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                                                       Calendar No. 879
110th Congress                                                   Report
                                 SENATE
 2d Session                                                     110-419

======================================================================



 
SOCIAL INVESTMENT AND ECONOMIC DEVELOPMENT FOR THE AMERICAS ACT OF 2007

                                _______
                                

                 July 15, 2008.--Ordered to be printed

          Mr. Biden, from the Committee on Foreign Relations,
                        submitted the following

                                 REPORT

                         [To accompany S. 2120]

    The Committee on Foreign Relations, having had under 
consideration the bill (S. 2120), to authorize the 
establishment of a Social Investment and Economic Development 
Fund for the Americas to provide assistance to reduce poverty, 
expand the middle class, and foster increased economic 
opportunity in the countries of the Western Hemisphere, and for 
other purposes, having considered the same, reports favorably 
thereon and recommends that the bill do pass.

                                CONTENTS

                                                                   Page

  I. Purpose..........................................................1
 II. Committee Action.................................................1
III. Discussion.......................................................2
 IV. Cost Estimate....................................................2
  V. Evaluation of Regulatory Impact..................................5
 VI. Changes in Existing Law..........................................5

                               I. PURPOSE

    The purpose of S. 2120 is to establish a Social Investment 
and Economic Development Fund for the Americas to provide 
assistance to reduce poverty, expand the middle class, and 
foster increased economic opportunity in the countries of the 
Western Hemisphere.

                          II. COMMITTEE ACTION

    S. 2120 was introduced by Senator Menendez on October 1, 
2007. It is cosponsored by Senators Biden, Cardin, Hagel, 
Coleman, Lugar, Bill Nelson, Salazar, Boxer, Clinton, Dodd, 
Kerry, Martinez, and Reid. On June 24, 2008, the committee 
considered the bill, and ordered it to be reported favorably, 
without amendment, by voice vote.

                            III. DISCUSSION

    The Social Investment and Economic Development for the 
Americas Act of 2007 directs the President, through the United 
States Agency for International Development (USAID), to provide 
assistance to reduce poverty, expand the middle class, and 
foster increased economic opportunity in Western Hemisphere 
countries. The Act also directs the Secretary of the Treasury 
to instruct the United States Executive Director at the Inter-
American Development Bank to use U.S. influence to urge the 
Bank to establish a fund which would be administered by the 
Bank to support microenterprise development, improve the 
investment climate by strengthening the rule of law, and 
increase workforce competitiveness. The legislation authorizes 
a total of 2.5 billion dollars over the next ten years for the 
activities described above. Such programs will assist 
developing nations in meeting the new criteria set for by the 
Millennium Challenge Corporation and will help support 
countries in a manner consistent with Secretary Rice's 
transformational development agenda by creating a partnership 
between the host government and the U.S. Government.
    The bill also establishes within U.S. Agency for 
International Development the Western Hemisphere Economic 
Investment and Development Advisory Committee. This committee 
will serve as a link among the U.S. government, nongovernmental 
organizations, the private sector, and other interested parties 
and review projects funded under this Act. Finally, the bill 
authorizes appropriations for payment to the Inter-American 
Development Bank of arrears owed by the United States to the 
Multilateral Investment Fund.

                           IV. COST ESTIMATE

    In accordance with Rule XXVI, paragraph 11(a) of the 
Standing Rules of the Senate, the committee provides this 
estimate of the costs of this legislation prepared by the 
Congressional Budget Office.


                            United States Congress,
                               Congressional Budget Office,
                                      Washington, DC, July 7, 2008.

Hon. Joseph R. Biden, Jr.,
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, DC.

    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2120, the Social 
Investment and Economic Development for the Americas Act of 
2007.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sunita 
D'Monte.
          Sincerely,
                                           Peter R. Orszag.

                                ------                                


               Congressional Budget Office Cost Estimate

                                                      July 7, 2008.

                                S. 2120


Social Investment and Economic Development for the Americas Act of 2007


  AS ORDERED REPORTED BY THE SENATE COMMITTEE ON FOREIGN RELATIONS ON 
                             JUNE 24, 2008

Summary

    S. 2120 would authorize the appropriation of almost $1.3 
billion over the 2009-2013 period and an additional $300 
million a year over the 2014-2017 period for assistance 
programs to reduce poverty, expand the middle class, and foster 
economic opportunity in countries of the Western Hemisphere. 
CBO estimates that implementing S. 2120 would cost $777 million 
over the 2009-2013 period, assuming appropriation of the 
authorized amounts. (Additional spending over the 2014-2018 
period would total $1.4 billion, CBO estimates.) Enacting S. 
2120 would have no effect on direct spending or revenues.
    S. 2120 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.

Estimated Cost to the Federal Government

    The estimated budgetary impact of S. 2120 is shown in the 
following table. The costs of this legislation fall within 
budget function 150 (international affairs).

                                  Changes in Spending Subject to Appropriation
                                     by fiscal year, in millions of dollars
----------------------------------------------------------------------------------------------------------------
                                        2009         2010         2011         2012         2013      2009-2013
----------------------------------------------------------------------------------------------------------------
Bilateral Development Assistance
    Authorization Level                     75          100          125          150          150          600
    Estimated Outlays                        8           40           72          100          124          344
----------------------------------------------------------------------------------------------------------------
Contributions to Inter-American
 Development Bank (IDB)
    Authorization Level                     75          100          125          150          150          600
    Estimated Outlays                       19           44           75          113          131          382
----------------------------------------------------------------------------------------------------------------
IDB Arrears
    Authorization Level                     51            0            0            0            0           51
    Estimated Outlays                       51            0            0            0            0           51
================================================================================================================
  Total Changes
    Authorization Level                    201          200          250          300          300        1,251
    Estimated Outlays                       78           84          147          213          255          777
----------------------------------------------------------------------------------------------------------------

Basis of Estimate

    For this estimate, CBO assumes that S. 2120 will be enacted 
near the start of fiscal year 2009, that the authorized amounts 
will be appropriated each year, and that outlays will follow 
historical spending patterns for existing programs. (S. 2120 
also would authorize the appropriation of $100 million in 2008 
for foreign assistance programs; however, those amounts are not 
included in this cost estimate because CBO assumes that no 
further appropriations will be provided in 2008 for such 
programs.)
            Bilateral Development Assistance
    Section 3 would authorize the appropriation of $600 million 
over the 2009-2013 period and an additional $600 million over 
the 2014-2017 period to operate and expand existing United 
States Agency for International Development (USAID) programs 
that promote education, disease prevention, housing quality and 
access, rural development, poverty reduction, law enforcement, 
and efficient judicial systems. The bill would require USAID to 
evaluate the impact of such programs and to make annual reports 
to the Congress. In addition, the bill would establish an 
advisory committee to consult with USAID and oversee the 
authorized programs. In total, CBO estimates that implementing 
those provisions would cost $344 million over the 2009-2013 
period, assuming appropriation of the authorized amounts.
            Contributions to Inter-American Development Bank (IDB)
    Section 4 would authorize the appropriation of $600 million 
over the 2009-2013 period and an additional $600 million over 
the 2014-2017 period for contributions to the IDB to establish 
a Social Investment and Economic Development Fund for the 
Americas. The fund, which also would be authorized to receive 
contributions from other countries and private entities, would 
provide assistance to reduce poverty, expand the middle class, 
and foster economic opportunity in countries of the Western 
Hemisphere. Assuming appropriation of the authorized amounts, 
CBO estimates that implementing this provision would cost $382 
million over the 2009-2013 period.
            IDB Arrears
    Section 6 would authorize the appropriation of $51 million 
as a payment to the IDB for arrears owed by the United States. 
Assuming appropriation of the authorized amounts, CBO estimates 
that implementing this provision would cost $51 million in 
2009.

Intergovernmental And Private-Sector Impact

    S. 2120 contains no intergovernmental or private-sector 
mandates as defined in UMRA and would not affect the budgets of 
state, local, or tribal governments.

Estimate Prepared By:

    Federal Costs: Sunita D'Monte
    Impact on State, Local, and Tribal Governments: Neil Hood
    Impact on the Private Sector: Jacob Kuipers

Estimate Approved By:

    Peter H. Fontaine, Assistant Director for Budget Analysis

                   V. EVALUATION OF REGULATORY IMPACT

    Pursuant to Rule XXVI, paragraph 11(b) of the Standing 
Rules of the Senate, the committee has determined that there is 
no regulatory impact as a result of this legislation.

                      VI. CHANGES IN EXISTING LAW

    In compliance with Rule XXVI, paragraph 12 of the Standing 
Rules of the Senate, changes in existing law made by the bill, 
as reported, are shown as follows (existing law proposed to be 
omitted is enclosed in black brackets, new matter is printed in 
italic, existing law in which no change is proposed is shown in 
roman).

                     Foreign Assistance Act of 1961


PART I

           *       *       *       *       *       *       *



CHAPTER 12.--SUPPORT FOR THE ECONOMIC AND POLITICAL INDEPENDENCE OF THE 
COUNTRIES OF THE SOUTH CAUCASUS AND CENTRAL ASIA

           *       *       *       *       *       *       *


    CHAPTER 13.--SOCIAL INVESTMENT AND ECONOMIC DEVELOPMENT FOR THE 
                                AMERICAS

SEC. 499H. AUTHORIZATION OF ASSISTANCE.

    (a) Assistance.--The President, acting through the 
Administrator of the United States Agency for International 
Development and working with foreign governments and civil 
society, shall provide increased and sustained assistance to 
reduce poverty, expand the middle class, and foster increased 
economic opportunity in the countries of the Western Hemisphere 
by helping to--
          (1) improve the quality of life and invest in human 
        capital, specifically by promoting education, improving 
        health and disease prevention, and increasing the 
        access to and quality of housing;
          (2) reduce crime, particularly violent crime, 
        including murder, kidnapping, gang violence, and 
        violence against women;
          (3) generate rural development and reduce poverty in 
        the agricultural and non-agricultural rural sector;
          (4) strengthen the rule of law, governance, and 
        democracy through the establishment of independent 
        judiciaries, efficient processes to adjudicate claims, 
        and trusted law enforcement bodies; and
          (5) reduce poverty and eliminate the exclusion of 
        marginalized populations, including indigenous groups, 
        people of African descent, women, rural and urban poor, 
        and people with disabilities.
  (b) Contribution Requirement.--To receive United States 
assistance under this chapter, a recipient country must 
contribute at least 10 percent of the total value of the funds 
the United States provides for projects in the recipient 
country. Such contribution is in addition to the funds such 
country regularly provides for these types of programs. 
Additional contributions may be required at the discretion of 
the Administrator of the United States Agency for International 
Development.
  (c) Ineligibility To Receive Assistance.--The President shall 
be prohibited from providing assistance under this section to 
the government of a country that is ineligible to receive 
assistance under section 620, this part, or chapter 4 of part 
II.
  (d) Terms and Conditions.--Assistance under this chapter may 
be provided on such other terms and conditions as the President 
may determine.
    (e) Coordination With Other Federal Agencies.--The 
Administrator of the United States Agency for International 
Development shall coordinate with the heads of other Federal 
departments and agencies as necessary to carry out subsection 
(a).

SEC. 499I. WESTERN HEMISPHERE ECONOMIC INVESTMENT AND DEVELOPMENT 
                    ADVISORY COMMITTEE.

    (a) In General.--There is established within the United 
States Agency for International Development an advisory 
committee to be known as the Western Hemisphere Economic 
Investment and Development Advisory Committee (hereafter in 
this chapter referred to as the ``Advisory Committee''). The 
Advisory Committee shall serve as a link among the United 
States Government, nongovernmental organizations, the private 
sector, and other interested parties and review projects funded 
under this Act.
    (b) Membership.--
          (1) In general.--The Advisory Committee shall be 
        composed of 6 members, of whom--
                  (A) 1 member, who shall act as co-
                chairperson, shall be appointed by the 
                President;
                  (B) 1 member, who shall act as co-
                chairperson, shall be appointed by--
                          (i) the majority leader of the 
                        Senate, in consultation with the senior 
                        member of the leadership of the House 
                        of Representatives belonging to the 
                        same political party as the majority 
                        leader of the Senate, if the majority 
                        leader of the Senate does not belong to 
                        the same political party as the 
                        President; or
                          (ii) the minority leader of the 
                        Senate, in consultation with the senior 
                        member of the leadership of the House 
                        of Representatives belonging to the 
                        same political party as the minority 
                        leader of the Senate, if the majority 
                        leader of the Senate belongs to the 
                        same political party as the President;
                  (C) 1 member shall be appointed by the 
                majority leader of the Senate;
                  (D) 1 member shall be appointed by the 
                minority leader of the Senate;
                  (E) 1 member shall be appointed by the 
                Speaker of the House of Representatives; and
                  (F) 1 member shall be appointed by the 
                minority leader of the House of 
                Representatives.
          (2) Qualifications.--Each member of the Advisory 
        Committee shall be--
                  (A) an individual with technical expertise 
                with respect to the development of Latin 
                America or the Caribbean; or
                  (B) a citizen of the United States with--
                          (i) regional experience related to 
                        development in Latin America or the 
                        Caribbean;
                          (ii) technical or functional 
                        experience with respect to development 
                        issues; or
                          (iii) extensive expertise in small 
                        business issues or international 
                        business experience in Latin America or 
                        the Caribbean.
    (c) Duties.--The Advisory Committee shall--
          (1) consult with, provide information to, and advise 
        the United States Agency for International Development 
        and other United States Government agencies, as 
        appropriate, on, and work closely with the United 
        States Agency for International Development Regional 
        Director, the Assistant Secretary for Western 
        Hemisphere Affairs of the Department of State, and the 
        United States Executive Director of the Inter-American 
        Development Bank on, matters related to this chapter;
          (2) meet at least twice annually and at other times 
        as necessary;
          (3) serve as a liaison with, and provide information 
        and counsel to, the private sector and nongovernmental 
        organizations in relation to the projects covered under 
        this chapter; and
          (4) review all impact evaluations on projects 
        proposed for funding using assistance provided under 
        section 499H(a) and make recommendations and submit a 
        written report to the Administrator of the United 
        States Agency for International Development with 
        respect to the effectiveness of the projects and future 
        changes to the program.
    (d) Conflicts of Interest.--A member of the Advisory 
Committee shall not be permitted to review an application 
submitted by an organization with which the member has been or 
is affiliated or in which the member has had a financial 
interest.
    (e) Staff and Travel.--Using funds appropriated pursuant to 
the authorization of appropriations under section 499L, the 
Advisory Committee may establish and maintain a staff of no 
more than 2 persons to provide administrative support and may 
maintain a budget for travel expenses.

SEC. 499J. EVALUATION.

    (a) In General.--The Administrator of the United States 
Agency for International Development shall ensure that projects 
carried out under this chapter are subject to rigorous, 
independent impact evaluations at the original design stage and 
conclusion of the projects to determine if they are helping to 
reduce poverty and foster social and economic development in 
the countries of the Western Hemisphere. When possible, such 
evaluations shall be conducted in coordination with evaluations 
of similar projects funded by other donors in order to expand 
the evidence base for decision-making.
    (b) Use of Evaluations.--The Advisory Committee shall use 
information from the evaluations conducted under subsection (a) 
to inform future project decisions.

SEC. 499K. REPORT.

    Not later than 1 year after the date of the enactment of 
the Social Investment and Economic Development for the Americas 
Act of 2007, and annually thereafter, the President shall 
prepare and submit to Congress a report on the specific 
programs, projects, and activities carried out under this 
chapter during the preceding year, including an evaluation of 
the results of such programs, projects, and activities. This 
report may be submitted with the budget justification materials 
submitted to Congress together with the budget of the President 
under section 1105(a) of title 31, United States Code.

SEC. 499L. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There are authorized to be appropriated to 
carry out this chapter, including for purposes of reducing 
poverty, expanding the middle class, and fostering increased 
economic opportunity in the countries of the Western 
Hemisphere, in addition to amounts of United States Foreign 
Assistance Funds (Function 150) otherwise authorized and 
appropriated and the $820,000,000 in bilateral development 
assistance provided by the United States, on average, to Latin 
America and the Caribbean each year, the following amounts:
          (1) $50,000,000 for fiscal year 2008.
          (2) $75,000,000 for fiscal year 2009.
          (3) $100,000,000 for fiscal year 2010.
          (4) $125,000,000 for fiscal year 2011.
          (5) $150,000,000 for fiscal year 2012.
          (6) $150,000,000 for fiscal year 2013.
          (7) $150,000,000 for fiscal year 2014.
          (8) $150,000,000 for fiscal year 2015.
          (9) $150,000,000 for fiscal year 2016.
          (10) $150,000,000 for fiscal year 2017.
    (b) Additional Authorities.--Amounts appropriated pursuant 
to subsection (a)--
          (1) are authorized to remain available until 
        expended;
          (2) are in addition to amounts otherwise available 
        for such purposes; and
          (3) may be used to fund staff and travel expenses of 
        the Advisory Committee.
    (c) Funding Limitation.--Not more than 7 percent of the 
amounts appropriated pursuant to subsection (a) for a fiscal 
year may be used for administrative expenses.

           *       *       *       *       *       *       *


The Inter-American Development Bank Act

           *       *       *       *       *       *       *



SEC. 38. FOCUS ON LOW-INCOME AREAS OF LATIN AMERICA ANDTHE CARIBBEAN.

           *       *       *       *       *       *       *


SEC. 39. SOCIAL INVESTMENT AND ECONOMIC DEVELOPMENT FUND FOR THE 
                    AMERICAS.

    (a) In General.--The Secretary of the Treasury shall 
instruct the United States Executive Director at the Bank to 
use the voice, vote, and influence of the United States to urge 
the Bank to establish an account to be known as the ``Social 
Investment and Economic Development Fund for the Americas'' (in 
this section referred to as the ``Fund''), which is to be 
operated and administered by the Board of Executive Directors 
of the Bank consistent with subsection (d). The United States 
Governor of the Bank may vote for a resolution transmitted by 
the Board of Executive Directors which provides for the 
establishment of such an account, and the operation and 
administration of the account consistent with subsection (d).
    (b) Other Contributions.--The Fund may accept funds from 
other member countries of the Bank, private entities in the 
United States and in other member countries of the Bank, and 
countries in Latin America and the Caribbean.
    (c) Matching Requirement.--No funds may be expended from 
the Fund until the total amount contributed by the United 
States in the first year of operation of the Fund has been 
matched.
    (d) Contribution Requirement.--To receive assistance under 
this section, a recipient country must contribute at least 10 
percent of the total value of the funds the Fund provides for 
projects in the recipient country. Such contribution is in 
addition to the funds such country regularly provides for these 
types of programs. Additional contributions may be required at 
the discretion of the Board of Governors of the Bank.
    (e) Use of Funds.--The Fund shall be used to provide 
assistance to reduce poverty, expand the size of the middle 
class, and foster increased economic opportunity in the 
countries of the Western Hemisphere by helping to--
          (1) nurture public private partnerships and 
        microenterprise development;
          (2) reduce the time and cost of starting a business 
        and increase access to credit for small-and medium-
        sized businesses;
          (3) leverage personal remittances and reduce the cost 
        of remittances sent to Latin America and the Caribbean, 
        for the purpose of advancing economic and social 
        development by--
                  (A) increasing access to financial 
                institutions for the poor, and working with 
                local financial institutions to reduce fees and 
                other costs associated with sending or 
                receiving remittances;
                  (B) working with local financial institutions 
                to develop programs whereby personal 
                remittances can be used as the basis for credit 
                for mortgages and loans for small business, 
                microenterprises, housing, and other 
                enterprises;
                  (C) providing matching funds for private 
                entities in the United States that send 
                donations for development projects in Latin 
                America and the Caribbean; and
                  (D) fostering enabling environments for 
                partnerships between civil society and local 
                authorities that lead to greater accountability 
                and improved processes for establishing 
                priorities for remittances, including income-
                generating and wealth-building activities;
          (4) in conjunction with changes implemented by 
        recipient countries, improve the investment climate in 
        individual countries by strengthening the rule of law 
        and implementing judicial reforms to increase 
        transparency and predictability in judicial, tax, and 
        regulatory systems;
          (5) increase workforce competitiveness in the global 
        economy, specifically by focusing on application of 
        technology and workforce training and development; and
          (6) reduce poverty and eliminate the exclusion of 
        marginalized populations, including indigenous groups, 
        people of African descent, women, rural and urban poor, 
        and people with disabilities.
    (f) Ineligibility To Receive Assistance.--The President 
shall be prohibited from providing assistance under this 
section to the government of a country that is ineligible to 
receive assistance under section 620, part I, or chapter 4 of 
part II of the Foreign Assistance Act of 1961 (22 U.S.C. 2151 
et seq.).
    (g) Terms and Conditions.--Assistance under this section 
may be provided on such other terms and conditions as the 
President may determine.
    (g) Authorization of Appropriations--
          (1) Contributions.--There are authorized to be 
        appropriated to the Secretary of the Treasury for 
        United States contributions to the Fund for the purpose 
        of carrying out this section the following amounts:
                  (A) $50,000,000 for fiscal year 2008.
                  (B) $75,000,000 for fiscal year 2009.
                  (C) $100,000,000 for fiscal year 2010.
                  (D) $125,000,000 for fiscal year 2011.
                  (E) $150,000,000 for fiscal year 2012.
                  (F) $150,000,000 for fiscal year 2013.
                  (G) $150,000,000 for fiscal year 2014.
                  (H) $150,000,000 for fiscal year 2015.
                  (I) $150,000,000 for fiscal year 2016.
                  (J) $150,000,000 for fiscal year 2017.
          (2) Additional authorities.--Amounts appropriated 
        pursuant to paragraph (1)--
                  (A) are authorized to remain available until 
                expended; and
                  (B) are in addition to amounts otherwise 
                available for such purposes.
          (3) funding limitation.--Not more than 7 percent of 
        the amounts appropriated pursuant to paragraph (1) for 
        a fiscal year may be used for administrative expenses.