DEPUTY SECRETARY HIGGINBOTTOM:  Good afternoon, everyone.  As you know, earlier today, President Obama released his Fiscal Year 2016 Budget, and I’m pleased to be joined here today by Administrator Raj Shah to discuss the 2016 budget request for USAID and the State Department and to take a few of your questions.

I just want to note that this is actually Raj’s last budget rollout.  As I’m sure you know, in just a couple of weeks he’ll be moving on.  And I just wanted to briefly take this opportunity to thank Raj for his service.  He has been a really effective and dynamic leader at USAID.  He has pushed forward innovative efforts like Feed the Future and Power Africa.  He’s galvanized our response to unexpected crises like the Haiti earthquake and the Ebola outbreak, and we’re really going to miss you.

Two weeks ago, in his State of the Union Address, President Obama said, “If there’s one thing this new century has taught us, it’s that we cannot separate our work at home from the challenges beyond our shores.”  That fact is deeply understood by Senator – Secretary Kerry and the men and women of State and USAID.  We see it in action every day.  And our FY ‘16 budget request makes critical investments in diplomacy and development that will secure peace and stability for the American people, strengthen the U.S. economy and global markets, and support U.S. citizens and our diplomatic and development presence overseas.

So first, the top lines.  The State and USAID budget request totals $50.3 billion, which is roughly 1 percent of the federal budget.  Our base budget request is $43.2 billion.  This will allow us to address ongoing and emerging national security challenges, 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, and carry out conflict prevention, nonproliferation, and peacekeeping activities around the world.  We’ve also requested $7 billion in Overseas Contingency Operations funds to respond to immediate and extraordinary national security requirements.  OCO funds will support critical programs and operations in Afghanistan, Pakistan, and Iraq, as well as exceptional costs related to our efforts to fight ISIL, respond to the conflict in Syria, and support Ukraine.

So let me just highlight a few of the key investments that we’re making or propose to make in the next year.  As Vice President Biden penned in an op-ed last week, our budget invests $1 billion in Central America.  These funds will address the underlying social, governance, and economic factors in Central America that drove last year’s crisis in unaccompanied migration – child migration, while helping Mexico secure its southern border.  Our goal is to partner with our neighbors in Central America to mitigate these underlying factors before their youth risk the dangerous journey north and arrive at our border.

For Afghanistan, our request includes $1.5 billion in assistance, which will support the Afghan unity government as it strives to implement key reforms, improve its economy, and work with us on shared security issues.  Our budget request also provides $963 million to secure and support embassy operations, including $125 million to harden Embassy Kabul, all of which will enable a significant reduction in our military presence.  With a new, reform-minded Afghan Government in place, we have the opportunity to solidify the progress we have made in Afghanistan over the last decade.  Our request continues the security, economic, and civilian programs necessary to do so.

As part of the Administration’s collaboration with coalition partners to degrade and ultimately destroy ISIL, our request includes $3.5 billion to strengthen regional partners, provide humanitarian assistance, and strengthen Syria’s moderate opposition to advance the conditions for a negotiated political transition.  The request also includes an additional $1.1 billion to support diplomatic engagement with Iraq to sustain our strategic partnership.

Last year at West Point, President Obama announced the creation of a Counterterrorism Partnerships Fund that will enable us to train, build capacity, and help facilitate partner countries on the front lines against terrorism.  Our request includes $390 million to support the CTPF through security and stabilization assistance and through efforts to counter violent extremism and terrorist ideology. 

Our budget also includes vital support for Ukraine to counter Russian pressure and aggressive actions.  This includes $275 million to support an additional loan guarantee of up to $1 billion if Ukraine continues to make progress on its IMF program and if other conditions warrant.  Our request also provides support for democracy and anti-corruption measures, European integration, energy security, and public diplomacy strategies to counter Russian propaganda throughout Europe and Central Asia.

The request also provides over $5 billion for international organizations and peacekeeping efforts.  These funds strengthen our strategic relationships across the globe and enable us to advance global security while sharing the burden with other nations.  Our assessed contribution supports 17 UN peacekeeping missions in Africa and the Middle East and satisfy U.S. obligations to the UN and 44 other organizations.

At the same time, our request will address urgent and growing humanitarian needs around the world.  We are now facing four large-scale crises in Syria, South Sudan, the Central African Republic, and Iraq.  To address this unprecedented challenge, we are seeking a total of $5.6 billion in humanitarian funding.

Shifting gears a bit, we’re investing over $800 million in clean energy, sustainable landscapes, and adaptation through the Global Climate Change Initiative.  This includes $350 million of a State Department contribution to the Green Climate Fund, a new multilateral fund that will help developing countries gain access to public and private finance to invest in reducing carbon pollution and strengthening resilience to climate change.

Secretary Kerry firmly believes that our people, the State Department and USAID personnel, are our greatest resource, and this budget makes significant investments in the people and platforms who make all of this work possible.  The budget includes $6.9 billion to support State and USAID personnel and operations around the world.  These funds sustain our relations with foreign governments and international organizations, the work of our development experts here in Washington and abroad, and vital overseas services to U.S. citizens and businesses.

In order for our diplomats and development professionals to do their work, they must be safe and secure.  Secretary Kerry is committed to doing whatever it takes to ensure that they are.  Our request includes $4.8 billion for worldwide security protection to support key security requirements such as protection of diplomatic personnel and new infrastructure such as the Foreign Affairs Security Training Center.

Within the Embassy Security, Construction and Maintenance Account, the budget includes $1.4 billion for worldwide security upgrades which include support for the Capital Security and Maintenance Cost-Sharing Programs and construction, maintenance, and security upgrades for diplomatic facilities as recommended by the Benghazi Accountability Review Board.

The fact remains that American leadership is needed now more than ever, but our global leadership and our leverage depends on our resources.  Our budget request reflects what is needed to ensure that the United States remains powerfully engaged on the myriad issues that directly impact the security, prosperity, and values of the American people.  We look forward to working with Congress to secure funding for these important priorities in the coming months.

And with that, I will turn it over to Raj to talk about our development assistance request.

ADMINISTRATOR SHAH:  Thank you.  Good afternoon, and thank you, Heather.  I appreciate your kind comments and your incredible leadership on behalf of ensuring that State and AID have the resources required to carry forth President Obama and Secretary Kerry’s strong commitment to American leadership around the world.

Heather likes to point out – and she’s right – that most Americans think our collective budget is greater than 20 percent of the federal budget, and in fact it’s somewhat smaller than that, clocking in at just under 1 percent. 

I’d also like to thank the leadership of President Obama and Secretary Kerry and bipartisan members, Democrats and Republicans, in both houses in Congress that have relatively strongly supported USAID and our country’s development and humanitarian missions around the world.  In fact, 2015 is an important year for our collective partnership to address extreme poverty and promote resilient democratic societies, often in the most difficult parts of our world.  But no matter where we work across the globe, the men and women of the State Department and USAID work on behalf of the American people.  And the modest yet critical investments we make in improving the quality of life for the world’s most fortunate, in fact, contribute directly to American strength, security, trade, and prosperity.

And above all, over the last years we have refocused our investments to make sure that we’re doing our work in a way where, over time, our aid and assistance is no longer necessary, where self-sufficiency can replace the need for outside assistance.  The President’s budget request this year includes $22.3 billion that USAID will manage or partly manage.  These critical resources allow us to advance our country’s interests in a far-ranging set of contexts.  By leveraging public-private partnerships and harnessing the power of technology, science, and innovation, we’re now able to deliver clear, focused, and measurable results with these resources.

Since 2010, USAID missions have reduced the number of programs and program areas in which we’ve worked from nearly 800 in total around the world to just over 500 today, or a reduction of greater than 35 percent.  This has meant that our Global Health Program, for example, has been phased out of 23 countries.  Our agriculture support programs have been phased out 25 countries.  And as a result, we’re able to deliver better resources where we concentrate our investments and our efforts.

Today, all of our major programs are independently evaluated by third-party evaluators, and the results of those evaluations – which are often important but not the most exciting documents to read – are available on an iPhone app, an unprecedented level of transparency.

When I started five years ago, just 8 percent of USAID’s global investment focused on public-private partnerships.  Today, it’s about 40 percent and the 2016 budget request will take that number to 46 percent.  Nowhere has this focus on delivering real, measurable results been more significant than in our work in global health.  The foreign assistance budget includes $8.2 billion for funding for global health, including HIV/AIDS, malaria, child and maternal survival, and a broad range of programs that tackle neglected tropical diseases, including Ebola.

These resources underscore our commitment to helping to realize the goal of ensuring that every child survives until the age of five and thrives beyond that timeframe.  To achieve this goal, we’ve already narrowed our focus of investment in our Child Survival program to 24 countries that account for 70 percent of under-five child deaths and maternal deaths.  As a result, in the past two years alone in those countries, we’ve delivered an 8 percent reduction in child mortality, more than doubling the baseline rate of reduction in child deaths.

We saw the power of this approach at work last week as the United States committed more than $1 billion over four years to the Global Alliance for Vaccines and Immunization in order to immunize 300 million children and save at least 5 million child lives by 2020.

Another notable example of this new model is President Obama’s commitment to Africa, and specifically Power Africa.  This year’s budget includes $134 million in resources to take that initiative forward.  And as President Obama reset the goal for that initiative this past summer in this building at the African Leadership Summit, those resources will help us bring tens of billions of dollars of private investment to the African power sector in the hopes of connecting 60 million homes and businesses to clean, renewable, affordable power.

This budget request includes $1.02 billion devoted to the Feed the Future Initiative, President Obama’s signature global food security effort.  The State/AID-managed portion of that will be $978 million.  In 2013 alone, these investments, in addition to bringing more than 70 companies to co-invest with us in countries around the world, has directly helped more than 7 million farm households move out of poverty and improved nutrition for more than 12 million children who otherwise would go hungry – not by giving out food, but by helping their families stand on their own two feet.

Since 2014, the President’s budget has included attempts to ensure that we reach more hungry people, particularly at their greatest hour of need, by restructuring America’s 60-year-old food assistance program, Food for Peace.  We look forward to working with Congress to get that done on a bipartisan basis this year.  In doing so, we hope to renew the unique policy partnership between America’s food producers, shippers, humanitarians, and the world’s children who suffer through crisis.  And this is important this year because smart, results-oriented humanitarian assistance is needed now more than ever.

Last year was the first time in our agency’s 53-year history that we were called to respond simultaneously to four large-scale emergencies around the world, not including the Ebola epidemic.  In Syria, we’ve supported more than 300 field hospitals, clinics, and medical points that have saved countless lives.  In the Philippines, we’ve reached nearly 3 million people with emergency assistance in the wake of typhoons.  And in West Africa, we’ve cut down dramatically on the number of new cases of Ebola from more than 100 a day in Liberia when our efforts started to less than 1 per day over the course of the last week in Liberia.

Using the $2.5 billion appropriated to State and AID for the FY 15 Ebola Response and Preparedness Fund, the budget presented today requests – includes resources for USAID’s Global Health Security Program to work alongside a range of countries to make sure that threats like Ebola do not emerge again.

But even as we respond to these crises, we know it’s critical to support civil society and human rights around the world.  That’s why this budget will provide $2.4 billion for democracy, human rights, and governance programs, some of which Heather has already spoken about.  And in addition, this budget will include nearly $200 million in central funding for science, technology, and innovation through the U.S. Global Development Lab.  The lab has already delivered extraordinary results, most notably redesigning the personal protective equipment that Ebola responders use in West Africa to keep themselves safe, building data systems to help us tackle Ebola cheaper, faster, and more effectively than anyone thought possible.  And those types of results can be replicated across the broad range of what we do if Congress continues to provide strong bipartisan support for the United States Global Development Lab.

Finally, and echoing Heather’s comments, with $1.7 billion in USAID administrative expenses, this budget allows us to invest in our most important resource: our staff.  This request represents just 7 percent of our total programmatic responsibilities, and we urge Congress to fully fund our operating expenses.

Thank you for your time and attention.  I look forward to taking questions.

MR. RATHKE:  Okay.  We have time for a few questions.  Matt, do you want to lead off?

QUESTION:  Yeah, because I – every year I have the same question, because these figures that you guys provide don’t match up with the figures that are put out by the CBO, at least in the historical page.  And I’m wondering – if you can’t answer these questions right now, maybe someone can get back to me on them.  According to the CBO, the historical page, in 2015 the budget authority – total budget authority for Function 150 was $62.12 billion.  And this year it’s 46.476 billion, which would be a reduction of 25 percent.  And I’m wondering what’s getting cut in this budget.

DEPUTY SECRETARY HIGGINBOTTOM:  So we’ll let our budget experts go through the tables with you, but our request overall for State and AID and the 150 account includes other agencies, such as Treasury and some others that have international affairs activities, is a 6 percent increase over our FY 15 request.

I can’t speak to the specifics on your table, but we’ll make sure you get an answer right after this.

QUESTION:  Okay.  Well, can you – off the top of your head in terms of highlights of things that are being cut, what are they?

DEPUTY SECRETARY HIGGINBOTTOM:  Overall, our budget request is increasing.

QUESTION:  Well – so nothing’s being cut?

DEPUTY SECRETARY HIGGINBOTTOM:  No, there are some cuts here and there in the budget, but overall the numbers are going up because there are more and vast crises that we’re dealing with.  For example, even though we maintain a robust investment in our Pakistan assistance, that’s come down by a small amount – about 10 percent – over last year based on what we think the needs are and what we think – what we assess the capabilities are.  We have a level funding for Iraq at this point.  We have level funding levels in many, many programs and increases where we think we need them.

So we can get into the specifics of where there are cuts and walk through the table with you if you’d like.

QUESTION:  Okay, thanks.

QUESTION:  I’m --

MR. RATHKE:  Okay, Arshad.

QUESTION:  Two similar ones, if I may.  One is that the CBJ summary tables have blanks for just about all the FY 2015 estimates.

DEPUTY SECRETARY HIGGINBOTTOM:  Mm-hmm, yes.

QUESTION:  I’m guessing that that’s because of the cromnibus and you haven’t had time to crunch the numbers?

DEPUTY SECRETARY HIGGINBOTTOM:  The issue with specific allocations for programs and at the country level – there’s a process that after we get an appropriation, we work through regular order every year with our appropriators to decide on the allocations in that level of detail.  So that process is happening at the moment.

QUESTION:  Sure.  And will we not get that breakdown until – when do you expect to have that breakdown available?  Or because it depends on Congress, you don’t really know?

DEPUTY SECRETARY HIGGINBOTTOM:  I would say in the spring.

QUESTION:  Yeah.

DEPUTY SECRETARY HIGGINBOTTOM:  That’s when the process kind of – it takes quite a while to go back and forth on the programming in country level.

QUESTION:  And then I have two kind of granular questions you may not be able to answer.

DEPUTY SECRETARY HIGGINBOTTOM:  More granular than that?  (Laughter.)

QUESTION:  Yes.  Yeah, much.  So I noticed that the economic support funds for Egypt are budgeted at 150 million for FY 2016; it’s a blank for FY 2015 because you don’t have that yet; and it was 200 million in FY 2014, the actual.  And as you know, for many, many years it was like 250 or 255 million, I think.  What explains the decision to ask for less for FY 2016 than you had in 2014?  Do you believe that the Egyptian Government is just not making progress and you don’t want to support them, or --

DEPUTY SECRETARY HIGGINBOTTOM:  No, it’s a good question.  We do know, from our engagement with Congress and over the ’15 appropriation and our discussions with them, that they intend the FY15 level for ESF to be about 150 million, and so in working with them with this request and thinking about where we can go moving forward on Egypt assistance, we’ve settled at that level.

QUESTION:  Okay.  And then last one – and again, somewhat obscure – but I see that you have IMET funding for Thailand, but of course Thailand had a coup.  And I wonder why you’re programming IMET funding for Thailand for FY16, given the coup.

DEPUTY SECRETARY HIGGINBOTTOM:  We’ll have to get back to you on that one.

QUESTION:  Okay.

DEPUTY SECRETARY HIGGINBOTTOM:  Thank you.

MR. RATHKE:  Do you have – yes. 

QUESTION:  Yes, I’m Mounzer Onsur with (inaudible).  I would like to ask highlights on Western Hemisphere.  I heard that the 1 billion for Central America.  But I would like more details.  For instance, Merida Initiative, 1 billion – that 1 billion includes part of Merida Initiative, or is only for --

DEPUTY SECRETARY HIGGINBOTTOM:  No, the $1 billion for Central America is just for --

QUESTION:  Only, none for Mexico?

DEPUTY SECRETARY HIGGINBOTTOM:  Yeah, that’s correct.  The – in the Central America response to the migration – child migration crisis, we have included $120 million specifically for Mexico, for the southern border, but that’s separate from the billion.  Our funding levels are pretty consistent with last year’s request for the Western Hemisphere with the exception of the Central American region.

QUESTION:  Could you please talk about Merida Initiative, Plan Colombia?

DEPUTY SECRETARY HIGGINBOTTOM:  Colombia’s about the same level.  It’s a slight decrease based on our assessment of the increased capacity of the Colombian Government to take on some of those activities.  And I don’t have the Merida number with me, I’m sorry.  We’ll follow up with you right after this.

QUESTION:  How about the human rights program for Cuba?  Any change?

DEPUTY SECRETARY HIGGINBOTTOM:  The Cuba funding is very similar to last year.  It is $20 million in democracy planning for Cuba.  I don't know, Raj, you can jump in.  The only difference in our funding request vis-a-vis Cuba is that we ask for $6.6 million to do some operational upgrades at our facilities there.

QUESTION:  On Venezuela, the democracy program for Venezuela?

ADMINISTRATOR SHAH:  I don’t have the numbers, but we can follow up with you.

DEPUTY SECRETARY HIGGINBOTTOM:  We’ll get them for you.

QUESTION:  Please, yes.  Thanks.

QUESTION:  Just the – a clarification on the Western Hemisphere and Colombia.  I thought you had asked for more money for Colombia.  In the first time in this Administration, there’s a slight increase, not a decrease.

DEPUTY SECRETARY HIGGINBOTTOM:  I think that there’s – I’m pretty sure there’s a slight decrease in Colombia, but we’ll make sure you have the right numbers.

QUESTION:  Okay.

MR. RATHKE:  VOA?

QUESTION:  Could you focus a little bit more on the priorities for Asia, please?  I didn’t see any mention on Asia.

DEPUTY SECRETARY HIGGINBOTTOM:  Sorry.  I’m glad you raised that question.  We have an increase in – of 8 percent for the Asian region vis-a-vis our FY – vis-a-vis FY14 appropriations.  The same issue regarding ’15 is still relevant in that we can’t compare to ’15 without the allocations that we’re going through with Congress.  But over the FY14 appropriation, there’s – we propose an 8 percent increase.

MR. RATHKE:  Okay.  Yes, (inaudible).

QUESTION:  Just to follow up on that, could you talk about why, as the pivot is a priority of this Administration, why Asia Pacific is not mentioned in your fact sheet and highlights?

DEPUTY SECRETARY HIGGINBOTTOM:  Well, it is – when you look at the budget overall and what we’ve prioritized increases for and where we’ve had to keep things level, and even some of the places we’ve had to cut, it’s clear that the Asia Pacific remains a key priority for us because of the level of increase.  There’s – we can speak to the specifics of a fact sheet, but the numbers really tell the story, and that’s a trajectory that has increased in our budgets consistently over the past few years.

QUESTION:  Specifically, where does the 8 percent goes to?

DEPUTY SECRETARY HIGGINBOTTOM:  All the details of that are in the congressional justification on our website, and in the call that you’ll have afterwards with folks.  They can get into that level of detail with you.

MR. RATHKE:  (Inaudible.)

QUESTION:  Can you get into a bit more detail about the 3.5 billion for anti-ISIS/ISIL operations?

DEPUTY SECRETARY HIGGINBOTTOM:  Sure.  So the number includes the work that we’re doing to counter ISIL with Iraq and our partners in the region, to deal with the Syria humanitarian crisis, and to stabilize that region and ensure that there is the ability to work against that.  So there’s security assistance training, et cetera, the humanitarian costs, the – Lebanon, Jordan, other partners in the region that are taking a lot of the responsibility for the crisis there.

MR. RATHKE:  Okay.  We have time for just a couple more.  Go ahead in the back.

QUESTION:  Hi.  Can you tell us what is the budget request for Afghanistan and Pakistan individually, and how much of that will go to security and economic assistance?

DEPUTY SECRETARY HIGGINBOTTOM:  Good question.  So – I’m flipping here, sorry – the Afghanistan request is $1.5 billion for assistance, as I said in the opening.  And I have the breakdown here.  1.2 million is in security and the rest is in – excuse me, 1.2 billion is in security and the rest is in civilian assistance.  Although is this --

ADMINISTRATOR SHAH:  Yeah, the --

PARTICIPANT:  So the total amount of the request for Afghanistan is $2.5 billion and that includes --

DEPUTY SECRETARY HIGGINBOTTOM:  But that includes our operations, our platform.

PARTICIPANT:  Correct.

DEPUTY SECRETARY HIGGINBOTTOM:  You asked about assistance, right?  Yeah.  So 1.5 is the number for assistance.

For Pakistan, the assistance number is 804 million.  There’s 534 million in civilian and 270 million in security. 

MR. RATHKE:  Okay.  Thanks very much, everyone.