“The truth is that addressing hunger, disease, and human misery abroad is a cost-effective way of making Americans safer here at home. Our foreign assistance benefits us as much as it does our local partners.” – Congressman Howard L. Berman

Washington, DC – Congressman Howard L. Berman, Ranking Democrat on the House Foreign Affairs Committee, delivered the following opening statement at today’s committee hearing entitled “The Agency for International Development and the Millennium Challenge Corporation: Fiscal Year 2012 Budget Requests and Future Directions in Foreign Assistance”:

Madam Chairman, I very much appreciate this opportunity to review the FY 2012 budget requests for USAID and the MCC, and to explore the steps each agency is taking to make our aid programs more effective and efficient.

Dr. Shah and Mr. Yohannes, thank you for being here with us this morning.

I want to offer a special welcome to Mr. Yohannes, since this is the first time that he is testifying before our committee.

When Dr. Shah last testified before this Committee, he had only been in the job for a few months. Immediately he was caught up in coordinating the U.S. government’s response to the earthquake in Haiti, and, understandably, much of the hearing was devoted to examining the status of those relief efforts. At that time, the administration was also in the midst of conducting the QDDR and, simultaneously, a review of development policy. We did not have much of a chance to get into specifics about his plans for reform.

Thankfully, Dr. Shah did not let the press of all this other business deter him from pursuing an overhaul of the agency. In the year since he last appeared before us he has embarked on a very ambitious reform agenda, which is aptly named “USAID Forward”. The aim of the effort is to change fundamentally the way the agency does business. It encompasses reforms in nearly every aspect of the agency’s programming and operations.

Under Dr. Shah’s leadership, USAID is taking aggressive steps to harness science, technology and innovation in support of development. He is exploring new ways of partnering with the private sector to leverage resources and achieve breakthroughs.

Likewise, the MCC finds itself at a pivotal juncture. Created by President George W. Bush as new approach to development, the MCC forms partnerships with poor but well-governed countries to eliminate constraints to growth. Given that the MCC was established by Republicans for the explicit purpose of creating a new model for development assistance, I find it astonishing that H.R. 1, the Republican CR, slashes funding for the MCC by nearly 30% from FY10 enacted levels.

Now that the MCC’s first two compacts have been completed, in Honduras and Cape Verde, and final evaluations are being conducted, we have an opportunity to assess the added value of the MCC. Many aspects of the MCC’s innovative model, in such areas as country ownership, transparency and accountability, and managing for results, are already being adopted by other foreign affairs agencies as a result of the QDDR. Yet the MCC has not been content to sit on its laurels; it is continually proposing ways to improve and strengthen its effectiveness, including a new initiative to expand partnerships with the private sector.

I share the view of everyone on this committee that in this difficult economic climate, we have an obligation to ensure that every tax dollar is put to the best possible use and that we are receiving a meaningful return on our investments. No area of the budget should be exempt from scrutiny.

However, I must say that I am concerned by the unrealistic expectations, often based on misinformation, that cuts in foreign assistance will fix the deficit. A poll last fall by the Kaiser Family Foundation found that four in ten Americans erroneously believe that foreign aid is one of the two biggest areas of spending in the federal budget. A December poll by the University of Maryland showed that when asked to estimate the amount of the federal budget that is devoted to foreign aid, the average American says 25 percent. When asked how much would be an appropriate percentage, the median response is 10 percent. Of course, what we actually spend is about 1 percent.

What’s particularly interesting about this poll is that, over the fifteen years it has been conducted, the amount Americans think is spent on foreign aid has gone up – from 20 percent to 25 percent – while the amount they think should be spent has remained steady at 10 percent. So even during this time of economic distress, people still think we should be spending about 10 times as much on foreign assistance as we actually are.

As members of this committee, I think we have a special obligation to exert leadership to help correct some of these misunderstandings.

The U.S. Agency for International Development and the Millennium Challenge Corporation provide the bulk of our development assistance around the world. They use quite different approaches and work with a different, though sometimes overlapping, pool of countries. But they both seek to reduce global poverty by promoting economic growth.

Reducing global poverty is not a matter of altruism, though it would be the right thing to do even if it brought us no direct benefits. But the truth is that addressing hunger, disease, and human misery abroad is a cost-effective way of making Americans safer here at home. Our foreign assistance benefits us as much as it does our local partners.

Let me offer a few examples. Anyone who had the experience of suffering the H1-N1 flu last year, which fortunately turned out to be much less deadly than we feared at first, can tell you that it is worth investing in surveillance, detection and prevention systems abroad. For just pennies a dose, we can rid the world of polio, which was one of the most dreaded childhood diseases of the 20th Century in the United States.

More than one in every five U.S. jobs is linked to exports and imports of goods and services, and approximately half of all U.S. exports go to developing countries. If those countries are not stable enough to serve as reliable trading partners, we lose our overseas markets. And if these people don’t have a way of earning income, they won’t be able to afford our products.

Dramatic increases in food prices in 2007-2008 created a global crisis and led to political and economic instability around the world. If we’re not helping to increase global food production, addressing the impact of climate change, and enabling couples to plan the size of their families, these problems are only going to get worse.

The recent democracy movements across North Africa and the Middle East have demonstrated not only the benefits of our security assistance, but also the importance of contingency funds for a flexible response. Countries that descend into chaos and anarchy provide breeding grounds for extremism and training grounds for terrorists. Just a small investment in supporting stable and peaceful transitions to democracy could yield far greater gains for U.S. national security than billions for developing new weapons.

And most obviously in places like Iraq and Afghanistan, the key to bringing U.S. soldiers home is jumpstarting the local economies and strengthening their capacity for good governance. As Secretary Gates recently said, “without development we will not be able to be successful in either Iraq or Afghanistan.” By investing an additional $4 billion in civilian assistance to these countries – as the President’s budget proposes to do -- we will save the American taxpayers $45 billion in military expenditures.

The bottom line is that whether we’re talking about Iraq and Afghanistan, where U.S. troops have been engaged in combat operations, or Haiti and Sudan, where complex humanitarian emergencies threatened to deteriorate into large-scale violence, USAID’s operations are every bit as important as the U.S. military’s to protecting the health and safety of American citizens. What the MCC provides is an extra push to help those countries who are doing all the right things to overcome remaining obstacles and make the transition to self-sufficiency.

While we may have differences over specific policies and priorities, I think it is important to acknowledge the critical importance of the work these agencies do, and thank the dedicated public servants, civil and foreign service alike, who carry out these programs, often at great personal risk and sacrifice.

Once again, it is a pleasure to have you both here today, and I look forward to your presentations.