Remarks on the FY2015 State Department and USAID Budget

Heather Higginbottom
   Deputy Secretary of State for Management and Resources 
Rajiv Shah
   Administrator of the U.S. Agency for International Development 
Washington, DC
March 4, 2014

MS. PSAKI: All right. Hello, everyone, including those watching on BNET – welcome. We are here today to roll out the State Department budget. We are fortunate to have with us Deputy Secretary of State Heather Higginbottom and USAID Administrator Raj Shah. They will be delivering brief remarks, and then, as everybody knows, there will be a background call at 2 p.m. starting shortly after this to answer all of your questions. With that, I will turn it over to Deputy Secretary of State Heather Higginbottom. Thank you.

DEPUTY SECRETARY HIGGINBOTTOM: Thank you, Jen. Good afternoon, everyone. I’m just going to take a few minutes to make some remarks about the Fiscal Year 2015 Budget Request for the State Department and the U.S. Agency for International Development, and I’m delighted to be joined by Administrator Shah, who will highlight investments in our important development programs.

As Secretary Kerry worked to develop this Budget Request, one fact was front and center: with just 1 percent of the federal budget, America’s investment in development and diplomacy has never been more vital to our national security, our economic prosperity, or our global leadership. Whether in the Asia Pacific, Middle East, Ukraine and Europe, or our own hemisphere, American leadership is needed now more than ever, and the resources we invest in diplomacy and development are returned to us in the form of security, stability, economic prosperity, and jobs.

As you’ll see, this budget funds the work that is required to sustain long-term investments in America’s security and prosperity while recognizing the significant fiscal constraints we’re facing as a nation. All the details are online in our congressional budget justification, so I’ll just hit a few highlights here.

First, the top line. The overall State and USAID Budget Request is $46.2 billion. The base budget of $40.3 billion is consistent with the FY2014 level. This will enable us to carry out our global, diplomatic, and development mission, advance the President’s signature policy and development initiatives, honor our security commitments to allies and partners, execute conflict prevention, nonproliferation, and peacekeeping activities, and respond to humanitarian crises such as the devastating typhoon in the Philippines.

Our $5.9 billion request for Overseas Contingency Operations, or OCO, funds key programs in Iraq and Pakistan and helps sustain hard-fought gains in Afghanistan through the 2014 transition. The OCO budget also enables us to respond to the ongoing humanitarian and refugee crisis in Syria and its neighbors, as well as unanticipated peacekeeping missions. OCO remains an essential tool for funding extraordinary activities that are critical to our immediate national security objectives without undermining our longer term diplomatic and development efforts.

To carry out these diverse critical missions, we have to continue to invest in the dedicated diplomats and development experts who make all of this important work possible. This budget ensures that we have the resources and tools to do that and to deliver effective results for the American people.

Of course, we also have an important obligation to protect our people. Accordingly, we are investing $4.6 billion in programs to sustain the security enhancements made in response to new threats and the recommendations of past independent accountability review boards. At its heart, this budget is designed to protect America’s national security. It supports our crucial engagement in the Middle East, including our partnerships with key allies like Israel and Jordan, and maintains robust support for partners in Tunisia, Egypt, Libya, and Lebanon. The budget also includes $5.1 billion for programs in Iraq, Afghanistan, and Pakistan, which is a reduction from prior years and part of our ongoing effort to right-size our engagement.

At the same time, we have significantly increased funding for our programs in the vital Asia Pacific region to a total of $1.4 billion. That’s up 8 percent since FY13, and that directly supports the President’s decision to rebalance to this region of growing political and economic importance.

The budget requests $4.8 billion to continue engagement with the United Nations and other key multilateral organizations such as UNICEF and the International Atomic Energy Agency. It also enables us to meet urgent international peacekeeping needs, including in Mali, South Sudan, Darfur, and the DRC.

And to connect directly to the people of the world, the budget requests 1.1 billion for public diplomacy and citizen exchanges, dramatically increasing the breadth and reach of American leadership in the world, laying a strong foundation of understanding and shared values, and forging linkages that endure beyond daily headlines, political shifts, and regime changes.

As Raj will talk about in a moment, this budget allows us to continue fighting challenges that know no borders, like disease, hunger, poverty, and climate change. These investments are not only the right thing to do, but also the smartest way to promote stability and global prosperity.

The Administration’s commitment to global health remains strong. Our $8 billion request will help put an end to preventable child and maternal deaths, and through continued support for PEPFAR, will sustain strategic investments in prevention, care, and treatment activities that keep us on the path to an AIDS-free generation. As the President announced on World AIDS Day, we intend to maximize the impact of PEPFAR by joining with the Global Fund and other international partners to develop joint HIV prevention and treatment goals. So our $1.35 billion contribution to the Global Fund will continue to expand multilateral engagement and support President Obama’s commitment to provide one dollar for every two dollars pledged by other donors for the (inaudible) replenishment to the fund.

This budget also makes the investments necessary to safeguard the single biggest inheritance we will leave our children and grandchildren: the environment. The budget provides $506 million for the Global Climate Change Initiative, including nearly $200 million to support clean energy programs.

As Secretary Kerry has repeatedly said, there is no longer anything foreign about foreign policy. The foreign policy decisions we make today, the decisions we made in crafting this budget, have a profound impact on the lives of Americans every day. Our prosperity, our security, and our values all depend on the work of the dedicated diplomats and development experts serving America overseas. And this budget gives them the resources that they need to do their jobs.

So with that, I’ll turn it over to Raj.

ADMINISTRATOR SHAH: Thank you. Good morning, and thank you, Heather. From President Obama to Secretary Kerry to Republicans and Democrats in Congress, we are fortunate to have had an exceptional set of leaders on both sides of the aisle who understand the importance of development to our nation’s security and prosperity. By partnering with other countries to end extreme poverty and promote resilient democratic societies, we help transform developing countries into stable and prosperous nations. We open new markets for American businesses, prevent conflict and extremism from reaching our shores, and help our young people build skills in science and technology, all for less than 1 percent of the overall federal budget.

This year’s President’s Budget Request includes $20.1 billion that USAID manages or partially manages. These critical resources allow us to advance our nation’s global interests while responding to pressing national security priorities from the Middle East to Afghanistan to South Sudan. This afternoon, I want to discuss how we are meeting these challenges through a new model of development reflected in this budget.

By leveraging public and private partnerships and harnessing innovation, we are able to deliver better and more focused results. We’ve made tough decisions to focus our resources where we’ll have the greatest impact, reducing our total number of program areas by 29 percent since 2010. Today, all of our major programs are independently evaluated, and those evaluations are available right now on an iPhone app. And we’ve placed a new emphasis on building local capacity so we can, over time, work ourselves out of a job. Four years ago, just 8 percent of USAID’s resources were programmed through this new model of highly leveraged partnerships and game-changing innovations. Today, it’s above 40 percent and we hope to increase it over time.

Above all, this budget supports the President’s priorities to deliver results in food security, global health, and improved access to low-cost clean energy. By fully funding the development assistance in Global Health, Child Survival accounts, we will keep up the momentum that has helped to cut the rate of children dying from malaria in half and given millions of children the nutrition they need to survive.

This is a critical moment in our fight and we cannot afford to step back. That’s why in this Budget Request, more than $1 billion is devoted to Feed the Future, President Obama’s global food security initiative. This past year, these investments helped improve nutrition for more than 12 million children and helped more than seven million farmers transform their family’s income and livelihood.

This year’s Budget Request builds on these results with a new and integrated approach to nutrition that will reduce child stunting, also known as hidden hunger, by 20 percent and change the lives of two million children in target partner countries, tackling one of the leading causes of child death that also undermines country and global growth. This budget maintains our nation’s tremendous leadership and humanitarian response, with $4.8 billion in state and USAID funding for humanitarian activities. In the last year, we’ve responded to an unprecedented number of crises around the world from the Philippines to Syria. And today, we face three category three-level emergencies simultaneously, a tremendous burden by historic standards.

Thanks to strong bipartisan support, we now have important food aid reforms that will allow us to reach an additional 800,000 hungry children every year with the same level of resources in our humanitarian programs. The need for this flexibility grows more urgent every day, as crises deepen from Syria to the Central African Republic to South Sudan. That’s why this budget calls for the flexibility to use up to 25 percent of the Food for Peace Program resources for lifesaving efforts, including vouchers and local purchase of food, in order to reach two million additional children in humanitarian need at no additional cost.

In this budget, $8.05 billion in USAID and PEPFAR funding for global health is committed to eliminating and realizing goals that once seemed unimaginable: ending preventable maternal and child death and ending the transmission of HIV/AIDS from mothers to their infant children. To achieve these ambitious goals, we are prioritizing 24 countries that account for 70 percent of maternal and child deaths in the developing world while also focusing on concrete targets to expand AIDS treatment where it’s most critically needed.

We’re advancing the President’s commitments to Africa, specifically allocating nearly $115 million in this budget to specific initiatives, including trade and Power Africa, which the president launched this summer during his visit to that continent. By securing partnerships with multinational companies and local entrepreneurs, these resources, as part of Power Africa, will bring affordable clean energy to 20 million homes and businesses in the markets of the future. And with our modest investment, we’re already leveraging billions of dollars in private sector commitments.

We know we cannot prevent typhoons or droughts from happening, but we can work harder to make sure the consequences of those climate disasters don’t devastate as many families and communities. That’s the goal behind a new emphasis on resilience that will help us use our resources in this budget to protect communities from future natural disasters. With $348.5 million from President Obama’s Global Climate Change Initiative, USAID will effectively work to both protect and manage the environment that supports us through our resilience programs.

Today, we’re applying this new model of work across all of our work, from promoting democratic governance to sustaining our gains in frontline states to improving the quality of education, especially for girls and children who live in crisis. That’s why we’ve dedicated more than $150 million in central funding in this budget for science, technology, and innovation and partnership initiatives. By collaborating with the world’s brightest minds and companies, we can develop and scale new scientific breakthroughs like climate-resilient seeds and mobile banking efforts that bend the curve of progress and give us the capacity to achieve our goals at lower cost in the long run.

Finally and most importantly, this budget invests in the most important aspect of our work: our own staff. With $1.4 billion in USAID operating expenses, we will fund our core operations at their current level – a request that represents just 8 percent of our total programmatic resources. As our responsibilities have grown over the last decade, this particular investment in upgrading our capabilities, training and protecting our staff and programs, and having the infrastructure to report and measure results effectively has proven essential to maintaining and taking forward our mission. Failing to invest in our people and our capabilities today will cost us far more in the future.

So this is an important moment. With new tools and a global community of diverse partners, we can eradicate extreme poverty in the next two generations, energizing the global economy and representing the best of our values around the world. The investments in the President’s budget enable us to seize this moment and serve the interests of the American people by being smart, effective, and efficient in how we do our work today.

Thank you.