FOREIGN ASSISTANCE ACT OF 1973 MR. FULBRIGHT, FROM THE COMMITTEE ON FOREIGN RELATIONS SUBMITTED THE FOLLOWING

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• Collection: General CIA Records
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• Document Creation Date: December 9, 2016
• Document Release Date: August 24, 2001
• Sequence Number: 4
• Publication Date: March 14, 1973
• Content Type: REPORT

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Calendar No. 86
93n CONGRESS SENATE REPORT
1st Session No. 93-62
FOREIGN ASSISTANCE ACT OF 1973
MARCH 14, 1973.-Ordered to be printed
Mr. FULBRIGHT, from the Committee on Foreign Relations,
submitted the following
REPORT
together with
ADDITIONAL VIEWS
[To accompany S. 837]
The Committee on Foreign Relations, to which was referred the bill
(S. 837) to amend the Foreign Assistance Act of 1961, and for other
purposes, having considered the same, reports favorably thereon with
an amendment and recommends that the bill as amended do pass.
I. PRINCIPAL PURPOSE OF THE BILL
The principal purpose of the bill is to authorize funds for fiscal year
1973 for military and related assistance programs carried out under
the authority of the Foreign Assistance Act of 1961 as amended and
the Foreign Military Sales Act as amended. The bill also authorizes
additional funds for relief activities in Bangladesh. The following table
lists the various categories of assistance to be authorized by this bill,
compares the Committee's recommendations with the amounts appro-
priated for fiscal year 1972, the Executive Branch's authorization
request, the current spending rate under continuing resolution
authority and provides other data on money items in the bill.
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Senate
Fiscal year Foreign
Fiscal year 1973 Relations
1972 authori- Continuing Committee
appro- zation resolution recommen-
Program priation request rate datior S. 837
1. Military grant assistance___________________________ $500.0 $780.3 $550.6 3;500.0
(a) Naval training-Latin America -------------------------------------------- 2.5 --------------
2. Supporting assistance_____________________________ 550.0 844.0 600.0 550.0
(a) Earmarked sums:
(1) Israel ------------------ (50.0)---------------------------- (50.0)
(2) Aid toSouthVietnam childrei-------------------------------------------------- (5.0)
3. Military credit sales_______________________________ 400.0 527.0 400.0 400.0
(a) Aggregate credit ceiling -------------------- - (550.0) (629.0) -------------- 1(550. 0)
Total military programs__________ _______ 1,450.0 2,151.0 1,553.1 1,450.0
4. Bangladesh assistance____________________ ----------------------------- 200.0 100.0 100.0 100.0
Grand total ------------------------------------ 1,65D 0 2,251.0 1,653.1 1,550.0
CEILINGS
1. Cambodia---.------------------------------------ 2341.0 ---------------------------- 226.3
2. Excess dofensearticles------------------------------ 2185.0 245.0 -------------- 185.0
3. Military aid and salestoLatin America ----------------- 2100.0 3150.0 ______________ 150.0
1 $300,000,000 earmarked for Israel.
2 Existing law.
3 Authority also requested for the President to waive the ceiling.
II. OTHER PURPOSES OF THE BILL
In addition to authorizir.g appropriations and other limitations as
detailed in Table I, the bill also does the following:
1. Requires that impounded funds for certain Federal departments
be released by a certain da-;e or foreign aid funds will be cut off;
development assistance funds for use for military or supporting assist-
ance purposes;
2. Requires that future agreements with foreign countries relating
to U.S. overseas military installations be submitted to the Senate for
its advice and consent;
3. Prohibits obligation or expenditure of funds to carry out the
military base agreement with Portugal until the agreement has been
submitted to the Senate in treaty form;
4. Imposes a $226 millior. ceiling for fiscal year 1973 on U.S. obliga-
tions in, for, or on behalf )f Cambodia;
5. With the exception of training assistance, it prohibits U.S.
Government military assisl,an~e or sales to the nations of South Asia;
6. Requires specific authorization for the financing of any foreign
forces operating in Thailand;
7. Prohibits transfer of Agency for International Development
development assistance ft:.nck for use for military or supporting
assistance purposes;
8. Restricts transfer of foreign assistance funds to other agencies;
9. Prohibits assistance to North Vietnam without specific authoriza-
tion and appropriation by Congress and, after. June 30, 1973, prohibits
further obligations for assistance to South Vietnam, Cambodia and
Laos without specific authorization and appropriation by Congress;
10. Requires financing of military assistance for South Vietnam and
Laos out of Foreign Assistance Act appropriations after June 30, 1973;
11. Earmarks $50 million of funds made available for development
or supporting assistance to be used for flood relief and related purposes
in the Philippines; and
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12. Prohibits aid to countries which do not provide access to U.S.
newsmen to military bases which were constructed or are maintained
with U.S. funds and from which U.S. personnel carry out military
operations.
This bill is the successor to H. R. 16029 which passed the Senate on
September 26, 1972, by a vote of 46-41. The House and Senate
conferees were unable to reach agreement on the bill and the programs
to be authorized by it have been financed since the beginning of fiscal
year 1973 under continuing resolution authority.
On March 14, 1972, the President sent a message to Congress
transmitting draft legislation concerning funding of foreign assistance
for fiscal year 1973. That draft bill was introduced by the Chairman
of the Committee on Foreign Relations, by request, as S. 3390 on
March 21, 1972. Public hearings were held on it on April 17, 18, and 19,
1972, and it was reported to the Senate on May 31, 1972. The bill was
defeated by the Senate on July 24, 1972 by a vote of 42 to 58. No
agreement was reached in conference with the House on H.R. 16029,
the second foreign aid authorization bill, and the bill died with the
expiration of the 92nd Congress.
On February 7, 1973, the President submitted to the Senate a
draft of new foreign assistance authorizations for the 1973 fiscal year,
essentially the same as that proposed in S. 3390 of the 92nd Congress.
This draft bill was introduced by Senator Mansfield for Senator
Fulbright (by request) on February 8. A hearing was held by the
Committee on Foreign Relations on February 22, 1973, at which the
following witnesses were heard:
Mr. Curtis W. Tarr, Under Secretary of State for Security Assist-
ance;
Mr. Robert H. Nooter, Assistant Administrator, Bureau of Sup-
porting Assistance, Agency for International Development;
Vice Admiral Ray Peet, Director, Defense Security Assistance
Agency, Department of Defense;
Professor George Kahin, Friends Committee on National Legisla-
tion; and
Mr. Don Luce, Director, Indochina Mobile Education Project.
The bill was considered by the Committee in executive session on
February 26 and ordered reported favorably by a vote of 12 to 4.
These voting in the affirmative were Senators Fulbright, Sparkman,
Symington, Pell, McGee, Muskie, McGovern, Humphrey, Case,
Javits, Pearson, and Percy. Those voting in the negative were Senators
Mansfield, Church, Aiken, and Scott.
IV. COST ESTIMATES
Section 252(a) (1) of the Legislative Reorganization Act of 1972 re-
quires that committee reports on bills and joint resolutions contain:
"(A) an estimate made by such committee, of the costs which would
be incurred in carrying out such bill or joint resolution in the fiscal
year in which it is reported and in each of the five fiscal years following
such fiscal year . . ." The Act also requires that the committee's cost
estimate be compared with any estimate made by a federal agency.
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The Committee estimates that the cost of carrying out the pro-
visions of H.R. 16029 during fiscal year 1973 .will be $1,550,000,000,
the total for the new appropriuitions authorized, plus additional funds
which will be available through receipts, recoveries, or other pre-
viously appropriated funds.
The outlook for the military assistance, military credit sales, and
supporting assistance program., over the following five years is murky
at best. Based on a straight..lin projection of the levels recommended,
not including military aid for South Vietnam and Laos beginning in
fiscal year 1974, the costs for fiscal years 1974-78 will total $7,250,-
000,000. The Department of State has projected costs of foreign
military aid, credit sales, in d supporting assistance for the period
fiscal years 1974-78 within a range from $8,384,000,000 to $12,096,-
000,000, also excluding military aid to Laos and South Vietnam which
are now funded out of the budsre.t for the Department of Defense.
SECTION-BY -SECT ION ANALYSIS
&SYection. 2. Overseas Private Investment Corporation
This section amends Section 234(c) of the Foreign Assistance Act
of 196i., relating to the Overseas Private Investment Corporation, to
permit the Corporation to acquire in its financing operations warrants
and other rights to acquire stock. But such rights may not be exercised
while held by OPIC.
Under present law, OPIC is prohibited from purchasing stock but
it may acquire debt securities convertible to stock (for example,
convertible debentures) and ..ell them to investors, but may not
convert them to stock while th-y are held by OPIC. OPIC has found
that rights to acquire stock ar. more flexible and more popular as a
financing tool than convertible debt securities and that, borrowers in
less developed countries are often reluctant to issue convertible debt
securities because of the lega:F technicalities associated with them.
Rights to acquire stock may aho spur private participation in OPIC-
financed projects as potential purchasers could be offered a choice of
an equity or debt position in a project. This would be especially
attractive to small financial institutions which might be reluctant to
purchase debt securities containing complex conversion features.
The amendment also would make it clear that the authority to
receive convertible debt securities and rights to acquire stock applies
to all of OPIC's financing opera Lions, that is to investment guaranties
as well as direct loans.
Section 3. Refugee Relief Assistance
This provision would authorize $100,000,000 for fiscal year 1973 for
refugee relief and humanitarian assistance in Bangladesh. In fiscal
year 1972 Congress appropriated $200,000,000 for relief activities
resulting from the conflict in what was East Pakistan and is now
Bangladesh..
To (late the United States Government has provided $319 million,
or approximately one-third, of `he estimated $1.1 billion in assistance
from all contributors to tha international relief, rehabilitation and
reconstruction effort for Bar.,.giadesh. The U.S. response to the needs of
Bangladesh and its people emphasized meeting these priority needs:
The combined threats of hunger and malnutrition: $136.8
mi [lion of Public Law 430 food grants.
-Rest ration of basic facilities and rehabilitation of the economy:
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Critical food transportation and handling operations: $35.3
million in grants to the United Nations.
Restoration of the homes and livehoods of thousands of
Bangalee families: $21.0 million in grants to U.S. voluntary
agencies.
Assistance for food transportation and logistical operations,
health, nutrition, and related needs: $10.9 million.
As the table below shows, the U.S. Government commitments to
Bangladesh have been funded principally out of the fiscal year 1972
South Asia Relief Appropriation and the Public Law 480 budget for
fiscal year 1972 and fiscal year 1973. Only about $5 million of the
fiscal year 1973 South Asia Relief request has been obligated to date
for voluntary agency programs. However, it is anticipated that a
substantial new grant will be made directly to the Bangladesh Govern-
ment in the near future to cover urgent commodity import require-
ments, particularly fertilizer and cotton, the rehabilitation and
expansion of agricultural cooperative and training facilities, the
construction of ferry landings and bridges, and other priority recon-
struction needs. This grant is expected to require up to $90 million of
the remaining funds. In addition, UNROD has asked the international
community for funds to cover its operations on a phase-down basis
through 1973. These costs are estimated at $8.6 of which the U.S. will
provide up to one-third of the total. Several voluntary agencies are
formulating proposals for such activities as vocational rehabilitation
of the disabled and agricultural demonstration for farmers. These
programs are currently estimated at $2.7 million.
TABLE II.-U.S. HUMANITARIAN ASSISTANCE TO BANGLADESH AS OF DEC. 31, 1972
[In million of dollars]
South Asia relief Public Law 480
appropriation Conlin- (title II) fun ther Grand
gency
Fiscal Fiscal fund fiscal Fiscal Fiscal sources total
year 1972 year 1973 year 1971, year 1972 year 1973
Public Law 480 (title 11):
Bilateral----------------------------- ------------------------ 15.6 39.1 --------------------
Multilateral ---------------------------------------------------75.1 7.0 136.8
Grant to Bangladesh Government:
Essential commodities_____________ 40.4 -
Rehabilitation projects/activities--_- 74.6 -------------------------------------------------- 115.0
Grants to United Nations (UN ROD)---__- 35.3 -------------------------------------------------- 35.3
Grants to U.S. voluntary agencies:
CARE---------------------------- .6 ---------- 4.7 ----------------------------------------
Catholic Relief Services------------ 8.0 ------------------------------------------------------------
International Rescue Committee____ 1.7 0.8 ----------- _______________________________________
American Red Cross--------------- 1.0 ----------------------- -------- -------- --------------
Medical assistance programs------- .9 ------------------------------------------------------------
Foundation for Airborne Relief ------ .9 ________________------------------------------------------
Church World Service-------------- 1.0 ------------------------------------------------------------
Community Development Founda-
tion--------------------------- .2 ------------------------------------------------------------
International Voluntary Services -- -- .05 .5 --------------------------------------------------
Asia Foundation---------------------------- .5 --------------- ?---------------------------------
Seventh-Day Adventist Welfare 21.0
Service --------------------------------- .1 ----------------------------- ?----------
World Relief Commission--------------------- ?1 -------------------------------------------------
Other assistance:
Food transport and handling, health,
nutrition, and related needs ------ 7.4 3.1 --------------------------------------------------
Cholera Research Laboratory--------------------------------------------------------- ----------
Support------------------ 0.4 10.9
------------------------------ -
Total__________________________ 172.0 5.1 4.7 90.7 46.1 .4 319.0
Assistance to refugees in East Pakistan
and India March-December 1971 ------ 27.4 ----------------------------------------------------------
Grand total--------------------- 199.4 -----
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TABLE III.-BILATERFL AND MULTILATERAL AID TO BANGLADESH
PRELIMINARY ESTIMATES OF COMMITMENTS AS OF NOV. 30, 1972 (CUMULATIVE TOTALS SINCE DEC. 15, 1971)
Voluntary
Donor Bilai:rral Multilateral r agencies
Total
As percent of
total
Argentina ----------- ..---------.------------------ --- 0.24 ---------------
0.24
0.02
Australia_.--------- _--------------- __ 2.55 4.97 4.43
11.95
1.07
Austria.-._--------------------------- .06 .04 --------------
.10
.01
Belgium ------------ -------- ________ :1.00 .87 .23
2.10
.19
Bulgaria-------_ _------------------ .21 -----_--------------------
.21
.02
Canada- ___- _ --- -------------- 54.50 8.37 4.60
67.47
6.06
Czechoslovakia- ._- ___--_ -------- 25.00 ..____________________
25.00
2.25
Denmark-_-__ _.---------- .----------- 7.72 2.71 .61
11.04
.99
P.E.C------- -------------------------- 7.92 .-------------------------._
7.92
.71
France_ ------------------------------ 4:.0O .51 .12
4.63
.42
Germany (FRG) ----------------------- 7.27 7.13 20.92
35.32
3.17
Germany(GDR) --------------------- 1.28 .------------------------
1.28
.11
Hungary --------------------------- .02 ----------------------------
.02
--------------
India --------- __________-__-___-___ 257.12 -------------- 1.38
259.10
23.27
Ireland ------------- -__----__-___----------------_
.18 .04
.22
.02
Italy --- ----------------- - .. it
.01 --------------
.11
.01
Japan 7.40 7.40
10.60 .93
18.93
1.70
Netherlands..-------------------- 5.63
7.21 -----------------
-----------
1.15
New Zealand ------- --________ ______ .61
.55 1.16
2.32
.21
Norway-------------------- ---- ----------------
3.02 4.43
7.45
.67
Rumania----------- --------- --- 9.60 --------------------------
9.60
.86
Sweden__ ____.---------------------- 26.96 5.03 3.04
35.03
3.15
Switzerland ---- ___.-_-__-_________------------- -..._- 1.55 6.54
8.09
.73
United Kingdom---.-------------- -_.._
13.54
29.88 2.88
46.30
1.16
United States- _.___-_--______-___-_-_
158.18
134.77 235.06
2328.01
29.46
U.S-S.R ---------------------- -------
51.00
--------- -------------------
51.00
4.58
Yugoslavia---`----------------------
50.(0
----------------------- ----
50.00
4.49
Others______________________________
0.01
4.32 5.12
.45
.04
World Bank (IDA)---------------------------------- ... 107.10 --------------
107.10
9.62
WFP------------------------------------------... 1.86 ---------------
1.86
.17
UNICEF6------------ --------- ---------------------- 7.63 -------------
7.63
-68
Total ----------------------- .__
492.28
334.55 96.49
1,113.32
100.00
Percent___..------------ __-____
62,18
30.05 7.77
100.00
______________
i Includes all multilateral aid channeled througl UNROD, UNICEF, IDA, WFP.
Includes contributions of voluntary agencies cut of own resources. U.S. Government assistance to Bangladesh totals
$318,800,000.
3 Nepal.
4 Chile, Fiji, Holy See, Liechtenstein, Luxembou-g, Sl=ain, Thailand, U.N. Secretariat, Philippines, private contributors,
Finland, Israel, Philharmonic Orchestra, Lebanon.
6 International Planned Parenthood Federation. nterriational Social Service.
5 UNICEF out of their own resources.
Source: UNROD/Dacca.
Section 4. P14lippine Disaster Relief Assistance
This provision earmarks $50 million of the funds available under
Part I of the Foreign Assistance Act for the purpose of providing
flood relief and reeonstructio:i assistance to the Philippines.
The U.S. response to the Philippines flood disaster of July and
August .1972 has been in the form. of a three-phased program:
Immediate emergency rescue and relief assistance;
Post-emergency recovery assistance; and
long-term reconstruction and rehabilitation assistance.
Immediate emergency aid from the United States Government
during July and August 1972 totalled $2.4 million. It financed rescue
operations and distribution of food, medical supplies, and other relief
goods to flood victims. U.S. military ships and aircraft and special
U.S. Army Disaster Assistance Relief Teams (DARTs) were employed
in this effort in addition to the voluntary efforts of hundreds of
Americans ar.d Filipinos.
Post-emergency recovery rssistance which began in the latter
part of August 1972 included $24 million worth of rice and other
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foods under the Public Law 480 Food for Peace program and $6
million for immediate disaster recovery needs from A.I.D. Contingency
Funds. Some of the Public Law 480 rice was diverted from shipments
enroute to Korea and additional amounts were shipped from the
U.S. A considerable portion of the Contingency Funds was used to
help to restore agricultural production, replant rice crops and to
finance other activities that will restore the economic livelihood of
the flood victims.
Total losses due to the floods are estimated to be $500 million.
Requirements for external resources for reconstruction needs are
estimated to be about $200 million. Of this latter amount, the U.S.
is contributing $50 million made available under the current Con-
tinuing Resolution. Following restoration of the funds drawn from
the Contingency Fund, the remaining $44 million will be used primarily
for reconstruction and rehabilitation of provincial roads, irrigation
systems, flood control facilities, schools, and other activities essential
to ensure full recovery from the effects of the disaster.
The attached table shows the estimated allocations of the funds to
relief and recovery activities to date. It is expected that almost $45
million of the $50 million appropriation will be obligated by February
28 and the remaining $5 million by June 30.
TABLE IV.-PHILIPPINE DISASTER RELIEF ACTIVITIES
]In millions of dollars]
Estimated
pro ram
By period
Cumulative
y
Activit
If
alle
ti ca ons
7. I Feb. 1973
Jun 1973 Jan. 1973 Feb. 1973
June 1973
Agriculture recovery-------
Fertilizer
6.00
2.00 3.97
0.03
00
2
5
97
_____________
Rice production-------
(1
00)
(1
00)------
---
.
(1.00)
.
(1.00)
6.00
(1.00)
Provincial infrastructure---
Irrigation systems
.
10.15
6
00
.
(-
8.48 1.30
(
. 03
)
?37) (8.48
9
78)
78
10
15)
Flood control facilities-----
.
18.00
3.60 2.35
23 10
5
05
.2 3.6
7
.
0.75
.
8.00
Saols__________________
Squatter resettlement
3.46
00 00
4
.
3.25 .16 6
.27 7 .25
.27
.05 3.25
13.43
3
41
13.46
3
46
Feasibility studies ---------
------
.
.....
.90
200
:90
2.00 ____________
.
2.00
.
4.00
Other
-------------------
1.49
26 60
--------- 63 -------- -- .90
.90
.
. 26 . 86
1.49
Total______________
50.00
17.82 21.78
10.40
17.82
39.60
50.00
Source: Agency for International Development.
TABLE V. Philippines disaster relief
Estimated contributions from all donors:
U
Japan nited States
------------------
millions
$76.4
Australia
Austr
36.0
-----------------------------------------------------
Republic of China
2.0
Peoples Republic of China
1. 5
World Bank
.5
Asian Development Bank
45.5
United Nations
6.5
Other Countries contributing less than $500
000
1.5
,
and private
contributions------------------------------------------------
5.0
Total --------------------------------------------------- 174.9
bilateral Note.-All basisassistance provided by the United States for Philippine disaster relief has been supplied on a
basis.
Source: A.I.D.
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Section 5. 111 hitary Assistance
Subsection (1)-Authorization
Subsection (1) authorizes the appropriation for fiscal year 1973 of
$500,000,000 for military ae,sis3;ance grants. With recoupments, reim-
bursements, and reapproprtations of $39,700,000 this will finance a
total military grant aid program of $539,700,000 in fiscal year 1973.
Congress appropriated $500,0(30,000 for this program for fiscal year
1972 also.
rl.'hc table below gives data on the amounts programed originally
for fiscal year 1973 and the amounts funded to date. The program as
approved at the more realistic level of the continuing resolution is
classified.
TABLE VI.-FISCAL YEAR 1:173 MILITARY ASSISTANCE PROGRAM-GRANT AID
East Asia and Pacific:
Cambodia-____ ----- ----- 209,541
Taiwan____ ------- .-7,642 745
Indonesia----- ---- ----- 28,745
Korea--------------- --- --
Philippines--___ --_--------- 20,780
Thailand --__ __ ----------- 59,954
Far East region- -_.____-- -_ 375
Near East and South Asia:
Greece ---------- -_. . 554
A2,554 746
Jordan -------------------- 42,746
Turkey-. ---------- - --- ..
NESA region ----- .------ - 591
]Europe:
Portugal -------------- --- - 9,2905
61
Spain
European region ---------- - 85
Africa:
Ethiopia ----------- 12,139
Liberia -__-_-------- 3,703
Tunisia---- _------------ 93
Africa region--- ______ ---
Latin America:
4, 873
Bolivia ---
Chile__ __ -- 1,114
Dominican Republic ----- --_ 1,435
Ecuador ------ .______ ----- 1,000
E'Salvador __-_-.--.------ 805
Guatemala---- -- _._-_.--- 1,736
Honduras------ -- 734
Nicaragua------------------ 1,045
Panama----------- -_ 527
791
Paraguay------- ~------- ---
Uruguay---.------ - ------- 1,460
ion 687
re
A
99,034
12,171
32,757
:l1 6, 025
'G, 955
10,153
267
1,144
16, 410
15,031
99
869
3,680
71233
117
1, 272
62
3, 066
919
586
0
464
711
537
669
243
601
314
merica
I e
g --- - -- 85,246 63, 3,533
General costs--_-.-_- - --
Toial-_-____--- 812,387 434,340
Source: Department of Defense.
East Asia and Pacific: Malaysia- 181 178
Near East and South Asia: 215 205
Afghanistan-______ ______ - 234 133
India -------------- --
Lebanon --------------- __ - 230 166
Nepal---------------- - 29 26
Pakistan------ _ 243 282
Saudi Arabia ------- _____.- 484 231
Sri Lanka____15 53
Europe:
Austria------ ------------- 24 18
Finland-----___---------- 24 ZO
Africa: 55 49
Ghana------------ - --
Mali -------------- ---- 50 26
Morocco --------- -- ------ 956 295
Senegal--------------- - 425 261
Zaire ---------_
Latin America: 550 555
Argentina---------
Brazil 988 669
-------------
Colombia --------- --------- 779 722
M e x i c o - - - - - - - - - - - - - - - - - -
P e r u- - - - - - - - - - - P e r u- - - - - - -- - - -- - -- 820 783
Venezuela ----------------- 870 866
Worldwide total program- 819, 700 439, 980
NOA_-___--------------- --- 780,000 413,000
Subsection (2)--Special Authority
This subsection amends section 506(a) of the Act to extend through
fiscal year 1973 the Pret,ident's special authority to order defense
articles and defense services subject to subsequent reimbursement.
Subsection (3)-Military Assistance for South Vietnam and Laos
This subsection, proposed oy Senator Case, requires that, beginning
with fiscal year 1974, all military grant aid to South Vietnam and Laos
be funded out. of the regular military assistance program, as authorized
under the Foreign Assistance: Act of 1961, as amended.
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[in tl cusands of dollars)
Proposed Fended Proposed Funded
program t3 date program to date
- - --- -- ------
TRAINING ONLY
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Military aid to these countries is currently being funded from the
Department of Defense budget, an interim procedure which the
Congress approved in 1966 in the case of South Vietnam and in 1967
in the case of Laos and Thailand. This was done at a time when the
realities of Southeast Asia were not unlike those that accompanied the
Korean war buildup in 1950, which occasioned a similar funding trans-
fer for military aid for Korea from the Mutual Security Act to the
Defense Department budget. Funding of military aid to Thailand was
returned to the regular MAP program by the Foreign Assistance Act
of 1971.
Return of funding for military aid programs in South Vietnam and
Laos to the regular foreign assistance program will permit the ap-
propriate committees of Congress to judge our military aid programs
in these countries in a foreign policy context. Military assistance to
Cambodia and Thailand is now being judged in this way, through
funding from the regular military assistance program. This change
will ensure that all U.S. military assistance to Southeast Asian
recipients is judged against security assistance needs elsewhere-all
of which have a direct bearing on this country's overseas commitments
and its foreign policy in general.,
Subsection (4)-Limitations on availability of funds for military
operations
This provision, proposed by Senator Case, adds a new section 515 to
the Foreign Assistance Act which would require specific Congressional
authorization before funds from any U.S. Government agency could
be made available for the purpose of financing any military operations
by foreign forces in Thailand.
The requirement of prior Congressional approval in this instance is
an outgrowth of the "crazy quilt" financing arrangements that have
emerged from U.S. involvement in Indochina and the conduct of
cross-border military operations by mercenary forces in that part of
the world.
Section 6. Security Supporting Assistance
Subsection (a) Authorization
This section amends section 532 of the Act to authorize the appro-
priation of $550,000,000 for security supporting assistance for fiscal
year 1973, of which $50,000,000 is earmarked for Israel.
The United States provides security supporting assistance to
selected countries or international organizations to promote or
maintain economic or political stability. The use of supporting
assistance funds in a given country depends on the degree of impor-
tance of that country to U.S. foreign policy objectives, particularly
in terms of potential impact on U.S. national security interests.
Since the criteria for providing military assistance and supporting
assistance are similar, countries which are principal recipients of
supporting assistance are also as a rule significant recipients of military
assistance through Military Assistance Service Funded programs (Viet-
nam, Laos and Thailand in fiscal year 1972; Vietnam and Laos only
in fiscal year 1973), the Military Assistance Program (Cambodia,
Jordan, and, beginning in fiscal year 1973, Thailand) or Foreign Mili-
tary Credit Sales (Israel).
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Supporting assistance funds normally contribute to some degree to
the economic growth or tc the developmental goals of the recipient
country, but the current motive in programing these funds is
neither economic growth nor development per se; rather, the specific
purpose is to stabilize the economic or political situation vis-a-vis a
given security situation.. Supporting assistance seeks, therefore, to
assist the recipient nation to overcome an immediate security threat
while avoiding simultaneous d'terioration of the national economy as
much as possible.
Following is the Executive Branch's proposed allocation of the fiscal
year 197:3 request for suppcrtiing assistance.
The following table provides comparative data on the supporting
assistance program:
TABLE VII.-SECURI''Y SUPPORTING ASSISTANCE, DEC. 31, 1972
-In tl cusands of dollars]
Proposed
fisca year
Country Fiscal year 1973,
Revised I
fiscal year
1973,
Obligations
- 1972, actual program
program
to date
Cambodia
- -- -------------------------------- aaa,lea b85, 000
332,600
101
246
_____ --------- 37,087 75,000 Israel
70
000
,
32
732
____---- _____ _ 50,000 50,000
--- -------------------
_______
,
50,000
,
_______-___-
Laos
_ 40,000
40, 000
Laos
40,000
_
40
000
--
Malta
-____--------------------- -- 47,327 49,800
---------------------
45,000
,
20,248
Thaila
Thailandd- ------------- 9,500
14,600
4,597
597
,
----- 14,840 25 600
East Asian Regional Development
-
------------
10,000
4,782
-
-
-
300 8,400
Philippines-----------
-
2,400
282
-
------------------- ----------------------------------
Spain -
50,000
11,934
---------------- 3,000
UNFICYP
3,000
--------
, Interregional ----------------_ _______ 2400 4,800
and other
2,400
-
2,400-
_____________________ 23,400
12:121
13,000
3,989
Total_._______-.____________________-
589,261 874,500
633,000
222,210
1Based on current continuing resolution levels
Source: Department of State.
a5'ubsnction (b) Assistance. to South Vietnamese children
This provision, sponsored by Senator Williams, earmarks $5 million
of security supporting assistar-ce funds for the specific purpose of
providing assistance to South Vietnamese children who have been dis-
advantaged by the war or co i.di,,ions related to it.
The funds can be used for two purposes: First, to provide for the
establishment., expansion, and improvement of day care centers,
orphanages, hostels, school feeding programs, and related programs in
health, welfare, and education for South Vietnamese children; and,
second, to facilitate the adoption of orphaned and abandoned children
in South, Vietnam by American. citizens. However, of the funds avail-
able under this provision, no more than 10 percent may be used for
adoption assistance.
This provision recognizes that Americans want the United States
to give proper assistance to help care for the children of South Vietnam
who are the unfortunate vicl;irn, of the war. It simply calls upon the
United States to do its fair share. The assistance authorized is to be
furnished "to the maximum extent possible, under the auspices of
and by international agencies or United States or South Vietnamese
voluntary agencies."
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Section 7. Transfer Between Accounts
Section 6 amends section 610(a) of the Foreign Assistance Act of
1961 to prohibit the use of development assistance funds for military
aid or supporting assistance purposes. In 1971, following the defeat
of the House passed foreign aid bill H.R. 9910, the Committee on
Foreign Relations reported two bills to the Senate which separated
authorizations for economic or development aid from military aid
programs. The Committee has approved this provision in order to
give further implementation to its strong view that military and eco-
nomic aid matters should be dealt with separately. The law now
permits transfer of technical assistance funds, for example to be used
for military aid or supporting assistance, a tempting loophole which
could be used to augment military aid or supporting assistance in
circumvention of Congressional actions on authorization and appro-
priation legislation. The Committee recommends that this loophole be
closed.
Section 8. Prohibitions Against Furnishing Assistance
Prohibition on military assistance or sales to the nations of South
Asia
This paragraph prohibits military grant assistance or credit sales
(except training) under the Foreign Assistance Act and the Foreign
Military Sales Act to the governments of Pakistan, India (including
Sikkim), Bangladesh, Nepal, Sri Lanka, the Maldive Islands, or
Bhutan. It would not prohibit commercial sales of either weapons or
supplies by private industry.
The Committee approved this restriction in order to insure that
the U.S. government does not become any more deeply involved in the
military affairs of the nations of South Asia.
The following is a list of the military aid programs planned for
countries in this region in fiscal year 1973:
Fiscal year 1973 program
[Dollars in thousands]
Military Military
grant credit
assistance i sales
South Asia----------------------------------------
$736 -
Pakistan-------------------------------------
285 -
India
------------------------------------
143 -
----
Sri Lanka (Ceylon) -----------------------------
55 -
Nepal ----------------------------------------
Maldive Islands -------------------------------
Bangladesh-----------------------------------
U.S. training only.
Access to U.S.-financed bases
This provision, adds a new subsection 620(y) to the Foreign Assist-
ance Act, in order to insure that American newsmen have access to
overseas base facilities constructed or maintained by United States
funds and used by U.S. personnel to carry out military operations.
The American public, consistent with security requirements, has a
legitimate right to be kept informed about activities conducted from
such facilities and they rely on the news media to perform this service.
This provision, though general in scope, results from U.S. newsmen
being denied access to bases in Thailand, constructed with the tax
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dollars of U.S. citizens, which are manned by U.S. military personnel.
As U.S. Air Force contingents have been removed officially from South
Vietnam, many of them have been shifted to American-built bases in
Thailand.
Because the Thai Government has restricted access to these bases
by American newsmen, the American public is in turn denied access
to information about our air operations in this area. The Committee
believes this situation should be remedied.
This provision prohibits, furnishing assistance under the Foreign
Assistance Act to any country which denies American reporters
access to military base facilities constructed or supported by United
States fund; and used by our personnel for military operations, The
prohibition :is not subject to waiver under Section 614(a) of the Act.
Section 9. Allocation and Reimbursement Among Agencies
Using the authority of Section 632(a) of the Foreign Assistance
Act the Agency for International Development on April 1, 1972,
transferred. to ACTION $2,600,000 in technical assistance funds to
finance Peace Corps operations abroad, after Congress had appropri-
ated $10,000,000 less for -Peace Corps operations than the amount
requested. The transfer w,is it deliberate effort to nullify Congress'
action in cutting the Peace Corps request. The change in law recom-
mended by the Committee will prevent such circumvention o:f the
Congress in the future. It prohibits transfers of funds for the purpose
of augmenting the appropriations of any agency for any purpose not
authorized by the Foreign Assistance Act. This change will still leave
ample authority for reimbursement by A.I.D. to other agencies for
services rendered, or for commodities procured.
Section 10. Limitation on assistance./or Cambodia
The Foreign Assistance Act of 1971 imposes a ceiling of $341,000,000
for fiscal year 1972 on United States obligations in, for, or on behalf of
Cambodia. This section set,; a ceiling of $226,388,000 on such obliga-
tions for fiscal year 1973. The purpose of such a ceiling was described
by the Committee in 1971 as follows:
'1'lie purpose of section 655 is to establish a ceiling on overall
U.S. expenditures, exclusive of air combat operations, in, for,
or on. behalf of Cambodia during the current fiscal year and to
put the Congress in position to know in the future, when
money is being requested for Cambodia, how much is actually
being spent and for what purposes. In the past, the cost of
United States Government operations in some countries has
far exceeded the amounts which have been requested and
then authorized and E.pp:ropriated. It is the Committee's
intention to see that this escalation of costs, not only un-
authorized by the Congress but also unknown to it, does not
occur in Cambodia. Section 655 is intended, therefore, to
return. to the Congress some measure of control over what is
actually spent by setting an absolute ceiling on expenditures,
a ceiling which applies to all Executive Branch departments
and agencies.
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The ceiling recommended by the Committee and approved by the
Senate was all-inclusive, with the exception of the cost of combat air
operations over Cambodia. The table below gives data on estimated
spending for certain programs in and for Cambodia in fiscal year 1972
and fiscal year 1973:
Fiscal year
1972
Through
Dec. 31, 1972
Estimate,
fiscal year 1973
1. To upgrade the capabilities of the Armed Forces of the Khmer
Republic: r
(a) Weapons ---------------------------------------------
$22,302
028
74
$1,116
47
931
--------------
(b) Ammunition-------------------------------------------
,
21
,
935
3
------ ---
spares and accessories___________________________
(c)) Aircraft
17,0
,
______________
,
d) Vehicles ----------------------------------------------
13,377
420
640
798
--------------
(e) Communication equipment and spares_____________________
3,
702
1
___ -------
(f) Support equipment and spares___________________________
5,759
3
779
,
210
--_-----------
(g) Construction -------------------------------------------
,
587
8
107
--------------
(h) Services and training-----------------------------------
16,
087
16
,
114
4
______________
(i) Supplies-----------------------------------------------
,
13
664
,
380
2
--------------
(I) Ship
,
,
--------------
s
(k) Missiles-----------------------------------------------
72
---------------------------
Subtotal---------------------------------------------
186,096
70,933 $133,000
2. To enable Cambodia to withstand the abnormal economic dislocation
caused by the North Vietnamese/Vietcong invasion:
(a) Security supporting assistance:
---
(1) Cash grant------------------------------------- 20,000 -------------------------000
(2) Commodity import program________________ 16,502 20,000 53,
(3) Program technical support costs___________________ 585 261 700
(4) Exchange support fund_________________________________________ 12,500 20,500
(5) Refugees and displaced persons ---------------------------------------2- ------- 1,500
(b) Title 1, Public Law 480----------------------------------- 16,562 12,885 z 20,618
(c) Administrative allotments________________________________ 31 35 70
Subtotal --------------------------------------------- 53,680 45,681 93,388
I Includes excess and redistributable materiel valued at 1/3 of acquisition cost.
3 Consists of country-use portion of Public Law 480
Source: Department of State.
Section 11. Limitation on Use of Foreign Aid Funds
This amendment, sponsored by Senator Fulbright, requires release
of impounded funds totalling $4.9 billion (according to the Office of
Management and Budget) appropriated for programs under the
authority of the Departments of Agriculture, Transportation, Health,
Education, and Welfare and Housing and Urban Development. The
amendment is a revision of section 658 of the Foreign Assistance Act
of 1971. As revised, this section includes the following provisions:
It requires a cut-off of funds appropriated pursuant to the Foreign
Assistance Act and the Foreign Military Sales Act if by April 30, 1973,
the President has not released all funds appropriated during fiscal
years 1972 and 1973 for the Departments of Agriculture, Transporta-
tion, Housing and Urban Development, and Health, Education and
Welfare.
It requires a similar cut-off of aid and military credit sales funds if
future appropriations for these departments are impounded for more
than 60 days.
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It defines the term "impounded funds" to include any action which
effectively prevents the creation of obligations or expenditures of
appropriated funds, or of authorizations to create obligations in
advance of appropriations, for any period of time irrespective of
whether such action is taken by the Office of Management and Budget
or the agency head.
It requires that aid and military credit sale funds be spent on an
orderly basis so as to insure that. the prohibitions in the amendment
are not, nullified either by 'reiinpoundment" or by it speed up in
the obligation of aid funds.
It provides for the withholding of funds in accordance with specific
legal requirements as may be contained in the authorizing legislation
for the departments affected or as is provided in the Anti-Deficiency
Act. The Committee recognizes that this Act authorizes reserves in
the apportionment process. The Committee wants to emphasize,
however, that such reserves are authorized under the Anti-Deficiency
Act only (1 for contingencies; and (2) to effect savings whenever
savings are made possible by or through (a) changes in requirements,
(b) greater efficiency of operations, or (c) other developments sub-
sequent to the date on which such appropriation was made available.
This latter provision refers r,o unforeseen developments subsequent
to the enactment of appropriations which reduces funds required to
carry out the program and does not include various other reserves
sometimes referred to as being for "routine financial administration."
The Committee will look to tie General Accounting Office to pursue
this interpretation and to ensure compliance with it.
Finally, this provision calls upon the Comptroller General to review
the accuracy of the certification made by the heads of the depart-
inents with respect to the impoundment of funds of their depa:rt-
uients and to issue quarterly reports on his findings beginning with
the first quarter in fiscal year 1974.
When the Committee considered Senator Fulbright's amendment, .he
reported on a letter which he had received from the Comptroller
General asking that certain modifications be made in the original text.
The Committee ? ccepted these modifications. The text of the
Comptroller General's letter, with enclosure, follows:
COMPTROLLER GENERAL OF THE UNITED STATES,
Washington, D.C., February 22, 1973.
R-135564.
lion. J. W. FUI.BRIGHT,
Chairman ` Committee on Foreign Relations,
U.S. Senate.
DEAR MR. CHAIRMAN: On February 8, 1973, you offered your
amendment No. 7 to the adninistration's foreign aid authorization
bill which would amend section 658 of the Foreign Assistance Act of
1971. In explaining the amendment you said that it will bring an end
to the expenditure of foreign aid funds if the President insists upo:a
impounding funds for high-priority domestic programs. Amendment
No. 7 together with explanatory remarks appears on pages 52431--
S2433 of the Congressional Record of February 8, 1973.
We are primarily concerned about the proposed subsection 658(c)
which contains no exceptions for reservations of funds made strictly
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within the authority of subsection (c) (2) of the Antideficiency Act,
31 U.S.C. 665(c) (2) and subsection 658(e) which would provide
substantial additional duties for the Comptroller General.
In my testimony of January 30, 1973, on Senator Ervin's Impound-
ment Control bill, S. 373, 93d Congress, I stated that we are not
aware of any objections to impoundments falling squarely within the
literal language of subsection (c) (2) of the Antideficiency Act, 31
U.S.C. 665(c)(2), or specifically authorized in other law. This testi-
mony was given at a Joint Hearing held by the Subcommittee on
Separation of Powers of the Senate Judiciary Committee and an ad
hoc subcommittee of the Senate Committee on Government Opera-
tions. A copy of my prepared statement and the attachments are
enclosed. It was suggested that consideration be given to amending
S. 373 to provide that its provisions shall not apply to funds being
withheld in accordance with this and other specific requirements of
law. As you are aware, section 658 of the Foreign Assistance Act
of 1971 presently exempts impoundments made in accordance with
specific requirements of law and, as stated in my testimony on S. 373,
I interpreted that provision as applying only to section (c) (2) of the
Antideficiency Act. We suggest a revision of subsection 658(c) to
reinstate that exemption to avoid the burden of reporting impound-
ments which involve only contingencies or savings in carrying out
legislative programs and which are generally conceded to be not only
of a noncontroversial nature but also desirable in achieving efficiency
and economy.
As now written, subsection 658 (e) would require that the Comptrol-
ler General determine if funds of the Departments of Agriculture,
Transportation, Housing and Urban Development, and Health,
Education, and Welfare have been impounded more than 60 days.
The imposition of such a requirement on our Office would result in
a workload that would severely tax our resources and even then we
could never be assured that all of the impoundments had been found.
The impoundments can be made by the head of a Department as
well as by the Director of the Office of Management and Budget and
documentary evidence thereof, if any, may be difficult to locate. We
would therefore much prefer language which would require the head
of each Department named to send us a report certifying the amounts
impounded during each 60-day period which we would review for
the purpose of making our quarterly reports to the Congress.
We also suggest that the parenthetical language "(including any
authorization to create obligations in advance of appropriations)"
which effectively includes contracting authority in the definition of
appropriation and which is included in subsection (a) be inserted in
subsection (b). This will avoid any implication that contract authority
is included with respect to fiscal years 1972 and 1973 but not to fiscal
year 1974 and subsequent fiscal years.
We have some reservations on one other aspect of subsections (a)
and (b). Under those subsections, if the impounded funds are not
timely released for obligation and expenditure, no further expenditure
of foreign assistance and military sales funds may be made notwith-
standing that payments may be due in liquidation of previously in-
curred valid obligations. We believe this prohibition against further
obligations would accomplish your purpose and avoid some objections
which may be raised against prohibiting expenditures in liquidation
of valid obligations of the United States.
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Language to carry out these suggestions is enclosed. I do not be-
lieve these suggestions will alter the purpose or impact of your amend-
ment. At the same time I fee] that they will: (1) clarify the meaning
of appropriation, (2) avoid some needless reporting, and (3) afford
it facility for keeping the Con;)~ress informed of impoundments in the
four named departments. If we can be of further assistance concerning
these suggestions or anything else involving your amendment or the
impoundment issue we would, of course, be pleased to provide such
assistance.
Sincerely yours,
[Enclosures.]
ELMER B. STAATS,
C9m.ptroller General of the United States.
(1) Delete the words "or expended" from subsections (a)
and the words "or expe aded" and "and expended" from
subsection (b).
(2) Insert between lines 7 and 8 of subsection (b) paren-
thetical phrase "(including any authorization to create
obligations in advance of appropriations)."
(3) Amend subsection (c) to read as follows:
"(c) The provisions of this section shall not apply with
respect to funds impounded in accordance with any provision
or law specifically authorizinz the impoundment of funds of
any such department, if the impoundment is made only with
respect, to and in accordance with such provision authorizing
the impoundment as interpreted by the Comptroller
General."(4) Strike the first sentence of subsection (e) and insert
in lieu thereof the following language:
"The head of each such department shall certify to the
Comptroller General within 10 days after the expiration of
each 60-day period in the :'fiscal year 1974 and any fiscal year
thereafter (1) the amount of funds appropriated to such
department which are impounded, (2) whether such funds
have been impounded for more than 60 days, and (3) if, and
when, such funds have been released in accordance with
this section. The Comptroller General shall review these
certifications and take such action as he deems necessary
to verify their accuracy."
In its report on the initial impoundment provision adopted
in 1971, the Committee offered the following explanation of
its action:
The objective of this arendment is to give the American
public some indication that the Committee is just as aware of
our domestic needs as it is of the needs of other countries. The
provisions of the section say to the taxpayers of this country,
"You will be assured of getting the funds appropriated by
Congress for domestic programs and projects before addi-
tional foreign aid funds tarn be obligated for similar programs
and projects in Rio de Jariero, Nairobi or New Delhi."
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In addition to focusing attention on domestic vs. foreign
needs in the context of the whole national priorities debate,
this section of the bill also addresses the separation of powers
issue and the Constitutional responsibilities of the Legislative
and Executive Branches of our Government.
If the President is left free to impound funds appropriated
by the Congress, this could result in an even greater im-
balance between the two Branches than has developed in the
field of foreign affairs. If the Congress's power of the purse is
infringed or restricted in any way-such as through the im-
poundment of appropriated funds-Members of Congress
might as well pack their bags and go home. This is the only
real power the Congress has left and it must be guarded and
protected, and kept whole and intact. The Committee be-
lieves that the requirements of this section are consistent
with this goal.
A majority of the Members of the Committee believe this
explanation is as valid today as it was then.
Section 12. Foreign Military Sales
Subsection (2) -Authorization
Subsection (1) authorizes an appropriation of $400,000,000 for
financing the foreign military credit sales in fiscal year 1973. This is
the same amount Congress authorized and appropriated for fiscal year
1972. The Executive Branch requested an authorization of $527,-
000,000. The Committee does not believe that an appropriation of
this size has been justified.
The military credit sales program is carried out under the authority
of the Foreign Military Sales Act. Its purpose is to make credit
available to developing countries to enable them to purchase military
material and services from the United States, with up to ten years for
repayment.
Subsection (2)-Aggregate credit ceiling
Subsection (3) authorizes a ceiling of $550,000,000 for foreign
military credit sales in fiscal year 1973, the same amount that Congress
approved for fiscal year 1972. Of the $550,000,000 ceiling, $300,000,000
is earmarked for Israel, as it was in fiscal year 1972.
A ceiling is necessary because military credit sales can be financed
under the Foreign Military Sales Act by both direct credit extended
by the U.S. government and through U.S. government guaranty of
credit extended by private banking institutions. Under the guaranty
program 25 percent of the amount of the guaranty is set aside in a
reserve account. Thus, unless an overall credit ceiling were imposed
the $400,000,000 appropriation recommended could, theoretically, be
used to finance $1,600,000,000 in credit sales to foreign countries.
Following is the Executive Branch's proposed military credit sales
program for fiscal year 1973 and the amounts obligated to date under
the continuing resolution:
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TABLE IX.-FISCAL YEAR 1973 FOREIGN MILITARY SALES CREDIT
[In thousands of dollars[
Proposed
fiscal year
1973
Obligated to
dste (:Feb.
Proposed
fiscal year
1973
Obligated to
date (Feb
program
!2, 1973)
program
.
22, 1973)
East Asia and Pacific:
Taiwan -------------------
K
55,000
55,OCO
11700
Latin America:
Argentina------------------ 15,000
---------
-
orea--------------------
25, 000
15, 000
Bolivia-------------------- 4,000
-
-
Malaysia_-______-___`__-_-_
Far East re
ion
0
1
10.000
Brazil --------------------15,000
-----------
g
-------------
2,500
------------
Chile --------- 5,000
-
Near East and South Asia:
G
Colombia----------------- 10,000
-----------
--------
reece----- ---
55
000
140, 750
Guatemala ----------------- 2
000
-----
600
J
d
:0
30000
2 126,250
,
Mexico-------------------- 2,000
,
---------
or
an--------------------
10,000
---------------
Peru---------------------- 5,000
---
----
Lebanon___________________
15,000
Uruguay------------------ 2,000
--------
-
SaudiArabia_--_____-__-_-_
Turkey------------------
45,000
15,000
------------
20,000
Venezuela ---------- ------- 15,000
----------
------------
NESA region_______________
Africa:
Morocco-------------------
__________________
3,000
15,000
-----------
------------
Total ------------------ 629,000
228,300
Zaire ----------------------
Zaire----------------------
3,500
------------
Includes $5 750 for a guarantee of $23 000 private crecit.
2 Includes $26,250 for a guarantee of $100,000 private
credit.
Subsection (3)-Aggregate regional ceiling
This subsection amends section 33(a) of the Foreign Military Sates
Act by raising from $100 million to $150 million the annual ceiling on
the total amount of military assistance, credit sales and ship loans
which can be furnished to Latin America.
The following provides an ostilnate of all military grant assistance,
FMS Sales, transfers of exce,os defense articles, and ship loans pro-
grammed for Latin America in FY 1973 as well as an estimate of U.S.
commercial sales to the region in FY 1973, which do not count against
the statutory ceiling:
Latin, America fiscal year 1973 estimate
Military grant assistance (includes $2.5 million for Inter-American
naval training) --------------------------------------------
$16,400
000
Foreign military cash and credit sales--------------------------
,
141, 400, 000
Transfers of excess defense articles -----------------------------
4,850,000
tT.S. commercial gales------- ----------------------------------
44, 925, 000
Country Transfer method Date
Genesee (AOG-8)----------------------- Chile--- ----------------------- Lease------------------ July 5,1972
AFDL-28--------------- --------------- Mexico- ------------------------- do----------------- Sept. 15,1972
Kiowa (ATF-72)---------------------- -_ Dominican Republic ------------------- do----- ------------ Oct. 16,1972
2 LCM-6's------------------ -- - ------ Uruguay ---- -----------------------do----------------- Oct. 13,1972
Grant Country (LST-1174) __----------- Brazil__- ---------- _------------ do ------------ Jan. 15,1973
Source: Department of Defense.
Section 13. Excess Defense Articles
Section 13 amends Section 8 of Public Law 91-672, which estab-
lished a ceiling on the amount of excess defense articles which can be
given to foreig-it countries eac.,i year under the military aid program
without a charge being made against appropriations for the military
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grant aid program. This ceiling, currently $185,000,000 a year, was
initiated by the Senate Foreign Relations Committee in 1970 as a
means of controlling the amount of excess military arms and equip-
ment which could be given away abroad, often in circumvention of
reductions made by the Congress in Executive Branch requests for
military aid.
The current ceiling of $185,000,000 under present valuation practice,
permits surplus arms and equipment which originally cost $555,000,000
to be given to foreign countries, in addition to the $500,000,000 in
new appropriations for military assistance authorized by this bill.
The annual ceiling was set initially at $100,000,000 and, at executive
branch urging, the Committee in 1971 recommended an increase to
$150,000,000. after the scope of the provision was broadened to cover
all agencies. This was increased in conference to $185,000,000.
The Committee is concerned about the prevailing practice of the
Executive Branch to value all excess material given away at one-third
of acquisition cost, regardless of condition. This is not what the Com-
mittee intended when it initiated this requirement. It intended that
the actual value of the article be counted, but in no case shall that
value be less than one-third of acquisition cost. The current practice
is not in keeping with the statutory requirement and the Committee
expects that appropriate remedial action will be taken. The Com-
mittee has also noted that the Congressional presentation materials
do not contain any information as to what articles are to be given to
each country, only a dollar amount. It expects that this problem, too,
will be remedied in the fiscal year 1974 presentation materials.
Section 13 is a further step in bringing about greater control over
the use of the vast amounts of military equipment and arms now be-
ing supplied to nation's around the world. This change, proposed by
Senator Pearson, requires that beginning with the 1974 fiscal year all
grants to foreign countries of excess defense articles be charged against
appropriations for military aid, with the materials to be valued at the
rate now specified by law, but not less than one-third the acquisition
cost paid by the U.S. Government. It appears from the following list
of excess defense articles planned for disposal this fiscal year that much
of the equipment to be given away to foreign governments could be
put to good public use by states, cities and towns here in the United
States.
Excess defense articles, fiscal year 1973
[Illustrative list]
Ethiopia :
Quantity
Aircraft trainer T-33-----------------------------------------
14
Trucks 2% ton and under------------------------------------
20
Trucks 5 ton and over---------------------------------------
15
Materiel handling equipment----------------------------------
6
Fire truck--------------------------------------------------
1
Greece :
Trailers, all types--------------------------------------------
- 480
Trucks 23 ton and under------------------------------------
1,832
Trucks 5 ton and over---------------------------------------
225
Tanks M-48------------------------------------------------
200
Communication equipment-----------------------------------
420
Materiel handling equipment----------------------------------
46
Grader road------------------------------------------------
18
Ditching machine--------------------------------------------
- 5
Crane truck MTD-------------------------------------------
8
Laundry units-----------------------------------------------
6
Generator--------------------------------------------------
30
See footnotes at end of table.
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Excess defense articles, fiscal year 1973-Continued
[Illusirative list]
Jordan:
Quantity
Grader road
6
Crane truck MTD----------------------
6
Water distribution truck MTD---------------------------------
2
Road construction equipment-. ---------------------------------
6
Generator----------------------- - ----------------------------
26
Tower water tank---------------------------------------------
20
Turkey :
Aircraft fighter F-100C------- ----------------------------------
173
Trailers, all types------------ ---------------------------------
2, 7'50
Trucks 2% ton and under---------------------------------------
2, 500
Trucks 5 ton and over ------- _----------------------------------
4:50
Tanks M-48.-------------------------------------------------
350
Communication equipment--- _.-_..------------------------------
190
Materiel handling equipment -----------------------------------
7
Grader road...-------------------------------------------------
9
Ditching machine----------------------------------------------
7
Crane truck MTD---------------------------------------------
15
Construction equipment ---------------------------------------
14
Generator-----------------------------------------------------
58
Repair shop trucks MTD-------------------------------------
36
Tunisia:
Trailers, all types---------------------------------------------
28
Trucks, 2j; tons and under -------------------------------------
50
Trucks, 5 ton and over-----------------------------------------
5
Cambodia:
Aircraft cargo, C-119 G---------------------------------------
14
Aircraft cargo, C-47 ------------------------------------------
113
Trailers, all types----------------------------------------------
30
Trucks, 2R,' tons and under ------------------------------------
25
Trucks, 5 tons and over -----._.--------------------------------
5
Machineguns, .30 cal--------- ----------__-_____________________
11,801
Machineguns, .50 cal--------------------------------------------
124
Mortar, 60 mm-----------------------------------------------
1 17
Mortar, 81 nlm----------------------------------------------
1191
Catridge, 75 mm--------------------------------------------- 1
10, 692
Indonesia:
Trucks, 2ij,,; tons and under -------------------------------------
50
Crane truck, MTD--------------------------------------------
4
Grader,road ------------------------------------------------
2
Instrument flight trainer ----------------------------------------
5
Korea:
Aircraft observation, O-ID-------------------------------------
25
Trailers, all types--------------------------------------------
420
Trucks, 23~4_, tons and under------------------------------------
4:70
Trucks, 5 tons and over ---------------------------------------
40
Communications equipment ------------------------------------
90
Materiel handling equipment -----------------------------------
125
Grader,road ------ ------------------------------------------
15
Crane truck, MTD --------------------------------------------
12
Construction equipment----------------------------------------
20
Welding machine---------------------------------------------
18
Generator----------------------------------------------------
98
Test sets, electrical --------------------------------------------
40
Fire trucks- .-------------------------------------------------
4
Laos:
Aircraft observation 0-11) --------------------------------------
110
Mortar 60mm --------------- --------------------------------
210
Howitzer 75mm---------------- ----------------------------
12
Mortal 81mm------------------- --------
-------------------
1 8
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Excess defense articles, fiscal year 1973-Continued
[Illustrative list]
Philippines :
Quantity
Trucks 2% ton and under_______________________________
50
Trucks 5 ton and over_______________________________________
2
Communications equipment -----------------------------------
4
Materiel handling equipment__________________________________
3
Thailand:
Trailers, all types--------------------------------------------
60
Trucks 2% ton and under____________________________________
40
Trucks 5 ton and over_______________________________________
65
Machinegun .50 cal------------------------------------------
175
Communications equipment___________________________________
20
Grader road------------------------------------------------
4
Crane truck MTD-------------------------------------------
2
Water distribution___________________________________________
1
Construction equipment______________________________________
12
Generator-------------------------------------------------
70
Taiwan :
Trailers, all types--------------------------------------------
475
Trucks 2iiton and under____________________________________
1,270
Trucks 5 ton and over_______________________________________
90
Communications equipment___________________________________
740
Materiel handling equipment__________________________________
112
Grader. road ------------------------------------------------
28
Ditching machine--------------------------------------------
S
3
craper road------------------------------------------------
Crane truck MTD -------------------------------------------
equipment______________________________________
40 9
125
Welding equipment------------------------------------------
21
Generator--------------------------------------------------
480
Test sets electrical___________________________________________
50
Compressors------------------------------------------------
112
Fire trucks-------------------------------------------------
14
Bolivia:
Trailers, all types--------------------------------------------
15
Trucks, 2% ton and under__________________________________
24
Bridge, fixed Bailey_________________________________________
2
Dominican Republic:
Trailers, all types--------------------------------------------
18
Trucks, 232 ton and under____________________________________
45
Guatemala :
Trailers, all types--------------------------------------------
26
Trucks, 2% ton and under____________________________________
65
Paraguay:
Trailers, all types-------------------------------------- -----
15
Trucks, 24 ton and under------------------------------------
50
Uruguay:
Trailers, all types----
35
Trucks, 2Y2 ton and under_
175
Trucks, 5 ton and over______________________________________
25
Construction equipment______________________________________
6
Generator-----------------------------------------------
5
Tower, water tank------------------------------------------
18
1 Actually in the program being presented to Congress.
Source: Department of Defense.
The General Accounting Office has now completed an in-depth
study of the excess defense articles program for the Foreign Relations
Committee and its report is expected to be made public soon. Hope-
fully, this study will lead to further improvements in the program.
The tables below provide data on the fiscal year 1973 excess program
and the allocations to date, by country.
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Fiscal year 1973 excess stocks at value specified in section 8(c) of Public Law 91-672
Country : Value in
D9 AP: tlousands
Cambodia ------------------------------------------------ $6, 400
Indonesia------------------------------------------------ 3200
Korea -------------------------------------------- ------- 19,000
Philippines----------------------------------------------- 1,400
Taiwan-------------------------------------------------- 29, 900
Thailand------------------------------------------------ 71000
Greece ------------------------------------------ 16,400
Jordan-------------------------------------------------- 3,500
Turkey ------------------------------------------------- 36,400
Spain---------------------------------------------------- 2,000
Portugal-------------------------------------------------- 350
Ethiopia ---------------------------------------- --------- 1,400
Liberia -------------------------------------------------100
Tunisia ---------------------------------------------------
600
Bolivia ------ -----------------------------
1, 100
Dominican Republic ___--_________________________________
350
Guatemala----------------------------------------------
750
Nicaragua-----------------------------------------------
800
Paraguay---------------- ------------------------
450
Panama-------------------------------------------------
200
Uru,guay.-----------------------------------------------
1, 200
Total MAP--------------------------------------------
1:32,500
Non-MAP:
Vietnam --------------------------------------------------
'507 800
Laos -----------------------------------------------------
700
Other Government agencies_______________________________
1,000
Total Non-MAP ---------------------------------------
52,500
Grand total--------------------------------------------
135,000
Source: Department of Defense.
Fiscal year 1973 allocations of excess defense articles as of February 20, j'973
Allocated I
Cambodia -----------------------------------------------------
18. 7
China (Taiwan)-----------------------------------------------
28. 8
Indonesia_________________-._____---____-_____-_-_____________
. 4
Korea------------------------------------=-------------------
3.0
Laos---------------------------------------------------------
3.2
Philippines--------------------------------------------------
1.9
Thailand-----------------------------------------------------
9.9
Vietnam------------------------------------------------------
33. 2
Greece_ ------------------------------------------------------
7. 8
Jordan--------------------------------------------------------
4.6
Turkey--------------------?----------------------------------
52. 1
Spain--------------------------------------------------------
1.6
Ethiopi.a.------------------------------------------------------
.9
Tunisia-------------------------------------------------------
(2)
Total------------------------------------------------------
'`166.1
I Allocations constitute authorizations to d