
Thank you.
OPENING STATEMENT BY MR. HARDY
Mr. Hardy. Vice Chair Lee, Ranking Member Rogers, members
of the subcommittee, thank you very much for having me here
today.
It is my pleasure to be able to be here to talk about USTDA
and its work around the world and the impact it is having both
on our partners abroad and right here at home.
As Chairwoman Lowey noted, the President's fiscal year 2021
budget proposes to eliminate funding for the U.S. Trade and
Development Agency.
As such, in today's testimony I want to focus on USTDA's
statutory mission and what we are currently doing to advance
our sustainable economic growth in our partner countries and
how that is opening markets for U.S. goods and services in a
dramatically changing and increasingly competitive
international environment.
As we all know, the American worker is the most productive,
innovative, and dedicated the world has ever known. When given
a fair opportunity, U.S. workers and U.S. companies compete and
win anywhere.
Too often, however, our products and workers are blocked by
trade barriers that restrict market access or are disadvantaged
by subsidized foreign competition that creates an unfair
playing field.
Congress created USTDA under the Jobs For Exports Act to,
quote, ``promote United States private sector participation and
development projects in developing and middle-income countries
with special emphasis on economic sectors with significant U.S.
export potential,'' closed quote.
USTDA is, therefore, mandated to engage the private sector
in infrastructure projects when technology options and project
requirements are being defined.
This early engagement ensures an honest and thorough
evaluation of the impact on labor as well as the environment,
and the financial sustainability of all activities USTDA
supports to ensure they can be financed on commercial terms.
To accomplish our mission, the agency provides grants to
overseas project sponsors that contract with American firms to
undertake these project preparation activities. This funding
may support a feasibility study, launch a pilot project, or
support an array of technical assistance.
USTDA also connects project sponsors with U.S. businesses
through its reverse trade missions that bring foreign decision-
makers to the United States to see the design, manufacture, and
operation of U.S. goods and services before a procurement
decision is made.
These activities produce results, as Chairwoman Lowey
noted, for our foreign partners and U.S. industry. For every
dollar USTDA invests in its project preparation activities, it
is generating, on average, $111 in exports of U.S. manufactured
goods and services.
This success is made possible by USTDA's ability to make a
small investment up front that paves the way for financing of
major infrastructure from the likes of Export-Import Bank, the
United States International Development Finance Corporation,
multilateral development banks, and regional lenders.
Last summer, I was fortunate to see firsthand the real-
world impacts of this investment, namely the opening of a
cancer treatment center in Lagos, Nigeria.
This resulted from a USTDA-hosted reverse trade mission for
Nigerian hospital officials that introduced those officials to
American health care technologies. These hospital officials
were from the Lagos State Teaching Hospital.
As a result of USTDA's early and targeted investment, the
Nigerian Sovereign Investment Authority financed the
establishment of this world-class oncology center that is
transforming cancer treatment in the most populous and largest
country in Africa.
As the President stated in his National Security Strategy,
the United States must strengthen cooperation with allies on
high-quality infrastructure.
As a result, USTDA is utilizing its current appropriation
and transfer funding from the Department of State to further
open markets for U.S. companies and unlock infrastructure
development opportunities.
At the direction of the NSC, USTDA is working with Japan
and other likeminded partners in new and unique ways to advance
this quality infrastructure priority in line with the National
Security Strategy. Critical to this effort is the
administration's Indo-Pacific vision.
Today, USTDA is utilizing its resources to advance this
vision which is responsive to our partners' needs for quality
infrastructure solutions in the energy, transportation, health
care, and ICT sectors.
This work is directly countering China's Belt and Road
Initiative. As you all know, you have seen firsthand in your
travelthat BRI poses serious economic and geopolitical
challenges, not just for the United States but for our partners
around the world.
As a result, USTDA is deploying all of our tools to support
sustainable economic growth in our partner countries that
provides a quality option and helps our partners and allies
avoid China's debt trap diplomacy.
This investment is laying the foundation for strong and
stable states in the Indo-Pacific region and around the world--
states capable of preventing conflict, states capable of
managing crises, but perhaps most importantly, states capable
of promoting prosperity.
It is my pleasure and great privilege to lead the U.S.
Trade and Development Agency and a staff that is dedicated to
advancing and achieving these critically dual trade and
development mandates.
Thank you very much. I look forward to your questions.
[The prepared statement of Mr. Hardy follows:]
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Ms. Lee. I go now to Chairman Reed. Thank you.
OPENING STATEMENT BY MS. REED
Ms. Reed. Vice Chair Lee, Ranking Member Rogers,
Representatives Torres, Frankel, Meng, and other members of
this subcommittee, thank you for inviting me to discuss the
President's fiscal year 2021 budget request for the Export-
Import Bank of the United States.
EXIM was established in 1934 and it is an immense honor to
be the first woman and the first West Virginian to lead this
agency.
Since being confirmed on a strong bipartisan basis 10
months ago, we have been hard at work to fully reopen, reform,
and reauthorize EXIM to provide results for our nation's
workers while protecting the U.S. taxpayer.
Now that we are back in full operation, we are very focused
on communicating to all of our stakeholders in the United
States and around the world that EXIM is now able to offer all
of its financing options to support U.S. exports.
EXIM, the official export credit agency of the United
States, has the important mission of supporting American jobs
by facilitating U.S. exports. Our vision is Keeping America
Strong, Empowering U.S. Businesses and Workers to Compete
Globally.
I love this mission and this vision as the U.S. worker is
at the heart of everything we do.
The President's budget for EXIM requests an administrative
budget of $100.9 million which will enable the agency to
effectively administer its operations and continue the
transition to full capacity by focusing on leveling the playing
field for U.S. exporters, supporting our nation's small
businesses, and minimizing risk to American taxpayers.
The request also proposes restoring EXIM's administratively
determined pay authority which EXIM had up until 4 years ago to
support the agency's efforts to attract and retain a talented
EXIM workforce. AD pay is a very important tool to help us
carry out our mission.
When EXIM is fully operational, it is a self-financing
agency because of the fees and interest it charges to the
foreign buyers for the use of its programs. After paying its
operating and program costs, EXIM has contributed a net of $9.4
billion to the U.S. Treasury since 1992.
EXIM estimates that in fiscal year 2021 it will fully cover
the costs of its administrative expenses, resulting in a net
zero appropriation and, based on projections, we will remit an
estimated $610 million to the U.S. Treasury at the end of the
fiscal year.
In fiscal year 2019, EXIM authorized $8.2 billion in
financing that is estimated to support 30,000 American jobs.
This was more than double the $3.3 billion in financing that
EXIM authorized in 2018. We expect to build on that progress.
In fiscal year 2021, EXIM forecasts that the requested
budget will enable the agency to support $20.9 billion in new
authorizations, supporting approximately 159,000 jobs in
districts like yours across the country.
EXIM has averaged a default rate of less than one-half of 1
percent over the past decade as a result of strong
underwriting, effective risk management, and due diligence
exercised during the authorization process and post-
authorization management of transactions.
We achieved a major success for our nation's businesses and
workers when Congress passed and the President signed into law
on December 20, 2019, a 7-year reauthorization of EXIM, the
longest in EXIM's 86-year history.
I am grateful for the strong support of our bipartisan
leaders in Congress including members of this committee for
this historic effort.
This reauthorization provides important long-term certainty
to the world so that American businesses of all sizes can
compete and win in a very competitive global marketplace.
We are beginning to implement the legislation and look
forward to working with you as we continue to analyze the
requirements and resource needs associated with full
implementation of this landmark reauthorization.
I briefly want to touch on some of the new congressional
requirements included in EXIM's 2019 reauthorization.
First, the law provides clear direction to EXIM to address
the threat China poses to America's economic and national
security.
EXIM is working to establish a program to advance our
country's comparative leadership in the world, directly
neutralize competing Chinese exports subsidies, and support
American innovation and employment in 10 transformational
industries including wireless communications, 5G,
biotechnology, and water sanitation, to name a few.
Next, Congress has again called on EXIM to increase its
financing to support small business exports as well as those
related to renewable energy, energy efficiency, and energy
storage. We are passionate about this work and taking steps to
better reach and educate more businesses that could benefit
from EXIM.
I am excited to continue working with you and your staff in
order to do great things on behalf of America's workers and
help see more exports stamped with those four beautiful words
``Made in the U.S.A.''
Thank you for this opportunity and I am pleased to answer
any questions.
[The prepared statement of Ms. Reed follows:]
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Ms. Lee. Thank you very much.
Now, CEO Boehler.
Thank you.
OPENING STATEMENT BY MR. BOEHLER
Mr. Boehler. Vice Chairwoman Lee, Ranking Member Rogers,
members of the subcommittee, thank you for the opportunity to
speak today.
The United States International Development Finance
Corporation became operational on December 20th, 2019,
propelled by bipartisan support in Congress and the support of
the President.
As a newly modernized agency, our mission is to invest with
private sector partners to advance the interests of American
people through development in emerging markets.
Many of the nations that I visited over the past five
months face economic uncertainty and poverty. Despite
incredible challenges, these countries and their people hold
enormous potential.
I personally witnessed how unleashing the power of the
private sector advances United States interests and transforms
the lives of people throughout the world. I have also witnessed
the great demand for a U.S. alternative from authoritarian
governments.
The BUILD Act enables the United States to be that
alternative. DFC, with our private sector partners, are
addressing the world's most critical development challenges by
increasing access to water, closing the financing gap for women
entrepreneurs, and building quality infrastructure.
We are excited to take on this tremendous responsibility. A
strong well-resourced DFC complements and amplifies the foreign
assistance efforts of our partner agencies such as USAID, the
Department of State, MCC, and my partners seated here next to
me today.
Together, we can foster sustainable economic growth and
advance U.S. foreign policy interests. We work best when we
work together.
As we scale our operations to deliver on the BUILD Act's
promises, the administration is requesting the resources
necessary to make DFC's model of public-private partnerships an
important tool of U.S. development and foreign policy.
The total budget request is $836 million. The request
consists of $136 million in administrative support including a
new inspector general, chief development officer, chief risk
officer, as well as $700 million for DFC programming.
These request reflect DFC's increased portfolio cap from
$30 billion to $60 billion that was authorized by the BUILD Act
as well as the additional responsibilities requested by
Congress.
In addition to our legacy finance programs, the BUILD Act
provides DFC with several new tools. Among the most important
is equity authority. This greatly expands on our ability to
deliver on the developmental and foreign policy goals that you
have set forth.
The BUILD Act also established new and important other
priorities such as feasibility studies and technical
assistance. When Congress established DFC it specifically
included the word development in DFC's name to reinforce our
core mission.
The DFC is already making significant progress on our
development mandate. We are creating a new state-of-the-art
development scoring system called the Impact Quotient, or IQ
score.
We built this system with extensive input from the
interagency and the broader development community. IQ will
enable DFC to more accurately measure and monitor the
development impact of every dollar that we invest.
We are also expanding promising and proven programs such as
the 2X Women's Initiative. The 2017 National Security Strategy
identified women's critical role in achieving global peace and
stability. DFC is proud to support this commitment through W-
GDP, which seeks to economically empower 50 million women
across the developing world by 2025.
DFC is promoting economic opportunities for women around
the world by expanding programs such as the Women's GDP 2X
Initiative and we look forward to working with Congress as you
seek to codify W-GDP.
I am also pleased to announce that we hired our chief
development officer, Andy Herscowitz, who is behind me over
there. Some committee members may be familiar with him because
he led Power Africa and I worked closely with Ambassador Green,
and with Bonnie Glick to identify a candidate like Andy to take
our development efforts forward.
I will close by noting that I really appreciate the
foresight of Congress in passing the BUILD Act. The strong
support of Congress indicates that investment and development
is not a partisan issue but an American priority.
The U.S. International Development Finance Corporation,
when combined together with our U.S. government partners, is an
unparalleled tool for lifting people out of poverty and laying
the groundwork for market-based economies across the world.
Thank you, and I look forward to answering your questions.
[The prepared statement of Mr. Boehler follows:]
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Ms. Lee. Thank you very much.
OK. I have a couple questions for all three at this point.
Each of your agencies I would like to get a response.
First of all, all of you promote private sector engagement
in different ways and so from your agencies' work what are some
of the barriers for U.S. businesses to engage in abroad? And
then sometimes there are business opportunities in areas where
the private sector's capacity is limited due to governance
issues, and so how do you handle that?
Then the second question, of course, is around coronavirus
in terms of how it has disrupted markets and caused upheaval in
production and supply chains across multiple industries and
sectors.
So how does really a shock like this public health crisis
affect your agencies' work and to date have you seen an impact
on private sector engagement from your agencies' standpoint?
And, if possible, are there plans to mitigate the impact?
Should we be looking at something to support what those plans
are? So we will start with Acting Director Hardy.
Mr. Hardy. Thank you very much.
I think the barriers that USTDA sees and the barriers that
U.S. companies see are straightforward. They are China. We hear
this from our partners around the globe and in the Western
Hemisphere.
Last week, Kim and I had breakfast with ambassadors from
the ASEAN countries and our partner countries are looking for
an alternative.
They are looking for quality solutions that are built to
last, that will provide long-term benefit to these countries,
and China right now is investing--overwhelming what the U.S. is
doing on a dollar for dollar basis.
But what the U.S. provides is quality and long-term
solutions and they are looking for that alternative and we hear
that from our partners around the world, and that is what is
driving the demand for us right now.
I will say just this past week I had a really interesting
conversation with a company, a manufacturer in Wisconsin who
manufactures cranes and is retreating from the international
market because they can't compete.
China's state-run company is putting $100 million into
local manufacturing of cranes in China and they can't compete
on a dollar for dollar basis, and they are coming to us saying,
what can you do--what can the U.S. government do to be
responsive. And this company's tagline is integrity, commitment
to stakeholders, and passion for excellence.
And right now, we are pulling our interagency together to
figure out a solution, how can we help change this paradigm not
only with this one company but around the world.
Ms. Lee. And on coronavirus?
Mr. Hardy. Oh, on coronavirus----
Ms. Lee. How is it affecting your agencies?
Mr. Hardy. I think at this point it is much more at a
agency level. We have travel restrictions now that are going to
limit our ability to do outreach to develop our program. We
haven't seen a direct impact on the private sector as of yet.
But I think that there will be definitely direct and short-term
impacts as travel restrictions continue to increase.
Ms. Lee. So are you all developing plans now, looking
forward to this possibly happening to mitigate the impact or
are you waiting?
Mr. Hardy. We have put into place travel restrictions.
Everything needs to be personally approved by senior management
for any travel. We have, obviously, invested in the IT
infrastructure that allows telecommunication whether it simply
be Skype calls. Our partners around the world are--very
frequently we use those in our normal course of business.
So we are just trying to look at different ways to achieve
our mission that don't require us to be on the ground as much.
It will be difficult but it is something that we are prepared
to implement.
Ms. Lee. Chairman Reed?
Ms. Reed. Thank you. Your question gets to the heart of
what EXIM does and I am so thrilled that we are now fully
reauthorized and giving the world certainty that we are around
through 2026.
When it comes to barriers in private sector capacity, EXIM
comes in with those specific tools such as export credit
insurance, working capital guarantees, direct loans or loan
guarantees to help our businesses compete and some of those,
when the private sector is able to compete and help our
businesses win deals we can come in and guarantee the loans
that the private sector offers.
But as Director Hardy mentioned, EXIM was not fully open
for about four years and when I became a nominee in 2017 there
were about 90 some export credit agencies around the world. I
even had one of them tell me to my face, we are glad you are
closed because we get your jobs.
And so when I finally was confirmed 10 months ago there are
now 113 export credit agencies around the world, and China has
two formal one informal one, and China does more than the G-7
countries combined.
And so we are very honored to have a long-term
reauthorization and also now are very focused on implementation
of this new mandate that you have given us to compete with
China and make sure that we are doing all we can to help our
workers win deals around the world.
Of course, we care about things like default and so we will
be very prudent with the taxpayer dollar and review things with
all the standards that we have.
And I will tell you that the rest of the world has told us,
we are glad you are back. The U.S. makes the best products in
the world and we are very happy to have this tool to help us
buy them.
When it comes to coronavirus, we are actively watching. We
come in when there are problems in our country for our workers
and so that is why we have things like export credit insurance
to help our businesses and we stand behind all of our products.
We did the same after the 2008 financial crisis. Right now it
is too early to predict. But we stand ready and we are
monitoring closely.
Ms. Lee. Are you planning any mitigation efforts based on
impact or are you sort of----
Ms. Reed. If there are claims filed we will honor those
claims to support our small businesses. So thank you.
Ms. Lee. Thank you. CEO Boehler?
Mr. Boehler. So to be additive, I am going to agree with
what my partners said, to be additive. I would say sometimes it
is access and familiarity with a particular market,
particularly when you are talking about frail states or smaller
markets.
U.S. investors don't have a lot of deals to look at and so
if you are talking about a small entrepreneur, let us say, in a
small country in Africa, people won't necessarily have
familiarity because they don't see a lot of deals.
So if we can bridge and take some risk out of the equation
for private businesses, it opens up an onramp. So I think
sometimes familiarity and access is a limiter.
But the second thing I will note as a limiter are
structural barriers and let me use a specific example. In
Ethiopia, there are certain structural barriers to investors
putting dollars there.
And so we are trying to address that even at the prime
minister level to say, look, we would love to invest and so
would other private capital; how can we help you with technical
assistance? And we are working with Treasury on this to
potentially adjust some of these things which would benefit
Ethiopia so we could flood the market with private capital. So
those are kind of things that often we would see out there.
From a coronavirus perspective, I would say there are two
areas where we are traveling--and onsite. One is, let us say,
the sourcing of deals, meeting with governments, et cetera.
And then the second one is we have pretty stringent
requirements for when we do a deal to ensure that it doesn't
violate our environmental standards, human capital standards,
and a lot of times, if there is any question in those deals we
go onsite to ensure that we are meeting the requirements set
forth in BUILD Act.
So what we are trying to do is, one, how much of that can
you do over video, quite frankly, and maybe we change some
practices and make lemonade out of lemons a little bit and say,
OK, is that visit necessary.
I just did a video conference with the Indonesians the
other day and not everything has to be a physical visit. Some
things do. So I think in addition to normal, protecting our
workforce from a travel perspective we are really trying to
push the envelope to see what can we really do without
traveling, if that is the case, and maybe even learn something
along the way out of it.
Ms. Lee. And do you have any specific plans or are you kind
of putting it together?
Mr. Boehler. Yes. I mean, obviously, so the immediate thing
that we did is we said listen, and just following best practice
from the USG is only mission-critical travel, not to these so
following CDC, et cetera.
So that was an immediate, and now what we are developing is
the specific. OK, what are, if you will, the work-arounds in
lieu of travel which would be more, hey, when can we use
teleconferencing in this. And I am having my team also look at
for meeting the deal requirements what can we actually check
off without being physically there.
And there are some things that we will probably need to be
physically there and that might delay a few things. But what do
we need to meet to make sure we meet our statutory obligations.
Ms. Lee. Thank you very much.
I will turn now to our ranking member, Mr. Rogers.
Mr. Rogers. Mr. Boehler, you were recently in Colombia I
think a couple of times in the last few months. A natural ally
of ours, our best partner in the region, and yet Colombia is
suffering from various scourges, one of which affects us and
that is the drug production.
And now, with the trouble in Venezuela, 2,000 Venezuelans a
day seeking asylum in Colombia, and it seems to me that--and I
think you agree--the ultimate positive answer in Colombia is a
strong local economy--small business, small manufacturing to
absorb some of the refugees as well as supplant or undo the
drug traffic.
Do you agree with that?
Mr. Boehler. I do, Ranking Member. And the way I think
about it is Congress, in the BUILD Act, set three priorities
for DFC: one, drive development worldwide, two, advance U.S.
foreign policy and national interests, and three, protect
taxpayer capital.
Those are the three things I always focus on, and I think
Colombia has the potential to be a best-case scenario in all
because from a foreign policy perspective, as you mentioned, we
have a domestic issue drug wise. They have an issue drug wise.
And you mentioned the Venezuelan migrants, the million and
a half people that are there crossing the border. Investment
could alleviate that and should alleviate that, done well.
But beyond that, where you are talking about investment in
that case. The farmers that produce coca are in rural
locations, that produce coca because they don't have a good
economic alternative, because there aren't good roads to
transport out coffee, cacao, palm oil.
And so, to me, it could be a wonderful opportunity to
achieve our mandate across development as well as advancing
U.S. interests.
Mr. Rogers. Are you having good relations with President
Duque?
Mr. Boehler. Yes. I have been quite a bit, and it was a
pleasure to see him this past Tuesday at the meetings that he
had in the United States.
Mr. Rogers. Does he agree with you on this concept we are
talking about?
Mr. Boehler. He does. We spent a lot of time with the
administration of Colombia. Obviously, something of this
magnitude and making a difference has to be done in
partnership. So, absolutely, Ranking Member.
Mr. Rogers. More than 95 percent of the world's population
is outside of the United States. Eighty percent of the world's
purchasing power outside the U.S. So we are starting from
scratch here. Those are pretty difficult odds to deal with.
Your agencies have a role in trying to expand U.S. trade
with our neighbors around the world. How can your agency--I am
going to ask each of you--how can your agency play a
significant part of expanding jobs in America with exports?
Please keep it short.
Mr. Boehler. Sure. I will make the comment that of every
visit I have met out there with heads of state, the No. 1, top
thing I heard repeatedly 100 percent is, we did not want to
take investment from that autocratic country. We wanted a U.S.
alternative and where were you?
And they have a good point, and I think that between the
three of us, as well as other government agencies, we are that
answer. And I think that means a significant amount for the
prosperity of U.S. businesses as we look at those markets, as
we invest and create that alternative.
People want American companies. People want American
businesses. They know what we represent--quality,
infrastructure, rule of law, transparency. And I feel very good
about our prospects together.
Ms. Reed. EXIM is dedicated tohelping our small businesses
and now that we are reauthorized we have given the world
certainty that we are going to be around through 2026. That is
key to getting us where we need to go.
I had a great experience in your district, sir, visiting a
wonderful company called DecoArt Paints in Stanford and
spending some time with CEO Stan Clifford. Because now we are
good to go for a long tenure. We are able to come in and help
the world say, hey, let us take a look at the United States
again.
It is a lot of work to get our small businesses up and
running with exports and so we are partnering with
organizations like the Independent Community Bankers
Association and ABA and others, and also working with something
called delegated authority so that our banks on the ground--
when you are a small business you go into your local bank--so
they are equipped to help share some of those tools.
And, of course, now that we are able to do those large
transactions over $10 million, we got $40 billion in the
pipeline when I showed up as the new chair and reopened EXIM,
and so we are thoughtfully going through those applications.
And we lost some of those applications. We lost, in fact,
$20 billion worth while we were shut. So it is getting the word
out. Working with each of you, coming and helping the world
know that we are back and the world should pick us.
Mr. Hardy. Thank you. Thank you, Chairman Rogers.
USTDA is using its current funding as the tip of the spear
to feed the pipelines of the financial entities--EXIM Bank,
OPIC, the DFC--using a small amount of money, as I said in my
testimony, to develop the infrastructure and the roadmap to
encourage financing.
And we have a history of success. I think that the three of
us and our agencies work well together. As I looked and
prepared for this testimony I reviewed a geothermal power plant
that is currently operating in Honduras, financed by the DFC or
the previously OPIC.
Just last year, work we did directly with Senegal to help
them expand transmission and distribution is in the pipeline
for EXIM right now under the $500 million commitment.
So USTDA's role is to develop those projects so they can
get to financing and with that having USTDA's export mandate
where we are bringing in U.S. technology, goods and services
into the thinking and the process and the development of these
projects is going to best position U.S. companies to succeed
internationally.
Mr. Rogers. I yield.
Ms. Lee. Thank you very much.
Now I will yield to Ms. Torres from California.
Ms. Torres. Thank you, and thank you to all of you for
being here.
I do want to do a quick follow-up to the coronavirus issue.
As you know, we are starting to see an increase here.
The county of L.A. just declared it also an emergency. I
have learned that the Commerce Department sent out a notice
last week that highlighted a change to Chinese regulations
which would make it easier for U.S. companies to export medical
supplies, medical supplies that are in critical shortage here
in the U.S. such as masks that--I have a family of three
nurses. They can't get masks while they are working front lines
in the hospital. I went to five different stores over the
weekend trying to find hand sanitizer. It is all completely
out.
So my question is the EXIM Bank consulted with the U.S.
Coronavirus Task Force to ensure that we are not supporting the
exportation of critically limited supplies that our first
responders need in order to protect our communities?
Ms. Reed. Thank you.
We take the coronavirus very seriously. EXIM comes in with
those very important tools to help our exporters be successful
and we have supported in the past medical equipment and----
Ms. Torres. I am sorry. Just a quick yes or no.
Ms. Reed. Yes.
Ms. Torres. The Commerce Department and EXIM coordinate to
make sure that we are not drawing down on supplies that are not
available to U.S. citizens in the homeland.
Ms. Reed. So I have communicated with all key parts of our
administration that we stand ready to be helpful in any way.
Again, we need to have applications come in to us and we will
promptly review any application to help our exporters get
medical equipment to China or other places around the world.
Ms. Torres. China is important but, you know, the most
important--for us, the priority should be to ensure that we
have these medical supplies here at home, available to first
responders and to American citizens before we begin to export
them out, right?
Ms. Reed. Our mission, though, is a very specific mission
to support the export of --
Ms. Torres. But our mission--we cannot cut our nose in
spite, you know, of our face. We have to protect our health
needs in the U.S.
So the left hand has to communicate with the right hand and
we can't say our priority is to, you know, allow folks to pay
$150 for a tiny bottle of hand sanitizer because it isn't
available anywhere here in the U.S.
Meanwhile, you are working to send these critically needed
supplies to China.
Ms. Reed. I would be pleased to work with you take a really
hard look at our legislation and anything we can do to help
support our country.
Ms. Torres. I am just saying common sense--let us look at
it and please work with the current working group that the
President has set up to ensure that they have all of the
supplies that they need before we start exporting them out. In
this case, exports are no bueno.
In relationship to the Northern Triangle of Central
America, I am very concerned that we have not paid attention to
major concerns and issues of public corruption.
Every businessperson that I talk to that is trying to do
business in the region, their number-one concern is having to
pay off local governments and corrupt elected officials in the
region in order to do business.
So incentivizing by providing--the DFC signed an MOU with
Guatemala to catalyze $1 billion in private sector investment.
Mr. Boehler, what does catalyzing $1 billion in private
sector investment mean and are we exposing our business
community to huge losses, potential huge losses, because they
are investing in Honduras, a narco government, in Guatemala, an
extremely corrupt government.
Mr. Boehler. Congresswoman, I want to note I agree with you
on this and I think something like a memorandum of
understanding, if used correctly, establishes kind of a
framework to say this is the potential.
This is the potential if you start really clamping down on
corruption. I went to the inauguration of the Guatemalan
President Giammattei and, you know, he spoke extremely well
about it. But action has to follow words.
Ms. Torres. And his actions have been, you know, to punish
NGOs who are trying to promote rule of law and good democracy
standards.
Mr. Boehler. Yes.
Ms. Torres. So we cannot incentivize these corrupt
officials to continue with their corrupt ways that are causing
all of the mass exodus in those countries, leaving families,
babies, at our southern border seeking assistance.
We have to provide the political support to the region and
we cannot do that by incentivizing American dollars to corrupt
or narco traffickers in the region, even if the narco
traffickers are the President and his entire family.
Mr. Boehler. Look, I 100 percent agree. I mean, this MOU is
not a commitment and these things are not conditionless or
blank checks. So I agree with you.
Ms. Torres. The BUILD Act--I had an amendment and my
amendment specifically says that assessments prior to providing
funding must occur and must be based on these policies and
procedures.
The law requires DFC to have these policies and procedures
in place, and I hope that you have policies already and that
you can follow up. My time is up so I can't continue to take
time from the panel. But I hope that you can follow up with my
office.
Mr. Boehler. We will.
Ms. Torres. And that we can get a briefing exactly on what
this MOU is because it is not--there is nothing transparent
about this MOU.
And I yield back.
Ms. Lee. Thank you.
Ms. Frankel.
Ms. Frankel. First off, thank you all for being here. I
appreciate your efforts.
Let me start by saying thank you for mentioning the women's
economic initiatives and which I support. I am going to have
some questions to that but I just want to say something for the
record, which is nothing personal against you all.
But I agree with this initiative to empower women
economically all over the world. But I am just--I just want to
say for the record it is contrary to this effort for the Trump
administration to come in here in another forum and ask for
cuts in girls' education and women's health care, specifically
access to reproductive care.
So with that said, I will get to some questions for you. So
the BUILD Act, we said that for DFC to prioritize the reduction
of gender gaps and maximize development impact by working to
improve women's economic opportunities throughout the DFC's
portfolio.
There was another provision in the BUILD Act that calls for
gender-segregated data. So I would like you to, if you could,
comment on each of those areas on how you are moving forward.
And then one other question I have in this regard is the
OPIC staff had been looking into EDGE certification, a global
certification standing for gender equality, and I am wondering
whether or not you are continuing to explore that. So those
three questions, if you could respond.
Mr. Boehler. Sure. And I am sorry. Could you repeat the
first one again?
Ms. Frankel. OK. The first one, the BUILD Act requires the
prioritization--I will read it specifically--to prioritize the
reduction of gender gaps and maximize development impact by
working to improve women's economic opportunities.
Mr. Boehler. Yes. And so on the first one, obviously, 2X
and our collaboration with W-GDP has been a huge focus. We set
up a goal initially in the first year of a billion dollars of
investment. We exceeded that. I think we were $1.3 billion,
$1.4 billion. We then set up --
Ms. Frankel. Where are you investing? How are you
investing?
Mr. Boehler. Yes. All over the place. I mean, let me give
you a specific example. When I was in India last week I visited
one of our investments called Satara, which is focused on
affordable housing for women.
We are backing up mortgages for women that are working
mothers and so got to see this right in place. You have got a
number of different initiatives focused on rural communities.
One of the things I find with women in emerging economies
and rural is that it is very difficult for them to leave and
work. And so some of the technology initiatives we are looking
at, for example, coding, if there is internet access, can be a
really effective way to improve employment on the women's side.
But our position has been, you know, how can you be a
successful country if you haven't empowered half of your
workforce. And so that is something that we have pushed very
hard.
Your second question, I think, really relates to our
monitoring and reporting back, and you will see that as per the
BUILD Act. We see those requirements. That is what we are
building toward.
And then your third question around EDGE certification, we
did get EDGE certification and I actually was looking at the
numbers a couple days ago. Not only we got it last year, but
our focus on the women's and minorities' side has resulted in
much higher increase actually in the amount of women.
One thing that I noticed when I came on board is that we
were over 50 percent women, but at the very senior level, that
was not the case.
Our management team has greatly expanded toward women even
since the year of our EDGE certification. So I think we are
very much moving in the right direction and we have an
increased commitment there.
Ms. Frankel. I think maybe you answered. The question is
whether you are going to actively work to identify partners who
prioritize gender equality. Yes.
Mr. Boehler. Yes. It is one of the considerations,
actually, we look at. In our evaluation of deals there is a 2X
focus, and when we do our IQ score being women-focused
increases your development score, which would greatly enhance
our probability of funding the deal.
Ms. Frankel. OK. I want to thank you and I thank you for
your commitment to that. And not to be sarcastic or rude, I
just want to say, as I conclude my remarks, that the women we
are getting mortgages for they need access to contraception.
And I yield back.
Ms. Lee. Thank you very much, Ms. Frankel.
Now I will turn to Ms. Meng.
Ms. Meng. Thank you, Madam Chairwoman.
Ms. Frankel asked most of my concerns and my first question
was about women's empowerment, too, especially women's access
to credit.
Just wanting to make sure and if you have any insight on
how we are making sure that, especially with the 2X initiative,
that women's access to credit will be institutionalized, made
permanent, dependent, regardless of who is in charge.
So that is my first question and I will just go to my
second question on a totally different subject, but climate.
Climate change poses great risks to the ability of many low and
lower-middle income countries to fulfill development goals.
One, although the Trump administration has announced that
the U.S. will leave the Paris Climate Agreement, to what extent
will the DFC help countries implement their nationally
determined commitments to international conventions?
And, two, in 2017, despite having strengthened its
environmental and social policies, OPIC financed four oil and
gas projects, which, collectively, represented over 2.3 million
tons of CO2 per year in emissions or a 14 percent increase in
annual emissions in these countries.
Will the DFC continue to finance projects that rely on
fossil fuels?
Mr. Boehler. So on the first question, I spoke about it a
little bit. The other thing I will just note on the side is the
visibility that Ivanka Trump has given the 2X Initiative I
think actually has mattered a lot. Because I know at the head
of state level when we meet with countries, they will very much
highlight their Women's Initiative.
And so that focus has made it a constant thought process
and I think that other countries know that as they look to ally
with the United States this is an important consideration that
we look at. And I think it has started to become really
institutionalized.
So, one, I think that is really positive and I think
women's access to credit and financing, limits on those are not
acceptable and really hinder. So a lot of our focus on
investing has been how do you get out and remove those barriers
from a financing perspective. So yes.
Ms. Meng. Right. Yes. Those are all positive and just
wanting to make sure, like, in a potential--in a future
administration that the priorities would be the same even if
the administration was----
Mr. Boehler. Yes. I think the nice thing--it feels like
this focus on women is becoming institutionalized, and so I
think that is really nice.
I think, especially as Congress thinks about codifying W-
GDP, the 2X brand, et cetera, it feels like it is settling in.
And, if you will,--it feels very American and continuing, and
not a partisan issue, which is really nice.
Ms. Meng. Thank you.
Mr. Boehler. Your second question around the 2017 deals,
obviously, I wasn't there in 2017 but I will tell you what I am
focused on, which is renewable energy. Over 80 percent of our
deals are in that space and anything that is not renewable,
based on the guidelines, that BUILD Act that Congress gave us,
the bar is high. It is very high.
It is looked at with increased scrutiny if it is not in
that category. So that is my general commitment. I will tell
you, I would much rather do a deal renewable than not, and so
it will face a higher bar based on the statutory requirements
that we have in BUILD Act.
Ms. Meng. Thank you. I yield back.
Ms. Lee. OK. Thank you very much.
Let me ask a couple of questions of all of you in terms
of--my first question has to do with the utilization of
minority-owned businesses.
As I travel throughout the world, I am always looking to
see what partnerships and what contracts where there are
business arrangements with U.S. firms. I never see African-
American companies, I never see Hispanic companies, and I never
see Asian Pacific-American companies.
How do you all--first of all, when you do business with
American companies as partners in any of your programs, how do
you address this?
And I would like to also ask if we could get a report back
with regard to the utilization, the partnerships, the
arrangements you have with minority-owned businesses
disaggregated by African American, Asian Pacific-American, and
Hispanic businesses.
Mr. Hardy.
Mr. Hardy. Thank you. I think I will start at the big macro
level, which is the small business, and then get down to the
micro level. USTDA is proud that we have over 60 percent of our
FAR contracts are committed to small business, and when we
drive down deeper a significant portion of those are dedicated
or in the 8(a) program that oftentimes are designed for a
minority-owned business, Hispanic-owned businesses.
We can give you a clear breakout, but a significant amount
of our FAR contracts are set aside for that 8(a) program and
our overall number is over 60 percent of all contracts at USTDA
funds under the FAR is small business.
Ms. Lee. OK. I would like to see that breakout. I am a
former 8(a) contractor myself and it was very difficult as an
African-American woman to break in.
And so I would like to see, again, the data disaggregated
based on the good work that you are doing in terms of the U.S.
Trade and Development Agency.
Mr. Hardy. We would be happy to, and we have--the 8(a)
program has been very successful for us to get companies, small
companies, that have--and as you know as an 8(a)--former 8(a)--
having that mentorship that that 8(a) program provides to small
business has been very helpful for us to get not only smaller
business started but help them get the capacity to expand
longer term.
Ms. Lee. OK. Thank you very much.
Ms. Reed. I am really taking this program that we have at
EXIM called Women and Minority-Owned Businesses to the next
level. I love it and I believe in it.
We have got a great staff and we know that it takes a lot
of dedicated staff time to ensure that we are reaching out,
especially as Director Hardy mentioned with our small
businesses.
So in fiscal year 2019, we did $441 million in
authorizations for women- and minority-owned businesses and we
are going to increase our staff that focus on that at EXIM over
the next few months. We are going to go from 11 to 13 of our
staff.
And I want to just touch on some of the groups. You asked
us to identify who our partners are and so I have partnered
with the Minority Business Development Agency, the National
Minority Supplier Development Council, Women's Business
Enterprise National Council, the U.S. Hispanic Chamber, and the
National Veterans Business Council.
But really look forward to doing more outreach, coming with
you and doing that, and as one of the 100 women leaders in STEM
I know that we need to do all we can at all levels, in the
private sector as well as in government.
So I am pleased to say that of our 373-person workforce at
EXIM, 40 percent--46 percent identify as nonwhite and 53
percent of our workforce is female.
Ms. Lee. Thank you very much, and I would like to get a
report back, though, with, again, disaggregated--African-
American, Hispanic, Asian Pacific-American.
Ms. Reed. With those numbers.
Ms. Lee. Thank you very much.
Mr. Boehler. Vice Chairwoman, got you on the report. I will
be happy to do it. I think two things, to be additive. One is I
think when we invest in countries in the United States, we have
great Diaspora populations. I mentioned Ethiopia before. You
have a great Diaspora population in Virginia, really close. A
Caribbean population in the United States.
On the Western Hemisphere, a Latin American population in
the United States, which I think you have people that have
moved from those countries, which could be great opportunities
and I think that will be phenomenal.
The second thing is Kim and I share different reasons--Kim
being newly reauthorized, my agency being newly created--
probably some opportunity to go out and to let U.S. businesses
know who we are.
So I think it is probably helpful and we could do a tour
together but happy to do it together with Members in districts
to advertise this, too, because we can always do better and we
are new. So I think that would be helpful.
Ms. Lee. Thank you very much. And, again, whatever data you
have I would like that back.
Mr. Boehler. Understood. Yes.
Ms. Lee. But I would also suggest that you look at the Tri-
Caucus, the Black, Hispanic, and Asian Pacific-American Caucus,
as you move out to raise awareness about this.
Mr. Boehler. Yes. To do that.
Ms. Lee. Mr. Hardy, let me ask you about your agency. Now,
the Access to Africa Initiative, that has helped facilitate
transactions that build sub-Saharan Africa's infrastructure
using American goods and services.
And as we know, in the President's budget it zeroes out TDA
operations. So if TDA operations cease, what do you anticipate
will happen, first of all, to ongoing projects in sub-Saharan
Africa, but secondly, and again, as I move through the
continent of Africa quite a bit every year I understand the
investments that China is making.
I see this each and every day, and if in fact we want to be
competitive and want to have a larger footprint there for all
of the reasons you stated, why in the world would we zero out
operations that would help U.S. companies and help ongoing
projects in Africa?
Mr. Hardy. Let me start with the ongoing projects. We have
worked closely internally within the agency and OMB to manage
how we would draw down the agency, draw down staffing, and the
long-term projects.
Because you are right, those do take a long time to--for
our investments to come forward to financing, and that would
include potentially having to move some of our authorizations
and commitments to another government agency in the out years
if, in fact, that Congress and the administration move forward
with closing USTDA.
What would it mean if USTDA was eliminated? I think that we
would--there would be a hole. But U.S. companies would be able
to step into that hole. It would be--it is a challenge, as I
talked about in my testimony, and there is a very competitive
market.
You have players that are not playing by the rules and
companies are suffering. U.S. companies are suffering greatly.
Companies in your district, companies around the country.
And there would be a hole if we weren't there but it would
be a hole that the budget request says that U.S. companies
could step into.
Ms. Lee. I think it would be a deeper hole just in terms of
the geopolitical dynamics that this message would send in terms
of the U.S. versus China. I mean, I think that this is
something I hope this committee will look at and address.
Let me ask you, Mr. Boehler, the relationship between the
African Development Bank--I think it was $54 million request
for the first aid installments--and the Millennial Challenge
Corporation, I think it is $800 million. It is down from $905
million in the past 2 years.
What does the relationship between the African Development
Bank and the MCC look like? I have visited the African
Development Bank a few times and I think it is doing quite an
amazing job with minimal resources.
And so I am trying to understand what is taking place now
in terms of the partnerships and this reduction in funding.
Mr. Boehler. First, so Vice Chairwoman, I am not 100
percent sure related to MCC and the African Development Bank. I
know that we have looked to partner with them at DFC, so we
established kind of a memorandum of understanding to look at
joint projects in Africa together.
I met Dr. Agustina a number of times and really, I think
they are aligned in our view and I always like partnering with
local partners. But I couldn't comment--I wouldn't want to
comment in detail on MCC and that area because I am not----
Ms. Lee. Well, maybe there isn't a relationship between--I
mean, you know, there are so many different agencies.
Mr. Boehler. Yes.
Ms. Lee. And I am trying to see how the coordination and
collaborations take place specifically on the continent of
Africa since it is such a neglected continent.
Mr. Boehler. What I could reflect on, if it is helpful,
Vice Chairwoman, is how we work with MCC with it in Africa or--
would that be helpful?
Ms. Lee. Yes, that would be helpful and also just in terms
of your background.
Mr. Boehler. Yes.
Ms. Lee. You know, in business it is a very difficult
region in Africa.
Mr. Boehler. Yes.
Ms. Lee. And so some countries in Africa receive the
private investments. Others receive little or none.
Mr. Boehler. Right.
Ms. Lee. And so I am glad you are there. But it is a
challenge.
Mr. Boehler. Yes.
Ms. Lee. And so I am going to try to stay on top of this
with all these agencies because I think we have a window of
opportunity now. We are losing that window very quickly.
Mr. Boehler. Yes. And you correctly identified, Chairwoman,
around China and the issue there, which is, as you know, very
real. So I will reflect a little bit on MCC and then what we
are trying to do not only in bigger countries that are known,
like South Africa, but other countries that are not as
developed.
Within MCC, when MCC enters into a compact, it can take a
while. There are a lot of requirements. And so one way that
Sean, who runs MCC, and I have looked at working together is
beforehand investing to help countries reach that threshold
potential so that they could enter a compact, because there is
a lot that can happen before that.
And then even once they enter a compact, because his money
is grant money, how could we surround and work together. And,
again, I think we are best when we work together and I know
that we have meetings, actually us, with MCC all the time
around, now we are looking at this--how could we have EXIM come
in and how could we do technical assistance before they get to
that threshold.
So I think it is a really good way we can work together and
I think you are right, our timing is good because we are
finally operational and there is a lot of focus on it, given
development in China.
And then the only other thing I will note is I very much
view our focus at, because we are a development agency first
and foremost, is to enter into fragile states and developing
states and not just where it is easiest. And so that will
continue to be our clear mandate because that is what has been
given to me by Congress and I will follow that mandate.
Ms. Lee. Great. And my final--did you have something?
Mr. Hardy. Thank you. If I could just follow up on Africa.
I want to assure you that Africa is not the neglected
region. I have spent over 20 years working in Africa and have
seen success after success after success of USTDA making that
early investment and how it has transformed people's lives.
Whether it be a digital inclusion in the townships outside
of Cape Town, the deployment of what is now a subsea--undersea
fiber optic cable that is bringing broadband access from the
southern tip of South Africa all the way up to Egypt and the
transformative impact that that is having.
And just this past year at the CCA conference we launched
an initiative called Access Africa that is designed to take
those successes and expand our investment in ICT infrastructure
to ensure that the IT infrastructure is best being able to help
Africans across the continent.
Ms. Lee. Yes, Chairman Reed?
Ms. Reed. Thank you.
Vice Chairwoman, I just want to underscore how committed
EXIM also is to sub-Saharan Africa. Congress has asked us to
prioritize sub-Saharan Africa, and back in September we stood
up a Sub-Saharan Africa Advisory Committee.
They sent a report to Congress with some wonderful
recommendations. My fellow board member, Judith Pryor, I have
asked her to take on that as one of our key objectives.
And just so you know, we have reopened EXIM. We approved
the largest deal in the history of EXIM last year and that was
to the country of Mozambique, a $5 billion deal that will
transform the country.
And because EXIM was reopened, originally China and Russia
were in the deal and they got kicked out because the Mozambique
government and those in Mozambique wanted to buy our U.S. goods
and services.
So that is going to support 16,400 jobs across the country
and we are working really hard. I don't know if you know Florie
Liser, who heads the Corporate Council on Africa, but she is on
our advisory committee and I am going with her to Africa in a
couple months.
As soon as I was sworn in, President Trump asked me to lead
his delegation to the swearing in of Cyril Ramaphosa in
Pretoria, South Africa, and it was such an honor to be there
and sit down with all of the potential business leaders--actual
business leaders--but for our potential business deals that
could happen now with Africa.
So we have done preliminary commitments in Cameroon and
Senegal to help some small businesses be successful there and I
really hope that we get to celebrate something from your
district to Africa as well. So we will work hard on that.
Ms. Lee. Thank you very much.
OK. Mr. Boehler, on thinking out of the box and really
coming up with new ideas, this new form of financing--hybrid
financing--it is intended to be like equity but treated like a
loan under the Federal Credit Reform Act, is it equity? Is it
not equity?
Is it another form of--seems like it is another form of
debt financing, which OPIC has been doing for some time. Can
you kind of drill down just a little bit on that?
Mr. Boehler. Yes. I think when you think about the
difference between debt and equity, there is a whole spectrum
of different products within there, and so kind of some of the
concept here is, and really, ultimately, what is the difference
between that debt and equity because they can look like each
other.
A lot of times, it is where you sit in the stack where
first money comes out, your governance rights is common, and
whether there is redemption. Those tend to be the three
differences.
And so as you move towards senior lending you move up the
stack, mezzanine lending, more senior loans. And so the idea is
really to be off--to be able to offer a spectrum of different
products that fit the right situation.
There are times, for example, when the senior lending
stack--if you will, the mezzanine stack--that is a riskier
layer. So you won't find theprivate market willing to do that.
But they would take a certain stack.
There are times where equity is really appropriate. I will
give you an example. If you are a small entrepreneur in Africa,
like we are talking about, saddling that entrepreneur with
debt, probably be counter to what we would want to do in terms
of--to your point, out of the box, is really to have a spectrum
of products so that you can use the right thing for the right
situation.
Ms. Lee. OK. Well, you have a development mandate, though,
right?
Mr. Boehler. Absolutely.
Ms. Lee. So this is more associated with more of a business
model.
Mr. Boehler. What I would say on this is, to me, it is not
business model. Again, it is using the right product for the
right situation. So by way of example, if you are using a
riskier debt product that a private market won't take, you are
enabling the private market to do deals to drive development.
This equity example, you are enabling entrepreneurs that
you wouldn't want to saddle with debt. So when I think about
our financial products, we are always using them to drive a
development purpose. That is our mission.
Ms. Lee. So are you testing it or are you using it without,
say, modeling it?
Mr. Boehler. There is nothing we won't enter into that is
not heavily modeled and then evaluated not only by our internal
credit process, which is an independent credit process, all the
way through, but then over by OMB as well.
So everything we do, it is always a refined, specific
process that is career led from that perspective, too. Because
I think it is critical that we have an independent view from a
credit perspective and then it goes over to OMB and, you know,
they have sharpened pencils there.
Ms. Lee. Well, keep us posted on how this is going. I am
very interested in this.
Mr. Boehler. Yes.
Ms. Lee. Making sure that it is going to do what it is
supposed to do.
Mr. Boehler. That makes sense.
Ms. Lee. OK. Thank you very much.
Let me thank the panel for your time. It has been very
informative and interesting, and glad to see you here.
And any reports or any requests that members made we look
forward to receiving those in a, hopefully, expedited fashion.
So this concludes today's hearing. The Subcommittee on
State, Foreign Operations, and Related Programs stands
adjourned.
Thank you again.
[Material submitted for inclusion in the record follows:]
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Wednesday, March 11, 2020
DEPARTMENT OF THE TREASURY
WITNESS
HON. STEVEN MNUCHIN, SECRETARY, DEPARTMENT OF THE TREASURY
OPENING STATEMENT BY CHAIRWOMAN LOWEY
The Chairwoman. The Subcommittee on State, Foreign
Operations, and Related Programs will come to order.
Secretary Mnuchin, thank you so much for joining us today.
The administration's fiscal year 2021 budget request, which
proposes unsustainable cuts of nearly 20 percent for foreign
assistance, demonstrates once again that the administration
just does not value the impact of the global economy on our
national security, nor does it recognize the merits of poverty
reduction through multilateral development.
Fortunately, this committee does. The Treasury Department's
international programs are central to achieving strategic
objectives overseas, and investing in these areas and our
multilateral partners builds resilience and promotes stability
that is essential to American interests.
The administration's repeated attempts to end cooperation
with multilateral organizations threaten our economic and
national security and weaken our global influence and
credibility. This creates opportunities for other countries,
such as Russia and China, to further encroach into areas where
we have chosen to diminish our leadership on the world stage.
As they continue to expand their reach, they will not represent
American values or interests.
With the effects of climate change increasing, I am worried
about the message we send to the rest of the world by reneging
on prior commitments, such as cutting in half the U.S. pledge
for the Global Environment Facility, providing less than half
of the $3 billion pledge to the Green Climate Fund, and
withdrawing from the Paris agreement.
This is of particular concern, given the administration has
touted that tree planting--although it is a good idea--but that
tree planting will solve our climate crisis.
Given that climate change will impact almost every program
funded by this bill, I, frankly, don't understand why the
administration refuses to stand behind commitments or make
investments that could harness the power of U.S. businesses to
innovatively address this challenge. Further, by neglecting to
contribute to the Global Agriculture and Food Security Program
and the International Fund for Agricultural Development, this
administration signals a fundamental lack of understanding
about the importance of risk mitigation and preparedness.
Just as the novel coronavirus has disrupted markets, shocks
like droughts, floods, or invasive pests can wipe out crops and
contribute to food price spikes that quickly create conditions
for instability, violence, and migration. While we don't always
know when these events will occur, we know there is an
increasing likelihood they will become more frequent and severe
due to climate change.
When communities are prepared to mitigate the impact of
such events, they are better able to prevent lasting effects
that are costly and threaten our own security. Diligence and
leadership matter. We must demonstrate that the U.S. is a
strong, reliable partner, just as we must stand unwaveringly
behind our commitment to promoting democratic values.
I am concerned about the Treasury Department's engagement
in U.S. efforts to combat terrorist financing networks and
enforce sanctions against rogue nations. While sanctions can be
a valuable tool to mobilize governments to cease human rights
violations and take democracy and rules more seriously, the
administration's approach is neither consistent nor effective.
Not one of the dangers I have just outlined is positively
addressed by your budget request. As chairwoman, I have every
expectation that we will produce a bill that maximizes each
taxpayer dollar while maintaining responsible investment with
our multilateral partners.
Again, I welcome you here, and before we move to your
testimony, let me turn to Mr. Rogers, the ranking member, for
his opening statement.
OPENING STATEMENT BY RANKING MEMBER ROGERS
Mr. Rogers. Thank you, Madam Chair.
And Secretary Mnuchin, welcome to our subcommittee. We
appreciate you being here and look forward to your presentation
on Treasury's fiscal 2021 international programs request.
Your Department is seeking $1.59 billion in the coming
fiscal year for international programs. That is about 8 percent
less than the fiscal year 2020 enacted level. Key elements of
the funding request would go towards meeting the annual U.S.
commitments to the international financial institutions, debt
restructuring, and Treasury's Office of Technical Assistance.
The decrease from the enacted level apparently is primarily
due to a negotiated reduction in the pledge to the
International Development Association of the World Bank Group.
This outcome is part of a larger package of reforms that the
U.S. has advanced at the World Bank, and I look forward to
hearing how those initiatives more closely align the World Bank
with U.S. national security, foreign policy, and economic
priorities.
In addition to such reforms, I hope you will address with
us this morning your role in providing the highest level of
oversight to these institutions. I will get into more specifics
during our question and answer period.
Mr. Secretary, another topic that we would like to hear
about, of course, is China. As you know, our Government has
identified the renewal of great power competition as a defining
feature of the 21st century. With respect to China, the United
States has developed a whole of government approach to respond
to Beijing's expanding global reach.
For the Department of Treasury, this response must include
countering China's authoritarian development with a more
transparent and market-oriented model. I hope you will address
this on the elements of a comprehensive U.S. economic strategy
toward China that offers a meaningful alternative to Beijing's
predatory trade and infrastructure financing.
Finally, I would be remiss if I didn't raise the issue of
the day, the spread of COVID-19 from China to much of the rest
of the world and its impact on the global economy. I hope you
will speak to the ways in which the administration and Treasury
are helping to mitigate the economic impact of this disease,
both domestically and internationally.
We appreciate your service to your country, and look
forward to your testimony.
I yield back.
The Chairwoman. Thank you.
I will be calling on members based on seniority of the
members that were present when the hearing was called to order.
I will alternate between majority and minority. Each member is
asked to keep their questions to within 5 minutes per round.
Secretary Mnuchin, we will be happy to place your full
testimony into the record. I know you have a hard stop of
12:00, noon. So if you would be kind enough to summarize your
oral statement, I want to make sure we leave enough time to get
to everyone's questions.
But, Secretary Mnuchin, please proceed as you desire. Thank
you.
OPENING STATEMENT BY SECRETARY MNUCHIN
Secretary Mnuchin. Thank you. I will be very brief.
But first of all, thank you, Chairman Lowey, and thank you,
Ranking Member Rogers and the members of the subcommittee. I am
pleased to be here with you today.
I first just want to emphasize the administration, through
the White House task force, is doing everything possible to
address the risks associated with the virus. And while public
health is our highest priority, I assure you that we are also
working on economic programs to support hard-working Americans
and businesses that are affected by the disruptions associated
with the spread of the virus. We are also coordinating with
international organizations and our counterparts.
The 2021 budget makes clear that we prioritize some very
important issues. We have $1.6 billion for international
programs. I would just highlight approximately $1.5 billion for
the MDBs, as well as $33 million for OTA and $78 million in
relief for the heavily indebted poor countries.
I also just want to apologize in advance. I normally
wouldn't do this, but I may look at my cell phone a couple of
times during the meeting, given everything that is going on.
And Chairwoman Lowey, I also want to recognize and thank you
for the previous work we were able to do together on the
bipartisan spending bill, and I look forward to Congress
working together to address these very important issues
associated with the virus on a timely basis.
[The prepared statement of Secretary Mnuchin follows:]
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The Chairwoman. Well, thank you very much, Mr. Secretary,
and I know that our work together with the Speaker was really
invaluable. And you offered such important contributions to the
effort.
So welcome today.
The 10-year Treasury yield fell to a record low due to
fears about the novel coronavirus. There are concerns of its
impact on economic growth. I think that is the understatement
of this hearing.
Mr. Secretary, how will this affect the economy at home and
abroad, and are you coordinating with the State Department and
USAID on how global economic upheaval due to the novel
coronavirus could impact underdeveloped nations? Is there a way
to mitigate the impact on U.S. business interests abroad?
And by the way, I realize that you are right in the middle.
So all these questions I am sure are on your agenda, and if you
could share with us some of your thoughts, both here and
abroad, we would be appreciative.
Secretary Mnuchin. Well, let me just comment that the
situation is obviously moving very quickly and rapidly. So we
are literally meeting every single day, 7 days a week, on this
on the task force. Steve Biegun from the State Department, the
Deputy Secretary, is on the task force. I actually was meeting
with Secretary Pompeo this morning, and we updated each other
on the issues directly as well.
So State and Treasury are very much coordinated. We have a
large team at Treasury, both consisting of international and
domestic people, looking at these issues. We are coordinating
on an international basis. We are the host of the G-7. So we
have been hosting both G-7 calls. We have been having bilateral
calls. We have had conversations with the IMF and the World
Bank.
We are also on a domestic basis in touch with all the
regulators. I hosted a call yesterday of the President's
working group, which included all the major regulators. So I
assure you we are not only focused on the health issues, but
the economic issues and coordinating across the board on these.
The Chairwoman. Secretary Mnuchin, I just can't resist
saying at the outset of this hearing that I appreciate your
involvement. I know that you, the Speaker, and I work closely
on many issues as they come forward. I appreciate you being
here today.
You should know, as a member of the President's Cabinet,
that Secretary Pompeo doesn't feel he has any responsibility to
come before this committee and other committees just to keep us
abreast of what he is doing. So just thought I would let you
know, as a member of the Cabinet. And again, we appreciate you
being here today.
Climate change. It is a threat to every investment made by
this bill from natural resources to food security and global
health to peace building. Yet this administration has
systematically withdrawn from activities to address climate
change.
Businesses here and abroad have experienced the negative
impacts caused by rising seas, erratic weather patterns, lost
productivity, and it makes it much more critical to uphold and
strengthen our multilateral partnerships. The administration
has justified cutting the United States pledge for the Global
Environment Facility in half, suggesting that doing so will
incentivize burden-sharing among other donors.
Mr. Secretary, given our lack of participation on climate
change, do our multilateral partners believe we are even
serious about tackling this problem?
Secretary Mnuchin. Well, let me first say that the
President very much cares about the environment and,
specifically, clean air and clean water, and we are doing
everything, both domestically and internationally, from a
technology standpoint and a policy standpoint to focus on clean
air and clean water.
I would just also comment, and I don't want to minimize the
issue of climate change, but I was at Davos last month where
the only thing people wanted to talk about was climate change.
And it was a month ago I was emphasizing to people there are
other very important issues, such as the health issues. I think
people underestimated globally the impact of this when China
was quarantining 12 million people.
So I want to emphasize that we look at the environmental
issues broadly, and this is one of the important international
issues, but not the only important international issue.
The Chairwoman. I appreciate that, and I would be
interested to know has the administration's approach to really
beat up on other countries to do more, has he been successful
in getting others to step up?
Secretary Mnuchin. Well, I wouldn't use the word ``beat
up.'' I would use the word ``encourage.'' And yes, the
President believes in burden-sharing. So whether it is other
countries paying their fair share of NATO, or it is other
countries paying their fair share for international
organizations or doing what they need to do, we have had
specific conversations with both China and India as a result of
environmental issues there, and the President is very focused
on that.
The Chairwoman. Has their increased participation made up
the gap from our retreated efforts? Because I understood that,
when you were saying he was trying to encourage greater
participation, which is a good thing. But has the gap been made
up?
Secretary Mnuchin. I think in most cases, it has. But I
would also just emphasize, it is not just the contributions of
money. It is the policies. So the United States is the most
advanced on clean energy. I think as you look at, you know,
what we are doing on tax credits for carbon recapture and other
ideas, I mean, technology is moving quickly. And we are looking
at technology for efficient and clean energy.
The Chairwoman. Thank you. Mr. Rogers.
Mr. Rogers. Mr. Secretary, let me ask you briefly about the
economic impact. Obviously, we are experiencing some heavy
interference in the normal business activities because of the
virus. Should we be getting more help from international
financial institutions like the World Bank, and should we not
expect more out of them?
Secretary Mnuchin. Well, let me just comment that, again, I
think, as you look at, there is no question that as a result of
the virus, in many parts of industry, the economic actions are
actually well in advance of what might be the health issues at
this time. And there is no question as it relates to both
domestic and international travel, it is down considerably.
On an international basis, both the IMF and World Bank have
committed significant resources. The IMF has made a commitment
to $50 billion of loans, and again, let me just say these are
loans, not grants. So we are pleased with that.
And the World Bank has announced about $12 billion, I
think, which is split with about $6 billion of loans and $6
billion of grants. So I think it is important both these
institutions, we have had conversations with the leadership,
both bilaterally again, as well as the leadership calls that
they have hosted. So we are working with them closely.
Mr. Rogers. What could you tell us about measures currently
under consideration to stabilize the global economy, both at
home and abroad? What do you need from us in that vein?
Secretary Mnuchin. Well, I think, as you know, the
President's major concern is focusing on the U.S. economy. So
we do want to make sure we coordinate on an international
basis, but our first concern is protecting the U.S. economy.
The immediate issue, and we are working with the Speaker
and Leader McConnell, and we urge Congress to pass legislation
quickly. The first priority is funding that will go for small
and medium-sized businesses that are directly impacted by this.
There are a large number of workers that are going to be
required to self-quarantine or be at home to take care of
family members who are self-quarantined. For small and medium-
sized businesses, we think it is appropriate for the Government
to pick up those costs. This is a little bit like a hurricane,
and we need to cover these outside of normal expenses.
We are also looking to increase SBA lending dramatically.
We have a current program. We need more authorization for that
program. We are also looking, and this we can do on an
administrative basis, we don't need Congress, but we are
looking at providing substantial relief to certain taxpayers
and small businesses who will be able to get extensions on
their taxes. And we think we can provide over $200 billion of
liquidity into the economy by delaying certain tax payments.
But we urge Congress to act quickly. The President very
much wants to consider a stimulus bill, whether it is through a
payroll tax or otherwise. We realize that may not get done this
week. So we want to get done what we can do this week, and we
will come back.
I will also say there may be specific industries. And I
want to be clear, this is not bailouts. We are not looking for
bailouts. But there may be specific industries that are highly
impacted by travel that have issues with lending, and just like
after September 11th, the Government authorized certain loan
guarantees, we may consider that.
And I would just say the loan guarantees are a very
effective way of making sure that the Government is paid back
without putting the Government at risk.
Mr. Rogers. I would assume that would include the airlines?
Secretary Mnuchin. I would assume the airlines would be on
the top of the list, but it would be--again, it may include
other areas, such as hotels, cruise lines, and others. And
again, this is something we will be working with industry and
coming back to Congress.
But the President feels very strongly that we need to
protect industry, not bailout, but provide relief to small and
medium-sized business. And whatever powers we need to make sure
our airlines and our travel industry can get through this, we
will.
Mr. Rogers. This question is going to refer not necessarily
to the monetary end, but the health side. We are being told
that large gatherings are not to be attended to avoid passing
of germs. We have got the National Basketball Association NCAA
tournament coming up with huge gatherings of fans all across
the country.
Do you anticipate that there would be a move to prevent the
public from going to those ballgames?
Secretary Mnuchin. Well, let me comment first. I have
enormous confidence in our professional health professionals.
This is an area that I haven't previously spent anything like
this period of time. I am immersed on this in the committee.
And whether it is the people at CDC, whether it is the people
at NIH, whether the people at HHS, we have enormous expertise.
This group is advising the task force and the Vice
President daily. This group is coming out with guidance to the
States. I would say in general, most of these decisions will be
decisions of the Governors on a State-by-State basis. But we
are--we will be updating the guidance. We are meeting,
actually, with the President today to give the President an
update on guidance.
I am not going to answer your specific question, but I can
tell you those are the types of things that the task force is
reviewing. And again, I would say it is mostly--it is most
likely going to be State-by-State recommendations. So this is
not a ``one size fits all'' approach necessarily.
Mr. Rogers. Well, of course, these national associations
that we are talking about, our national programs like
basketball, NCAA, is not subject to local control. Governors
don't control the NCAA. Only national associations that I am
talking about.
Do you anticipate that those national associations would
come to some agreement to restrict the attendance of the public
at these large sports events, for example?
Secretary Mnuchin. I am not trying to deflect your
question. We are addressing these types of issues, and the task
force will be making recommendations. As you have said, in
certain cases, these will be Governor decisions. In certain
cases, they may be Federal decisions. In certain cases, they
are private decisions.
So I can tell you private companies, as I have said, have
already reacted to pretty much canceling all large events. I
can tell you I saw on the news yesterday Coachella in
California is postponed until October. So, again, I don't want
to give you an answer to a specific event, but I can tell you
these issues are being addressed, and recommendations will be
made by the task force.
Mr. Rogers. Mr. Secretary, we appreciate your work. This is
tough stuff you are going through. And none of us, especially
you and the administration, have ever been through this before.
So this is we are in a new field here.
But thank you for your service, and thank you for staying
with it.
Secretary Mnuchin. And again, thank you for saying that.
And I want to acknowledge these are difficult issues, but I
also want to just put this in perspective, as I have said
before.
Both on the economic side, when there was a financial
crisis, people were concerned that was going to go on for
years. This will not go on for years. I am highly confident,
listening to the medical professionals, that the medical
approaches will develop quickly in being able to address these
that, again, this is something we need to deal with for a
period of time.
And again, I want to just emphasize for children, this is
less harmful than the flu. For most young or middle-aged
Americans, this will be similar to the flu. And that there are
parts of our population that we are particularly focused on
that are the elderly, particularly with other issues, that are
having more impactful.
But I want to emphasize to the committee and to the
American public we will get through this.
Mr. Rogers. Thank you.
The Chairwoman. Thank you again. Ms. Lee.
Ms. Lee. Thank you, Mr. Secretary. Good to see you.
I would like to ask you a bit about Sudan. I visited Sudan
a couple of months ago with Congresswoman Bass and a bipartisan
delegation, and we were cautiously optimistic about the
progress of the new government.
I have to ask you these questions because Secretary Pompeo
won't come, and I know some of this jurisdiction is probably
within State, but I know you do have some jurisdiction with
regard to terrorist financing and what have you.
First of all, Sudan is on the list of state sponsors of
terrorism. We were looking at should we de-schedule or not, and
we have introduced legislation asking to expedite this review
process. One of the issues we learned when we were there was
that it is very difficult to identify any terrorist financing
because of sanctions and because of multilateral sanctions and
also because other countries are caught up in the United
States, of course, sanctions as it relates to, or as a result
of, state sponsors of terrorism.
And so, again, I understand the State Department is
responsible for delisting or de-scheduling if, in fact, that is
going to happen. But I would like to get your take on the
sanctions, the multilateral sanctions and the issue of
terrorist financing because I know that someone, that Mr.
Marshall Billingslea was in Sudan this past weekend looking at
this.
And so how does all of this work with other countries and
other multilateral organizations because of what the United
States has not moved forward yet on?
Secretary Mnuchin. Well, on sanctions broadly, we
coordinate very, very closely with the State Department.
Certain of the sanctions authorities are managed by the State
Department in consultation with us, and certain are the other
way around. But I assure you, we are very much coordinated.
Secretary Pompeo and I have specifically talked about these
sanctions.
I will also tell you I have spent an incredibly large
amount of time with both the Foreign Minister of Sudan and the
Water Minister of Sudan because you may have seen in the press
at the President's request, I have been helping to negotiate an
agreement between Egypt, Ethiopia, and Sudan on their dam. And
I feel that, first of all, let me just say I think the
government in Sudan is absolutely making the right improvements
and working in the right direction. We like what they are
doing.
I would also say if we can reach an agreement on this dam,
it will bring tremendous economic benefits to Sudan. The
creation of electricity, as you know, there are many people in
Sudan that do not have access to electricity. It will also
bring important economic help to the region.
So I can't comment specifically on this, but I can tell you
we are in direct discussions with the State Department on the
sanctions.
Ms. Lee. Sure. But what I wanted to drill down a bit on is
in terms of terrorist financing, that is within your
jurisdiction, right?
Secretary Mnuchin. Yes.
Ms. Lee. And so I know that this is an impediment, having
Sudan on the state sponsors of terrorism. How does that work
with regard to our assessment of whether or not terrorist
financing is taking place, as well as other countries and other
multilateral institutions who, as a result of what we are
doing, they have a problem also?
Secretary Mnuchin. So we have given very direct input, both
us and the State Department, to Sudan, what they need to be
doing. As you said, Marshall, who works for me, was there this
week. So we have had very direct discussions. In this
environment, obviously, in an open environment, I cannot go
through the specifics with you. But we are in very direct
conversations with the government there.
Ms. Lee. OK. Then I would like to follow up with you
because I think, based on what we learned and what we saw, we
have a very short window to move forward in terms of supporting
the new government of Sudan or we will see some backwards turns
in terms of where they are heading.
On Iran, let me ask you about the maximum pressure campaign
and the drastic implications it has on the Iranian people now
in terms of just financing humanitarian imports, given that
Iran has one of the highest numbers, actually, outside of China
is one of the epicenters for the COVID-19 virus.
And so, yes, much of the blame is on the Iranian
government. But reports indicate that sanctions really may
inhibit now the importation of test kits and medical equipment
and medical devices. So can you kind of let me know what is
taking place in terms of direct assistance maybe to Iran
through a third country, or what is the status of this, given
the state of the emergency?
Secretary Mnuchin. Sure, thank you. That is a very good
question.
So our sanctions programs have always allowed for
exceptions for humanitarian aid and medicine, and our--we have
always made very clear our issues are not with the people of
Iran. We want to make sure that they have access to that.
Even before the virus, we started working on what we call
the humanitarian channel with the Swiss. Last year, we were
able to do the first transaction through that. And what that
means is that countries or entities that want to provide
humanitarian aid, in essence, if you go through this channel,
OFAC will, in essence, provide a green light for that
transaction. It is a heightened due diligence transaction.
And we did that even before the virus because we wanted to
make very clear our issue is not with the people of Iran. I can
tell you I have made very clear at the G-7 and the G-20, again
that that channel is open, that people that want to,
particularly as a result of the virus, contribute to Iran, we
support the people of Iran. Our issue is with the government of
Iran, and they are using the people's resources on nuclear
development.
Ms. Lee. OK. If we have a second go-around, I have another
question that I would like to ask you later.
Thank you, Madam Chair.
The Chairwoman. Thank you. And following up on your
question, the fact that last week the Treasury Department
decided to exempt humanitarian trade involving the Central Bank
of Iran from economic sanctions in light of the coronavirus.
How is Treasury planning to ensure that the Central Bank of
Iran uses this humanitarian exception appropriately?
Secretary Mnuchin. We would be happy to follow up with your
office because it is a long and technical answer. But the
answer is we have put through on this Swiss channel what we
call ``heightened due diligence.'' So it allows OFAC to have
complete visibility to where the money is coming from, where
the money is going to, and for us to make sure it is not
diverted for illicit activity and things that should be
sanctioned.
But we would be happy to follow up on a technical basis and
explain that to your staff.
The Chairwoman. Thank you. That would be very helpful.
Oh, Ms. Meng, I think you are next.
Ms. Meng. Thank you, Madam Chair. Thank you, Mr. Ranking
Member. And thank you, Secretary, for being here today and for
your leadership during this difficult time.
I wanted to ask about a letter I wrote to you in December,
expressing concern about an American Muslim woman from New York
City who used her Venmo account to pay for a meal at a
Bangladeshi restaurant named al-Aqsa restaurant. She was soon
contacted by Venmo to ask for a full explanation of her
transaction.
And what we have been hearing is that this is part of a
larger trend in which banks have closed, often without
justification, credit and bank accounts of customers perceived
as Muslim. And for an American Muslim or anyone to learn that
their account, including identifying personal and financial
information, has been flagged to OFAC based on simple search
terms that implicate them in terrorist activities is
unsettling.
According to your office's response--and thank you for the
response--OFAC encourages companies to use the specially
designated national and blocked persons list to employ a risk-
based approach to sanctions compliance but does not mandate or
require any specific screening regime or stipulate specific
terms for our financial institutions to use.
So my question is when a Venmo or a PayPal account is
flagged for the inadvertent use of a term that is on that SDN
list, what personal information from that account, if any, does
OFAC retain, and is that information used for any other
purpose?
Secretary Mnuchin. I actually do read the letters that you
all send to me. So I want you to know that. I don't always
remember every single letter, but I actually do remember your
letter. My team just handed it to me, but I don't need to look
at it because it was one of those letters that was very
specific. And I do remember I inquired with our team about and
saw our response.
I don't know the exact answer to what you are describing
because it is highly technical, but I will ask my team to
follow up. But I was assured when I reviewed this that this was
not as a result of something that OFAC was doing.
Ms. Meng. OK, sure. I would love to follow up because I
think people are just very nervous. This was in this case a
young girl, woman who was just going out to eat at a restaurant
with her local friends and was just trying to Venmo the money
back to her friend to repay.
And well, can I ask, will OFAC work with companies like
Venmo to ensure that they are using smarter technology to
contextualize transaction descriptions that might overlap these
types of terms in order to avoid infringing on the privacy of
users who are clearly not supporting terrorist organizations?
Secretary Mnuchin. Let me just emphasize it is unfortunate
of this specific situation, and when I looked into this, I
wanted to make sure. OFAC puts out guidelines, and I don't
think anything in the OFAC guidelines is what caused this. We
put out guidelines how people administer the BSA and the
sanctions list.
Obviously, we encourage companies to have different
approaches. So I am not sure it is OFAC's job to go out and fix
every single company's issues, but I assure you there is
nothing in OFAC's guidelines on that we think would encourage
this type of behavior. And as I said, we will follow up with
you more on the specifics.
Ms. Meng. Thank you. I appreciate that.
My other question is coronavirus related. I know that you
have been named as a member of the President's coronavirus task
force. I wanted to ask about comments. Last week, Lea
Gabrielle, the coordinator of the Global Engagement Center,
warned that Russia is coordinating millions of online false
personas that seek to spread misinformation about the virus.
What is the task force doing to combat this and to ensure that
accurate information about this pandemic is the prevailing
online narrative?
I am concerned that the President's comments, which have
gone against CDC guidance that coronavirus isn't really
dangerous, that people with minimal symptoms should continue to
go to work, that those comments would feed into this Russian
propaganda threat.
Secretary Mnuchin. I don't think that the President's
comments are inconsistent with the guidance. What I would say
is that this situation is evolving very, very quickly, and
the----
Ms. Meng. Sorry, Secretary. He has made comments that
people with coronavirus could and should continue to go to work
and that the coronavirus isn't really dangerous.
Secretary Mnuchin. I don't believe he said that people with
the coronavirus should go to work. I think what he said was
that for most people, OK, that they can go about their
business, that the coronavirus, OK, that the risk for most
people getting it is very low. And if someone gets it, it is
very low. That is still true.
Having said that, our guidance is now more specific. There
are areas of the country where the guidance has changed. And
again, this guidance has been reviewed with the President, and
he agrees with that. It is now much more specific.
And as it relates to the first part of your question, I am
not familiar with that, but I don't consider that to be the
task force responsibility, but I can assure you the intel
community looks at those types of things. Again, I am not
familiar with it and can't opine on it. But what you are
referring to sounds more like an intel community issue than a
task force issue.
Ms. Meng. My time is up. Thank you. I yield back.
The Chairwoman. Ms. Frankel?
Ms. Frankel. Good morning. Thank you, Madam Chair.
Thank you, sir, for being here.
I want to pick up on some of the coronavirus questions. So
what industries do you expect are going to be hardest hit?
Secretary Mnuchin. I think at this point, it is clear that
the travel industry in particular is going to be the hardest
hit. That what we are seeing is similar to after 9/11, there is
a big impact on airline travel. Unlike a recession where
airlines lower the price of tickets and more people fly, this
obviously, we just have a complete decrease in volume.
So as I said earlier, there may be needs to come back to
Congress like we did after September 11. And again, I don't
want to--this is not a bailout. This is considering providing
certain things for certain industries.
So I would say, you know, airlines, hotels, cruise lines I
believe are the areas that are impacted. But again, our focus
is also on small and medium-sized businesses that are
particularly associated with these industries.
There are many industries that will go on fine. Many
industries can telecommute very easily. Many areas of the
country still don't have cases or have very few cases. So,
again, this is something we are going to have to look at very
specifically.
Ms. Frankel. I am sorry, Madam Chair, if I am repeating
some questions that were asked. But what are some of the ideas
that you are circulating in terms to help these industries?
Secretary Mnuchin. Right now, our focus--and again, I would
kind of say this is the first and second inning. Right now, we
are working with Congress on making sure that we can reimburse
workers who have to be home on sick leave, OK? For many times,
they are quarantined for 2 weeks. They may or may not even be
sick. They may have been in contact with someone who is sick--
--
Ms. Frankel. So, excuse me, just to reclaim. So that would
be something like paid family leave? I am assuming that is
something I know I have heard the President mention. Is that
something that is on your list of----
Secretary Mnuchin. It is, and I have spoken to the
President and the Speaker and others about that, and that is
what is being worked on immediately.
Ms. Frankel. And what would be the form of the payment in
the plan that you are working on? Where would the money come
from?
Secretary Mnuchin. Well, the money would come from the
Federal Government. We are actively looking at how we disburse
it. There are alternative mechanisms that we are exploring on
how we can most effectively disburse. But this would be the
Federal Government reimbursing companies so that they could pay
the workers, and whether the money goes direct to the workers
or the money goes to those companies to the workers, we are
figuring out the most efficient way----
Ms. Frankel. Well, let us just make sure that--first of
all, I think this is a good thing to be looking at paid family
leave. I just want to make sure that the workers actually get
it. Which gets me to the next--there had been some talk about a
payroll tax cut, and I have a question relative to that because
I think would--this sounds sort of----
Well, let me just ask the question. A payroll tax cut could
actually encourage someone who was sick to come to work?
Secretary Mnuchin. No, I don't see that as the case at all.
Ms. Frankel. Let me ask you that question a different way
because I want to be fair here. What do you think a payroll tax
cut would do in this environment?
Secretary Mnuchin. There are two ways of dealing with the
issue. One is dealing with very specific issues, as I have just
said. A person is in home quarantine, they are not even sick.
They are in home quarantine because they randomly came in
contact with someone.
They work for a small business. They don't get covered. We
think those people should be covered. That is very direct. So
there are----
Ms. Frankel. Be covered by what?
Secretary Mnuchin. They should--the Federal Government
should make sure those people get paid for those 2 weeks.
Ms. Frankel. So that is--OK.
Secretary Mnuchin. So there are some very specific things.
Ms. Frankel. I could agree with that.
Secretary Mnuchin. OK. As it relates to there are other
issues where the entire economy is slowing down, again only
because not because of a specific issue that anybody is sick.
Because every company in the U.S. right now is stopping travel,
stopping meetings, and everything else. That has impacts on
restaurants, hotels, everything.
Ms. Frankel. I understand that, but just get to the payroll
tax cut. How would that help?
Secretary Mnuchin. The payroll tax cut, the payroll tax cut
is a stimulus mechanism of putting money into the economy.
Ms. Frankel. But is that why--oh, I am sorry to interrupt
you. That is why putting--that puts money into the individual
worker's pocket. Is that correct?
Secretary Mnuchin. That is correct.
Ms. Frankel. OK. So I am just putting this out there. I am
going to ask you this question. Do you have to come to work or
not? Do you have to come to work to earn the money for the
payroll tax cut, or are you thinking of a scheme where you were
going to get that money regardless of whether you come to work?
Secretary Mnuchin. Well, I don't like the word ``scheme''--
program.
Ms. Frankel. Program, program. Program, program.
Secretary Mnuchin. Again, let me just say there are two
different things, and I want to emphasize this, and it is an
important issue to understand.
Ms. Frankel. Yes, OK.
Secretary Mnuchin. I want to emphasize this.
Ms. Frankel. Thank you.
Secretary Mnuchin. One is there are people who we are
encouraging not to come to work, OK, because based upon State
guidance and CDC guidance those people should be in self-
quarantine. We don't want to penalize those people from not
getting paid if their company is not covering it.
Ms. Frankel. Right.
Secretary Mnuchin. JP Morgan and the big banks are covering
it. We don't need to reimburse them.
Ms. Frankel. So you want to give them some money back, and
I am sorry to keep----
Secretary Mnuchin. I want to make sure that those hard-
working Americans get paid for the 2 weeks----
Ms. Frankel. And how will that happen? What are the ideas
for that?
Secretary Mnuchin. I have just said to you there are two
ways of distributing the money. One is directly to that person
in the form of a debit card or a direct deposit.
Ms. Frankel. Got it.
Secretary Mnuchin. The other is making sure that the
companies continue to make those payments and that the company
will be reimbursed. The only difference is we are just trying
to figure out very quickly mechanically how we can do it. It is
not a philosophical question.
Ms. Frankel. OK, but that is not a payroll tax cut.
Secretary Mnuchin. That is not. The payroll tax cut has
nothing to do with whether you are home sick. The payroll tax
cut is money--it is an efficient way of getting money to all
the hard-working Americans.
Ms. Frankel. But you have to come to work to earn that
money. Correct?
Secretary Mnuchin. Let me be clear, OK? If you are home
because you are in a sick situation, you would get that money
as well. That money would go--that money goes to everybody
across the board to stimulate the economy. So it doesn't in any
way encourage you you have to work or you don't have to work.
It is completely independent.
Ms. Frankel. All right. Yes, I think I have used up my
time.
Thank you, Madam Chair. I yield back.
The Chairwoman. Mrs. Torres?
Mrs. Torres. Thank you, Chairwoman.
And thank you for being here with us once again.
I want to continue on a little bit just because I think it
is really important. Constituents that I represent don't get to
have an audience with you. So that is my job to do. China shut
down a lot of its shipments into the Port of L.A. and Long
Beach. My constituents work when shipments are coming in or
leaving to those locations.
So let us just take Amazon as an example. There are
employees that work directly for Amazon. I assume those
employees will be taken care of. But there are contractors that
do data entry for Amazon whose contracts have already been
canceled. Many of them are independent folks. Gig workers such
as Uber drivers are already being impacted because, as you have
stated, there are cancellations of conferences and different
things.
As an example, coming here on Sunday night from Dulles to
DC, my Uber driver worked 12 hours on Saturday night, and he
earned $60. So this is not someone who is just sitting at home,
waiting to be called back to be returned to work. It is simply
there is no work out there for them.
I want you to think about it from the perspective of when
the bottom fell out of the housing market. We want to make sure
that we are protecting people that need to pay rent, that need
to pay their mortgage, and I want to applaud the effort that
you have talked about to temporarily halt payments to the IRS
that are due April 15. That is a good step in the right
direction.
But I want to make sure that while we are looking to--and I
know you don't want to use ``bailout.'' But while we are
looking to assist the airline industry and major cruise
airlines, I am not going to vote for a bill that comes before
me that does not include the poor working people that I
represent or the people that I come across every single day. I
just want to make sure that you understand that. That is going
to be what I am looking at very, very closely.
Secretary Mnuchin. I appreciate that, and let me just
emphasize that is also the President's No. 1 concern.
Mrs. Torres. Thank you.
Secretary Mnuchin. So, as I said, I want to emphasize it is
critical that Congress act quickly. This isn't going to be the
first time--I mean, this isn't going to be the last time we do
this. So we want to get something done quickly, but I can
assure you we are going to be back one, two, three, four times.
The hard-working people, small and medium-sized independent
people that are directly impacted by this, OK, that is where we
need to provide economic support. And the President and I agree
with you 100 percent.
Mrs. Torres. I also----
Secretary Mnuchin. I have addressed people who may be home
because they are sick. There are also areas, as you said, where
kind of having no fault of theirs, because travel has shut
down, all of these other people that work around these
industries will need to be helped.
Mrs. Torres. It is also my job to ensure that you are
addressing public corruption in the Northern Triangle, and so I
want to discuss OTA, what OTA has done in Central America.
Migrants continue to come north. The government in Honduras is
maxed out on corruption. I don't know that there has been an
envelope that hasn't been given to the president that he has
not accepted in cash payment.
So in your 2019 project report, we saw that OTA engaged
with Guatemala and Honduras, but not on issues of economic
crime. Whereas, OTA worked with other countries on money
laundering and anti-corruption measures. Is OTA really
interested in dealing with the root causes of migration in
Central America?
Secretary Mnuchin. I think they are, and I think OTA
provides very important resources, and we appreciate the
committee funding it. And as to the specifics of what you are
talking about, we are happy to follow up with your office.
Mrs. Torres. You are asking for an increase, $33 million in
fiscal year 2021. So what kinds of programs does OTA plan to
use that funding for, and would OTA look into using this
funding to increase the work within the Northern Triangle,
including Panama?
We talked about a lot of letters that come to your desk. I
wrote a letter in November of 2017. The NGO Global Witness
alleged that there was drug trafficking and money laundering
that occurred that might have involved the Trump Ocean Club
Panama. I still haven't heard anything on that.
So I want to make sure that we are focused. If you are
asking for an increase, that that increase is going to be to
deal with crimes of public corruption and drug trafficking as
it relates to money laundering.
Secretary Mnuchin. I agree, and we will follow up with you.
Mrs. Torres. Thank you. I yield back.
The Chairwoman. My friends, I think we will do another
round, although, Mr. Rogers, you are sitting there lonely. I
will ask a question, then I will turn it over to you.
One of my favorite issues not because they are so
successful, but I keep trying to get information and hope they
will be successful, and that is the Office of Technical
Assistance. The Office of Technical Assistance often sends
technical advisers to work beside officials in host countries
for an extended length of time in order to help improve their
capacity to manage public finances.
I would be interested to know if there are partnerships
that have worked according to your standard. Are they achieving
the intended objectives? How does this support help keep
countries from falling into debt traps? And how does it decide
where to engage?
For example, your office, this office I believe was
involved in Afghanistan when Ashraf Ghani took control. Many of
us had great hopes for Ashraf Ghani because of his prior work
experience. Just as an example, if you could discuss that or
any other area where perhaps you can share some successes of
this office?
Secretary Mnuchin. Well, I----
The Chairwoman. I see you are smiling.
Secretary Mnuchin. I am smiling because Afghanistan is
obviously a complicated situation an----
The Chairwoman. You can use other examples of this office.
Secretary Mnuchin. I am sorry. This office is OTA, or this
was the----
The Chairwoman. It is the Office of Technical Assistance.
Secretary Mnuchin. Yes. So I think there is really in many
places, let me just check. I think, again, we had a question
earlier on the Northern Triangle, but El Salvador, Guatemala,
Honduras. I know there are countries in Africa. I know there
is--really, this has been a project where I really think it has
been successful all over the world.
And the real issue for us is it is only $33 million, and we
have to figure out how we limit our resources because I
constantly have countries who ask us for technical assistance.
So whether it is around raising revenues or other issues, this
is--you know, we have asked for a small increase, but this is
something that we think is well paid for.
The Chairwoman. I would appreciate it. To me, this is one
of the most important functions, and I would appreciate
following up with you. If there are examples of success, how
did it work? What happened?
Northern Triangle was another story. This committee was
pretty outraged. The Government--our Government just held up
the money for 6 months.
Secretary Mnuchin. I understand.
The Chairwoman. We never sent the money over there. I don't
know if you had anything to do with it, but if you did I would
love for you to have the opportunity to tell me about it.
Secretary Mnuchin. I had no involvement in it. And let me
just make--I think I made a comment earlier, and somebody in
the room must have picked up. I was referring to our No. 1
economic priority was on small and medium-sized businesses.
Someone interpreted that I think incorrectly in the room back
there. Our No. 1 priority is obviously protecting health and
human life. I was only referring to the economic issues.
The Chairwoman. But in any event, I would like to follow up
on OTA, and I think it would be helpful for us--oh, my
goodness, isn't that good? So your staff is giving you some
additional information.
Secretary Mnuchin. What we are going to do is I will send
you a report that you can distribute to the committee that has
a full analysis over the last year, these are the countries we
have provided assistance, and this is what we have done. So
there is complete transparency, and the committee can
understand that.
The Chairwoman. And in fact, it doesn't have a huge amount
of funds. But these services, in my judgment, have been
desperately needed in so many parts of the world. And it would
be very good if, in fact, you can give us examples of success
and where we can use these principles----
Secretary Mnuchin. We will absolutely do that. And you
know, I am known as a micromanager, but this is something that
is actually even below my radar. So we will provide you the
report.
The Chairwoman. I am known as a micromanager, too. But I
really don't know of examples of success there. So I thank you.
Mr. Rogers?
Mr. Rogers. Thank you, Madam Chair.
Mr. Secretary, as you know, China's Belt and Road
Initiative has both undermined U.S. influence and brought with
it a wide range of problems associated with corruption and debt
burdens. Many have focused on the new U.S. International
Development Finance Corporation as the principal means by which
the U.S. can counter China's lending model.
While the DFC is an important tool, we need everyone
working toward this effort in a concerted way. In this regard,
how can Treasury help shape the rules of the road and bring
greater transparency to China's opaque practices abroad?
Secretary Mnuchin. As you mentioned, the U.S. Development
Finance Corp, it is one of our tools. But that is just one of
our tools. And we are very focused, both at the IMF and the
World Bank, on debt transparency. We think this is critically
important. And in certain programs, we have required in these
institutions for the countries to get the programs renewed that
we had complete debt transparency as related to loans with Belt
and Road in China.
And I want to be perfectly clear. We are not using and we
are not ever going to be using money from these international
organizations to pay back China.
Mr. Rogers. How do you see the role of the World Bank and
the Asian Development Bank countering the China model in the
Indo-Pacific region?
Secretary Mnuchin. Well, I think the World Bank in
particular is incredibly important, and this has been a great
institution, post war institution. The U.S. has shown great
leadership. We are very pleased that David Malpass, who used to
work for me at Treasury, is now leading the organization. He
has been moving forward many reforms, and we think that it is a
great source of funds to countries that need it.
Mr. Rogers. Switching subjects, Mr. Secretary, last year as
we hosted the eighth annual national Rx Drug Abuse and Heroin
Summit in Atlanta, at which the President and First Lady
attended--and by the way, the ninth edition of that summit is
coming up in early April, becoming now the premier place for
the discussion of opioid research.
I know combatting the flow of fentanyl and other opioids
into the U.S. has been a top priority of this administration,
and we thank you for that. I am cautiously optimistic that we
are making some progress with China on fentanyl and other
opioid issues, and I hope you agree.
I know that Treasury's Office of Foreign Assets Control has
used the Foreign Narcotics Kingpin Act to target the assets of
Chinese fentanyl traffickers. What can you tell us about this
effort and the efforts of the men and women working on issues
of terrorism and financial intelligence to help break these
trafficking networks?
Secretary Mnuchin. Thank you.
I think this is an issue that is very important to the
President, as you know. China has made significant progress.
That is the result of at one of our summits, President Trump
specifically asked President Xi to change the laws, which he
agreed to do and has been working with us.
Notwithstanding that, there are times where there are
things going on that they even can't control, and OFAC will use
its tools, as you have identified, to do whatever we can to
stop illicit activities.
Mr. Rogers. Well, the experts tell us that within the world
of opioids and look-alikes that fentanyl is by far the most
deadly and the one most difficult to stop. So I appreciate the
work that you are doing and the administration in fighting this
fight. It is way from over.
We need to keep more pressure on the Chinese because that
is where all of the fentanyl is coming from. It is not just a
piece of the world. It is the world of fentanyl. And we ask you
to keep up the good work.
Madam Chair, I yield back.
Thank you, sir.
The Chairwoman. Ms. Lee?
Ms. Lee. Thank you very much.
OK. Mr. Secretary, let me ask you a couple of questions.
One is you are on the interagency task force, right, as it
relates to COVID-19?
Secretary Mnuchin. Yes, the White House task force.
Ms. Lee. Yes, OK, White House task force. Excuse me. I
asked Dr. Redfield yesterday about this. Every committee
hearing I am attending I am asking, so I can wrap my hands
around what is going on as it relates to hand sanitizers. And
Dr. Redfield said yesterday it was the White House task force
that was looking at this or responsible for it. CDC did not
know the lack of availability.
First of all, when you look at the directives from CDC and
our health agencies, the directives are in terms of prevention
of the transmission or contracting the virus is washing one's
hands at least 20 times. But secondly, if that is not
available, and a lot of places don't have clean water, use the
hand sanitizers.
Well, first of all, if you can't find the hand sanitizers.
And you know, I have been in 3 cities in the last 7 days. None,
there are no hand sanitizers available. What does one do?
I started looking and doing some research and found that
now people are making their own, using alcohol and aloe vera. I
guess sooner or later, alcohol will not be available.
What is the task force doing in terms of the supply chain
and the directives for people in terms of the public health
directives are useless if, in fact, you can't find hand
sanitizers. And Dr. Redfield said the task force is responsible
for this.
Secretary Mnuchin. First of all, let me say thank you for
raising the topic. I think on the hand washing, I just want to
clarify, I am not 100 percent sure, but I think you are
supposed to wash your hands for 20 seconds.
Ms. Lee. I mean--what did I say, 20 minutes?
Secretary Mnuchin. Twenty times.
Ms. Lee. Twenty times. Twenty seconds, excuse me.
Secretary Mnuchin. I just wanted to, for everybody's
benefit, clarify that.
Ms. Lee. Twenty seconds.
Secretary Mnuchin. It may end up being you wash your hands
20 times a day as well.
Ms. Lee. Or more.
Secretary Mnuchin. Specifically, I will follow up on this.
The answer is we have the task force. There are then
subcommittees of the task force. I am sure somebody is looking
at this. I will follow up.
Ms. Lee. I hope so, but no one has been able to answer, and
I am getting ready to go to Ag, and I understand FDA now is the
authority.
Secretary Mnuchin. Well, we are having a committee meeting
this afternoon. I assure you I will address it.
Ms. Lee. You will do that, and would you let us know the
response right away because people are becoming very concerned
about this.
The second question I have is just going back to Iran and
secondary sanctions. If banks can't purchase humanitarian
supplies, medical supplies, how are what we are doing allowing
these supplies to be distributed in Iran, given the emergency?
So how do secondary sanctions weigh in with this?
Secretary Mnuchin. Both primary sanctions and secondary
sanctions, there are exemptions for humanitarian transactions.
So banks are able to participate. And again, these transactions
need to be properly vetted.
Ms. Lee. Sure.
Secretary Mnuchin. And the reason why we set up the Swiss
channel, but the answer is in this case of this channel,
obviously, banks are involved. And again, if you go through the
Swiss channel, effectively you get a Good Housekeeping seal of
approval, and the bank doesn't have risk for that transaction.
Ms. Lee. OK.
Secretary Mnuchin. So that is why we wanted to facilitate
that.
Ms. Lee. Thank you very much.
The Chairwoman. Secretary Mnuchin, I know how busy you are.
I want to thank you for your time. I want to thank you for
appearing before us.
And this concludes today's hearing.
Secretary Mnuchin. Thank you for letting me out early.
The Chairwoman. The Subcommittee on State, Foreign
Operations, and Related Programs stands adjourned.
Thank you so much for being here today.
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