Special Briefing
Senior State Department and USAID Officials
Washington, DC
April 10, 2013


MODERATOR: Okay. Good afternoon, everybody, and happy budget day at the State Department. Thank you for joining us. Let me just do a quick check here. Are we able to – do we have our dialed-in guests? Are you able to hear us? Well, we’ll go forward here.

And so today, we’re introducing the President’s Fiscal Year 2014 budget proposal for State and USAID. Joining us, we have three of our finest experts who will walk you through the details. This session is on background. These will all be Senior U.S. Officials. I guess we have two State officials, so Senior State Department Officials for all three. Let’s leave it at that. They’re going to provide us a quick overview, and then we’ll take your questions.

So thank you for coming, and I’ll turn it over to all of you.

SENIOR STATE DEPARTMENT OFFICIAL ONE: Great. I’m [Senior State Department Official One] and I will provide a quick overview of the whole budget and then we can take your questions. And we’re happy to be here. Just to make sure people have the materials, you should have, or at least access to – there is a one-page summary, there’s a fact sheet, there’s a bigger budget book that has more of the details. So a lot of what we’re going to be talking about are already in these materials. If you have any questions, we can certainly answer your questions after.

The budget includes the resources we need to ensure diplomacy and development can sustain our country’s global leadership and deliver results for the American people. First, I want to cover the Function 150 budget, the international affairs function, then I’ll talk about the State-AID budget. As all of you may know, but just as a reminder, the Function 150 covers all international affairs programs, including State and USAID, and other agencies such as the Millennium Challenge Corporation, Treasury’s international affairs programs, the Peace Corps, the Export-Import Bank, the Overseas Private Investment Corporation, among other agencies. And there’s a table in the blue book that lists all of the agencies.

The total Fiscal ‘14 budget for Function 150 is $52.1 billion. It’s a decrease of 4 percent below 2012. And one thing --

QUESTION: I’m sorry, what percent?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Four percent below 2012 for the whole function. One thing I should point out at the beginning is that the President’s budget – ‘14 budget – compares everything to 2012, because when we pulled the budget together, the final Fiscal ’13 enacted level was not completed, so all of the comparisons we’ll be making today and all the comparisons in the printed material compare the ‘14 level to 2012, which was basically the level we’ve been operating at until the Congress passed the continuing resolution a couple of weeks ago.

Going from the Function 150 budget to the State-AID budget, again, as a reminder, the State-AID budget is about 92 percent of the total function, so it’s a majority of the resources. And for Fiscal ’14, the budget request for State and USAID operations and assistance is $47.8 billion. That’s a 6 percent reduction from 2012 levels. The request makes tough tradeoffs, proposing important reforms and takes advantage of efficiencies to support our core mission of advancing America’s national security and economic interests and using taxpayer dollars efficiently.

Of the $47.8 billion, we’re requesting 44 billion as part of our base budget or enduring budget, and $3.8 billion for Overseas Contingency Operations, which largely covers the extraordinary costs of Iraq, Afghanistan, and Pakistan. And another cut at the 47.8 billion, 15.9 billion funds the State Department operations budget, and 31.8 billion covers the State-USAID foreign assistance programs.

The State Department budget represents over – just over 1 percent of overall federal spending, and this modest amount is a critical component to achieving our national security objectives and protecting Americans at home and abroad. So let me just give you a rundown of some of the highlights in the budget.

First, the budget advances peace, security, and stability around the world. The budget supports continued engagement with people and governments of the Middle East and asks for $580 million for the Middle East and North Africa Incentive Fund. The budget strengthens our posture in the East Asia and Pacific region. It right-sizes our presence and programs in Iraq, Afghanistan, and Pakistan, providing a total of $6.2 billion for these countries – a $4.2 billion reduction from 2012. The budget supports our commitment to Israel, Egypt, and Jordan, and funds our contributions to multilateral organizations and peacekeeping missions. The budget strengthens our economy while combatting global challenges.

The budget includes a major reform effort on how we provide food aid around the world. The Administration’s food aid reform proposal will enable us to feed 2-4 million more people and get food to crisis areas up to 14 weeks faster with a savings of 20-50 percent in cost. With respect to food aid reform, the proposal provides a range of tools to deal with emergencies around the world, including the purchase of U.S. agricultural commodities and the local and regional purchase from countries near crises, among other mechanisms. And we can get into more details about this after my talk.

In total, we provide over $1.8 billion for food aid, a little more than what we provided in Fiscal Year 2012. The budget includes $8.3 billion for the Global Health Initiative with a 2 percent increase above 2012 to help achieve an AIDS-free generation and end preventable child and maternal deaths. The request – this request includes 1.65 billion for the Global Fund, making our strong – marking our strong support for reforms and challenging other donors to match our contribution on a 2 to 1 basis.

We seek to lift 50 million people out of poverty in Africa over the next 10 years through our $1.1 billion Feed the Future program. We provide $481 million to help countries mitigate the destabilizing impacts of global climate change. We help people around the world cope with manmade and natural disasters by providing $4.1 billion in humanitarian assistance, and that includes the food aid. And our budget keeps our borders safe for the legitimate flow of commerce and provides assistance to American citizens overseas when they need help the most.

Finally, the budget provides the tools State and USAID need to confront the complex national security and foreign policy challenges facing our nation. The budget provides $5.5 billion to support diplomatic operations in more than 280 locations around the world; 4.6 billion to secure overseas personnel, facilities, and classified information to the maximum extent possible, while still providing an environment to accomplish our mission; provides 1.4 billion to support USAID’s operation worldwide; and fully supports the suite of reforms known as USAID Forward, including an increase to mobilize science and technology to solve development problems. And finally, the budget includes $1.1 billion for public diplomacy and exchange programs, which support U.S. foreign policy by strengthening relationships between the United States and our partners around the world.

That’s a very general overview. I’m happy to take, with my colleagues, your questions, if you have specifics.

QUESTION: Hi, oops, sorry.

MODERATOR: Yes, go ahead.

QUESTION: Nicole Gaouette, Bloomberg News. I had real trouble breaking down what you’re doing about embassy security and security of personnel, and it seems like there are several different numbers and several different categories used. This fact sheet mentions 4.4 billion. The larger report mentions 2.2 for building new structures and 2.4 for other elements. I’m just wondering if you could break down very simply what has changed, whether it’s increased or decreased, and if you could just sort of compare apples to apples, that would be great.

SENIOR STATE DEPARTMENT OFFICIAL TWO: Okay. So what we’re doing in the FY14 budget is really continuing what was proposed as part of the increased security proposal in the FY13 full-year CR. So following the Benghazi attacks, we worked with Congress to be able to get funding realigned from our OCO accounts to our Worldwide Security Protection account and to our Embassy, Construction, Security, and Maintenance accounts. And that was approximately $1.4 billion in FY13 funds.

It broke down into three components. About $550 million would be adding additional Marine security guards, and they are Post 1 facilities at locations around the world. We also requested 130 for an additional 155 Diplomatic Security guards. And we requested $736 million associated with advancing the construction of new embassy compounds. Also inside of that was funding to allow for sort of quick fixes to compound security.

So that was in the ’13 continuing resolution. In FY14, we’re continuing that proposal. So what we’re requesting is, for Worldwide Security Protection, $2.2 billion in increases – not in increases, total funding. All right? And inside of that, what we’ll be doing is the recurring costs associated with hiring the 155 additional security guards, and so you’ll see a line in there that says an increase of 5 percent. And that is basically the funding associated with the increase of the 155 guards carried forward into FY 2014.

In addition to that, we are going to be adding additional vehicles. We are going to be adding local guards. And we are going to be providing for support costs for deploying staff overseas. We’re also going to be providing for residential security upgrades. It’s basically a straight-line funding from FY13 to ’14 for our Worldwide Security Protection account.

For our Embassy, Construction and Maintenance Account, or ESCM, also known as our OBO account, what we’re looking for there is to implement the recommendations that came out of the Benghazi Accountability Review Board. In our increase, there is about $996 million. The one thing that the Benghazi Accountability Review Board said is that we had to get a capital security construction program at about a $2.2 billion level. Right now, between the State and our other agency shares, it’s been ranging between about $1 billion to $1.4 billion a year. And in FY14 we will have $2.2 billion, and the components associated with that are – we’re going to have our straight Embassy, Security and Construction program at about $1.9 billion. We then have our other agency share piece, and that’s $567 million.

Traditionally, the other agency’s share is usually about 30 percent of the overall amount that we request for construction. This year, because the negotiations were going on so long through the process, it’s only at about 60 percent, but in the future, we hope to be able to have it back to the regular share of the 30/70 split. In addition to that, we are carrying on our complex security – compound security, which is those quick fixes, and we do have our maintenance account as well, and it’s about $137 million for the State Department and $37 million for the other agency shares.

So the total amount that’s being requested for our Embassy Security account is 2.649. And it’s all broken down in your book.

QUESTION: So where does that differ from the 4.4 billion in your fact sheet?

SENIOR STATE DEPARTMENT OFFICIAL TWO: Where does that differ?

QUESTION: Well, what’s the – because in your fact sheet, it says 4.4 – Hi, I’m Elise from CNN. Sorry.

SENIOR STATE DEPARTMENT OFFICIAL TWO: Sure.

QUESTION: 4.4 – it’s in the fact sheet – it says 4.4 billion in Worldwide Security Protection, so you’re talking 2.6. What does the other --

SENIOR STATE DEPARTMENT OFFICIAL TWO: No, it’s the two components. It’s the Worldwide Security Protection piece and it’s the Overseas Infrastructure piece. The Worldwide Security Protection is the $1.2 billion, and the Overseas Infrastructure, or Embassy, Security, Construction and Maintenance account, is $2 billion, and that doesn’t include $250 million for a project in Irbil or for the other agency share. So that’s how you get to those numbers.

QUESTION: So [Senior State Department Official Two], the worldwide security is staying stable from last year?

SENIOR STATE DEPARTMENT OFFICIAL TWO: From 2013 --

QUESTION: 2013. And --

SENIOR STATE DEPARTMENT OFFICIAL TWO: Full-year CR level.

QUESTION: Right. And then the embassy construction and so on is going up. You said $996 million?

SENIOR STATE DEPARTMENT OFFICIAL TWO: That’s right, and that’s off of the ’12 funding level, off of the 2013 full-year CR. It is actually coming – it’s almost a straight line, but coming down a little, though. But that’s because we had that bump up in 2013 for --

QUESTION: Coming down a little from 2013?

SENIOR STATE DEPARTMENT OFFICIAL TWO: Correct.

QUESTION: So how would I characterize, like, in that awful journalistic shorthand? Does my first sentence of the story say --

SENIOR STATE DEPARTMENT OFFICIAL TWO: Increase off of our current operating level.

QUESTION: Okay.

QUESTION: Thanks so much. I’m Josh Rogin, Foreign Policy magazine. Thanks so much for taking the time. I want to ask you about the Middle East and North Africa Incentive Fund. This is the second time we’re trying this. Last year, you requested 770 million, including MEPI funds. It wasn’t funded by Congress. A lot of the reason, I think, lawmakers gave was that there wasn’t enough meat on the bone, they didn’t feel like it was fleshed out enough.

SENIOR STATE DEPARTMENT OFFICIAL ONE: Sure.

QUESTION: So first of all, does this include MEPI? Why 580 and not 770? What have you done internally to address the concerns that caused it not to be funded last year?

SENIOR STATE DEPARTMENT OFFICIAL ONE: So, the basic rationale for the MENA Incentive Fund is the same as it was last year. We are dealing with a region that’s changing. We’re dealing with a – I said bilateral assistance programs that are either heavily weighted toward security assistance or are so small that we don’t have the wherewithal to expand our relationship – our bilateral relationship on assistance to things like economic reform or governance reform, because that’s not traditionally what we have focused on in the past.

So the rationale has not changed. The fact that – we’d be spending most of our money out of existing resources responding to various crises. So we felt we still need a place in the budget where we can deal not so much with the response short-term, but more with the long-term developmental types of programs which we really haven’t focused on in the past. And so that’s the rationale. I think the Congress was split last year. The House did not have money in its original ’13 bill. The Senate actually gave us more than we asked for in the ’13 bill and the whole thing got – gave us $1 billion. And at the end of the day, because we were really dealing with a CR, it all sort of fell off.

So we’re going to – we’re making the argument again. It’s even more important now because the demands on our budget on things like Syria really – we don’t want that to crowd out what we need to be focused on over the long term.

Why the 580? Because we’re also dealing in a world of budget constraints. The MEPI is in there at $70- or $75 million, and then there’s a regional USAID program that it’s analog. But we felt that we are – we’re in a constrained budget. We don’t – obviously, the 770 last year, we didn’t get, so we just wanted to have something that was substantial, that would give us the flexibility but that could fit within the overall totals.

QUESTION: I guess my question is: Did you – have you fleshed out a more detailed plan for Congress this year than last year?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Well, we had worked out internally, and we’ve worked out with other agencies, how we’re going to do this. But at the end of the day, a lot of this is going to be driven by where we think we can make the biggest bang for the buck in terms of reform, what countries are interested in working with us. And we don’t know yet where that’s going to be. Nor do we know how to apply it to accounts.

And what we explained to the Congress last year, and I think it did have some resonance, was that we can’t predict yet if this is going to be an economic dollar, a dollar that’s going to governance, a dollar that’s going to police training, a dollar that’s going to military assistance, because it’s really going to depend on where the governments are in transition, what they really need, what the constraints to their growth and their reforms are. So we feel keeping it open and having it be more of a contingency that would allow us to work with governments is the right way to do it. And that’s the argument we’ll be making with the (inaudible). I think they’ll be receptive to it. I think it’s just a question of where the appropriations process is going to come out this year.

QUESTION: Sure. And one more quick one before I yield the floor.

SENIOR STATE DEPARTMENT OFFICIAL ONE: Sure.

QUESTION: PCCF, we’ve been following this for years. It went through this – Hillary Clinton wanted it in State, and she couldn’t – they couldn’t handle it, so they shared it with DOD, and then it went back to DOD and then came back to State. And according to this, zeroed out in the State Department budget this year. So what’s going on with it?

SENIOR STATE DEPARTMENT OFFICIAL ONE: So, PCCF is one of those programs that we’re ending in the ’14 budget. We’re actually ending it – Congress actually ended it in the ’13 CR. And it’s a program that we were beginning to wind down even as early – in the 2012 budget, in part because there were issues of implementation. There was a – DOD had money. As you remember, it’s sort of a – it was a yo-yo for a while. It started with us, it went to DOD and came back to us. There were implementation issues, but also we feel we can – our FMF program, which is still in the request for Pakistan, is the primary way we’re going to be dealing with the security relationship at this point with the Pakistanis.

And as part of a general sort of clear-eyed view of what we’re doing in these countries, we just felt that this was not money that we – that was – we could use. And the idea between us and DOD was that we should wind it down. We’ve started to wind it down already. And the Congress gave us very clear signals in 2013 that they were not going to pick it up. They didn’t pick it up in the CR. It’s zeroed out in the CR. So the ’14 budget basically just ends that program.

QUESTION: Is it frustration with how Pakistan is handling --

SENIOR STATE DEPARTMENT OFFICIAL ONE: I wouldn’t say it’s a frustration. I think we’re just looking at our programs, and we’re making sure that what we’re doing in Pakistan and the dollars that we’re putting against Pakistan are going to have the biggest impact. And given the fact we have demands in other parts of the world, these are the kinds of tradeoffs we have to make.

QUESTION: Thank you.

MODERATOR: Do we have other questions around the room?

QUESTION: (Off-mike.)

MODERATOR: Go ahead, Michele.

QUESTION: (Inaudible) trade-offs because there’s still a lot of money in there for Afghanistan, Iraq, and Pakistan. But is that where the – where is the big – where is the 6 percent savings?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Well, I’ll start and then I’ll ask [Senior State Department Official Two] if she has anything to add. But the 6 percent savings is a net savings, so there is big reductions in Iraq, Afghanistan, and Pakistan. And although we still have a very healthy budget in those countries that – because we still have very, very important interests in what we’re doing there. And so that – but we also know that Iraq is – we’re undergoing a glide path and we’re winding down – we’re shrinking our presence and our programs. In Pakistan, we’re – again, we’re looking at programs to make sure that we have – we’re putting the dollar where it’s going to have the greatest impact.

And in Afghanistan, it’s going through a transition. It’s going through a transition that in 2014 there’ll be a different type of military presence. We still have a robust assistance program in Afghanistan, but eventually we’re going to have to look at those programs as well.

So the main driver of the 6 percent is that, but there are other increases and other tradeoffs in other parts of the budget that when you put all those together, it nets out to 6 percent. So it’s a lot of different decisions. So the PCCF we just talked about was one example where we were saving money because we’re not picking up that program, but the MENA Incentive Fund is a $580 million increase. And so you have to look at the puts and takes, as we call them, to get to the sort of the net 6 percent.

QUESTION: Does this account for sequestration?

SENIOR STATE DEPARTMENT OFFICIAL ONE: The Fiscal ’14 request does not account for sequestration because this budget sits in a larger President’s budget. If you heard the President speak this morning, this is part of the overall deficit – his deficit reduction plan, which, if it’s adopted, wouldn’t need to carry forward the impact of sequestration. So this doesn’t reflect the sequester that we’re implementing in 2013 because it’s part of the overall economic plan.

QUESTION: Do you have another version somewhere that does account for sequestration?

SENIOR STATE DEPARTMENT OFFICIAL ONE: No.

QUESTION: Do you not – you haven’t planned at all for sequestration?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Well, we’ve planned – we’re planning for sequestration, but in the ’14 budget, the ’14 budget, again, is not – is not being implemented in – this budget doesn’t implement the sequester. The sequester is a one-time --

QUESTION: It’s not one time. It happens every year.

SENIOR STATE DEPARTMENT OFFICIAL ONE: One time.

SENIOR STATE DEPARTMENT OFFICIAL TWO: No.

SENIOR STATE DEPARTMENT OFFICIAL ONE: No, it happens against the Fiscal ’13 appropriation. That’s the only year that sequestration is being applied.

SENIOR STATE DEPARTMENT OFFICIAL THREE: And so as we put together the FY14 budget, we were not assuming that we would be under a sequester order.

QUESTION: Understood.

QUESTION: In the food – and there’s no savings in the food piece? It’s just more efficient? Is that what that column is there?

SENIOR STATE DEPARTMENT OFFICIAL THREE: Yeah, it’s all about efficiency and timeliness gains. So we’re going to reach a lot more people with more effective programs through these reforms with a combination of tools, the flexibility to use a combination of tools to meet each circumstance, each crisis circumstance, without needing additional resources.

QUESTION: But are you expecting a big fight on that one?

SENIOR STATE DEPARTMENT OFFICIAL THREE: Well, our goal is to save more lives and be able to implement decades of learning in how to run food aid programs and in nutrition and food science to get better results. And we’re encouraging Congress to act.

MODERATOR: Go ahead.

QUESTION: Yes, I have a question regarding Asia. As Secretary Kerry traveling to Korea, China, and Japan, in his letter to Congress that is a reflection of rebalancing to Asia, there’s a 7 percent increase of – in terms of assistance to Asia. Would you please provide details on those programs?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Sure, sure. So I think you had it right. There is a – last year the President announced that we are shifting our focus to the Asia and Pacific region. This budget definitely shows that. You said it made – it’s a 7 percent increase above 2012 levels for that region, and that’s assistance. And it’s basically going to a number of different things. There is a component of it that is – where we’re strengthening regional security. So for example, we’ve provided increases to the Philippines, for example, to help increase security. It’s enhancing economic integration, so we have money in the budget to support multilateral or regional organizations like ASEAN and the Pacific Island Forum and to work with Vietnam to help them complete the Trans-Pacific Partnership. So there’s regional organizations that we’re supporting through this – what we call the pivot.

We’re expanding development in the Lower Mekong region, and this is basically dealing with transnational threats in that region, water management, infectious diseases, those kinds of things that we need to help those countries strengthen.

We’re addressing transnational health and environmental challenges, and so we have money in the budget, increases for, for example, HIV/AIDS, malaria, and TB in Burma, climate change in Indonesia, and climate change in the Pacific Island region. So there’s an effort on sort of transnational sort of developmental challenges that we’re trying to deal with.

There is a supporting democratic development component to it – again I’ll mention Burma – going through a democratic transition. There is an increase in our assistance to Burma to help them manage that crisis.

And then there is a component of the pivot on assistance that we’re calling Addressing War Legacies, which is removing explosive remnants in Laos, Cambodia, Vietnam, dioxin remediation in Vietnam.

So it’s really across the board, but it does sort of show that we’re taking not only bilateral assistance very, very seriously, but sort of the regional issues and regional integration to help strengthen not only our engagement in the region but to help strengthen the region itself. So that’s – those are the basic details.

QUESTION: Just to follow up, you mentioned transnational health. Does that include any aid to prevent or flu, like swine flu --

SENIOR STATE DEPARTMENT OFFICIAL ONE: There is – we have a – I don’t have the number in front of me. We had a modest budget for pandemic flu, and that usually gets allocated to regions around the world. And I’m sure that there is funding for that in Asia and the Pacific. We can get back to you on that.

QUESTION: So if you won’t mind, is that increasing, and how much percent?

SENIOR STATE DEPARTMENT OFFICIAL ONE: We’ll get back to you on the details on that.

QUESTION: Also – I’m sorry – one final?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Sure.

QUESTION: Cyber security in this initiative is very important to U.S.-China relations. I’m trying to find under which category will that fund be allocated.

SENIOR STATE DEPARTMENT OFFICIAL TWO: Well, we have some funding associated with the Coordinator for Cyber Security and there are positions that are being requested to be able to support that initiative and ensure that we have the correct personnel that are out looking at the issues and dealing with the issues.

And I don’t know if there is anything on your side.

SENIOR STATE DEPARTMENT OFFICIAL ONE: Yeah, we – again, we don’t have a lot of assistance to China, although, again, most of the cyber security programs are funded on the operations side of the budget. But to the extent that we’re working with countries to help them sort of secure – do regulatory things, we have small amounts in the budget. But how much goes to China, I don’t know.

SENIOR STATE DEPARTMENT OFFICIAL TWO: We’re also being sure that we’re hiring the appropriate people to be able to work with DHS and other agencies, as the President’s overall cyber security initiative goes forward.

MODERATOR: In the back.

QUESTION: Sure, thanks. I have a question about the Foreign Military Financing. It shows (inaudible) budget line increase is 235,000 from 2012. How much of an increase is that from East Asia/Asia and Pacific? There isn’t like an individual line for how much an increase that is over 2012?

SENIOR STATE DEPARTMENT OFFICIAL ONE: There is an increase in FMF for East Asia. Again, I don't have that number right in front of me, but we’ll get back to you.

QUESTION: Okay. And for – it just says that there are programs. Are there any specific programs that you’re going to emphasize?

SENIOR STATE DEPARTMENT OFFICIAL ONE: In the account itself or in the region?

QUESTION: Yeah. For East Asia and Pacific.

SENIOR STATE DEPARTMENT OFFICIAL ONE: The country that gets the biggest, I think, single increase is working with the Philippines. And that’s an important security relationship we have, and we’re trying to make sure that the budget supports that.

QUESTION: Can I ask --

MODERATOR: Go ahead, Nicole.

QUESTION: -- just to follow up. The 7 percent increase for Asia, you said there are increases in security. How much of the 7 percent is – increase is security or will be devoted to --

SENIOR STATE DEPARTMENT OFFICIAL ONE: I can tell you that instead of looking at it as an increase, if we – we’re spending $768 million in assistance to East Asia and the Pacific. That’s the total amount, from all accounts, all sources in our budget. The regional security of that is $128 million. This is just the cut that we can get out. But we can do the math offline in terms of what that’s compared to in 2012.

QUESTION: Okay.

MODERATOR: Do you have other questions? Let’s get a couple more and then come back to you, Josh.

Go ahead.

QUESTION: Going back to Pakistan, can you confirm the assistance? I understand $1.4 billion. Is it covered under (inaudible) and can you provide the makeup of how much is it – how much is the economic assistance and how much is military assistance?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Sure. The – our assistance to Pakistan is about – just is about $1.2 billion. What we call nonmilitary assistance is about $860 million. I’m rounding. And we have about $300 and so million in military assistance, the foreign military financing. That’s – and that’s – those are the two main components.

QUESTION: 300 and some --

SENIOR STATE DEPARTMENT OFFICIAL ONE: $300 million in the military assistance side.

MODERATOR: Matt.

QUESTION: I got two very brief ones. About how – about what percent of the additional East Asia Pacific money would you say is designed to counter either Chinese military or Chinese threats or Chinese influence, and particularly in Southeast Asia among former French colonies?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Well, I mean, the pivot to East Asia is, in some sense, is broad in that we don’t have any specific dollar or specific program that’s meant directly to say this is to counter China influence. I think the whole effort is meant – (laughter) --

QUESTION: So 100 percent?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Well, the whole – the effort is – our effort is to strengthen our engagement in that region, because there are obviously other influences there that we’re trying to make sure we either counter or we make sure that the countries of that region have help to do that. So we don’t have a line item in the budget that says “X million dollars to counter Chinese influence,” because I think by helping countries become a stronger partner is by increasing security assistance, by helping them deal with these transnational threats, by strengthening regional institutions, it helps strengthen the region. And that’s ultimately in our interests.

QUESTION: Thank you for being so forthcoming. I didn’t expect an answer at all. (Laughter.) I expected the usual answer, which is not what I got, so that’s good. Just on the Latin American drug initiative, Merida and Plan Colombia, and their legacies --

SENIOR STATE DEPARTMENT OFFICIAL ONE: Yeah.

QUESTION: -- is there any – are those still left?

SENIOR STATE DEPARTMENT OFFICIAL ONE: They are. But they – the programs in Mexico and Colombia are on sort of a downward glide path, because – for two reasons. One, the assistance to those countries in the past have been very, very high, and they were driven largely by big military equipment, which are very sort of expensive. Now we’re sort of normalizing those programs to be much more in a capacity training types of programs. So you’re going to see – there are decreases in our budget compared to 2012 with Mexico and Colombia, but we’re also – but we’re increasing our accounted drug efforts in the Caribbean, where things seem to be moving in terms of drug trafficking and crime. So programs like our regional Central America security initiative go up.

QUESTION: Do you have a breakdown of how much they’re – they will be decreasing next (inaudible)?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Yes. Let me just get my notes here. Hang on one second. Yeah. It’s right here. Yeah. Mexico, we’re providing $205 million, which is about $124 million decrease from 2012. And Colombia, we’re providing $323 million, which is a $61 million decrease.

QUESTION: Decrease.

SENIOR STATE DEPARTMENT OFFICIAL ONE: Decrease. And the Caribbean initiative I mentioned, we’re providing $162 million, and that’s a $26 million increase. So we’re basically changing the balance of the resources in the region. Although, the Colombia and Mexico assistance is still pretty – they’re still one of the largest recipients of assistance. It’s not like we’re going down to de minimis levels in those countries.

MODERATOR: Time for a couple more? (Inaudible) wanted to get a follow-up.

QUESTION: Sure, just a quick – a couple line items – programs that I’d like to ask for quick explanations on. You funded the Mike Mansfield Fellowship Program. Is that – we’re not doing that anymore?

SENIOR STATE DEPARTMENT OFFICIAL TWO: What we’re doing is we’re looking at our overall Education and Cultural Exchange Program, and what we’re trying to do is ensure that we’re are covering the same groups within our Fulbright Scholarship Program. So what you’ll see is a small bump-up in the Fulbrights, and it’s really going to be just the realigning.

QUESTION: And does that include the Israeli-Arab scholarship program as well?

SENIOR STATE DEPARTMENT OFFICIAL TWO: The Israeli-Arab scholarship is going to be a completely separate line item, and there will be a separate line in there for that.

QUESTION: Okay. And reductions for National Endowment of Democracy?

SENIOR STATE DEPARTMENT OFFICIAL TWO: Traditionally the same funding level as was our request in FY13 and our request in FY12. So it’s not really a reduction from a previous presidential request level.

QUESTION: Congress plussed it up, okay. And last one is the Secretary’s office went up from 48 million to 60 million. That’s a 25 percent increase. Why does John Kerry require 25 percent more money than Hillary Clinton?

SENIOR STATE DEPARTMENT OFFICIAL TWO: There were a number of – there are a number of increases associated with the Office of the Secretary. One of them is cyber security, where we have additional staffing within the Office of the Secretary. There are some data system requirements that are included in there. There is the Foreign Assistance Dashboard requests in there. So when you’re looking at the Office of the Secretary, it’s a lot broader than just the Secretary and the people that are in the Secretary’s area. It is a very large organization and it is not the Secretary, the deputy secretaries, or the policy people. It is really those other components that are being plussed up.

QUESTION: It’s for the Secretariat, is it?

QUESTION: So – yeah, so for S total, but do you have a number of how many people that’s going to – that are going to be in S compared to Fiscal 2012 and 2013?

SENIOR STATE DEPARTMENT OFFICIAL TWO: Right now, the increases in the staffing –

MODERATOR: Colleagues, I think we have somebody on the phone from London. Can you put your phone on mute? Could you all put your phone on mute, colleagues?

PARTICIPANT: Okay. Sorry. (Laughter.)

SENIOR STATE DEPARTMENT OFFICIAL TWO: So I believe that the total staffing level is going to be an increase of about six positions within the Office of the Secretary. And as I said, that’s cyber security and --

QUESTION: For a total of what?

SENIOR STATE DEPARTMENT OFFICIAL TWO: I don’t have that number.

QUESTION: Okay. So it’s about 2 million per position?

SENIOR STATE DEPARTMENT OFFICIAL TWO: But I can get that. We can get that. No, the funding level is associated – what we usually estimate is about $250,000 per position depending upon whether it’s domestic or overseas. Obviously, overseas positions are more expensive. And there is a combination of both the domestic and the overseas positions associated with the Cyber Security Initiative.

QUESTION: Can I ask a related question that maybe you could field? But Defense Secretary Hagel and the President have both offered to take cuts in their salaries given the economic climate. And I’m just wondering if the Secretary has offered to do anything or is planning on doing it this way?

MODERATOR: You missed this earlier in the week – yeah, last week, excuse me.

QUESTION: Sorry. What’s the answer?

SENIOR STATE DEPARTMENT OFFICIAL TWO: Yes.

MODERATOR: Yes. We’ll get you the transcript.

QUESTION: Thank you.

QUESTION: I got – it’s budget day and I haven’t seen the breakdowns.

QUESTION: $9,000 --

QUESTION: I’m assuming the East-West Center has survived yet another (inaudible)?

SENIOR STATE DEPARTMENT OFFICIAL ONE: Oh, I have that one, actually.

SENIOR STATE DEPARTMENT OFFICIAL TWO: Yeah, the East –

QUESTION: Minus 6 million.

SENIOR STATE DEPARTMENT OFFICIAL TWO: Yeah. The East-West Center has survived. It is a reduction, and that is traditional with our request level for the East-West Center as well.

QUESTION: Yes, but somehow every year, it always went up. But I suppose now that someone is no longer in the Senate, that won’t be happening. So it is still there.

SENIOR STATE DEPARTMENT OFFICIAL TWO: Yes, sir.

QUESTION: But with a 6 million cut. Thank you.

MODERATOR: I think we’ve just got time for about one more question if anybody else has the final wrap-up.

Should we try our colleagues one more time here? Folks in London, is there anybody else who wanted to ask a follow-up question? Go ahead and go off-mute if you want an additional question. I’ll give you a couple of seconds. Looks like not. Thank you all for joining us.



PRN: 2013/0386