MR. FULGHAM: Good morning.

AUDIENCE: Good morning.

MR. FULGHAM: Come on, all the Starbucks coffee to drink this morning. Come on, good morning.

AUDIENCE: Good morning.

MR. FULGHAM: USAID and State Department colleagues and members of the press, it is my distinct pleasure to welcome you to the United States Agency for International Development. We are honored to have with us today Secretary of State Hillary Rodham Clinton as well as senior members of her leadership team at the Department of State. Deputy Secretary Lew and Dr. Slaughter and friends and colleagues, thank you all for coming.

Madame Secretary, many of our colleagues attended the town hall you hosted at the State Department on Friday and are eager to learn more about this important initiative that we are about to undertake. I know that you had originally planned to come to USAID on Friday, and I thank you for postponing it until today so that I could be here.

As some of you know, I was taking my daughter on a college tour. And in fact, one of the schools we visited was the Secretary's alma mater. (Laughter.) As a father, it gives me tremendous pride to know that thanks to the efforts of Secretary Clinton and those before her, my daughter can now grow up to be anything she wants to be. (Applause.)

Madame Secretary, as First Lady, as a United States senator, and now as our Secretary of State, you have emphasized the importance of expanding the circle of human dignity to every human being, men and women, boys and girls. And that is the essence of what we do at the United States Agency for International Development. We look forward to partnering with you in the weeks and months and years ahead on this important initiative and in the furtherance of our national security.

Ladies and gentlemen, please join me in extending a very warm welcome to the 67th Secretary of State, our fearless leader, Hillary Rodham Clinton. (Applause.)

SECRETARY CLINTON: Thank you. Thank you so much. Thank you all. Well, thank you. I am delighted to be back here at USAID with all of you. I want to thank Alonzo for that kind introduction. He's absolutely right; when I found out that he wouldn't be here, we waited until he got back from that college tour. He took his daughter to Wellesley, and one of the recruiting comments now made as young women are shown around is, "You have a really good chance if you go to Wellesley to become Secretary of State." (Laughter.) Madeleine Albright was there ten years before me, so I don't know, something's in the water.

I am looking forward to answering your questions, hearing your ideas, and continuing our conversation that we started here in this atrium about how best to serve our nation and our world through effective development efforts. I know that Alonzo mentioned two of the people who along with Alonzo will be leading up our effort, the Quadrennial Diplomacy and Development Review, but I just wanted to mention that Deputy Secretary Jack Lew and Director Anne-Marie Slaughter will be working along with Alonzo on this.

We see in the Obama Administration development as one of the most powerful tools we have for advancing global progress, peace, and prosperity. The President and I believe that it therefore must be a vital part of our country's foreign policy. And when I became Secretary of State, here in this great space, I pledged to elevate development to its rightful place alongside diplomacy and defense as we tackle the many global challenges and seize the opportunities facing us.

We are committed to pursuing peace and prosperity in every corner, not only in the marble halls of government, but in rural villages, in distant cities, where people are striving to live and work and learn and raise families and grow old with dignity. These are universal dreams, and the United States seeks to make them a reality for more of the world's people.

To that end, we have set the United States Government on a path to double foreign assistance with our 2010 budget request. We've made significant pledges of assistance for the West Bank and Gaza. We've made development an integral part of our approach in Afghanistan and Pakistan and Iraq. And at last week's G-8 meeting in Italy, the President announced our food security program that will come with a major increase in funding for food and sustainable agriculture. And again, when he was in Ghana, he focused on the importance of smart development.

So development stands on its own pillar of our foreign policy, as does diplomacy and defense. And at their best, they reinforce each other. When USAID and the State Department work in tandem, we achieve a multiplier effect, significantly increasing the scope and the impact of our programs and policies.

To deliver concrete results, we have to maximize our effectiveness. That's why I'm excited to be here today to discuss a new enterprise, the Quadrennial Diplomacy and Development Review, which I announced at the State Department on Friday.

We are adopting this idea from the Pentagon. The Pentagon has successfully used this quadrennial review process to improve effectiveness and to establish a long-term vision. And I know from my time - about six years on the Senate Armed Services Committee - that the defense review helped convey the Department's mission to all stakeholders, from members of Congress, to the members of the armed forces and their civilian colleagues, and to the rest of government, as well as to the American public.

Diplomacy and development deserve the same rigorous evaluation and strategic thinking. To protect our nation, advance our interests, and spread opportunity to more people in more places, we, of course, need more than a top-notch military. We need talented diplomats to foster partnerships and negotiate peace. We need experts in development, like all of you, to steer crucial investments and the material conditions of people's lives, from strengthening health and education to improving agriculture and access to food and water.

We also need development experts to create the conditions for what President Obama described in Ghana as transformational change. So we rely on your expertise to promote and support good governance, fair and open access to global markets, strong political and economic institutions, and a thriving civil society.

As we've seen in many places around the world and most recently in Afghanistan, long-term stability depends not only on the defeat of violent extremists, but also on the construction of roads, the creation of jobs, and the strengthening of Afghan institutions to address the needs of the people.

For the past six months, I have fought on behalf of USAID and the State Department to get you the resources you deserve to do your jobs well. We've called for our government to increase its support of our work. But in return, we are also called to improve on that work. So this review comes at a critical time. We are facing an unprecedented set of challenges. And too often in the face of these challenges, USAID and the State Department are forced to play catch up when we should be taking the lead.

The truth is we know we can do better. We know that, those of us in this effort together, better than anyone. But it's also true that in a time of economic recession in our own country, we owe it to our brothers and sisters and parents and friends and colleagues and classmates who are struggling to be able to put their own family's future on a strong footing, to explain to them why at this time we are asking for significant increases in the work of diplomacy and development.

We therefore have to strengthen and streamline our organizations. And we have to be sure that we do so in a way that tells the story of the importance of the work that the State Department and USAID does for the citizens of the United States as well as for the people of the world.

So we're going to launch this major reevaluation of how we set our priorities, organize our work, and allocate our resources to make sure that we start looking to the horizon; to plan, not just react. For the State Department and USAID to have the greatest impact, we cannot simply strengthen each agency on its own. We need to maximize the collaboration between us. We want to build on the existing partnerships and find new opportunities, to share knowledge, tackle common problems, and align our programs around the world.

The QDDR will help us create short-term and long-term blueprints for advancing our foreign policy objectives and enhancing coordination between USAID and State, a crucial element of exercising smart power.

We want to be sure that our top priorities are consistent and clear, and that these then drive not only decisions about budgeting and programming, but how we approach the training and development of the new officers coming on board through the Development Leadership Initiative.

As I told the people at State on Friday, the QDDR has a different aim than previous reform efforts as well as a broader scope. It's designed to tell us where we are and help us determine where we want to be, and how to bridge the gap between the two. Through this process, we will be working closely with the White House to harmonize the activities of USAID and the State Department with the goals and actions of the entire government. We're doing this review at the start of this Administration, rather than a few years in, because we don't have the luxury to wait.

We are facing challenges that demand our best efforts, our best experience and expertise right now. Each of you will be key to the success of this process. You are on the front lines. You know what works and what doesn't. And we want to rely on you, your energy and expertise, to make sure this review is substantive and useful. I know there are a lot of questions about how this will work in practice, and I'll try to answer as many of the questions you have today, and then we'll answer more in the days to come.

This initiative will have a dedicated staff. It will be chaired by Deputy Secretary Jack Lew, the first person to serve as Deputy Secretary of State for Management and Resources. It's a position that I filled for the first time to make sure that the Department and USAID are able to perform at the highest level. We've already seen the benefits of having the position filled, and even more so, having someone of Jack's experience fill it.

I remember when we were talking about his new assignment, Jack, who some of you might recall, was the director of OMB during the Clinton Administration, said that it was always so easy to cut money from State and USAID in the budget process because they would never come in in a unified way. And so divide and conquer in the face of more demands for defense and more demands for domestic priorities became the order of the day.

When we presented a united front to OMB this time, they were somewhat bewildered that we came in and said we are here on behalf of diplomacy and development, and we are here to move toward the President's stated goal of doubling our assistance budget. And we've made tremendous progress.

I also want to thank Alonzo for serving as the co-chair, along with Dr. Anne-Marie Slaughter. Alonzo will be filling this role until a permanent administrator is brought on board. And let me say I am as eager as you are to have a permanent USAID administrator in place. But we're not waiting, and we don't think we have time to wait. So Alonzo will be an integral part of our leadership team putting this together.

I'm going to work as hard as I can in the days, weeks, and months ahead to get the resources that you need to do your jobs better. As part of this process, we will of course be including PEPFAR and MCC. We will be working through the White House process with Treasury, Defense, and others to try to get a handle on all of the resources that go either into diplomatic or development efforts. But one of my key goals is elevating development to its proper place in our foreign policy agenda. It is not only the smart thing to do; it is the right thing to do.

For me, as with many of you, this is personal. For most of my adult life, I have been an advocate for women and children and families both here in the United States and around the world. Way back in the early 1980s, I read about a man named Muhammad Yunus, and called him up and asked him to come to Arkansas. And we created a micro enterprise project, the first in the United States modeled on the Grameen Bank.

And then I heard about a program in Israel that worked with mothers to help them, even if they were illiterate as many of the refugees from Ethiopia and other places were, to prepare their children, and we brought that to Arkansas as well. But it wasn't until I had the honor of representing our nation overseas as First Lady that I fully appreciated the intersection between diplomacy and development and the progress we can make when the two work together.

In 1995, I had the privilege of speaking on behalf of our government at the United Nations Conference on Social Development in Copenhagen. And shortly after that, I took my first trip to South Asia - to Bangladesh, Pakistan, India, Nepal, and Sri Lanka. I not only met AID workers, but I visited AID projects and saw the tangible results of your efforts.

It had a profound effect on me and my thinking, and I worked hard during my husband's administration and later in the Senate to make sure that development was recognized as the vital tool that it is, that it was done effectively and intelligently, that we invested in its potential to advance our national interests, and that we were serious about maximizing the resources and energy we put into it.

That's what this review is designed to do, and I'm counting on all of us to make it a success. I am grateful for your hard work, and I'm looking forward to continuing to work with you to build a USAID that is fully prepared to take on the challenges of the 21st century. I want USAID to be seen as the premier development agency in the world, both governmental and NGO. I want people coming here to consult with us about the best way to do anything having to do with development. And I very much look forward to the day when we are able to bring back more full-time USAID employees to do the work that now has been too often sent outside of this agency, and to recapture the dollars that should be spent on delivering results and not just paying contractors.

So we have a lot ahead of us in the case that we need to make, but we're going to rebuild USAID, we're going to revitalize the mission, and we're going to convince not only the Congress but the American people that this is the best investment they can make. Thank you all very much. (Applause.)

MR. FULGHAM: The Secretary is going to take a few questions. There are microphones on the left and right side. We can start on the right. First person at the mike, I guess, at this point. Please, don't be bashful. We don't get many chances to speak with the Secretary directly. I know a lot of you have a lot of questions, so step up to the mike.

SECRETARY CLINTON: And I'd appreciate it if you'd identify yourself and where you work.

QUESTION: Sure. I'm Mike Burkly. I'm a Foreign Service officer stationed in Washington now. My question is, when I was stationed in Brazil, the Brazilian Government turned back $38 million of our HIV funding because we had a difference in policy about abstinence and about commercial sex workers.

So I would hope, as part of this review, that the people who are doing it could look at that. And I just wanted to find out your opinion about, one, abstinence, and whether that's really supported by data, which a lot of people, including me, feel it really isn't; and the other one is working with commercial sex workers in a productive way and not stigmatizing them. Thanks.

SECRETARY CLINTON: Well, thank you. Both of those issues are getting a lot of attention from Dr. Eric Goosby, our new Director of PEPFAR. I believe that the importance of effective prevention requires that we take a hard look at the policies that interfere with such prevention efforts going forward. I think that there is a role for abstinence, but I remember going to Uganda, which pioneered the ABC approach to HIV/AIDS, and it was a combined approach that worked. And we're going to look at how we get back to what works. This is our highest priority.

We are also negotiating with the Congress on the commercial sex and prostitution requirements because we don't want to again be eliminating effective routes to preventing and treating HIV/AIDS. So I appreciate your mentioning both of those.

Yes.

QUESTION: Thank you, Madame Secretary. My name is Yoni Boch. I'm with the USAID's Office of U.S. Foreign Disaster Assistance. Thank you for coming to address us here today.

In your Friday town hall meeting, you suggested that an eventual administrator of USAID will report to Deputy Secretary Lew, reporting to yourself, Secretary of State. While this arrangement and the inclusion of AID in the QDDR as you laid out might be successful in an administration with a strong commitment to development and USAID's priorities as you and President Obama have repeatedly laid out, it also appears to subject the agency's ability to fulfill its mission to the particular ideology and priorities of whomever is in power.

So my question is twofold: One, can you please confirm the reporting structure you envision for the eventual USAID administrator; and two, what institutional safeguards will you put in place to ensure USAID's future independence to fulfill its missions and mandate long term, and that the agency will not become more vulnerable to subsequent administrations with possibly a less-than-positive view of AID and its work around the world? Thank you. (Applause.)

SECRETARY CLINTON: Thank you. What we are attempting to do is to strengthen AID and to provide it with the support that it needs to fulfill its mission. The administrator of AID will certainly have a direct line to me, but on budget issues and coordination that will enable us to maximize our impact, I will expect the administrator to work with Deputy Secretary Lew. We believe that it will enhance the results that AID will see in terms of budget support.

And I take very seriously what you say about the changing winds of politics in Washington, which is why we're trying to establish institutional structures like the QDDR so that it stands on its own, it provides a pathway for USAID no matter who is in charge in the White House or the State Department, and why we also want to build up USAID again and not see what's been happening, which is a transfer of expertise and experience outside the agency, which we think has undermined the strength and the authoritative position of USAID within our own government as well as outside it.

So we're trying to take steps that we believe will actually strengthen AID's position no matter who's in charge. But I would just end by saying you know when a new president is elected, policies change. So we've got to try to strengthen AID to withstand what might be a political atmosphere that was not as positive about development, and I think the steps we're taking will enable us to do that.

Yes.

QUESTION: Mrs. Clinton, my name is Georgia Sambunaris. I'm with USAID. Let me start by saying what an inspiration you are to all of us, especially women.

SECRETARY CLINTON: Thank you. (Applause.)

QUESTION: My question deals with why so much of the agency's resources are allocated to so few offices and people to manage, and in particular, in the global health sector, and what - while the rest of us are receiving crumbs? And I'd like to know what can be done to make the equitable allocation of resources more appropriate to the agency's staff?

SECRETARY CLINTON: Well, thank you for asking that. That is part of what we're trying to get a handle on in this review process. It is a fair statement that certain programs within AID have received a disproportionate amount of funding to the exclusion and detriment of other programs. Part of what we want to do is set forth priorities in an integrated way to prevent that from happening in the future, and we also need to bring the rest of the government in.

When you think about how much money PEPFAR spends on health, when you think about our new commitment that we've made in this Administration to global health, and not defining it just through the HIV/AIDS or even the HIV/AIDS/malaria/tuberculosis prism, but also maternal and infant health and other chronic diseases which are becoming very debilitating to developing countries - orphan diseases. We want a much more holistic view of global health. But at the same time, we know that education goes along with improved health outcomes. We know that de-conflicting geographic areas assists help. I mean, you can't just take these in isolation. So part of our goal in this process, which we need your advice and input on, is how we look at this from a more integrated perspective.

Secondly, I will admit I have an opinion going into this process that we have contracted out too much of the core mission of USAID. It doesn't mean that the contractors are bad people or doing a bad job; it just means that we're not getting the kind of resources into the delivery of services abroad that we should. Too much of the money stays right here in Washington. And that, to me, wouldn't happen if we beefed up our USAID personnel and programmatic capacity again. We'd get more dollars on the ground where we are desperately trying to utilize them.

So I go into this believing we need to integrate and have a more holistic approach, and that we have to take a very hard look at the outsourcing of so many of the functions of USAID. And we're going to have an open process, but I think it's fair for me to tell you that that's kind of how - where I start from.

Yes.

QUESTION: Madame Secretary, my name is Jeff Spieler. I'm in the Bureau for Global Health, the part that gets more than just crumbs. (Laughter.) It's indeed a pleasure and an honor to have you as our Secretary of State.

SECRETARY CLINTON: Thank you.

QUESTION: And I'm just so pleased as an American and as an AID employee since - for more than 26 years. I'm glad to hear you speaking about staffing and how critical that is, and the QDDR is going to give us an opportunity to look closer at that. The DLI has been a marvelous exercise in bringing new Foreign Service officers into the agency. I've seen many of them. They're highly qualified and we're doing a marvelous job.

And we also need to think about technical excellence within the agency, both overseas and in Washington. And we need to maintain our comparative advantage by having strong technical people within the agency. It's important to have generalists that can do development, but we need specialists. We need them in Washington to backstop the field, because the field will never have the capacity to have as broad a range of technical experts in the areas that we work as Washington can, and us in Washington backstop the field.

So one of the things I want to bring to your attention, please, is the fact that for a Foreign Service officer - for instance, a backstop 50, a health officer - if that person wants to maintain his or her technical work, technical capacity, there is no career path for them. For them to be promoted in the Foreign Service, to get to the senior Foreign Service, they have to stop being a technical expert. They have to move into management. They're not going to become a mission director and deputy mission director by being a strong technical expert working at the grassroots in countries. They need to have a broader work.

In Washington, there is no career path for a technical expert. There is no way for a technical person to move up to senior Foreign Service or to what's called SL positions. The only way they can get an advancement if they want to stay as a technical leader is to move to another agency, because we don't have the capacity at AID. We actually have the capacity. We don't exercise it. So I would love for you to take on the fact that we need strong technical people, as you've said very clearly, in Washington. We don't have to contract it all out. There's still going to be a role for contractors because sometimes we need people for a short period of time --

SECRETARY CLINTON: Right.

QUESTION: -- where you don't want a full-time staff person.

SECRETARY CLINTON: Right.

QUESTION: But we need to build up that excellence across all of the bureaus within AID Washington, so we can backstop the field. And we need to create a career path for people who want to be technical experts. Thank you.

SECRETARY CLINTON: I think that's great. (Applause.) Well, that's why I appreciate sessions like this because you're the first person who has said that to me. And I'm very, very appreciative to you. It dovetails with the general complaints I get about how we used to have, back in the good old days - I guess, the '80s, I don't know - (laughter) - before I'll bet some of you were born or were in kindergarten, and certainly in the '90s, that we had agronomists, more agronomists. We had more engineers. We had more people with specific technical skills, in addition to Foreign Service officers who really burrowed in and understood a technical area well.

And I think it's one of the reasons why, frankly, we've seen a lot of our responsibility drift to the Defense Department. You stop and think about it; if we don't have enough engineers, they've got the Army Corps of Engineers, and it's hard to compete with that. So you're doing some kind of development project, they just say, well, we'll do it, don't - you don't have to worry about it. We'll do it. And I want us to be competitive on the technical expert page. So I think that's an excellent point and I thank you for it.

Yes.

QUESTION: Hi, my name is Bethany Eagen. I'm with the Office of Public Affairs, currently as an intern. I have a similar frustration, maybe on a different level, where - as being ready for hire, but pre-masters, I'm looking for an entry-level type of position where I can utilize the experience I've gotten here at USAID and sort of, you know, transfer that into the workforce. And so far, I've run into a few issues with that where the DIL program is - allows you to start from the bottom and work your way up, but it requires a Master's.

The other option seems to be a more Civil Service track, which the entry-level positions are predominantly administrative and stick to an administrative track. So I'm wondering if there is a way that this can be, you know, reevaluated and reorganized so that there are entry-level positions that utilize interns and people who already have, you know, some USAID experience and training, perhaps, or maybe even experience from other places that's limited, but who want to come in on the ground and grow and professionally develop in the USAID organization.

SECRETARY CLINTON: I think that's a really fair question. And one of the purposes of internship programs is to both convince young people they want to be in government and, in this case, in AID, and it's a great recruiting tool to be able to get a pool of people that you can evaluate. But if there's nowhere for you to go, that's kind of a dead end. So let me look at that. Again, nobody's raised this with me.

I mean, part of my goal is to persuade and cajole and entice a lot of young people into development work. And that should - there should be opportunities available. So we will add that to the list of things to look at.

QUESTION: Thank you.

SECRETARY CLINTON: Thank you. Yes.

QUESTION: Hi, my name is Ryan McCannell. I'm a democracy officer for the Africa Bureau. We all have good days and bad days, but after the speech this weekend in Accra, this is a very good day. So --

SECRETARY CLINTON: Good.

QUESTION: I wanted to talk to you about evaluation. We're in the process right now, in the bureau, of putting together our preparation actually for the senior reviews for the 2011 budget. And one of the challenges that we're facing, especially in democracy and governance, is trying to figure out how to measure the success of our work, and I know that that's a very big challenge for all of us and something that you're very interested in.

The fact is we at USAID have lost a lot of our capacity to have evaluate our own programs, and we're finding it very difficult to look at in-house ways of measuring our work. We actually - and sort of simultaneously, I was asked to help defend a request for our 2009 budget as we wrap up our 2009 budget, to spend some money on program design and learning to help us measure our programs. So I just wanted to put that forward before you and just let you know and sort of ask you what your commitment is to help us evaluate our work more effectively.

SECRETARY CLINTON: Another really great point. And we want to have a capacity to measure what we're doing. That's how we're going to gain even greater credibility and, frankly, resources that go with that. And it is difficult if there's no ongoing process for evaluation in-house. Obviously, there's a role for independent outside evaluators, but internally, we do want there to be a constant evaluation. So again, we'll look into this. Any thoughts or ideas that you might have about it would be extremely welcome.

It's easier to measure how many children have been immunized or how many textbooks have been delivered than it is sometimes to measure whether a democracy or rule of law program is successful. So we have to have different approaches, not just sort of the input measurement evaluation, which is kind of easy. It needs to be done, but it's not that difficult, but looking more on the ground in terms of effects and results. And you're in an area that is more difficult to assess.

And we also have to be looking at what it is we expect from host countries. And I think that was really at the core of the President's speech in Ghana. Making decisions about the future of African countries is up to Africans. He was very clear about that. But we have to see how we can influence and leverage whatever diplomatic and development efforts we are putting forth. So I think that's another area where the coordination between the two will maximize the impact of our development work. So all of this is really grist for our mills as we begin churning out what we want to say in the QDDR. And I thank you for raising that.

Yes.

QUESTION: Thank you. I'm Ira Birnbaum in the Europe and Eurasia Bureau. Given the recent developments on global climate change at the G-8 as well as on Capitol Hill and the upcoming negotiations, what do you see as the most appropriate development role for us in moving forward on this process?

SECRETARY CLINTON: Great question. I was talking to Todd Stern, our Climate Change Envoy, this morning, and he said that the results from the Major Economies Forum in Italy were actually somewhat better than we had expected, but that we face, as you well know, the challenge of persuading India and China to figure out what they can do and will - and what obligations they will take on commensurate with their own development goals.

So I think that there's a real role for development expertise in trying to come up with ideas - clean energy technology transfers, small-scale clean energy projects that can be upscaled in ways that the Chinese and the Indians would find attractive, looking at targets that can be met with increasing aid over time. I mean, there's got to be a lot of creative thought as to how we do this.

And of course, it's true more generally than India and China, but they're going to be the bell cows, if you will. A lot of the developing countries will look to them. How do we incentivize the saving and restoration of a tropical forest? What do we do about reforestation? I mean, there's a lot that we can be doing both in terms of ideas, but also by example. So I would ask you and your colleagues who are thinking about and working on climate change to give us your best ideas about what will work. Recently, I was in El Salvador and there's a big project - it's part of an MCC with a USAID support - to use single-panel solar for isolated homes up in the mountains of north El Salvador that are not connected and not likely anytime soon to be connected to any grid. My husband was just in Haiti as Ban Ki-moon's envoy, along with my chief of staff and counselor, Cheryl Mills, who's heading up our Haiti effort that some of you have been involved in. And in one neighborhood in Port-au-Prince, they are separating garbage and recycling certain elements of waste into these pellets that substitute for charcoal, which are cheaper and diminish, obviously, black carbon.

So there are - many of you know of specific examples. We need - as comprehensive a list as possible, because the more we can say, look, this is doable, this is not beyond the reach of a development agenda that, in China and India's case, they want to keep trying to grow their economy eight, nine percent a year because they have to absorb so many people. There are things to be done on retrofitting and other approaches. And so I would really welcome - and I'll speak for Todd Stern here - your specific ideas, those of you in this area, as to what can be scalable. Because we need - I'm going to India Thursday night for a couple of days of consultation. We're starting a Strategic Dialogue between myself and the new external minister of foreign affairs. And climate change and clean energy are on there, but we need to be as specific as possible. So any thoughts any of you have, please try to get them to me.

QUESTION: Thank you.

SECRETARY CLINTON: Yes.

QUESTION: Thank you and good morning, Madame Secretary.

SECRETARY CLINTON: My name is Willy Hardin. I'm the first vice president of American Federation of Government Employees. And my concern is of those of the Civil Service employees. Here in this agency, we have the Foreign Service officers, then we have the contractors, and below those two are Civil Service - civil servants. Now, it's inevitable that the number of contractors we have or given the number of the contractors that we have here, they are performing inherently governmental duties. And we have statistics to show, number one, that that is happening; and two, that it violates the federal occupation regulation.

My question to you is: What actions do you plan to take to: number one, at least reduce the number of contractors who are performing these kinds of duties; and two, the manner in which we here at the agency can anticipate that the Civil Service numbers will increase? Thank you.

SECRETARY CLINTON: Thank you very much. Well, it won't surprise you to hear me say that as part of our intensive review, we're looking at the roles people play and the positions that contractors hold. I'm going at it also from a cost perspective. I mean, there is increasing evidence throughout the government that contractors performing the same job as a government employee are inherently more expensive.

Secretary Gates in his budget submissions to the Hill is asking to bring thousands of contract employees back inside the Pentagon because they've already done, through their QDR process, an analysis which proves how much money they will save by bringing people back into the government.

And of course, once people become government employees, once again, then the issues that you're raising will be obviously addressed and taken care of. And I look forward to working that through and trying to determine the best way that we can maximize our government's capacity at the appropriate cost, which I think means we have more people in-house who are government employees once again.

QUESTION: Thank you.

SECRETARY CLINTON: Yes.

QUESTION: Thank you. I'm very glad that you're here today with us. I think I want to ask the question that probably most of the inquiring minds here in the auditorium would like to have answered. As you've kind of laid out or some information has come out about the QDDR process that we're about to commence, and then also the new structure where the head of our agency, I guess, will be reporting to deputy - to the Deputy Secretary of State.

The question that I think many of us have is: When will we be getting political leadership in our agency? And I think we'd also like to hear from you why it's taking so long. I think, you know, we're very concerned about this. We want to be at the table. We want to be represented. We know that we're part of the foreign policy apparatus of the United States Government, and certainly we don't see ourselves as opposed to the State Department, but we do think that we have very specific interest and insights that we think that political leadership that is a part of our agency could spend the time to understand kind of our unique perspective and represent that perspective. So I think most of us here today would like to know why is it taking so long in terms of getting someone in place and when might - we might have someone in place? Thank you.

SECRETARY CLINTON: You're welcome. (Applause.) Well, let me say it's not for lack of trying. We have worked very hard with the White House on looking for a candidate who, number one, wants the job and, number two - (laughter) - I mean, it's been offered. (Laughter.) But most significantly, the process, the clearance and vetting process, is a nightmare. And it takes far longer than any of us would want to see. It is frustrating beyond words. I pushed very hard last week when I knew I was coming here to get permission from the White House to be able to tell you that help is on the way and someone will be nominated shortly, and I was unable - it just was - the message came back we're not ready.

But I have to quickly add, certainly your senior leadership - Alonzo, Lisa and others - they are at the table every day at the State Department - (applause) - and you are well represented at every leadership level, every meeting that we have. So I know that you and I share a very strong desire to get the political leadership in place, because once we get an administrator and a deputy, there are a lot of other positions to be filled. I mean, we've got a long way to go. I mean, as probably many of you know, we don't have all the positions at the State Department filled either.

So I think anyone who has gone through it or looked at this process would tell you that every administration, it gets worse and it gets more cumbersome. And unfortunately, with everything going on in the nomination and confirmation process, it is just taking a long, long time. And some very good people, you know, just didn't want to be vetted. You know, and not that they had done anything wrong, that when they looked at the burdens of it and the fact that people who aren't very well off - I mean, it's not that they're poor, don't get me wrong, but they're not multimillionaires - you have to hire lawyers, you have to hire accountants. I mean, it is ridiculous.

And I'll say that as somebody - and then here's one of the questions you get asked. (Laughter.) First of all, you have to remember everywhere you've lived since you were 18, and beyond a certain age you can't even remember when you were 18. (Laughter.) It's really burdensome. And then one of my all-time favorite questions: Please tell us every foreign national you know. (Laughter.) I mean, some people who are of different ancestry, they're a hyphenated American and they have family still living in other countries finally say this is ridiculous, I can't even - you know, I have lots of cousins I've never met. You're going to ask me to put their names down so they can all be interviewed? That's ridiculous.

So you're sensing my frustration. (Laughter.)

MR. FULGHAM: One last question, ma'am.

SECRETARY CLINTON: Yeah, right there.

QUESTION: Good morning, Madame Secretary. I'm Maxine Hillary with Public Affairs with the Bureau for Latin America and the Caribbean here at AID. To my knowledge, there is only one USAID staff person at the United Nations Mission in New York, and considering that so many AID programs overlap with UN initiatives, I wondered if there had been any discussion on enhancing the role of USAID at the UN Mission, particularly in the areas of indigenous peoples, women, global health, democracy, et cetera.

SECRETARY CLINTON: Another excellent idea. I will certainly look into that because there is, as you know, so much coordination between USAID and UN programs and there needs to be even more. So I think that's an excellent idea, and I will certainly follow up on that.

There's two more people standing. We'll take those very quickly. Go ahead.

QUESTION: Good morning, Secretary Clinton. It's such a pleasure to have you here. I just wanted to introduce myself as one of the contractors that works directly - (laughter) - here at USAID. (Applause.) We come in many flavors. Some of us are fellows and some of us are contractors, and some of are fellows and then contractors. And I think we have the technical expertise, we have many years of experience, 20 years and more sometimes, and we've been working inside the building but we don't have the pleasure of being direct hires. I think there's many of us that would really enjoy a career path. And thank you so much.

SECRETARY CLINTON: I am so glad to hear that. (Applause.) I would love to give you that career path. And one of the things that I hope we can do, Alonzo, is in the process of the QDDR have some roundtables with contractors. I mean, what are the pluses, what are the minuses. My problem is I look at the numbers. We're paying somebody else's overhead for them to hire you to send you to us. That strikes me as really hard to justify. There are certain cases, as one of the earlier questioners said, where we have no choice, where there's expertise that is short-term or not available. But I would love to have career paths for qualified, concerned, passionate people like yourself. So give us ideas about how best to do that. And with the new hires and with the increased funding that we're requesting from the budget, we'll have an opportunity to start that, too.

Final question.

QUESTION: I want to thank you also, Madame Secretary, for being here. I've been in government service at Defense for ten years at the beginning of your husband's administration, and here at USAID now for five. I'd like to point out only one theme that cuts across presence at USUN, technical capability evaluation capabilities, and apex jobs here within USAID, positions for senior people, SFS and the like. And it was in a bureau, the PPC, Programs and Policy Coordination, which was picked up and moved over into State by the Director of Foreign Assistance in the last administration when the F bureau was created. We would very much like to hear a bit more about the plans for F bureau and the Director of Foreign Assistance. And also, I will tell you that there were 60-odd senior positions in this PPC Bureau here at USAID which handled program coordination, budget activities, staffed international organizations, and provided a great deal of our technical excellence and jobs in both sides of our personnel system. Redressing that absence, if you will, and all of the fine people over at F, who may now serve great functions in State but really were, you know, sort of ripped off the top of USAID, would perhaps be a good way to help revitalize the agency. Thank you. (Applause.)

SECRETARY CLINTON: Well, again, this is one of those issues that we need your ideas about. Obviously, this was done prior to our arriving, and we want a very clear analysis about what works and what doesn't work. It's hard to imagine having an evaluation and review mechanism without the people to carry it out on either the budget or the programmatic side. So this is all part of what we're attempting to understand better and learn from.

I want to just end by saying we come in to this without any preconceptions. I mean, our view is very clear that we want to do this so that we - either talk about seats at the table - we have as strong a position as possible within our own government and on the Hill in presenting the proposals and the future planning for diplomacy and development, and making a concerted case that will frankly protect the prerogatives and the funding of both the State Department and USAID. But on a lot of these particulars which you have mentioned, we don't have any firm views, so we welcome your ideas. I mean, one thing that I hope we'll do is set up a website specifically for the QDDR process so that you can either, under your own name or anonymously, submit ideas. Because this will only be as successful as the involvement that all of you have in it, and I think we have a lot riding on this. We want to try to get it done and teed up and get it up to the White House and the Hill in time to influence the budget process for next year. So we're on a tight timetable, but we're very sure that with the expertise and help we have here, we can make it.

And so I thank you for your wonderful questions, but more than that, your very substantive suggestions, because there's a lot of real substance here that I want to be sure we take advantage of. So please continue doing the great work you're doing, and keep thinking about ways it can become even greater and more effective. Thank you all very much. (Applause.)