FOREIGN ASSISTANCE ACT OF 1971

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP73B00296R000400170001-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 90
• Document Creation Date: December 9, 2016
• Document Release Date: September 7, 2000
• Sequence Number: 1
• Publication Date: October 21, 1971
• Content Type: REPORT

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9213 CONGRESS 1 SENATE REPORT
1st Session No. 92-404
LEGISLATIVE COUNSEL
FILE COPY
FOREIGN ASSISTANCE ACT OF 1971
OCTOBER 21, 1971.?Ordered to be printed
Mr. FULBRIGHT, from the Committee on Foreign Relations,
submitted the following
REPORT
together with
SUPPLEMENTAL VIEWS
[To accompany H.R. 9910]
The Committee on Foreign Relations, to which was referred the bill
(H.R. 9910) 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.
1. PRINCIPAL PURPOSE OF THE BILL
The principal purpose of the bill is to authorize funds for FY 1972
for foreign assistance programs carried out under the Foreign Assist-
ance Act of 1961, as amended, and the Foreign Military Sales Act.
The bill also authorizes appropriations for FY 1973 for certain eco-
nomic assistance programs. The bill authorizes total appropriations
of $3,202,870,000 for fiscal year 1972. The Executive Branch's request
was for $3,552,100,000, including $250,000,000 for relief of Pakistani
refugees. The amount approved by the.Committee is $349,230,000 below
the budget request.
In addition' the bill also makes a number of substantive changes in
the Foreign Assistance and other acts.
The following table lists the various categories of foreign assistance
for which funds are to be authorized by this bill, compares the Com-
mittee's action with appropriations for FY 1970 and 1971, the Execu-
tive Branch's authorization request for FY 1972, and the amounts
approved by the House of Representatives:
65-0100-71 1
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TABLE I.--FOREIGN ASSISTANCE AUTHORIZATIONS AND APPROPRIATIONS, INCLUDING FOREIGN MILITARY CREDIT SALES
(In thousands of dollars]
CN:f
CZZ:
14.4,1
?
7.ien
CV)
C.3
Program
Appropriations
Requested
fiscal year 1
Authorization
House fiscal
year 1972 2
Senate committee
recommendation
Fiscal year
1970
Fiscal year
1971
Fiscal year
1972
Fiscal oar
1973
Development loans (worldwide)
$300, 000
$420, 000
$400, 000
$400, 000
$320, 000
$320, 000
Technical assistance (worldwide)
166, 700
166,800
231, 300
183, 500
208, 270
208, 270
Alliance for Progress
336, 500
370, 400
364, 000
378, 250
309, 400
309,400
Loans
(255, 000)
(287, 500)
(235, 000)
(287, 500)
(199, 750)
(199, 750)
Grants
(81, 500)
(82, 900)
(129, 000)
(90, 750)
(109, 650)
(109, 650)
American schools and hospitals abroad
28, 900
12, 900
10, 200
30, 000
30, 000
30, 000
Population programs
(75, 000)
(100, 000)
4 100, 000
125, 000
125, 000
International organizations
105,000
9 103, 800
141,000
143,000
139,000
139,000
Indus Basin
7, 500
11,900
15, 000
15, 000
Grants
(7,500)
(4,900)
15, 000
5,000
(15,000)
(15,000)
Loans_
UNWRA, training
1,000
(7,000)
1,000
9 (12, 000)
()
7 1,000
(9
11,000
(9
71, aoo
Contingency fund
12, 500
9 22, 500
9100, 000
30, 000
30, 000
30, 000
Pakistan relief
250, 000
100, 000
250, 000
Administrative expenses:
AID
51, 000
51, 000
57, 600
57, 600
51, 800
51,660
State Department
3, 700
4, 100
(10)
(10)
(10)
(10)
OPI C reserves
37, 500
18, 750
(10)
(10)
(10)
09
Total, economic assistance
I, 070, 300
1, 183, 150
1, 569, 100
1, 428, 350
1, 479, 470
1, 229, 470
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l\D
Military assistance
Supporting aSsistance
Total, military assistance and supporting assistance
Total, foreign assistance act programs
Military credit sales n
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Aggregate ceiling
Total, economic assistance and military grant and credit sales
I Administration's foreign assistance authorization request was for 3-year authorizations for the
following programs: Development loans. $1,500,000,000; technical assistance, $1.200,000,000; and
American schools and hospitals abroad, $35,000,000.
7 The foreign aid bill approved by the House contains a 2-year authorization with the
following authorizations for fiscal year 1973: development loans, $450,000,000; Alliance for Progress,
$422,250,000, of which $331,500,000 is for loans and $90,750,000 is for grants: technical assistance
worldwide, $183,500,000; American schools and hospitals abroad, $30,000,000; population pro-
grams, $125,000,000; international organizations and programs, $143,000,000; Indus Basin grants
$10,000,000; UNRWA training, $1,000,000; contingency fund, $50,000.030; AID administrative ex-
penses, $57 600,000; military assistance grants, $705,000,000; supporting assistance, $800,000,000;
and foreign military credit sales, $510,000,000, with aggregate credit ceiling set at $582,000.000.
All economic assistance programs, except Pakistan relief, were authorized for 2 years. Military
programs are for 1 year only.
'Separate authorization; additional funds for population programs may be taken from other
economic assistance programs.
350,
395,
000
000
817 690,
8 569,
000
600
705,
768,
000
000
705,
800,
000
000
565,
17 699,
000
400
745,
000
1, 259,
600
1, 473,
000
1, 505,
000
1, 264,
400
1, 815,
300
2, 442,
750
3, 042,
100
2, 933,
350
2, 743,
870
14 70,
000
13 200,
000
510,
000
510,
000
459,
000
(340,
000)
(582,
000)
(582,
000)
(523,
800)
1, 5,
300
2, 642,
750
3,552,
100
3, 443,
350
3, 202,
870
S Does not include $13.300,000 for UNRWA funded from supporting assistance.
6 Funds previously authorized in Foreign Assistance Act of 1957.
7 In addition, $1,000.000 in Egyptian pounds authorized for fiscal years 1972 and 1973.
8 I ncludessupplemental funds.
o In addition, an unlimited authorization has baen requested for "humanitarian assistance."
in Permanent authorization is in existing law.
II Authority contained in the Foreign Military Sales Act of 1968, as amended.
II In addition $60,000,000 in economic supporting assistance was transferred to the military assist-
ance program under authority of section 614(a) of the Foreign Assistance Act of 1961.
Is Does not include $500,000.000 for military credit sales to Israel authorized by the 1970 Defense
Authorization Act,
14 Provided under continuing resolution authority.
15 Includes $85,000,000 for Israel.
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4
2. OTHER PURPOSES OF THE BILL
In addition to authorizing appropriations as detailed, the bill also
does the following:
1. Prohibits use of funds for U.S. forces in Indochina for any, pur-
pose other than withdrawal and protection of those forces from immi-
nent danger" during the withdrawal process.
2. Declares a national policy that all U.S. forces be withdrawn from
Indochina within six months, subject to release of prisoners of war.
3. Ties the release of funds appropriated for foreign aid and mili-
tary sales funds to prior release of impounded funds for domestic
programs.
4. Provides for annual authorization of appropriations for the De-
partment of State and the United States Information Agency.
5. Provides for funding of military aid to South Vietnam, Thailand,
and Laos from the regular Military Assistance Program beginning
July 1, 1972.
6. Imposes a ceiling of $250,000,000 on obligations and expendi-
tures in or for Cambodia in FY 1972 and puts a ceiling of 200 on the
number of American civilian and military government personnel in
Cambodia.
7. Calls for shifting more of our economic aid. to a multilateral basis
and requires a phasing-out of the bilateral loan program by June 30,
1975.
8. Authorizes $250,000,000 in FY 1972 for refugee relief programs
in India and Pakistan.
9. Authorizes $125,000,000 for population control activities in both
FY 1972 and FY 1973.
10. Requires the President to submit to Congress a country-by-
country list of foreign aid allocations within 30 days after passage of
the appropriation bill and permits a maximum 10% increase in aid
in each category and country by transfer of funds from other coun-
tries or programs without advance notice to Congress.
11. Requires advance notice to Congress before use by the President
of the transfer, waiver, and certain other special authorities available
to him under the Foreign Assistance Act.
12. Requires a 25% cutback within, the next year in the number of
U.S. military personnel assigned abroad to military advisory missions
or similar groups.
13. Authorizes operations by the Overseas Private Investment
corporation in Yugoslavia and Romania.
14. Provides for a cutoff in aid to countries which do not take ade-
quate steps to control the international drug traffic.
15. Requires 25% payment in foreign currency for U.S. military
grant aid.
16. Suspends all assistance and military sales to Pakistan, except
humanitarian relief. The President must make certain findings before
aid could be resumed.
17. Prohibits further foreign assistance or military sales to Greece
with provision for a Presidential waiver to permit aid to resume and
be furnished up to the FY 1971 level.
18. Prohibits waiving by the President of the ceilings on military
aid and sales to Latin America and Africa.
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3. BACKGROUND AND COMMITTEE ACTION
The 1968 foreign assistance act contained a provision, sponsored by
Senator Javits, which called on the President to make a thorough re-
view of all foreign assistance programs and submit his recommenda-
tions to Congress by March 31, 1970. On September 29, 1969, President
Nixon appointed a task force to study the matter and the task force
reported back to him on March 1, 1970. The President sent a message
to Congress on September 15, 1970 containing his broad recommenda-
tions for a revised foreign aid program. However, the draft legislation
to implement his policy recommendations was not submitted to Con-
gress until April 21, 1971. Two bills, embodying the President's legis-
lative requests, S. 1656 and S. 1657, were introduced by Senator Ful-
bright, by request, on April 26, 1971. The Committee held hearings on
the bills on June 10, 11, and 14.
Due to the complexity of the issues involved, it was apparent that
the Committee would not have time to give proper study to the pro-
posals as a basis for FY 1972 appropriations. Accordingly, the Com-
mittee turned its attention to consideration of legislation to extend the
existing program on a stop-gap basis.
During the hearings on the bill testimony was received from?
Dr. N. R. Damelian, president, International Economic Policy
Association;
John H. avis, president, American Near East Refugee Aid,
Inc.;
Thomas L. Farmer, chairman, International Development
Panel, Chamber Of Commerce of the United States;
Maurice J. Goldbloom, executive secretary, U.S. Committee
for Democracy in Greece;
Mrs. Virginia M. Gray, executive secretary, Citizens Committee
for UNICEF;
Hon. John A. Hannah, Administrator, Agency for Interna-
tional Development;
Mrs. Edwin Hannum chairman, National Action Committee,
the League of Women Voters;
Hon. Mark 0. Hatfield, U.S. Senator from Oregon;
George J. Hecht, publisher, Parents magazine;
Hon. John N. Irwin, II, Undersecretary of State;
William R. Klamon, director, U.S. National Student Associa-
tion Center for Greek Studies;
Mrs. Thomas Kouzes, National Congress of Parents and
Teachers;
Hon. Melvin R. Laird, Secretary of Defense; accompanied by
Adm. Thomas H. Moorer, Chairman, Joint Chiefs of Staff, and
Lt. Gen. Robert H. Warren, Deputy Assistant Secretary of De-
fense (Military Assistance and Sales) ;
Rudloph A. Peterson former Chairman, President's Task
Force on International Peterson,
Dr. Jon A. Rohde, U.S. Public Health Service;
Hon. Robert Taft, Jr., U.S. Senator from Ohio ? accompanied
by Rabbi Seymour Gewirtz, vice president, Rabbinical College
of Telshe ; and
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Dr. Michael Tanzer, president, Tanzer Economic Associates,
New York, N.Y.
Executive sessions on H.R. 9910 were held on September 28, 29, Oc-
tober 5, 6, 13, 14, and 20. At his request, Dr. John A. Hannah, Ad-
ministrator of the Agency for International Development, was heard
again, in executive session, on October 13. During the lengthy markup
sessions a total of 48 record votes were taken, which indicates the
thoroughness with which the Committee discussed the issues involved
in the bill. H.R. 9910 was ordered favorably reported on October 20
by a vote of 11 to 5.
4. COMMITTEE COMMENTS
Reports by the Committee on Foreign Relations on foreign aid bills
over the last several years reveal the depth of dissatisfaction of many
members with the existing foreign aid program. In 1967 the Commit-
tee report on the aid bill stated:
Many members felt that there was inadequate justifica-
tion for continuing foreign aid at approximately the same
level as the last fiscal year in view of mounting war costs
and the Government's worsening fiscal situation. Others be-
lieved that drastic changes were needed in the foreign aid
program, and that it had been oversold as a cureall, both
at home and abroad. Some viewed the aid program as tend-
ing to involve the United States unnecessarily in the polit-
ical and social affairs of other countries, making it more likely
that the United States would in the future find itself involved
in more Vietnams. Perhaps the most common attitude among
members was the feeling that foreign aid policy has not
kept pace with a changing world and that all too often
dollars were applied in an attempt to serve as a substitute
for sound policies.
In 1968 the Committee stated:
The committee acted on the foreign aid bill this year against
a background of growing concern over the international pos-
ture of the United States and over the problems which the
American people face at home. With respect to the former,
the committee has seen nothing in the past year to allay the
unease which it has frequently expressed over the prolifera-
tion of aid programs and the seeming inability or unwilling-
ness of the United States to reduce its international commit-
ments. With respect to the latter, the committee is persuaded
that the United States cannot longer postpone giving priority
to putting its own house in order. Over both the foreign and
domestic problems of the United States hang the fiscal and
balance-of-payments crises which have been alleviated but
not solved, and which fundamentally result from overcom-
mitment, both at home and abroad, and from efforts to spread
available resources too thinly.
In 1969 the Committee report put the basic problem this way:
All members of the committee are acutely aware that the
richest Nation in the world has an obligation to help close
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the widening gap between the "haves" and the "have nots" of
the world. The issue is not "Should we provide aid ?" It is
"How?" and "How much?" The first question must be an-
swered before the second can be approached sensibly?and
the old answers of the past to "How?" are outmoded and dis-
credited. The future of foreign aid is bleak indeed until a new
program can be developed which will command greater re-
spect and support, both with the public and the Congress,
than the current program commands.
At the time the 1969 report was filed the Committee hoped that the
President's recommendations, to be submitted pursuant to Senator
Javits' amendment, would be submitted in time to work out a new
program during 1970. Instead, his recommendations were not received
until more than a year after the date specified by law. In view of this,
the Committee again finds itself recommending continuation of a pro-
gram for which few members have any real enthusiasm.
The Committee's reduction of the authorization request by $349,-
230,000 is modest in view of the fact that the Federal budget deficit
of $23 billion last year is likely to climb to $30 billion or more this
year, that the nation's balance-of-payments deficit is running at an
unprecedented rate, that our unmet domestic needs continue to mount,
and that the nation's economy is so sick inflation continues in the midst
of a serious recession.
The Committee has for years stressed that the United States is over-
committed around the world. The foreign aid program is one of the
most obvious manifestations of that overcommitment. As of June this
year there were a total of 26,663 people working in connection with
the regular economic and military aid programs authorized under the
Foreign Assistance Act. There were 8,936 Americans abroad engaged
in U.S. foreign aid activities, compared with a total of 6,145 for all
Department of State personnel overseas. The Committee has taken
action which should lead to substantial reductions in the number of
foreign and personnel. Most of the non-Communist world is slated to
receive some type of foreign aid from the United States in FY 1972.
Forty-five countries are to receive technical assistance, 31 to get sup-
porting assistance (24 for public safety programs only), 46 to get
military grant aid, 85 to get Public Law 480 assistance, 43 slated for
military sales (18 for credit) , and 55 are to receive assistance through
the Peace Corps.
The President has recognized that foreign aid must bear a share of
the price that must be paid to restore the health of our economy. In his
speech to the nation on August 15 he announced that he had'. . . or-
dered a 10% cut in foreign economic aid." The details of how the cut
is to be applied have not been revealed, other than the announcement
of an exemption for Latin America. The Committee supports the Pres-
ident's initiative and has taken further action to insure that foreign
aid programs for FY 1972 reflect, at least to some extent, the urgency
of the times.
The United States' foreign aid effort is not limited to the programs
authorized by this bill. The programs funded by authorizations con-
tained in this bill constitute only about two-fifths of the total United
States foreign aid effort. The Executive Branch's program for for-
eign assistance this fiscal year totals $9.5 billion, as shown on tables II,
III, and IV.
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TABLE 11-MILITARY AND ECONOMIC ASSISTANCE DATA, FISCAL YEAR 1972 PROGRAM REGIONAL SUMMARY
Uri thousands of dollars]
Military programs
Economic programs
Agency for International Development program
Other programs
Total
military
and
economic
Total
military
and
Military
Foreign
Military
Adminis-
Econom- trative
ic sup- and
assist-
once
grants
military
credit
sales
Excess
defense
articles'
assistance
service
funded
Ship
loans a
Total
military
Develop-
ment
assistance
porting other ex-
assist- penses,
once State
Contin-
gency
fund
Total
Peace
Corps
Public
Law 480
Total
economic
proposed,
fiscal year
1972
econemit,
fiscal year
1971
Summary, all programs__ 731,500
582,000
324,000
2, 230, 800
90,100
3, 958, 400
1, 515, 285
825,000 4,400
191,300 2,
445,985
71, 200
1,115, 260
3, 632, 445
7, 593, 845 3
7, 325, 503
LA 9,868
70,000
3,830
83,668
405,074
5,850
410,924
16,102
151,130
578,156
661,824
545,10
AFR 19,009
17, 000
1,600
37,609
159, 915
5,950
165,865
15, 533
106,230
287,628
325, 237
300, 508
EU R 14,082
3,000
54,600
71,682
68
14,900
14,968
86,650
31,916
NESA 167,000
420,000
90,400
24,400
700,800
407,335
30,250
437,585
6,242
429,881
783,708
1, 574, 508
1, VO, 954
EA and PAC 501,100
75,000
4209,000
446,900
3,050
1, 235, 050
173,825
202,750
376,575
11,100
320,124
707,799
1, 942, 849
1, 7'38, 503
VN
1, 783, 900
5,250
1,789, 150
565, 000
565,000
02,680
647,600
2,436, 750
2, 368,428
Other 20,441
20,000
40,441
369,136
15,200 4,409
101,300
490,036
22,155
10,395
522,586
563,027
459,474
I Excess defense articles are shown at legal value for purposes of Section 8(c), Public Law 91-672. 4 For Korea, in addition to $40,000.000 in excess defense articles, there is included an additional
Valued at acquisition cost $104,000,000 estimated dollar value (at acquisition cost) of certain defense articles authorized by
2 Excludes $30,172,000 in State Department expenses and contingency fund. sec. 3 Public Law 91-652 to be transferred to that government in fiscal year 1972.
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TABLE III.?Other foreign assistance programs?Not included on regional
Chart
[In thousands of dollars]
Economic: Estimate,
1. U.S. contribution to international financial Institutions: fiscal year 1972
(a)
International Development Association
$320,
000
( b )
Inter-American Development Bank
575,
000
(c)
Asian Development Bank
60,
000
(d)
African Development Bank
15,
000
Total, U.S. contributions
2. Export-Import Bank?Long-term loans to developing countries
(1968-70 average)
970,000
501,100
Total, economic
1,
471,
100
Military:
1. Public Law 480 grants for defense purposes
116,
600
2. MAAG's, military groups, etc
262,
600
3. International military headquarters
72,
300
4. NATO infrastructure
20,
000
Total, military
471,
500
Total, other foreign assistance programs
1,
942,
600
Estimates from regional chart
7,
590,
845
Grand total, foreign assistance fiscal year 1972
9,
533,
445
-
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TABLE I LITARY AND ECONOMIC ASSISTANCE DATA, FISCAL YEAR 1972 PROGRAM BY COUNTRY
II n thousands of dollars]
Military programs Economic programs
Agency for International
Development program Other programs Total Total
Military military military and
Military Foreign Excess assistance Economic and eco- economic,
assistance military defense service Ship Total supporting Develop- nomic, fiscal
grants credit articles 1 funded loans 2 Mill- assist- ment Peace Public Law Total fiscal year year
sales tary mice assistance Total Corps 480 economic 1972 1971
Latin America
9, 868
70, 000
3, 800
83, 668
5, 850
405, 074
410, 924
16, 102
151, 130
578, 156
661, 824
545, 720
Argentina
897
15, 000
15, 897
15, 897
14,310
Bolivia
666
666
115
13, 285
13, 400
1, 039
8, 730
23, 169
23, 835
14, 092
Brazil
892
20, 000
3,800
24,692
174
70, 325
70, 499
2,428
55, 890
128, 817
153, 509
127, 815
Chile
856
5, 000
5, 856
1, 310
1, 310
608
6, 390
8, 308
14, 164
10,825
Colombia
844
8,000
8,844
340
78, 010
78, 350
1,049
22, 050
101, 449
110,293
91,148
Costa Rica
198
1,205
1, 403
561
270
2, 234
2,234
7, 211
Dominican Republic
539
539
370
16,800
17, 170
464
13,900
31, 534
32, 073
27, 769
1.-1
Ecuador
645
645
135
17, 718
17, 853
769
6, 330
24, 952
25, 597
20,998
0
El Salvador
374
374
56
12, 622
12, 678
417
1, 620
14, 715
15, 089
14, 708
Guatemala
336
5, 000
5, 336
377
18, 872
19,249
477
2, 430
22, 156
27, 492
22, 741
Guyana
99
4,690
4,789
25
I, 065
5, 879
5, 879
7, 830
Haiti
3, 000
3, 000
3, 600
6,600
6,600
6, 027
Honduras
467
467
171
12, 375
12, 546
646
900
14, 092
14, 559
7,658
Inter-American
Organizations
17, 675
17, 675
17, 675
17, 675
13,000
Jamaica
96
11,000
11.096
1,029
1,980
14, 105
14,105
13, 695
Mexico
107
107
107
87
Nicaragua
568
568
91
12,490
12, 581
466
594
13, 641
14, 209
9,694
Panama
173
173
203
28, 588
28, 791
603
29, 394
29, 567
21, 736
Paraguay
387
387
8, 427
8,427
390
4, 475
13, 292-
13, 679
12, 374
Peru
792
792
14, 100
14, 100
1, 785
17, 690
33, 575
34, 367
20, 045
ROCAP
13, 526
13, 526
220
90
13, 836
13,836
10,024
Surinam
45
45
45
45
Trinidad and Tobago
99
99
99
104
Uruguay
400
2,800
2,400
225
13, 406
13, 631
131
2, 208
15, 970
18, 370
26, 378
Venezuela
734
15, 000
15,734
200
350
550
1, 465
2,015
17, 749
13, 344
Other West Indies
14
14
14
650
Eastern Caribbean regional
10, 100
10,100
815
157
11,072
11,072
1,143
Economic regional
programs
28, 200
28, 200
1, 318
29, 518
29, 518
22, 831
Regional military costs
191
191
191
7,438
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Near East and South Asia _ _ _ _
167, 000
420, 000
90,400
23, 400
700, 800
30,250
407, 335
437, 585
6,242
429,881
873, 708 1, 574, 508
1, 820, 954
Afghanistan
Ceylon
Cyprus
Greece
India
Iran
Iraq
Israel(3)56,
Jordan
Lebanon(5)
Nepal
Pakistan
Saudi Arabia
Syria
Southern Yemen
Turkey
United Arab Republic)
(Egypt)
Yemen
CENTO
Economic regional programs3,959
Regional military costs+
19,875
942
9,599
(5)
99.770
46, 413
60,000
5,000
0
5,000
0
350,000
38,000
48,400

23, 400
117875
5,000
942
0
0
(5)
5,000
(')
171, 570
396,413
30,000
250
7,018
230,050
750
2,695
118,338
43,948
585
7,018
230,050
30,750
2,695
118, 580
43,948
585
3,959
758
3,032
1,081
1,156
53
162
4, 110
23, 420
360
181,670
6,400
90
133
3,088
3, 565
450
101,950
72
45
27,000
738
20, 790
11,886 11,886
23, 420 23, 420
360 360
117.875
414,752 419,752
7,481 8,423
90 *90
56, 133 56, 133
33,838 33,838
3, 565 3, 565
4, 301 4, 301
220, 530 225, 530
(*)
72 72
45 45
71, 001 242, 571
738 738
585 585
24,911 3g11.1.
13, 50
17, 406
349
118,800
403,605
18, 130
180
558,770
72,414
13, 835
4, 152
212 260
38,674
90
63
328, 525
0
2,390
420
25, 3?1
East Asia and Pacific
501, 100
75,800
209, 000
446,900
3,050
1,235, 050
202, 750
173, 825
376, 575
11, 100
320, 124
707, 799 1,942, 849
1, 798, 503
Burma
Cambodia
China (Taiwan)
Hong Kong
Indonesia
Korea
Laos
Malaysia
Philippines
Ryukyu Islands
Singapore
Thailand
Western Samoa
Economic regional programs
Regional military costs
200,000
19, 500
24,990
239,400
134
17, 000
76
45, 000
15,000
7,500
7,500
11,000
48,0(X)
3,000
' 144, 000
3,000
243,900
125,800
77,200
1,200
1,850
211,000
112, 500
27,900
642,300
125,800
7, 634
21,2(X)
9,350
77,200
76
110,000
50,500
800
40,000
1,400
107, 325
24,100
29,100
13,300
110,000
107,325
24,100
50,550
29,900
40,000
14,700
1,944
2, 154
1,890
1,323,5
3,364
540
20,009
4, 500
180
131,750
103,490
1,710
1,215
33,760
1,980
90
20,900
540 540
130,009 341,009
4, 500 117, 000
180 180
239,075 267,065
129,534 771,834
52,260 178,000
3,369 11,003
65,550 86,750
1,980 1,980
90 9,440
62,223,139,42325 5
18,064 18,064
76
741
282,009
142,017
540
252, 892
716,326
194,389
9, 153
59,295
5,612
114, ,6.E
1
16,370
4,015
Vietnam
1, 783, 900
5,250
1, 789, 150
565,000
565, 000
82,600
647,600 2, 436, 750
2, 368, 428
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TABLE IV.-MILITARY AND ECONOMIC ASSISTANCE DATA, FISCAL YEAR 1972 PROGRAM BY COUNTRY
[In thousands of dollars!
Military programs
Economic programs
Agency for International
Development program Other programs Total Total
Military
military military and
Military Foreign Excess assistance Economic
and eco- economic,
assistance military defense service Ship Total supporting Develop- OONC, fiscal
grants credit articles' funded loans 2 mili- assist- ment Peace Public Law Total fiscal year
sales tary ance assistance Total Corps 480 economic 1972 year
sales
Botswana
Burundi
Cameroon
Central. Africa Republic
Chad
Congo (Kinshasa)
Dahomey
Equatorial Guinea
Ethiopia
Gabon
Gambia(6)354
Ghana
Guinea
Ivory Coast
Kenya
Lesotho
Liberia
Libya
Malagasy Republic
Malawi
Mali
Mauritania
Mauritius
Morocco
Niger
Nigeria
19, 009
17, 000
1,600
37, 609
5,950
159, 915
165, 865
15, 533
106,230
287,628
325, 237
300, 508
}-L
LND
477
12, 790
500
(2)
2,000
(3)
500
100
2,477
13,290
600
0)
1, 016
106
203
4,100
0
(9189
0
0
0
5,543
0370
(9
16,899
(9
17, 3
(9
(9
2, 174
8,3;
(9
V
2143: 3 0
42
0
2
(6..
f6
6,559
2
16,899
(9
0 17, 416
8
2, 174
(9
8,534
0
0
(6)
(9
(9
13,350
28, 5(32
264
480
389
388
1,052
1, 490
622
639
1, 571
143
1,119
262
224
202
720
449
1,350
27
198
148
1, 080
405
630
117
90
18, 075
7,100
270
630
3,600
441
180
180
1,188
720
1,400
31, 095
1,368
5,850
1,614
189
507
198
537
8, 027
775
18, 581
117
444
36,981
7,722
909
4 ,375
3,743
10, 094
180
442
1,412
720
1, 602
45,165
1,817
34,380
1,614
189
507
198
537
10, 504
775
31,871
117
444
36, 981
7,722
909
4,375
3, 743
10, 694
180
442
1,412
720
.1, 602
45,165
1,817
34,380
1,660
299
582
177
555
15,998
420
28,240
117
897
211; 90145617
5,756
4,766
1, 892
6,989
180
491
3,331
1,708
2,000
46,429
1,043
36,748
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Rwanda
(6)
(6)
360
360
360
450
Senegal
(6)
(6)
566
2,583
3, 149
3, 149
2,646
Seychelles
(6)
(6)
36
36
36
36
Sierra Leone
(6)
(9
1,209
1,035
2,244
2,244
2,453
Somali Republic
540
540
540
540
Sudan
63
63
63
63
Swaziland(
175
175
175
3, 538
Tanzania
5,819
5,811
1,980
7,799
7,799
5,048
Togo
(6)
(6)
603
360
963
.963
1,076
Tunisia
0
0
(3)
125
12,350
12, 483
317
19, 980
32, 780
32, 780
40,358
Uganda
4, 780
4, 780
380
225
5,385
5, 385
3, 521
Upper Volta
(6)
(9
327
1,638
1,965
1,965
3,894
Zambia
0
0
90
90
90
90
80
Economic regional pro-
grams:
Central West Africa
14, 537
14, 537
14, 537
14, 537
13, 716
East Africa
1,745
1,745
1,745
1,745
8,665
Southern Africa
300
9,400
9, 700
9, 700
9,700
11,430
Africa regional
100
21, 789
21, 889
1, 218
1,009
24, 116
24, 116
19,055
Regional military costs 4__
5.242
15, 000
1.099
21,242
21, 242
50
Self-help projects
1,450
1,490
1,450
1.450
1,450
Europe
14,082
3,000
54,600
71,682
68
14,900
14,968
86,650
31,916
Austria
--
Denmark
Iceland
900
900
900
1, 300
Malta
68
68
68
Norway
.31
Portugal
1,000
1,000
4,000
4,000
5,000
2,035
Spain
13,000
3,000
54,600
70,600
10,000
10,000
80,600
28,350
Yugoslavia
Regional military costs
82
82
82
200
Regional
1 Excess defense articles are shown at legal value for purposes of sec.-8(c), Public Law 91-672.
2 valued at acquisition cost
3 Classified.
Includes classified countries.
5 In addition to $40,003,003 in excess defenss articles, includes $100,000,000 estimated dollar
value (at acquisition cost) of certain defense articles authorized by section 3, Public Law 91-652, to
be transferred in fiscal year 1972 to the Government of Korea.
6 Self-help funds only.
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14
Executive Branch officials have in recent years argued that, com-
pared with other rich nations, the United States development aid
effort is quite low. In testifying before the Committee on foreign aid
legislation this year. Dr. John A. Hannah, Administrator of the
Agency for International Development, when discussing the United
States' comparative aid effort said:
Measuring assistance as a percent of GNP, the United
States ranks 11th among the 16 major assisting countries.
The U.S. share of total world assistance has dropped by half,
(from) 80 percent fifteen years ago to 42 percent this year.
Dr. Hannah was, of course, referring only to the approximately
$3.2 billion of official development aid, as categorized by the Develop-
ment Assistance Committee of the Organization for Economic Co-
operation and Development (OECD), which we now dispense each
year. It does not take into account the more than $4 billion in military
aid planned to be given other countries this year, humanitarian relief,
and other aid outflows not incurred by other rieh nations.
It also does not take into account the tremendous burden American
taxpayers have assumed under treaty obligations to protect the secur-
ity of 43 nations around the world. The estimated costs of maintaining
forces to meet the NATO commitment alone start at $14 billion and
go up from there. But, as the September 7, 1971 report of the Senate
Armed Services Committee on the Defense Authorization Bill stated:
"This excludes the cost of the 'nuclear umbrella' which is perhaps the
cornerstone of NATO . .." and the Committee added that 'a review of
selected general purpose weapons systems estimated to cost $30 billion
shows that $21425 billion of that cost can be identified with the re-
quirement to support NATO defense." (S. Rept. 92-359, P. 15-16)
Yet, according to London's Institute for Strategic Studies, in 1969,
when the -United States spent 8.6% of GNP and $393 per capita for
defense, Germany spent only 3.5% and $90 per capita, Italy 2.9% and
$44 per capita, France 4.4% and $123 per capita, Britain 5.1% and
$100 per capita, and so on. According to the Senate Armed Services
Committee the situation was no different in calendar year 1970. It re-
ported that ". . . data for calendar year 1970 shows that the NATO
allies spend 4.1 percent of their GNP on military programs compared
to t Tnited States spending of 8.6 percent." Under these circumstances
it makes little sense for the United States to foot the military aid bill
for Greece and Turkey, to cite only one small example of the inequi-
ties of the present situation. There is no reason why the other NATO
nations should not assume this and other burdens now borne by the
United States taxpayer. Japan, even under plans for a substantial
increase in military spending over the next five years, will allocate
less than 1% of GNP for defense. It now spends about $15 per capita
annually for defense purposes.
Yet the United States, throughout the world, provides the defense
umbrella that frees vast resources of the other rich nations which,
in all likelihood, would otherwise be spent for military purposes.
To the extent that the United States provides this subsidy, it permits
these other nations to achieve, with relative ease, the kind of reorder-
ing of national priorities which this country has been unable to accom-
plish because of its huge defense expenditures. Viewed in this light it
is only fitting that these nations should give a greater proportion of
A p ptjareaerpur
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1
ing nations. To measure only one segment of the U.S. aid effort, and
by such a distorted yardstick as GNP at that, without considering
the totality of United States economic and military support for both
the rich and the poor is to see only a few trees and not the forest.
TIIE SECRECY PROBLEM
For many years the Committee has pressed for public release of
more information about the foreign aid program. It is not possible to
carry on a rational public dialogue about foreign aid if the amounts
involved are kept from public scrutiny. In 1969 country-by-country
economic aid figures were finally declassified. This year, in bits and
pieces, the Executive Branch declassified much of the country-by-
country figures for military grant aid and credit sales. There are a
few countries in the Middle East and North Africa, however, for
which the Executive Branch insists on keeping the figures classified.
The Committee is gratified that progress has been made in bringing
out in the open more information about where American tax money is
being spent abroad. It expects that further progress will be made
in this direction by the time the FY 1973 program is presented to
Congress.
COST ESTIMATES
Section 252(a) (1) of the Legislative Reorganization Act of 1970
requires that committee reports on bills and joint resolutions con-
tain: "(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 com-
mittee's cost estimate be compared with any estimates made by a Fed-
eral agency.
The Committee estimates that the cost of carrying out the provisions
of H.R. 9910 during FY 1972 will be $3,660,255,000, which is the cost
for the programs proposed by the Executive Branch less the reductions
made by the Committee.
The outlook for foreign aid programs over the following five years
is murky at best. Based on a straight line projection of the program
levels recommended, the costs for FY 1973?FY 1977 will total $18,301,-
275,000, not taking into account inflation or other unforeseeable fac-
tors. This, of course, reflects only costs for programs authorized in this
bill and does not take into account aid programs authorized under
other laws.
In view of the Committee's difficulty in obtaining long-range es-
timates from the Executive Branch, the Committee staff was directed
to make long-range projections. It did so primarily on the basis of the
size of programs for FY 1970?FY1971 and the programs proposed for
FY 1972.
The staff estimates that, on the basis, all foreign assistance for the
five-year period, FY 1973-1977, would total slightly more than $51 bil-
lion, approximately the same amount as was spent in the last five
years. Of the total, $24 billion would be for development or humani-
tarian assistance and $27 billion would be for military or related as-
sistance programs. Thirteen billion would be attributable to programs
now funded through appropriations for the Department of Defense,
and the Public Law 480 program accounts for an additional $7 billion.
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TABLE V.-ESTIMATED LEVELS OF FOREIGN ASSISTANCE, FISCAL YEARS, 1973-77,
[In thousands of dollars!
Military programs
Economic programs
Total
Foreign
military
Grant military assistance
AID programs
Total
Other economic programs
Foreign
Assistance
Act,
military
credit
sales,
DOD
Military
and
economic,
fiscal
Excess
Military
aid now
Develop-
ment
Sup-
porting
Admin-
istra-
tive
Contin-
Public
credit
defense
Ship
funded
Total
assist-
assist-
ex-
gency
AID
Peace
Law
Total
military
years
sales
MAP
articles
loans
by DOD
military
ance
once
penses
fund
programs
Corps
480
economic
aid
1973-77
1-4
East Asia and Pacific_ ___
423,000
3,096,000
525,000
15,250
13,380,000
17,439,250
2,358,000
4,188,000
6,546,000
78,000
2,610,000
9,234,000
23,970,000
26,673,250
CD
Near East and South
Asia
1,800,000
978,000
452,000
25,000
3,255,000
2,340,000
200,003
2,540,000
45,000
2,933,000
5,515,000
5,770,000
8,770,000
Europe
50,000
18,000
10,000
78,000
66,000
66,000
68,000
144,000
Africa
195,000
92,590
12,500
300,000
861,600
99,600
961,200
108,000
592,200
1,661,400
1,261,200
1,961,400
Latin America_
671,000
50,000
25,000
4,000
750,000
2,311,200
21,000
2,332,200
114,000
817,200
3,263,400
3,082,200
4,013,400
Summary-All
programs _____
__ 3,089,000
4,266,500
1,032,500
54,250
13,380,000
21,822,250
7,870,800
4,308,600
363,000
800,000
13,339,400
345,000
7,015,400
20,699,800
35,107,400
42,522,05
1 inflation factor of 3.5 percent used to calculated projections for all programs except those for
ship loans and excess defense articles.
Average program for fiscal yaar 1970-72 used to project economic programs; fiscal year 1971-72
used as base for projecting military programs in most cases.
It is assumed that Viatnam war related programs will continue at fiscal year 1972 rate.
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TABLE VI.?Other foreign assistance programs?Not included on regional chart I
[In thousands of dollars]
Economic: fiscal year
1. U.S. contributions to international financial institutions 2
( a) International Development Association
(b) Inter-American Development Bank
(c) Asian Development Bank
(d) African Development Bank
Total, U.S. contributions
2. Export-Import Bank: Long-term loans to developing
countries
Estimate,
1973-77
$1, 600, 000
2, 300, 000
240, 000
15, 000
4,
3,
155, 000
060, 600
Total, economic
7,
215, 600
Military:
1. Public Law 480 grants for defense purposes
699, 600
2. MAAG's, military groups, etc. (excluding Vietnam, Thailand,
and Laos)
278, 400
3. International military headquarters
188, 400
4. NATO infrastructure
120, 000
Total, military
1,
280,400
Total, other foreign assistance programs
8,
502, 000
Estimates from regional chart
42,
522, 050
Grand total, foreign assistance ?
51,
024, 050
1 Programs are projected on the basis of the fiscal year 1972 estimate, plus an inflation
factor of approximately 3.5 percent, except for Export-Import Bank loans which are pro-
jected on the basis of the fiscal years 1968-70 average and expenses of MAAG's, etc.,
which are based on fiscal year 1971 estimate.
2 Represents a continuation forward of present levels or scheduled contributions; does
not include an inflation factor.
On October 14, shortly before the Committee completed its markup
of the bill, a letter was received from the Secretary of State containing
five year projections of military grant and credit assistance. The low
range was $5.1 billion and the high range, which, the Secretary stated,
was ". . . a reasonable assessment of the requirements . . . as far as
can be predicted at this time," was $9.2 billion. The estimates do not in-
clude expected outlays for South Vietnam and other countries now
receiving military aid through the Defense? budget, supporting as-
sistance, the value of excess materials to be given away, ship loans, or
grants for military purposes under the P.L. 480 program which, pro-
jected at present levels, would be more than double the high range
estimate.
No estimates have been received from the Executive Branch for eco-
nomic assistance projects.
CONCLUSION
The fact that the Committee has approved a foreign aid bill at all
this year reflects the view of a majority of the members of the Commit-
tee that continuation of the existing program is in the national interest.
There is, however, general agreement among members of the Com-
mittee that the aid program as constituted must be drastically altered
and reshaped if it is to continue to command the support of Congress
in the future. For the last several years Congress has allowed it to
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continue more by sufference and a lack of appealing alternatives than
through true support. In view of the dearth of enthusiasm for the
existing program, the government's fiscal crisis, and the state of our
economy and our society, it is remarkable that there is a foreign aid bill
at all this year. Under these circumstances the Committee believes that
the reductions it made in the Executive Branch's request are modest,
the sums it allowed generous, and the changes it recommends long
overdue.
SECTION-BY-SECTION ANALYSIS
PART I-ECO NOMIC ASSISTANCE DEVELOPMENT LOAN FUND
Section 101--Development Loans
Section 101(1) (A) amends section 202(a) of the Foreign Assist-
ance Act of 1961 and authorizes the appropriation of $320 million in
each of the fiscal years 1972 and 1973 for worldwide development lend-
ing. This amount is twenty percent less than that requested by the
Executive Branch and may be compared to the following:
Development loan program (excludes Alliance for Progress loans) :
1. Fiscal year 1970 appropriation
$300,
000,
000
2. Fiscal year 1971 appropriation
420,
000,
000
3. Fiscal year 1972 appropriation request
400,
000,000
4. House allowance:
Fiscal year 1972_
Fiscal year 1973
400,
450,
000,
000,
000
000
5. Committee recommendation:
Fiscal year 1972
Fiscal year 1973
320,
320,
000,
000,
000
000
Development loans provide part of the resources needed to support
the self-help efforts of recipient countries and underwrite the planning
and execution of their development programs. These loans finance the
commodities and technical services used for the construction of facili-
ties such as schools, clinics, roads, dams and irrigation facilities and
factories, and the import of a wide range of products such as fertilizer,
farm equipment, chemical products, iron and steel products, motor
vehicles, industrial and electrical machinery, petroleum and other
products.
Most development loans to recipient governments are on 40-year
terms, including a 10-year grace period. Interest rates are 2% during
the grace period and 3% thereafter.
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The following table shows the Administration's proposed develop-
ment lending program (excluding Latin America) for fiscal year 1972:
Near East and South Asia
India
Pakistan
MilItons
$370. 0
220.0
110..0
Turkey
40. 0
East Asia
140, 0
Indonesia
100. 0
Korea
20. 0
Philippines
20. 0
Africa
95. 0
Africa Regional/Multidonor
2. 5
Central and West Africa Regional
7. 0
East Africa Regional
Southern Africa Regional
7. 0
Congo (K)
5.0
Ethiopia
12. 0
Ghana
15. 0
Kenya
Liberia
4. 0
Morocco
11. 0
Nigeria
16.0
Tanzania
3. 0
Tunisia
10. 0
Uganda
2. 5
Grand total
605. 0
Subsection 101 (1) (B) repeals existing authority which permits ap-
propriations to be made on the basis of balances remaining from
previous authorizations for development loans. -Without this restric-
tion a total of $230 million, above the amounts authorized for FY 1972
could otherwise be appropriated during this fiscal year on the basis of
balances from previous authorizations. The Committee believes that if
any of these funds were appropriated, it would serve to negate the
Committee's recommendation and it has, therefore, repealed this
authority.
Subsection 101(1) (C) extends for FY 1972 and FY 1973 the pro-
vision of existing law which requires that not less than 50 percent of
the funds appropriated for development lending shall be, available
for loans made to encourage economic development through private
enterprise.
Subsection 101(2) extends through FY 1973 the authorization in
section 203 of the Act for the use of proceeds from certain loan repay-
ments for further lending purposes.
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Section 101 (3)- ?Multilateral Frog rams
This subsection is designed to encourage the shift of a greater pro-
portion of United States bilateral aid' to a multilateral basis. It
puts the Congress on record in favor of moving to internationalize
our bilateral aid program, to the extent feasible. It is consistent with
the President's announced policy. He stated in his September 15,
1970 message to Congress: "I propose that the United States channel
an increasing share of its development assistance through multilateral
institutions as rapidly as practicable." He said that "moving in this
direction holds the promise of building better relations between bor-
rowing and lending countries by reducing the political frictions that
arise from reliance on bilateral contracts in the most sensitive affairs
of nation-states."
In order to implement this policy, this provision requires that. the
bilateral development loan program be phased out by not later than
June 30, 1975. And it authorizes the President to use any of the funds
appropriated for economic aid to be transferred to multilateral lend-
ing institutions for lending purposes. If after 1975 an unusual situa-
tion developed where the President felt that a bilateral loan was im-
portant to the national interest?another British loan case, for ex-
ample?he can come to Congress and ask for a specific authorization.
It does not provide for phasing out the technical assistance program,
although it would permit transfer of technical assistance funds to
the multilateral organizations.
A majority of the members of the Committee on Foreign Relations
have long held the view that multilateral means of channeling the
foreign assistance efforts of the United States are superior to bilateral
methods. The Committee has been a strong and constant supporter of
international financial and development institutions. For example, re-
cently the Committee by votes of 14 to 1, 15 to 0, and 13 to 2 reported
favorably authorization for a total of $2 billion in additional contribu-
tions to the International Development Association, the Inter-Amer-
ican Development Bank, and the Asian Development Bank,
respectively. In contrast many of the major issues involved in this bi-
lateral aid bill were decided in Committee by only the narrowest of
margins.
The advantages of multilateral over bilateral aid were summarized
in this way by Under Secretary of the Treasury Charls Walker in
testimony before the Committee this year:
Here are. som.e reasons why we think the multilateral ap-
proach is a sound one and worthy of our increasing support.
It permits each donor country to contribute according to its
financial strength with all countries contributing on the same
terms. It permits a pooling of knowledge and expertise on
development problems which no single country can muster.
It provides for an allocation of assistance on the basis of
development needs, relatively free from political ties or com-
mercial factors, thereby minimizing political motivation for
assistance. These institutions are forums for bringing inter-
national influence to bear on donor countries, in connection
with their trade policies, and on recipient countries, to follow
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generally acceptable development policies. They provide an
important force in favor of more open and less restricted na-
tional economies leading to a more effective use of externally
provided resources as well as a more rational allocation of re-
sources at home. And finally, they provide a shielding device
against undue reliance of any recipient on a particular source
of aid, an undue responsibility of any donor in support of a
particular recipient.
The President's Task Force on International Development (Peter-
son Commission) also urged that greater emphasis be placed on the
international organizations. It said:
The international organizations could roughly double their
present rate of lending?from $2.5 billion a year to $5 bil-
lion a year?over the next several years while continuing to
follow sound practices and maintain high standards. This
judgment takes into account the capabilities of these organi-
zations, the current international investment climate, the
increasing availability of sound development projects, better
planning and performance in both public and private sectors
of the developing countries, and estimates of the level of
foreign investment and bilateral assistance.
Subsection 3(a) (i) amends section 209 (a) of the Foreign Assist-
ance Act of 1961 to express Congress' strong support for the concept
of multilateral aid. It states Congress' support for increasing the pro-
portion of U.S. assistance to developing countries that should be chan-
neled through multilateral organizations. It also expresses Congress'
support for undertaking measures that will help improve the com-
petency and capacity of the international organizations.
Subsection (3) (A) (ii) adds two new subsections to the revised sec-
tion 209.
The new subsection (c) requires that the bilateral loan program be
phased out by not later than June 30, 1975. During the phaseout period
the Committee intends that maximum use be made by the President
of the transfer authority available under the new subsection (d).
The new subsection (d) authorizes the President to transfer any
funds appropriated under Part I of the Foreign Assistance Act, the
economic assistance portion of the Act, to the International Develop-
ment Association, the International Bank for Reconstruction and
Development, the International Finance Corporation, the Asian Devel-
opment Bank, or other multilateral lending or development institu-
tions for lending purposes. The institution must agree, when making
loans with the funds transferred, to take into account the same con-
siderations that the President must now consider under sections 201 (b)
and (f), 207, and 208 of the Act. The funds could be transferred under
such other terms and conditions as the President may determine.
Subsection 3(B) amends subsection 209(b) by striking out the
heading.
Subsection 3(C) repeals section 205 of the Act which authorized
the transfer of up to 10% of funds available for development lending
to certain multilateral institutions. This authority is superseded by
the expanded transfer authority authorized by subsection (3) (A) (ii).
Subsection 3(D) is a technical amendment to section 619 of the Act.
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Section 102?Technical Cooperation and Development Grants
Section 102(1) authorizes an appropriation of $208,270,000 for each
of the fiscal years 1972 and 1973 for worldwide technical assistance and
development grants. This amount represents a ten percent reduction in
the Administration's request and may be compared to the following:
Technical Assistance (worldwide) :
1. Fiscal Year 1970 appropriation
$166,
750,
000
2. Fiscal Year 1971 appropriation
166,
750,
000
3. Fiscal Year 1972 authorization request
231,
300,
000
4. House allowance:
Fiscal Year 1972
Fiscal Year 1973
183,
183,
500,
500,
000
000
5. Committee recommendation:
Fiscal Year 1972
Fiscal Year 1973
208,
208,
270,
270,
000
000
The technical assistance program deals with the human side of the
development process. Skilled Americans from all parts of the country
join to work with people of the developing countries, to transfer the
knowledge and techniques to the developing countries.
The United States has pioneered in developing technical assistance
concepts and programs. Technical cooperation, as an organized govern-
mental activity, began in 1942 with the Institute of Inter-American
Affairs. The Point IV program' initiated by President Truman in his
inaugural address of 1949, challenged the American people to pool
their knowledge and energies with those of the peoples of the develop-
ing countries for the general betterment of mankind. These themes
were carried out in the 1950's by the Foreign Operations Administra-
tion and the International Cooperation Adniinistration which were
followed in the 1960's by the Agency for International Development.
The major types of technical assistance are:
Research, helping solve development problems through re-
search and building institutional research capacity in the devel-
oping countries themselves;
Institution-building, helping developing countries establish new
institutions and improve existing ones;
Training, providing people with formal education, training in
particular skills, and experience in modern techniques, so that
they can contribute to development by using their new knowledge
and skills and passing them on to others;
Advisory technical services, providing the skilled manpower
needed to help developing countries adapt modern technology and
employ modern research methods to the solution of their devel-
opment problems.
Subsection 102(2)--American Schools and Hospitals Abroad
This section of the bill authorizes the appropriation of $30,000,000 in
each of the fiscal years 1972 and 1973 for the purpose of assisting
"schools anft libraries outside the United States founded or sponsored
by United States citizens and serving as study and demonstration cen-
ters for ideas and practices of the United States." The section applies
similarly to "hospital centers for medical education and research out-
side the United States, founded or sponsored by the United States
citizens." The I louse bill also contains an authorization of $30,000,000
for each year.
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In recent years it has become the practice for Congress to specify
each individual project and the amount to be spent on it from funds
authorized by this section. This procedure has proved to be counter-
productive and led, perhaps inevitably, to a considerable lobbying
effort on behalf of American sponsored schools and hospitals abroad.
As a result, the list of projects has increased significantly and Congress
has not had sufficient opportunity to analyze the merits of each. The
number of projects vying for a Congressional stamp of approval has
increased several fold during the last few years. This year, for ex-
ample, the Agency for International Development proposed a total of
ten projects costing $10.2 million. The House authorized an additional
twenty projects, bringing the total cost to $28.7 million. Some of these
projects were also presented to this Committee. Thirteen projects in
addition to those on the House list, totaling $13.7 million have been
submitted to the Committee on Foreign Relations for its consideration.
These projects are as follows:
1. Beth-Avoth American Geriatric Center
$1, 200,
000
2. Beth Rivka Comprehensive School for Girls
1, 500,
000
3. Technion, The Israel Institute of Technology
4, 000,
000
4. Musa Aland Foundation of Jericho
200,
000
5. Kiriat Noar?A "Boys Town" type school for orphaned boys
500,
000
6. University of Pittsburgh?Haifa University Cooperative Study
Program
2,000,
000
7, Sefardic Vocational College for Girls
300,
000
8. Tom School
1, 060,
000
9. Ch'san Sofer Chasan Yecheskel Institute
350,
000
10, Shaari Zedak Hospital
750,
000
11. Betsefer Miksol Tichoni Lemechonaut Rechev U.M
840,
000
12, Hebrew Union College Biblical and Archaeological School in
Jerusalem
138,
800
13. Shocken Institute for Jewish Research in Jerusalem
1, 000,
000
Total
13, 778,
800
Because of the proliferation of projects, the Committee reached the
conclusion that corrective action must be taken this year. Most impor-
tantly, the Committee believes that Congress should not put itself in
the position of picking and choosing among proposals for individual
i
school, hospital, or library projects n foreign countries. This is not
the task of Congress. Nor is Congress best equipped to initiate such
projects.
The role of Congress in this instance, is to render an overall judg-
ment about the value of the entire program based on testimony and
evidence presented by AID and State Department officials and other
witnesses. It is the responsibility of Executive-Branch officials to weigh
the relative merits and weaknesses of each specific project, subject of
course to overall Congressional review. Accordingly, the Committee
has authorized a lump sum of $30,000,000 for this program but with-
out allocating amounts to individual projects.
In taking this action, the Committee was faced with the practical
problem of the House already having listed individual projects and
recommended specific amounts for each. In view of this situation, the
Committee expects that AID and the State Department will consider
the projects submitted to the Committee, as listed above, on an equal
basis to those recommended by the House. In considering the projects
submitted to both the Senate and the House, AID and State Depart-
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inent officials should weigh each on its merits according to the estab-
lished criteria used by AID and the State Department to evaluate the
merits of Section 214 projects and in consultation with the host gov-
ernment. The Committee is not sure that all of the projects submitted
to it qualify for funding under the Act. The combined Senate and
House list is not intended to exclude other appropriate projects from
consideration and evaluation by Executive Branch officials.
Subsection 102 (3)--Suez Canal
Subsection 102(3) adds a new section to Title II of the Act which
authorizes an appropriation of the equivalent of $10 million in Egyp-
tian pounds, owned by and excess to the needs of the United States,
for the purpose of assisting in the reopening of the Suez Canal. In no
case will the United States furnish such assistance until the parties
involved?principally the United Arab Republic and Israel?have
reached agreement on this matter. Another condition for U.S. as-
sistance is that the agreement stipulate that the canal will be open on
equal terms to the ships of all nations, including Israel, on a nondis-
criminatory basis.
The Committee believes this authorization may prove useful if and
when a negotiated settlement is reached in the Middle East. However,
rather than provide an open-ended authorization for the appropria-
tion of U.S.-owned Egyptian pounds for this purpose, the Committee
believes that the equivalent of $10,000,000 in such funds should prove
sufficient for the foreseeable future. If future developments warrant
increased funding, the Congress can authorize additional funds.
Section 103 (1)?Worldwide Housing Guaranties
This section amends section 221 of the Act by increasing by $50,-
000,000 the ceiling on the total authority for guaranty of housing
projects outside of Latin America. With this increase the total face
amount of housing guaranties that may be issued under section 221
will be $180,000,000.
The Committee believes that this increase will be more than suffi-
cient in view of the fact that only $32.5 million in guaranties had been
issued through March 31 of this year.
Section 103(2)
This section amends section 223(1) of the Act to extend the world-
wide housing guaranty authority through June 30, 1974.
Section 104?International Drug Control Assistance and Related
Restrictions
Subsection 104(a) adds a new title IIA dealing with international
drug control assistance to Chapter 2 of Part I of the Foreign As-
sistance Act. Pursuant to its terms, the President is authorized to
furnish assistance to any foreign country in order to encourage and
enable such country to control or eliminate the production processing
or distribution of drugs (as defined by the Comprehensive production,
Abuse
Prevention and Control Act of 1970) within or across its boundaries.
In addition, the President is authorized to furnish assistance to any
international organization, such as the United Nations Special Fund
for Drug Abuse Control, for the same purpose. Not less than $25,-
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000,000 of Foreign Assistance Act funds shall be available in each
fiscal year only to carry out the provisions of the new title.
Subsection (b) adds a new subsection (v) to Section 620 of the
Foreign Assistance Act, relating to prohibitions against furnishing
assistance. It provides that the President shall determine annually,
before furnishing any assistance to a foreign country, whether such
country has undertaken appropriate measures to prevent drugs, par-
tially or completely processed or produced in or transported through
such country, from unlawfully entering the United States or being un-
lawfully supplied to American citizens. If the President determines
that such country has not taken appropriate measures to control the
illegal flow of narcotic drugs into the United States, he shall cease to
furnish all assistance to that country and seek, through the United Na-
tions or any other international organization, the imposition of inter-
national sanctions against such country. On the other hand, if the
President finds, after his determination to cease to furnish assistance
to a foreign country, that such country has undertaken appropriate
measures to prevent the illicit flow of drugs into the United States, or
finds that the overriding national interest requires that assistance be
furnished to such country, he may continue or resume assistance to the
country, as the case may be.
The new subsection also provides that the President shall utilize
agencies and facilities of the United States Government to assist for-
eign countries in their efforts to prevent drugs from unlawfully enter-
ing this country or being supplied to our citizens. No law shall be
construed to authorize the President to waive the provisions of this
subsection.
Section 105?Oversea8 Private Investment Corporation
Subsection 105(1) amends section 238(c) of the Act in order to per-
mit any group of U.S. investors holding 95 percent of the subscribed
share capital of a foreign corporation to Qualify as eligible investors
for the purposes of participation in OPIC programs. Such investors
are currently eligible only if foreign law requires 5 percent of the
share capital to be held by their nationals or other foreign citizens.
Subsection 105(2) amends section 239 of the Act to add a new sub-
section (g) which authorizes the operation of programs by the Over-
seas Private Investment Corporation in any country if the President
determines that such operations of those programs in that country
would be in the national interest.
The primary purpose of this provision is to authorize OPIC guar-
antees for investments by U.S. investors in Yugoslavia and Romania.
The Committee believes that this is a desirable goal and one which
could serve to improve our overall relations with the Communist
countries.
Subsection 105(3) extends the existing provisions of the Act relat-
ing to agricultural credit and self-help community projects through
June 30, 1974.
Section 106?Alliance for Progress
This section authorizes appropriations for each of the fiscal years
1972 and 1973 of $309,400,000 for the Alliance for Progress, of which
no more than $109,650,000 may be used for technical assistance grants.
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The total amount represents a fifteen percent reduction in the Admin-
istration's request and may be compared to the following:
ALLIANCE FOR PROGRESS
Loans
Limitations
on grants
Total
1. Fiscal year 1970 appropriation
$225, 000,090
$81, 500, 000
$336, 500, 000
2. Fiscal year 1971 appropriation
287, 500, 000
82, 875, 000
370, 375, 000
3. Fiscal year 1972 appropriation:
Request
235, 000, 000
129, 000, 000
364, 000, 000
4. House allowance:
Fiscal year 1972
287, 500, 000
90, 750, 000
378, 250, 000
Fiscal year 1973
337, 500, 000
90,750, 000
428, 250, 000
5. Committee recommendation:
Fiscal year 1972
199, 750, 000
109, 650,090
309, 400, 000
Fiscal year 1973
199, 750, OGO
109, 650, 000
309, 400, 000
The following table shows the Administration's proposed FY 1972
development lending program for Latin America.
Country In millions
Colombia 60.0
Brazil
60. 0
Central American Economic Community:
Regional Office of Central America and Panama (ROCAP)
10. 0
El Salvador
10. 5
Guatemala
15. 0
Honduras
9.0
Nicaragua
10. 0
Bolivia
10. 0
Dominican Republic
15. 0
Ecuador
14. 0
Guyana
3.5
Jamaica
10. 0
Panama
25. 0
Paraguay
6. 0
Peru
10.0
Uruguay
12. 0
Eastern Caribbean Regional
10. 0
Regional
5. 0
Total
310. 0
Section 107?Authorization for Population Programs
Section 107 amends section 292 of the Act to authorize the appro-
priation of $125,000,000 for population and family planning in pro-
grams in each of the fiscal years 1972 and 1973.
The authorization of an increase in funding for population activities
follows past practice and emphasizes the Committee's concern over the
population growth problem. In FY 1970, Congress earmarked $75
million and in FY 1971 it set aside $100 million for this purpose. The
Committee believes this pattern of increasing emphasis should be main-
tained because of the critical importance of the problem. The House-
passed bill, on the other hand, maintains the FY 1971 spending rate of
$100 million. In the Committee's view this approach runs the risk
of losing the momentum established during the last few years.
Since it is estimated that the average number of women in the less
developed countries aged 20 to 29?the peak years of human fertility?
will increase by about one-third during the 1970s and two-thirds dur-
ing the 1980s, over the average number for the 1960s, every effort
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should be made to extend family planning information and services
on a voluntary basis to couples in the developing countries. Unless
population growth rates in these countries are reduced, their 'popula-
tions will double in 20 to 30 years and their development efforts over
the next two decades will not result in any noticeable improvement in
individual standards of living.
The Committee is encouraged by the important role which the
United Nations, through the UN Fund for Population Activities, is
now playing in support of family planning and population programs
in the developing countries. Established by the Secretary-General in
1967 and transferred in 1969 to the UN Development Program under
Paul Hoffman, the Population Fund expects to receive during calen-
dar year 1971 nearly $30 million in voluntary contributions from some
thirty governments, including the United States. The funds are to be
used to supplement the various national family planning programs
and to strengthen technical assistance and training provided through
the United Nations system. The Committee has long urged that a
larger share of U.S. assistance in this field be provided to multilateral
organizations like the United Nations and the International Planned
Parenthood Federation and hopes that a substantial portion of the
funds earmarked for population activities will be used regularly to
support these international initiatives.
Section 108?International Organizations and Programs
Subsection 108(1) authorizes the appropriation of $139,000,000 in
each of the fiscal years 1972 and 1973 for voluntary contributions to
various international organizations and programs. This amount repre-
sents a slight reduction in the Administration's request and may be
compared to the following:
International Organizations and Programs
1. Fiscal year 1970 appropriation
$105,
000,
000
2. Fiscal year 1971 appropriation (includes
$14,300,000
for
UNRWA)
118,
110,
000
3. Fiscal year 1972 request
141,
000,
000
4. House allowance:
Fiscal year 1972
Fiscal year 1973
143,
139,
000,
000,
000
000
5. Committee recommendation
Fiscal year 1972
Fiscal year 1973
139,
139,
000,
000,
000
000
These contributions will help fund twelve multilateral assistance
programs, the largest of which is the UN Development Program. The
Committee wishes to draw special attention to the UN Children's
Fund, to which the Executive Branch plans to contribute $13 million
in FY 1972. The Committee recommends that the United States con-
tribution to the UN Children's Fund be increased to $15 million. This
increase was also recommended by the House Committee on Foreign
Affairs.
For most of these international programs, the United States con-
tributes between 33 and 40 percent of the total budget. The following
compares U.S. contributions in FY 1971 with those proposed for FY
1972.
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VOLUNTARY CONTRIBUTIONS TO INTERNATIONAL ORGANIZATIONS AND PROGRAMS'
un thousands of dollars!
Fiscal year
1971
estimated
Fiscal year
1972
proposed
Multilateral technical assistance:
U.N. development program
86, 268
100, 000
U.N. Children's Fund
13,000
13,000
U.N. population program
27,500
7,500
U.N. fund for drug abuse control
2,000
2,000
International Atomic Energy Agency-operational program
1,550
1,550
World Meteorological Organization-voluntary assistance program
1,500
1,500
U.N./FAO world food program
1,500
1,500
U.N. Institute for Training and Research
400
400
World Health Organization-medical research
150
312
International Secretariat for Voluntary Service
70
73
Special contributions for Vietnam..
950
Total
114, 888
127, 835
U.N. Relief and Works Agency:
Regular budget
3 13,300
13,300
Arab refugee vocational training
1,000
Total
14,300
13,300
Total U.N. and related programs
129, 188
141,135
I Excludes proposed U.S. contribution to the U.N. force in Cyprus, which is included under economic supporting
assistance.
2Includes $4,000,000 from development loans for population program under title X.
Funded from supporting assistance.
Section 108(2)?Indus Basin Project
This subsection authorizes the appropriation of $15,000,000 in each
of the fiscal years 1972 and 1973 for U.S. grant contributions to the
World Bank-administered consortium which is financing the Indus
Basin development project.
Because of the possibility that funds appropriated for the Indus
Basin could be transferred and consolidated with funds for other as-
sistance programs, the Committee has added language to prevent any
transfer of these funds, as the President may otherwise be able to do
under Sections 610 (a) and 614 (a) of the Act.
The amount authorized by the Committee is the same as that re-
quested by the Administration and may be compared to the following:
Indus Basin?Comparative Data (Note.?Authorization is required only for
grants for the Indus Basin project. Loans are already authorized under Sec.
302(b) ( 1 ) of the Foreign Assistance Act of 1931 as amended.) :
1. Fiscal year 1970 appropriation
$7,
500,
000
2. Fiscal year 1971 appropriation
4,
929,
000
3. Fiscal year 1972 request
15,
000,
000
4. House allowance:
Fiscal year 1972
Fiscal year 1973
5,
10,
000,
000,
000
000
5. Committee recommendation:
Fiscal year 1972
Fiscal year 1973
15,
15,
000,
000,
000
000
The Committee strongly favors this type of development project and
the multilateral auspices under which it is being carried out.
The Indus Basin Settlement Agreements of 1960 and 1964 provide
for the establishment of the Indus Basin Development Fund to finance
a construction program which ensures an equitable division of the
waters of the Indus Basin between India and Pakistan and helps pro-
vide arable land for over 50 million people in those countries. The
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United States and eight other donors (the World Bank, Australia,
New Zealand, Pakistan, United Kingdom, Canada, Germany and In-
dia) contribute to the fund.
The Indus Basin Settlement succeeded in forestalling imminent
hostilities between India and Pakistan over the Indus waters. Under
the agreements, India received the use of the waters of the three
eastern rivers?the Ravi, Beas and Sutlej?and Pakistan the use of
the waters of the three western rivers?the Indus, Jhelum and Chenab.
The downstream irrigated areas in Pakistan formerly dependent on
water from the three western rivers through a series of barrages (low
darns) and replacement link canals supplemented by the construction
of a high storage dam on the Jhelum. In addition to replacing water
diverted to India, the agreements provide for a substantial element
of development for Pakistan which has been identified largely with
the Tarbela Dam on the Indus. This structure will impound n million
acre feet of water for additional irrigation of the 50 million acre area
and have an initial power capacity of 700 megawatts.
Over 95% of the replacement works of the Indus Basin has been
completed, including the Mangla Dam, 300 miles of link canals and
7 barrages. The Chasma-Jhelum link canal was substantially com-
pleted on November 2, 1970, 5 months ahead of schedule. Commission-
ing is due to commence in May 1971. Completion of the Taunsa-
Panjnad 50-mile link canal is expected by October 1971; and the
Chasma Barrage, by May 1971. The Government of Pakistan, with
the approval of the IBRD, concluded a contract for the main civil
works of the Tarbela Dam in May 1968. The bulk of the funds applied
to the Indus fund this year and in the future will finance the con-
struction of Tarbala Dam, which is scheduled for completion in 1976.
The Indus Basin Development Fund Agreement provides that con-
tributors make payments to the Indus Fund according to a fixed
apportionment upon semiannual call from the World Bank. Funds
are called on the basis of the anticipated rate of construction and
disbursements.
The total commitment to the Indus Fund, including the carryover
for Tarbela, amounts to $1,541.2 million in foreign exchange and
rupees. The United States has pledged $295 million in grants, $121.2
million in loans, and $235 million equivalent in P.L. 480 Pakistan
rupees. India is contributing $168.8 million in foreign exchange, and
Pakistan is contributing $1.2 million in foreign exchange and. $360.5
million equivalent in rupees. In addition, Pakistan is meeting all rupee
requirements for the Tarbela Dam which amount to about $500 mil-
lion equivalent.
Disbursements through December 1970 included $526.9 Million from
the United States, $168.8 million from India, $395.6 million from Pak-
istan and $271 million from other donors.
Section 108(3)?Technical and Vocational Training of Arab refuges
Section 108(3) authorizes an appropriation of $1 million for each of
the fiscal years 1972 and 1973 for an additional contribution to the
United Nations Relief and Works Agency for expansion of technical
and vocational training of Arab refugees. This special authorization
was initiated by Congress in 1969 and $1 million was provided for this
purpose in each of the fiscal years 1970 and 1971.
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Egyptian Pounds
Section 108(4) authorizes the appropriation of $1 million for each
of the fiscal years 1972 and 1973 in Egyptian pounds owned by the
United States and determined to be excess to the requirements of the
U.S. Government, for the purpose of providing technical and voca-
tional training and other assistance to Arab refugees.
Amounts appropriated under this subsection are authorized to re-
main available until expended.
The Committee believes that training and resettlement of refugees
can help to promote a solution of the Arab refugee problem in the
Middle East. The United States owns a substantial amount of Egyp-
tian pounds which are currently excess to the needs of our Government
departments and agencies. Since it appears that some of those pounds
might be utilized to expand vocational training of Arab refugees, the
Committee recommends that the President be given the authority
contained in this subsection.
Section 109?Contingency Fund
This section authorizes the appropriation of $30,000,000 for each of
the fiscal years 1972 and 1973, the same amount authorized by the
House of Representatives. The Administration request was for $100
million.
The Committee believes that the amount authorized is in line with
AID's use of the contingency fund over the past several years and
should be sufficient to meet unforeseen developments or situations dur-
ing FY 1972 and FY 1973 which are not of sufficient magnitude for
the President to make a special request to Congress for additional
funds.
[In millions]
Authorized Used
Fiscal year:
1968
$50
$27.5
1969
10
13.9
1970
30
27.7
1971 (estimated)
30
29.3
Section 110?Relief for Pakistani Refugees
This section adds a new section 481 to the Foreign Assistance Act
which authorizes $250,000,000, requested by the President, for use in
providing for the relief of refugees from East Pakistan in India and
for humanitarian relief in East Pakistan. These funds will be in ad-
dition to those available for humanitarian and relief assistance under
Public Law 480.
The Committee is greatly concerned over the tragedy taking place
in East Pakistan. The Agency for International Development esti-
mated that, as of October 14, more than nine and one-half million East
Pakistanis had fled their homes to take refuge in India. And the flow
continues. Famine threatens many millions of Bengalis who remain in
East Pakistan. The United States has a very strong interest in helping
in every way possible to avert war and massive human suffering in
that area.
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The Committee has been advised that the United Nations is lead-
ing and coordinating international humanitarian relief efforts in both
India and East Pakistan. The Agency for International Development
estimates that the total costs of providing food, water, clothing, shel-
ter, medicine, and skeletal public services for the refugees in India
will cost about $95 million per one million refugees for the first year.
This totals over $900 million for first-year costs for the existing
refugee load.
According to the latest information available to the Committee,
total refugee aid to India from all sources amounts to about $210
million, of which the United States has contributed $89.2 million. It
is estimated that the costs thus far exceed $350 million, most of which
has been borne by the Indian government. United States grant funds
for refugees in India are contributed as part of the international relief
effort which is being coordinated by the UN High Commissioner for
Refugees (UNHCR). These funds are made available through the
Office of Refugee and Migration Affairs, Department of State. Some
of the grant funds are being allocated directly to the Government of
India and some to the UN High Commissioner for Refugees
(UNHCR) or directly to other international voluntary agencies, de-
pending upon priority needs of the refugee situation and capabilities
and plans of the various organizations involved. P.L. 480 food as-
sistance is made available through A.I.D. channels.
The relief requirements in East Pakistan are difficult to estimate. A
United Nations team has estimated that there will be a foodgrain
shortfall in East Pakistan of 1.8 million tons. In addition, edible
oils and high protein foods will be needed to supplement grain re-
quirements. According to A.I.D., total U.S. humanitarian relief for
East Pakistan since March 25 comes to $82.3 million in dollars and
food aid, and U.S.-owned local currency. Assistance from other nations
totals $37.5 million.
In East Pakistan the monitoring of the receipt and distribution of
foodstuffs and other relief assistance is being carried out by a special
UN Relief Supervisory Team set up by the Secretary General. Pri-
mary distribution of foodstuffs is being made by the Food Depart-
ment of the Government of East Pakistan under the supervision of
that Team.
In authorizing $250 million for relief activities the Committee ex-
pects that Executive Branch officials will exert every effort to get
other countries, including the Soviet Union and other Communist
nations, to pay a fair share of the costs of this tragedy. The Executive
Branch estimates that countries other than the United States have,
thus far, contributed $159 million in goods and services for the refugee
relief effort. The Committee does not intend that the United States,
in any way, assume primary responsibility for the refugee problem.
This is an international disaster and the responsibility must be shared
by, the entire world community under the leadership of the United
Nations.
The Committee adopted the following amendment to stress its con-
cern that government-to-government channels be minimized in the
distribution of relief and to forestall the possible buildup within the
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Agency for International Development of a large operating arm to
carry out disaster relief programs:
"Such assistance shall be distributed, to the maximum extent
practicable, under the auspices of and by international institutions
and relief agencies or United States voluntary agencies."
The Committee does not wish to have the U.S.-Pakistani relief
effort used by A.I.D. as a foot in the door to build up an operating
disaster relief agency, as A.I.D.'s normal activities are curtailed by
the shift of our aid to a multilateral basis. The Committee believes
that the international organizations and the voluntary agencies pro-
vide the most effective organizational framework for distribution of
U.S. relief in disaster situations.
Printed below are two tables providing information on the United
States relief assistance furnished to date in both Indian and East
Pakistan:
South, Asia Relief Assistance
(Contributions reported as of Oct. 19, 1971)
Refugee Relief in India:
U.S. Government Assistance
$89,
157,000
(Of which Dollar Assistance was $35,500,000; and Food
Assistance was $53,657,000)
Assistance from Other Sources
121,
068,
766
(U.S. contributions as 42% of total)
East Pakistan Relief:
U.S. Government Assistance
92,
300,
000
(Of which Dollar Assistance was $9,000,000; Food As-
sistance,' $69,800,000; and Local Currency Assistance,
$13,500,000)
Assistance from Other Sources 37, 510, 146
(U.S. contributions as 71% of total)
Excludes $4.7 million for cyclone rehabilitation projects which is available for current
expenditure.
2 Excludes $18.3 million food for cyclone relief authorized earlier but being delivered
currently, and also excludes $38.9 million of previously authorized normal PL 480 food
which is also being delivered this fiscal year.
Source: A.I.D.
SOUTH ASIA RELIEF ASSISTANCE
(as of Oct. 19, 1971)
[In millions of dollars!
Allocation of international assistance
between India and Pakistan
Total assistance Percent U.S. assistance
from all sources share
only
Percent
share
India
Pakistan
Total
210.2 62
129. 8 38
89.2
93.3
44
56
340.0 100
112.5
100
U.S. SHARE OF TOTAL INTERNATIONAL RELIEF ASSISTANCE
Total
Percent share
United States
181.5
53
Other donors
158. 5
47
Total
340.0
100
Source: AID.
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PART IT-MILITARY ASSISTANCE
Section 201-Authorization
Subsection 201(1) authorizes an appropriation of $565 million in
fiscal 1972 for military grant assistance. This amount represents a
twenty per cent reduction from the Administration's request and may
be compared to the following:
Military assistance funding-comparative data
1. Fiscal year 1970 appropriation
$350,
000,
000
2. Fiscal year 1971 appropriation
690,
000,
000
3. Fiscal year 1972 authorization request
705,
000,
000
4. House action:
Fiscal year 1972
Fiscal year 1973
705,
705,
000,
000,
000
000
5. Committee recommendation
565,
000,
000
'Plus $60,000,000 in funds transferred from supporting assistance.
It is doubtful that the reduction recommended by the Committee
will seriously impair the Administration's ability to carry out the kind
of military assistance program that it proposed for fiscal 1972. As the
following data indicates, the regular MAP program funded through
the authorization in this bill is only a portion of the overall military
assistance we provide to other nations.
military assistance and related prograints-yroposed fiscal year 1972 levels
(In millions
of dollars)
Military Assistance Service Funded
$2,
230. 8
Military Assistance Program
731. 5
Foreign Military Credit Sales
582. 0
Excess Defense Articles
324. 0
Ship loans'
90. 1
3,
958. 4
'Valued at approximately one-third of acquisition cost.
'Valued at acquisition cost.
PROPOSED MILITARY ASSISTANCE AND RELATED PROGRAMS FOR FISCAL YEAR 1972, BY REGIONS AND MAJOR
RECIPIENTS
[I n millions of dollars]
Region/country
Regular
MAP
Other
military
programs
Total
East Asia and Pacific
$501.1
$2, 523. 0
$3, 024. 1
Cambodia
Indonesia
Korea
Laos
Taiwan
Thailand
Vietnam
200. 0
24.9
239.4
19. 5
11.0
3.0
402.9
125.8
93.0
77. 2
1, 789. 1
211. 0
27. 9
642. 3
125.8
112. 5
77, 2
1, 789. 1
Near East and South Asia
167.0
533.8
700.8
Greece
19.8
98.0
117.8
Turkey
99.7
71.8
171.5
Latin America
9. 8
73. 8
83. 6
Africa
19.0
18.6
37. 6
Europe
14.0
57.6
71.6
Other
20.4
20.0
40.4
Total
731.5
3, 226. 9
3, 958. 4
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34
Subsection 201(2)A?Conditions of Eligibility
This subsection amends section 505(b) (2) of the act which requires
that the President determine, when furnishing assistance on a grant
basis in excess of $3 million, "that such defense articles will be utilized
by such country for the maintenance of its own defensive strength,
and the defensive strength of the free world." The amendment, which
was put in on the House side, substitutes the word "or" for the word
"and," thus relaxing the more stringent conditions now contained in
the section.
The Committee accepts this amendment not because it believes the
present conditions unduly restrict the President's authority to provide
military assistance. Rather it accepts this amendment because it be-
lieves the conditions of eligibility already in the act have little, if any,
meaning if the President and his advisors determine that this or that
government should get military aid. As the House, too, recognizes, this
amendment is really not necessary if the President wants to give more
than $3 million in military assistance to Indonesia, Cambodia or any
other country without meeting the condition that such assistance will
serve the "defensive strength of the free world . . ." Under the Act,
the President has the authority to waive this condition. Hence the
amendment is little more than a convenience to avoid the paperwork
of a Presidential determination.
The only possible advantage the Committee sees in the amendment
is that it may cut down on the number of Presidential waivers which
would otherwise be issued.
Subsection 201(210?Public Law 480 Common Defense Grants
This subsection repeals section 505(e) of the act which requires that
recipients of PL 480 assistance enter into an agreement with the
United States to permit local currencies accruing to the United States
under Title I of the Agricultural Trade Development and Assistance
Act of 1954 to be used for common defense purposes, including internal
security.
This amendment, originally introduced as S. 905, was sponsored
by Senators Proxmire, Humphrey, McGovern and Mansfield. It re-
moves the requirement that recipient countries formally agree that
funds accruing from the P.L. 480 program to the United States be
available for military assistance purposes.
Subsection 201 (3)?Special Authority
This subsection amends section 506 (a) of the act by extending for
FY 1972 the authority of the President to draw on Department of De-
fense stocks to carry out the purposes of the military assistance pro-
gram, subject to subsequent reimbursement therefor from military
assistance funds. As in prior years, this authority is limited to $300
million for fiscal year 1972.
Subsection 201(4)?Restrictions on Military Aid to Latin America
This amendment reduces from $25 million to $10 million the ceiling
on the value of defense articles that the United States can furnish to
Latin American countries during any fiscal year.
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Beginning in FY 1966, Congress initiated what has developed into
a phased reduction of our military assistance to Latin America. Dur-
ing the past six years, this program has steadily declined from a high
of $79 million in FY 1966 to a low of $11 million in FY 1971. Clearly,
the intent of the Congress has been to move toward the curtailment of
the material assistance portion of the program.
The $10 million ceiling recommended by the Committee is but
another step in this direction.
Section 201 (5)?New Provisions Relative to Military Assistance
New Section 511?Reduction in Military Aid Mission Personnel
The new section 511 states the sense of Congress that the size of our
military aid missions should be reduced and consolidated with other
elements of our overseas diplomatic missions and requires a twenty-
five percent reduction worldwide by September 30, 1972 in the number
of military aid mission personnel serving abroad. As of June 30, 1971,
there were 2,808 military personnel serving abroad in 48 military aid
missions, groups, or similar activities, not including South Vietnam.
The Peterson Task Force Report on International Development rec-
ommended a reduction and consolidation of U.S. military advisory
groups and the Committee believes that this amendment is in line with
the Task Force's recommendation. During the Committee's, considera-
tion of the 1969 foreign aid bill, it gave very serious consideration to
compelling, by law, a reduction in the number of overseas military as-
sistance advisors. The Committee's report on that bill clearly evidences
its concern:
"Many members of the Committee have become increasingly con-
cerned over the size of United States military aid missions abroad. As
of July (1969), there were 3,185 Americans attached to the military
missions in 36 countries which receive military aid under the authority
of this bill."
". . . The Committee is of the opinion that many of these missions
could be eliminated entirely, at great savings to the taxpayer and with
the resultant benefit to our foreign relations. The Committee expects
to see considerable progress in this direction when it reviews the 1971
military aid program."
There have been some token cuts overall but there is no evidence to
suggest that the Executive Branch has given this issue the serious
attention that the Committee intended. In many instances either the
cost of the military missions remains considerably greater than the
aid programs being administered or the number of people in the
mission is substantially larger than the size of the U.S. diplomatic
mission?or both.
This amendment is aimed at bringing about the kind of corrective
action which the Committee had hoped the Administration itself
would initiate. The twenty-five percent reduction required by this
amendment should be considered only as a beginning.
The amendment is not intended in any way to impose .a ceiling on
the number of military attaches stationed abroad but the Committee
intends to keep close watch over our attache missions to ensure that
their personnel levels do not increase as the size of the military aid
missions decline.
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New Section 512.?Military Assistance to South Vietnam, Laos
and Thailand
The new section 512 requires that, beginning with fiscal year 1973,
all military aid to South Vietnam, Laos and Thailand be funded out of
the regular military assistance program as authorized under the For-
eign Assistance Act of 1961, as amended.
Military aid to these countries is currently being funded from the
Department of Defense budget, an interim procedure which the Con-
gress approved in 1966 in the case of South Vietnam and in 1967 in
the cases 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.
The realities of the 1970's in Southeast Asia are not those of 1966
and 1967: the war is being wound down; U.S. combat troops are being
withdrawn; and negotiations for a peace settlement are taking place.
In other words, the realities of the situation in Indochina today are
primarily political, in contrast to the predominantly military realities
of 1966 to 1968. It should be noted that, together, the Cooper-Church
and the Mansfield amendments should insure that participation by all
U.S. forces in the war is ended within 6 months.
Accordingly, the time has come to return the funding of military
aid programs in South Vietnam, Laos and Thailand to the regular for-
eign assistance program; this will permit the appropriate committees
of Congress to judge our military aid programs in these countries in a
foreign policy context. Military assistance to Cambodia is being
judged in this way, through funding from the regular military assist-
ance program.
This change will ensure that all U.S. military assistance to the four
principal Southeast Asian recipients is judged against security assist-
ance needs elsewhere--all of which have a direct bearing on this
country's overseas commitments and its foreign policy in general.
New Section 513?Limitation on Availability of Funds for
Military Operations
The new section 513 of the Act would require specific Congressional
authorization before funds from any U.S. Government agency or offi-
cial could be made available "for the purpose of financing any military
operations by foreign forces in Laos; South Vietnam, North Vietnam,
Thailand, Cambodia, or Burma outside the borders of the country of
the government or person receiving such funds . . ." In addition, the
amendment would require the President to make available to the Con-
gress copies of any agreements and other information bearing on such
military operations., The amendment is not intended, however, to in-
fringe or restrict military operations and exercises outside Southeast
Asia which are required for self-defense purposes or which are pur-
suant to regional defense arrangements, such as NATO, or other
arrangements, such as U.N. peacekeeping operations.
This amendment is an outgrowth of the "crazy quilt" financing
arrangements that have emerged from U.S. involvement in Indochina
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and the conduct of cross-border military operations in that part of the
world. WithT.Continuing reports about U.S. financing of Thais and
Cambodian mercenaries in Laos, and even Thai mercenaries in Cam-
bodia,M is virtually impossible for the Congress to judge the accuracy
of these reports or know how much of the taxpayers' money is being
used to support these activities, as well as others where the U.S. may
be footing the bill for military operations ostensibly initiated and
controlled by another government. In this connection, it will be re-
called that only long after this fact did the Congress discover that
Philippine and Thai troops in Vietnam were being paid at consider-
ably higher rates by the U.S. Government than were American sol-
diers for comparable combat service.
The carrying out of such clandestine activities by the Executive
Branch?without the knowledge, let alone the approval of the Con-
gress?makes a mockery, of our system of separation of powers.
This amendment would serve to restore a more proper balance be-
tween the Legislative and Executive Branches in such matters.
,Vetv Section 514?Payments in Local Currency for Military
Grant Aid and Excess Military Equipment
This new section 514 requires that a foreign country which receives
military grant aid or excess defense articles pay, in its own currency,
25% of the amount of the grant aid or, in the case of excess articles,
an amount equal to 25% of the fair market value. The foreign currency
obtained in payment would be available to meet, U.S. obligations in
the country and to finance educational and cultural exchange pro-
grams. It would not apply to a country where military aid was given
in payment for base rights. And, if the President decided, the pay-
ment requirement would be waived if, without it, the United States did
not need to make dollar purchases of the local currency for financing
U.S. operations in that country. In practical effect, the payment re-
quirement would not be applied unless it would actually result in
dollar savings.
It is basically the same as an amendment adopted by the Senate last
year in the Foreign Military Sales bill, II.R. 15628, but which was de-
leted in the conference with the House. The most significant change is
that this provision requires only a 25% payment in the local currency,
whereas last year's amendment called for 50%. That amendment was
supported in the Senate by a vote of 36 to 52 when an attempt was made
to strike it. The need for the amendment is even more compelling
today than it was a year ago.
In none of the countries which are major recipients of military grant
aid, Korea Taiwan, Greece, and Turkey, does the United States own
an excess of the local currency. In fact, none of the top ten recipients
of military aid, programmed for FY 1972, are excess currency coun-
tries. There is no valid reason why recipients of military aid should
not be required to pay at least one-fourth the value of the materials
we give them, especially if we have to buy their currency with dollars
to pay for the, cost of U.S. operations in the country. Having additional
foreign currencies available would lessen the drain on our dollar re-
sources and have a favorable impact on our escalating balance-of-pay-
ments deficit.
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The General Accounting Office examined the question of a foreign
currency payment requirement from the standpoint of its potential
impact on the budget. Based on the Treasury Department's estimates
of U.S. foreign currency purchases in FY 1972 for official operations
in countries which receive military grant aid, the United States would
save $117.7 million if 30% payment were made in the country's own
currency for military grant aid programmed to be given to them. The
GAO analysis and a table listing the major grant aid recipients and
the estimated dollar purchases of their currency follows:
GENERAL ACCOUNTING OFFICE ANALYSIS
For the purposes of this analysis, the excess defense articles
programmed for FY 1972 Military Assistance Programs are val-
ued at one-third (1/3) of the cost of acquisition. This valuation is
in accordance with the Foreign Military Sales Act, as amended.
The data used for the analysis does not include nonregional mili-
tary assistance grants, service-funded military assistance, or ex-
cess defense .article programs for cetain countries in Southeast
Asia.
VALUE OF MILITARY ASSISTANCE PROGRAMMED FOR FISCAL YEAR 1972
The programmed FY 1972 military grant assistance and the
value of excess defense articles, with the above exclusions, amounts
to $710 million and $200 million, respectively, for a total of $910
million. United States Treasury projected purchases of foreign
currencies from commercial sources, in the same countries receiv-
ing the military aid, amounts to $315 million for FY 1972.
POTENTIAL REDUCTION OF 'U.S. PURCIIASES OF LOCAL CURRENCIES
In the proposed FY 1972 Military Assistance Program, a total
of 35 countries are to receive grant assistance or excess defense
articles, and in 28 of those countries the United States could re-
duce its foreign currency purchases if partial payments are made.
In seven of the recipient countries the United States will not pur-
chase local currency or has a sufficient amount of local currency
holdings to meet requirements. Over 94 percent of the purchases
which could be reduced would result from U.S. programs in six
countries. Twenty-two other countries would account for about 6
percent of the reduced purchases.
On the basis of amounts programmed for FY 1972, the follow-
ing table shows the amounts by which dollar purchases of local
currencies could be reduced if the United States were to receive
partial payment for military grant assistance and excess property
grants in those countries where the United States purchases local
currencies with dollars to meet its needs. Figures in the table are
based upon applying a percentage to the value of programmed
military assistance by country, comparing the results with the
amount of projected local currency purchases in the country, and
utilizing whichever is the lesser.
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REDUCED AMOUNT OF U.S. FOREIGN CURRENCY PURCHASES
In millions of dollars)
Totals
6 countries
22 countries
Percentage of partial payment:
50
$131.5
$124.6
$6.9
40
125.9
120.3
5.6
30
117.7
113.3
4.4
20
83.7
80.5
3.2
10
45.5
43.5
2.0
Source: General Accounting Office.
Foreign currencies to be purchased in fiscal year 1972?selected countries
(In millions)
Korea
Spain
$85. 8
32.5
Greece
9. 9
Philippines
83. 4
Ethiopia
6. 1
Republic of China
4. 8
Source: General Accounting Office.
Finally, the requirement of 25% payment in value will serve as a--
brake on the appetites of foreign military leaders, who, under the
present system, are encouraged to ask for all the weapons they can get
since they cost them nothing. It will insure that requests by foreign
countries for military aid must be treated as any other claim on that
country's budget resources. If military aid must be weighed in bal-
ance with other national priorities, foreign governments may be more
reluctant to approve their military leaders' requests for United States
aid.
The President's Task Force on Foreign Assistance, after pointing
out that the United States now makes the basic determination on what
equipment a country should get., recommended that in the case of mili-
tary grant aid: "More should be done to enable these receiving coun-
tries to estimate their own requirements, to relate them to their budg-
etary priorities, and to make their military decisions in the light of
available resources." This provision will carry out the spirit of that
recommendation.
Subsection (a) (1) requires that a recipient of military aid agree to
deposit in a special account established by the United States the fol-
lowing amounts of currency of that country:
(a) 25% of the fair value of excess defense articles; and
(b) an amount equal to 25% of any grant of military
assistance.
Subsection (a) (2) provides that the country must agree to make
available, from that special account, sufficient. amounts of the foreign
currency thus generated to pay for the official local currency costs of
the U.S. Government plus amounts needed to finance activities under
the Mutual Educational and Exchange Act of 1961.
Subsection (b) permits the President to waive the foreign cur-
rency payment requirement if he determines that the currency will
not be needed to finance both U.S. official operations in the country
and educational and cultural exchanges.
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Subsection (c) exempts from the payment requirement grants made
to countries pursuant to base rights or similar agreements.
Subsection (d) states that the provisions of section 1415 of the Sup-
plemental Appropriation Act of 1953 shall not apply to this section.
Section 202?Security Supporting Assistance
This section adds a new chapter 4 to part II of the Act entitled
"Security Supporting Assistance." The sections in this chapter, which
are numbered sections 531, 532, and 533 correspond to sections 401,
402, and 403, respectively, of the present chapter 4 of part I of the
act. The name of this chapter has been changed from "Supporting As-
sistance" to "Security Supporting Assistance" to reflect more accu-
rately the purposes of this form of assistance. This change is in accord
with the Administration's proposed reorganization of the foreign as-
sistance program.
Subsection (b) of this section repeals chapter 4 of part I of the
act which was re-enacted without change as chapter 4 of part II by
subsection (a) of this section. It also provides that references to chap-
ter 4, or to part I or part II of the act, will not change the provisions
of law, including implementing authorities, or other references appli-
cable to supporting assistance military assistance, or other types of
assistance furnished under the Act.
The new section 532 authorizes an appropriation of $614,400,000 in
fiscal year 1972 for security supporting assistance. In addition, the sec-
tion authorizes an appropriation of $85,000,000 in supporting assist-
ance for Israel only. This special authorization recognizes the severe
strains placed on Israel's economy because of the critical situation in
the Middle East.
The authorization recommended by the Committee may be com-
pared to the following:
Security Supporting Assistance
1. Fiscal year 1970 appropriation
2. Fiscal year 1971 appropriation (does not include funds for
$396,
000,
000
UNRWA)
556,
300,
000
3. Fiscal year 1972 authorization request
778,
000,
000
4. House allowance:
Fiscal year 1972.
Fiscal year 1973.
800,
800,
000,
000,
000
000
5. Committee recommendation
699,
400,
000
Supporting assistance provides budgetary or similar support to cer-
tain less developed countries threatened by internal insurrection or
external attack. For fiscal year 1972 five countries are programmed to
receive the bulk of these funds:
(In. millions)
Vietnam
$505. 0
Cambodia
110. 0
Laos
50. 5
Thailand
40. 0
Jordan
30.0
Over half of the supporting assistance funds requested by the Execu-
tive Branch, $450 million, were to be used for the Commercial Import
Program (CIP) and an Economic Support Fund in Vietnam. These
programs are for the purpose of keeping inflation in that country at
manageable levels. According to the Administration, the process of
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Vietnamization makes the import program even more crucial than in
the past because the shift of military responsibilities from the United
States to Vietnam means that the Vietnamese are spending more for
their own defense at the time when their foreign exchange earnings
from U.S. military expenditures are decreasing.
To further compensate for the rapid decline in DOD expenditures
in Vietnam during FY 1972, an additional $150 million is requested
for an Economic Support Fund. The $150 million is roughly equiva-
lent to the estimated decline in Department of Defense piaster pur-
chases during the year. In addition to supporting assistance, South
Vietnam is also slated to receive $70 million in Title I P.L. 480 sales
in FY 1972.
PART III--GENERAL AND ADMINISTRATIVE PROVISIONS
Sec. 301?Prohibition of Assistance to Greece and Pakistan
Section 301 adds two new subsections to section 620 of the Foreign
Assistance Act which prohibit further assistance to Greece and
Pakistan.
PROHIBITION OF ASSISTANCE TO GREECE
The new subsection (w) provides that no assistance shall be fur-
nished under the Foreign Assistance Act, and no sales made under the
provisions of the Foreign Military Sales Act, to Greece. This restric-
tion may be waived only if the President finds that overriding require-
ments of the national security of the United States justify such action
and promptly reports such findings to Congress, in writing, together
with his reasons for such a finding. In no event shall the aggregate
amount of assistance furnished under the provisions of the Foreign
Assistance Act in any fiscal year exceed the aggregate amount ex-
pended for such assistance and such sales for fiscal year 1971.
The language of the provision requires that foreign assistance and
military sales to Greece be suspended. This will demonstrate to the
Greek government, and the world, that the military dictatorship of
that country does not enjoy the backing and support of the United
States Congress. It will also serve to show the people of Greece that the
United States does not condone the failure of the military regime to
schedule parliamentary elections and restore constitutional govern-
ment. The suspension of aid can only be negated by a Presidential
finding that there are overriding national security requirements which
justify such action.
On December 12, 1969, the Senate adopted, without opposition, the
following resolution to express its concern over the failure of the
Greek government to restore constitutional government: "Resolved,
That it is the sense of the Senate that the United States Government
exert all possible effort to influence a speedy return to a constitutional
government in Greece." (S. Res. 298) In the two years since that reso-
lution was passed the Greek government has made no progress toward
that objective. The Committee recognizes that the cutting off of aid to
Greece may not serve to expedite a return to democratic government
in Greece but it will make it clear to the Greek people that the Con-
gress of the United States supports the restoration of their freedoms.
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The Committee recognizes the role that Greece plays in the defense
of the southeastern flank of the North Atlantic Treaty Organization
area. However, the Committee calls attention to the fact that the signa-
tories to the NATO Treaty pledged in the treaty preamble, "to safe-
guard the freedom, common heritage and civilization of their peoples,
founded on the principles of democracy, individual liberty and the
rule of law." The Committee is of the opinion that the policies and
practices of the military regime in Greece do not live up to those po-
litical standards. This view is shared by delegates to the recent meet-
ing of the North Atlantic Assembly in Ottawa, Canada who adopted
the following resolution by a vote of 46 to 8:
NORTH ATLANTIC ASSEMBLY
RESOLUTION ON GREECE PRESENTED BY THE
POLITICAL COMMITTEE
The Assembly,
Recalling that in the past international organizations, in-
cluding the European Communities and the Council of Eu-
rope, have expressed unequivocally the view that human
rights and political freedoms in Greece have been drastically
restricted;
Noting that the House of Representatives of the United
States Congress has called for the right to suspend arms
deliveries to Greece;
C onsidering that, in the NATO context, the continuing po-
litical efforts of the democratic representatives from the
other member states of the Alliance have not been able to
convince the Greek Government of the urgency and gravity
of the situation;
Recognizing that Greece's membership of the North At-
lantic Alliance gives Greece not only rights but also responsi-
bilities, one of the most important being to end the political
injustice which characterizes Greece's internal situation;
Affirming that for parliamentarians of the countries of
the Atlantic Alliance, Greece not only represents a problem
with respect to the moral credibility of our Alliance but also
poses a question concerning the political posture of NATO;
Expresses its renewed condemnation of any repression of
democratic freedoms in Greece as dangerous to the internal
cohesion of the North Atlantic Alliance bearing in mind the
text of the Preamble to and Article 2 of the North Atlantic
Treaty;
Urges the Government in Athens to undertake immedi-
ately, serious steps leading to the restoration of democratic
freedoms;
Urges the other Governments and Parliaments of the North
Atlantic Alliance use their political influence upon the Gov-
ernment in Athens to realize this goal.
APPROVED BY THE FULL ASSEMBLY,
September 27 , 1971.
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As the Committee stated in 1969, in recommending the prohibition
of additional aid to Greece, "The United States should not supply
military aid to governments whose actions are anethema to our own
principles." It stands by that position.
According to figures made available by the Department of Defense,
the United States in fiscal year 1971 programmed $35,333,000 grant
military assistance to Greece under the provisions of the Foreign As-
sistance Act and planned to sell $55,000,000 worth of defense articles
and services to Greece under the provisions of the Foreign Military
Sales Act?a total of $90,333,000. If the President found sufficient
justification to use the waiver authorized, any future military assist-
ance furnished or sales made to Greece could not exceed $90,333,000.
The Executive Branch had programmed a total of $117,875,000 in
military aid for Greece in FY 1972; $57,875,000 in grant aid and $60,-
000,000 in credit sales.
SUSPENSION OF ASSISTANCE TO PAKISTAN
The new subsection 620(x) suspends all military, economic and
other assistance to the Government of Pakistan, including sales of
military equipment and sales of agricultural commodities, The adop-
tion of this provision demonstrates the Committee's deep concern
over the repressive actions taken by the Government of Pakistan
against the people of East Pakistan. It is the Committee's view
that, in the current savage civil war between the western and eastern
wings of Pakistan, the United States should be benevolently neutral,
giving aid to neither side.
This suspension does not apply to the provision of food and other
humanitarian assistance when such assistance is coordinated, distrib-
uted, or monitored under international auspices. The Committee, in
authorizing $250,000,000 for refugee relief, adopted language designed -
to stress the role of the international agencies and U.S. voluntary agen-
cies in the relief effort. That language states that relief assistance ". . .
shall be distributed to the maximum extent practicable, under the aus-
pices of and by international institutions and relief agencies or United
States voluntary agencies."
The Committee expects that "humanitarian relief" will be construed
with a rule of reason with relieving human suffering as the objective.
But under no circumstances is the language to be used to justify re-
sumption of normal foreign aid activities under the cruise of "humani-
tarian relief." Neither should articles, such as trucks or boats, pro-
vided for relief purposes be allowed to be diverted for military
purposes.
The prohibition approved by the Committee is considerably more
strict than that contained in the bill as passed by the House of Rep-
resentatives. It prohibits providing military services as well as ar-
ticles, guaranty of credit sales of military items as well as direct credit,
and it suspends all outstanding licenses relating to export of military
materials to Pakistan.
Under this provision no new loan agreements can be made, and
disbursements under existing loan agreements can be made only pur-
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suant to outstanding irrevocable letters of credit. Technical assistance
contracts shall be terminated according to the termination provisions
of the contracts. Title I sales programs under P.L. 480 shall be ter-
minated to the extent legally possible, except for those providing
for famine or disaster relief directly for the people of East Pakistan.
Other humanitarian relief under P.L. 480, Title II, could also be con-
tinued. It is expected that the A.I.D. mission staff would be withdrawn
except for the personnel absolutely essential to winding up A.I.D.
programs in an orderly fashion. The term "other assistance" is in-
tended to prohibit any official -U.S. action to suspend or postpone re-
payment of debts, including interest, owned by Pakistan to the United
States, operation of Peace Corps programs, the making of Export-
Import Bank loans, operation of programs by the Overseas Private
Investment Corporation, as well as any other indirect aid to that
government. The provision is not intended to affect funds made avail-
able for 'U.S. contributions to the Indus Basin Project.
Assistance and sales could be resumed after the President reports
to Congress that the "Government of Pakistan is cooperating fully
in allowing the situation in East Pakistan to return to reasonable
stability and that refugees from East Pakistan in India have been
allowed, to the extent possible, to return to their homes and to re-
claim their lands and properties."
Section 302.?Administrative Expenses.?This section amends sec-
tion 637(a) of the Act to authorize the appropriation of $51,800,000
for each of the fiscal years 1972 and 1973 for administrative expenses
of the Agency for International Development. This is a $5,800,000 re-
duction from the Administration request of $57,600,000, which was the
amount approved by the House of Representatives.
The amount recommended by the Committee is approximately the
same as appropriations for administrative expenses for FY 1970 and
FY 1971, $51,125,000 each year.
The Committee's decision to reduce administrative expenses
is in keeping with the concern it expressed in its report on the Foreign
Assistance Act of 1969:
The Committee is concerned about overstaffing in AID and
believes that AID should assume a much lower posture abroad
and at home. The committee believes that the massive AID
presence in so many countries is not in the best interests of
American foreign policy or an effective foreign aid program.
Although this reduction applies only to administrative per-
sonnel, the Committee expects that appropriate steps will be
taken to reduce the size of the personnel rolls financed out
of program funds.
The Committee is not satisfied with the little progress that has been
made in reducing A.I.D. personnel rolls, either here or abroad, and
expects to see a much more aggressive effort in this direction in com-
ing months.
Section 303.?Miscellaneous Provisions.?Section 303 amends sec-
tion 652 of the Act and adds new sections 653, 654, 655, and 656.
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REVISED SECTION 65 2-LIMITA1I0NS UPON EXERCISE OF SPECIAL
AUTHORITIES
Sections 610(a) and 614(a) of the Foreign Assistance Act com-
prise the President's primary authority to transfer funds from one
program to another and to waive restrictions imposed by the Act.
Under the authority of these two sections Cambodia was allotted $110
million in foreign aid last year without specific authorization by Con-
gress. Section 506(a) authorizes the President to draw on Department
of Defense stocks with subsequent reimbursement to be made out of
appropriations for military assistance.
During fiscal year 1971 and thus far in fiscal year 1972, sections
610(a) or 614(a) served as a basis, in part or in whole, for 17 Presi-
dential waivers. In none of these cases (or in any of the others in which
the President relied on addition waiver authority) was the Con-
gress notified before the President acted. In fact, in many of these
cases the President waited a month before notifying the Congress of
any action at all.
Some of these actions, such as those concerning Cambodia, involved
transfers of millions of dollars and raised a number of critical foreign
policy issues.
This amendment simply requires that, before the President exercises
the authority in sections 506(a), 610(a) or 614(a), he must give ten
days prior notice in writing to the Speaker of the ouse of Represen-
tatives and the Committee on Foreign Relations of the Senate.
NEW SECTION 6 5 3-CHANGE IN ALLOCATION OF FOREIGN ASSISTANCE
Under existing provisions of the Foreign Assistance Act the Presi-
dent has unlimited authority to increase or decrease the amounts of
foreign assistance actually given to foreign countries from the amount
previously justified to Congress. He can shift amounts from country
to country as lie sees fit. Section 614(a) of the Act also gives the Presi-
dent general authority to waive restrictions in the Act when he con-
siders such action "important to the security of the United States." By
using this waiver authority last year Cambodia was allocated a total
of $110 million in military aid by the President without a specific
authorization by Congress through transfer of funds from other eco-
nomic and military aid programs. Section 653 restricts the President's
sweeping authority to change country amounts.
This provision would do the following:
(a) Require the President to notify Congress at least 30 days after
passage of the Foreign Aid Appropriations Act of how much aid he
plans to allocate to each country for each category; and
(b) Prohibit giving any country more than 10% more than the
amount specified for each category unless the President determines
that an additional amount is vita/ to national security and gives Con-
gress at least ten days prior notice.
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46
NEW SECTION 654-PRESIDENTIAL FINDINGS AND DETERMINATIONS
This new section would tighten several provisions in the Foreign
Assistance Act relating to the President's waiver authority. It stems
from certain Executive Branch actions over the last two years, pri-
marily those relating to the furnishing of military aid to Cambodia
without a specific Congressional authorization. It requires that:
(1) All Presidential determinations and findings which must be
reported to Congress be put in writing and signed by the President
before any action could be taken pursuant to the finding or
determination.
Last year the Executive Branch gave Cambodia $7.9 million in
military aid anti, after the fact, obtained a Presidential determi-
nation which was made retroactive in an effort to legalize what
had already been done.
On April 10, 1971, the President made an oral determination to
to authorize giving $3 million in military aid to Ceylon. The de-
termination was not put in writing until June 7 and was not trans-
mitted to Congress until June 25-21/2 months after the decision
was made;
(2) Presidential findings and determinations must be printed in the
Federal Register unless publication would be detrimental to the na-
tional security.
Prior to the Committee's protests last year concerning the clas-
sification of the Presidential determinations on aid to Cambodia,
all thesedecisions were furnished to the Committee on a classified
basis ;and
(3) Information could not be denied to Congress by Executive
Branch officials pending a Presidential determination.
Last year the Committee staff was denied access in the field to
information on military aid to Cambodia on the grounds that no
information on the subject could be released prior to transmittal
to Congress of a related Presidential determination.
These factors are basic to Congress's consideration of foreign aid
and foreign military sales, which, in turn, are of fundamental im-
portance in this country's foreign policy. If Congress is to fulfill its
responsibilities in these areas, it must be fully informed before the
fact?and not confronted with a fait accompli weeks after the Presi-
dent has acted.
This amendment is not intended to supersede any, other requirement
providing for prior notification of findings and determinations made
by the President to the Congress or any of its Committees.
NEW SECTION 655-LIMITATION ON ASSISTANCE TO OR FOR CAMBODIA
The new section 655 of the act provides for limitations on assistance
to Cambodia. Subsection (a) provides that no funds authorized to be
appropriated by this or any other act may be obligated or expended
in excess of $250 million to carry out directly or indirectly any eco-
nomic or military assistance, or any operation, project, or program
of any kind, or for providing any goods, supplies, materials, equip-
ment, services, personnel, or advisers in, to, for, or on behalf of Cam-
bodia during the fiscal year ending June 30, 1972.
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Subsection (b) states that in computing the $250 million limitation
the "value" of any goods, supplies, materials or equipment provided
by gift, donation, loan, lease or otherwise must be included and that
"value" means the fair market value and in no case less than one-third
of acquisition cost.
Subsection (c) provides that no funds may be obligated or expended
in, to, for or on behalf of Cambodia in any future fiscal year unless
they are specifically authorized by law and that in no case shall funds
in excess of the amounts specifically authorized by law for any fiscal
year be obligated or expended.
Subsection (d) excludes from this $250 million limitation the obli-
gation or expenditure of funds to carry out air operations over
Cambodia.
Subsection (e) requires that whenever any request is made to the
Congress for the appropriation of funds for use in, for, or on behalf
of Cambodia the President shall furnish a written report to the Con-
gress explaining the purpose for which such funds will be used.
Subsection (f) provides that the President shall submit to the Con-
gress within 30 days after the end of each quarter of each fiscal year a
written report showing the amount of funds expended during the pre-
ceeding quarter in, for, or on behalf of Cambodia and the purposes
for which such funds were expended.
Subsection (g) states that enactment of this section shall not be con-
strued as a commitment by the United States to Cambodia for its
defense.
The 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 Cam-
bodia, 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 appropriated. It is the Committee's intention to
see that this escalation of costs, not only unauthorized by the Congress
but also unknown to it, does not occur in Cambodia. Section 655 is in-
tended, therefore, to return to the Congress some measure of control
over what is actually spent by setting an absolute ceiling on expendi-
tures, a ceiling which applies to all Executive Branch departments and
agencies.
The ceiling of $250 million set by the Committee represents a total
reduction of the $93 million in the amounts, tentatively programed by
the Executive Branch. In part, this action reflects the Committee's
general view that the state of the nation's economy requires substan-
tial overall reductions in spending of foreign assistance. In addition,
the Committee was aware that the Executive Branch already had under
consideration a proposal to reduce the size of the economic assistance
program in Cambodia by as much as $50 million. Furthermore, it was
felt by many members of the Committee that a reduction in the funds
available for United States operations in Cambodia would serve to
restrain what they perceive to be a tendency to duplicate in Cambodia
an entire range of United States supported programs of the type
which have resulted in ever deeper and seemingly endless involvement
in other countries of Southeast Asia.
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The amendment is also designed to close any loopholes still remain-
ing regarding the transferability of funds of the Defense Department
and other agencies and, in connection with the expenditure ceiling, to
establish a method of setting a value on excess materials by requiring
that they be at fair market value and in no case less than 331/3 percent
of acquisition cost.
By setting an absolute ceiling on expenditures in Cambodia, the
Committee means to include all Executive Branch expenditures except
those relating to combat air operations. The limitations would thus
apply to the military assistance program, supporting assistance, excess
defense articles P. L. 480, CIA operations, the administrative costs
of the various articles,
States Government departments and agencies
who engage in activities to, in, for or behalf of Cambodia and, as in
the similar provision relating to Laos included in the Defense Authori-
zation bill, H. R. 8687, the costs to the United States of South Viet-
namese ground operations in Cambodia.
Section 655 specifically excepts all combat air operations over Cam-
bodia from this ceiling. This exception covers all United States and
South Vietnamese combat air operations as well as combat air opera-
tions by other countries which involve the expenditure of U.S. funds.
This exception is included because of the view of some Committee
members that monetary limitations on air operations in Cambodia
might jeopardize the continuing withdrawal of U.S. forces from
Vietnam.
NEW SECTION 656-LIMITATIONS ON UNITED STATES PERSONNEL
AND PERSONNEL ASSISTED BY UNITED STATES IN' CAMBODIA
The new section 656 of the Act imposes a ceiling of 200 on the num-
ber of United States civilians and military personnel who can be
present in Cambodia at any time. It also imposes a ceiling of 50 on the
number of non-Cambodians working in Cambodia whose compensa-
tion can be paid in whole or in part, directly or indirectly, by the
United States. U.S. military personnel involved in air operations
originating outside of Cambodia will not be counted against the ceil-
ing. This is intended to exempt personnel engaged in combat air oper-
ations from bases outside Cambodia as well as those engaged in pe-
riodic air cargo or similar missions into Cambodia from bases outside
the country.
The purpose of this provision is to prevent the further growth of
a large American presence in Cambodia which could drag our nation
even more deeply into that difficult situation. When the Cambodian
incursion began in April, 1970, the United States mission in Phnom
Penh consisted of 12 people. Since the initiation by the Executive
Branch of a vast military and economic aid program to that country
the number of Americans in Cambodia in an official capacity has
mounted steadily. By the time Secretary of State Rogers testified be-
fore the Committee on December 10, 1970, in support of the authoriza-
tion of a total of $285 million in aid to Cambodia for FY 1971, the
American presence had quintupled. In replying to members who ex-
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pressed concern that a large American mission would result from the
proposed aid program, Secretary Rogers said:
Senator, as you know, we have already delivered hardware
to Cambodia, and we have done it, I think, successfully with-
out involvement of any large numbers of people. We have a
very small mission in Phnompenh, 62. And we intend to keep
our mission small. We think we can do it based on the experi-
ence we have already had.
In addition, of course, we have people in Saigon who are
working on this problem. They can do it from Saigon, so there
will be no necessity for them to go to Phnompenh. There are
some people involved in the delivery process who are located
in Saigon, and they will stay in Saigon.
There are now 56 U.S. civilian employees and 87 U.S. military per-
sonnel in Cambodia, a total of 143. The Committee was advised that,
in addition, some 25 to 35 persons are there at any given time in a tem-
porary duty status. There have been recent news reports that the De-
fense Department plans to expand the size of the military mission con-
siderably during the next year. The slim U.S. operation that was
promised has already grown much too fat.
The Committee does not approve of the vast escalation that has
already taken place in American involvement in Cambodia. The situa-
tion seems to be developing in precisely the way most members of the
Committee feared at the beginning of the U.S. involvement. The end
of the escalation in men and money is not in sight, unless Congress
imposes strict limits on both. In placing the personnel ceiling at 200 the
Committee does not intend, in any way, to imply that it would look
with favor on any increase in the number of U.S. personnel now in
Cambodia. Indeed, the Committee hopes that there will be a rollback
in the current level.
Administration spokesmen have said in justification of the increase
in military personnel that they are needed to carry out provisions in
the Foreign Assistance Act relative to "end use." The statute requires
"observation and review" of how the material furnished is being used
only to the extent "as the President may require." Under the statute
the President may waive "end use" review entirely and, in fact, this
has been done in other countries in the past. The, Committee is not say-
ing that there should not be any surveillance at all of how the military
aid we give to Cambodia is used. But reliance by the Executive Branch ,
on the 'end use" requirement to justify the buildup of a huge military
aid mission in Cambodia is a weak reed at best and goes directly con-
trary to the spirit of the Cooper-Church amendment.
There are recurring news reports that the Executive Branch will
attempt to get around the prohibition of the Cooper-Church amend-
ment against providing United States advisers to Cambodian forces
by bringing in and paying for the services of advisers or technicians
from other countries. The Committee opposes any such plan and in
order to prevent an end run around the restriction, through the use of
foreigners, has put a limit of 50 on the number of third country na-
tionals in Cambodia who can be paid out of U.S. funds.
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SECTION 30 5--ANNUAL FOREIGN ASSISTANCE REPORTS
This section would add a new section 657 to the Act to require that
not later than December 31 of each year the President transmit to
Congress a detailed report on all programs and categories of foreign
assistance (as defined by the section) in terms of volume and cost pro-
vided during the previous fiscal year by the United States to all for-
eign aid recipients, both individually and collectively. In addition, the
report is to include information on the volume and value of arms sales
made to foreign countries and international organizations by U.S.
private industry.
The purpose of this amendment is to bring together in a single re-
port all of the data that is necessary to give Congress and the Ameri-
can public a full and complete overview of the entire U.S. foreign
assistance effort, whether it involves a direct transfer of resources and
services such as provided by bilateral lending or contributions to inter-
national organizations, or an indirect transfer, such as through our
adherence to international commodity agreements or support for debt
rescheduling arrrangements.
During Congress' consideration of the Foreign Assistance Act and
Foreign Military Sales Act legislation, it has become increasingly
evident that the totality of the U.S. foreign aid effort is "unknown.'
This is due in large part to the fact that our aid programs involve any
number of Executive Branch agencies and departments, ranging from
the Agency for International Development, to the Department of De-
fense to the Central Intelligence Agency. Just as there is no single
department or agency responsible for the entire foreign assistance
program, there is no single Congressional Committee that has legisla-
tive oversight responsibility for this program in its entirety. At a
minimum, however, the Congress should have a complete report pro-
viding details on all of these programs and their cost to the taxpayer.
Without this information it is virtually impossible to render a con-
sidered judgment on either the relative merits of each individual pro-
gram or on the program as a whole.
SECTIO N 300-LIMITATION ON USE OF FUNDS
This section focuses attention on domestic vs. foreign needs. It calls
upon the President to release no later than December 31, 1971 all of the
funds that were appropriated for domestic programs but later im-
pounded during FY 1971. If the President does not release these funds
by the December 31 deadline, then he is prohibited after that date
from obligating or expending any funds appropriated persuant to
this bill. The prohibition would continue to apply until the impounded
funds were released and the Comptroller General so certified to the
Congress.
The provisions of this section shall not apply to funds being with-
held in accordance with specific legal requirements.
The latest information that the Committee was able to collect on the
impounded funds issue indicates that the total amount of these funds
is about $12 billion. Of this total, more than $10 billion for domestic
programs was still impounded as of May 14, 1971, with the Office of
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Management and Budget estimating that perhaps half the amount
would be released by June 30, 1972. In terms of the precise amounts
now impounded, the Committee will rely on the determinations made
by the General Accounting Office.
The objective of this amendment 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 sec-
tion say to the taxpayers of this country, "You will be assured of
getting the funds appropriated by Congress for domestic programs
and projects before additional foreign aid funds can be obligated for
similar programs and projects in Rio de Janiero, Nairobi or New
Delhi."
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 unbalance 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 impoundment 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 pro-
tected, and kept whole and intact. The Committee believes that the
requirements of this section are consistent with this goal.
PART IV-MISCELLANEOUS PROVISIONS
Section 401?Foreign Military Sale8
This section amends the Foreign Military Sales Act of 1968, which
authorizes credit sales of military equipment and services to foreign
countries. Annual authorization by Congress is required for both ap-
propriations and a ceiling on the amount of credit that may be pro-
vided. Most of the countries which purchase arms under this program
are less developed. Credit sales of military hardware to the majority of
the developed countries are financed either through the Export-Import
Bank or regular commercial channels.
Subsection (1) amends section 31(a) of the act to authorize an ap-
propriation of $459,000,000 for fiscal year 1972. This represents a ten
percent reduction from the Administration's request of $510,000,000.
The House approved the full request. The Committee believes that,
through the use of the guaranty authority, the amount authorized will
be more than sufficient to finance the sales program authorized by the
ceiling set by subsection (2).
Subsection (2) establishes an aggregate credit ceiling of $523,800,000
for fiscal year 1972. The Executive Branch requested a credit ceiling
of $582 million, which the House approved.
The following tables provide data on authorization and credit ceil-
ings, historical data, estimates for all U.S. military export sales, and
the proposed credit sales program, by region and county, for fiscal
year 1972.
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AUTHORIZATION AND CREDIT CEILING DATA
110 millions]
Fiscal year 1972
Committee
Fiscal year Fiscal year Executive House recom-
1970 1971 request bill mendation
Authorization of appropriations ___ . _____
Credit ceiling
'$70
(9
2 $250
340
$510
582
$510
582
$459. 0
523.8
1 Provided under continuing resolution authority.
2 Does not include special authorization for Israel contained in the Defense Authorization Act.
FOREIGN MILITARY SALES BY REGION WITH TOTAL DISTRIBUTED BETWEEN DEVELOPED AND LESS DEVELOPED
COUNTRIES, FISCAL YEARS 1966-72
1ln millions of dollars]
Region by type of order
1966
1967
1968
1969
1970
Total,
Estimated
1966-70
1971
1972
East Asia and Pacific:
Cash
162.3
113. 3
96.9
132. 3
132.8
637. 5
192.5
170. 0
Credit
12.1
21.6
67.4
26.0
40.0
167.1
66.0
75.0
DOD direct
(11.2)
(8.1)
(26.0)
(20.0)
(40.0)
(105.3
DOD guaranty
(.9)
(13.5)
(41.4)
(6.0)
(61.8
Total
174. 3
134.9
164. 3
158.3
172. 8
804.6
258. 5
245. 0
Near East and South Asia:
Cash
87.6
95.7
185. 3
383. 5
216. 2
968.3
410. 9
290.6
Credit
267. 7
258.4
160. 3
223.3
30. 0
939.7
620. 0
420.0
DOD direct
(61.8)
(42. 0)
(50. 1)
(174. 0)
(30.0)
(357. 9)
DOD guaranty
(205.9)
(216.4)
(110.2)
(49.3)
(581.8
Total
355.3
354. 1
345.6
606. 7
246. 2
1, 908. 0
1, 030. 9
710. 6
Europe and Canada (cash) _
1, 180.7
524.8
521.8
863.2
472.4
3, 562. 8
499.9
1, 028. 5
Africa:
Cash
1.9
22. 3
3.3
11. 8
6.6
45. 9
21.2
. 5
Credit
. 2
15. 5
9 5
25. 2
17. 0
DOD direct
(.2)
(14.0)
(9. 5)
(23.7
DOD guaranty
(1.5)
(1.5
Total
2.1
37.8
3.3
21.3
6.6
71.1
21.2
17.5
Latin America:
Cash
9.9
15.4
12. 4
13.4
16. 3
67.4
18. 0
74. 0
Credit
37.3
27. 7
35.6
22.4
123.0
54.0
70. 0
DOD direct
(7.5)
(12.0)
(12.3)
(22.4)
(54.2
DOD guaranty
(29.8)
(15.7)
(23.3)
(68.8
Total
47.2
43. 1
48.0
35. 8
16.3
190. 4
72.0
144.0
International organizations:
Cash
25.2
33.6
29.9
34. 4
19.0
142. I
Credit (direct)
.1
.1
Total
25.2
33. 6
30.0
34. 4
19.0
142. 2
Contingency (credit)
15.0
Worldwide:
Cash
1,467. 7
805. 1
849. 7
1, 438. 5
863.2
5, 424. 2
1, 142. 5
1, 563. 6
Credit
317.2
323.2
263.4
281. 2
70.0
1, 255. 0
755.0
582. 0
DOD direct
(80.6)
(76. 1)
(88. 5)
(225.9)
(70.0)
(541. 1)
(601.0)
(486. 0)
DOD guaranty
(236.6)
(247. 1)
(174.9>
(55.3)
(713. 9)
(74.0)
(96. 0)
Total
1, 784. 9
1, 128.3
1, 113. 1
1, 719. 7
933.2
6, 679. 2
1, 897. 5
2, 145. 6
Developed countries
1, 556. 0
966.3
784.2
I, 170.4
687. 6
5, 164. 5
834.4
1, 374. 0
FMS cash
1, 388. 3
719.9
654. 2
1, 066.2
687.6
4, 516. 2
804.4
1, 344. 0
FMS credit
167.7
246. 4
130. 0
104.2
640.3
30. 0
30. 0
DOD direct
0)
75. 0)
(169.7)
DOD guaranty
(i2.41:9
(21:B
r7.
93. 0)
(29.2)
(478.6
Less developed countries'_ __
203. 7
128.4
98. 9
514.9
226. 6
1. 372. 5
1,048. 1
771. 6
FMS cash
54. 2
51.6
165. 5
337.9
156. 6
765. 8
338. 1
209.6
FMS credit
149.5
76.8
133.4
177.0
70.0
606.7
710.0
552.0
DOD direct
1.14)
(51. 5)
(150.9)
(70. 0)
(371.4
DOD guaranty
g71.. 2
a )
(81.9)
(26. 1)
(235. 3)
'Economically developed countries are those so listed by Executive order for interest equalization tax purposes.
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FOREIGN MILITARY CREDIT SALES--FISCAL YEAR 1971 AND PROPOSED FISCAL YEAR 1972
[In millionsj
Region/country
Fiscal year
1971
Proposed fiscal
year 1972
Near East and South Asia
Greece
India
Israel
Jordan
Lebanon
Pakistan
$620. 0
$420.0
45.0
500.0
30.0
5.0
10.0
60.0
5.0
(9
5 !tii
Saudi Arabia
30.0
(1)
Regional 2
350.0
East Asia and Pacific
66. 0
75.0
Korea
15.0
15.0
Malaysia
5.5
7.5
Singapore
5.5
7.5
Taiwan
40.0
45.0
Latin America
54. 0
70. 0
Argentina
13.0
15.0
Brazil
15.0
20.0
Chile
1.0
5.0
Colombia
8.0
Guatemala
4.0
5.0
Uruguay
4.9
2.0
Venezuela
10.0
15.0
Regional
7.8
Africa
17. 0
Congo (K)
2.0
Morocco
(1)
Regional 2
15.0
Grand total
755.0
582.0
I Classified data.
2 Includes countries for which data is classified.
CEILING ON MILITARY SALES AND ASSISTANCE TO LATIN AMERICA
AND REPEAL OF THE PRESIDENT'S WAIVER AUTHORITY
Subsection 401(3) amends section 33(a) of the Foreign Mili-
tary Sales Act for the purpose of increasing from $75 million to
$100 million the annual ceiling on military credit sales and grant aid
(excluding training) to Latin America. Subsection 401(4) repeals
the President's authority to waive this ceiling and the $40 million
ceiling applicable to Africa.
Subsection 33(c) of the Foreign Military Sales Act gives the
President authority to waive the annual ceilings on military assist-
ance, sales, and the value of ship loans to Latin America and Africa
when he determines it to be "important to the security of the United
States." On April 9 the President waived the FY 1971 ceiling for
Latin America and on June 16 the 1971 ceiling for Africa. The
Executive Branch requested legislative authority to increase the per-
manent ceiling to $150 million for Latin America and $60 million for
Africa.
The United States should not encourage the nations of Latin
America and Africa to spend their scarce resources on arms which
they neither need nor can afford. The argument that they will buy
elsewhere if we no not sell to them makes little sense if they should
not have the planes and tanks in the first place. It amounts to an
admission that the United States Government is going after the
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Latin American and African arms market because it thinks Ameri-
can suppliers should have the business instead of foreign arms manu-
facturers. This is a return to the old "hard sales" policy which Con-
gress rejected in 1967.
There is nothing in the ceiling restriction which prevents the coun-
tries affected from i buying on the commercial market here, after the
ceiling has been reached. The ceiling only affects government trans-
actions. Let the purchasing country and the manufacturer of the
arms arrange credit through private channels if credit is needed.
The removal of the waiver authority is one additional small step
in taking away some of the vast discretionary power Congress has
given the President on foreign aid matters. If the President wants
to increase the ceilings for specific actions let him come to Congress
and justify it.
Section 402?Restrictions on Excess Defense Articles
This section amends section 8(a) of the Foreign Military Sales Act
Amendments of 1971 to (1) increase the ceilinc, on the value of excess
articles that may be given to foreign countries without a charge
against appropriations for military grant assistance, and (2) require
that all excess defense articles provided to a country (except Vietnam,
see below) or international organization on a grant basis by any U.S.
Government agency or department (except the Agency for Inter-
national Development, see below) be treated in a like manner to ex-
cess defense articles provided by the Department of Defense to for-
eign countries under the authority of Part II of the Foreign Assist-
ance Act of 1961, as amended.
There have been reports to the effect that the CIA has provided and
is providing surplus arms to foreign forces in Southeast Asia. If this
is true. Congress' efforts to bring the distribution of surplus arms
under control is being circumvented.
Hence, the objective of the provisions in subsections (1) and (3) is
to ensure that any grants of excess defense articles by the Central
intelligence Agency, for example, be applied to the annual ceiling on
surplus military equipment or, once the ceiling is reached, charged
against the appropriation for military assistance. Only by making
these limitations applicable to other Government agencies and depart-
ments, like the CIA, can Congress keep account of the distribution of
these arms and hold the program within meaningful limits.
AID's use of excess military equipment is excluded from the pro-
visions of this section because of its use of many of these items, such
as vehicles or engineering equipment, for economic assistance pro-
grams. Moreover, the provisions of this section are not to apply to the
distribution of surplus arms in Vietnam until July 1, 1972, when fund-
ing for military aid to that country will be resumed under the regular
military assistance program authorized bv the Foreign Assistance Act.
Subsection (2) increases from $100 million to $150 million the value
of excess defense articles which may be ordered during any fiscal
year before the value of the articles is considered military assis-
tance to be charged against funds appropriated for this purpose un-
der Part II of the net.
Raising this ceiling on the amount of excess property that can be
used will permit (Treater use of the excess military equipment that is
becoming available from Southeast Asia.
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Section 403?Interparliamentary Union
Section 403 amends the 1953 Act, as amended, authorizing U.S. par-
ticipation in the Interparliamentary Union. It increases the annual
authorization of an appropriation from $53,500 to $102,000. Of this
latter sum, $57,000 is for the annual U.S. contribution toward the
maintenance of the Bureau of the Interparliamentary Union and
S45,000 is for the purpose of defraying the expenses of the American
group of members of Congress who participate. These increases arise
from an increase in the U.S. assessment for its participation in the
Interparliamentary Union, a more active role by the Union, from ex-
panded U.S. participation in its deliberations, as well as from the re-
evaluation of the Swiss franc, which is the currency unit used to
settle its accounts.
Section 404?Inter-American Foundation: New Name
Paragraphs (1), (2) and (3) of section 404 ainend part IV of Public
Law 91-175, enacted December 30, 1969, by changing the name of the
Inter-American Social Development Institute to that of the Inter-
American Foundation.
This change was recommended by the executive branch.
Representation
Paragraph (4) amends section 401(e) (4) of Public Law 91-175 by
authorizing the Foundation to determine how its expenses for repre-
sentation shall be allowed and paid, and by limiting such expenses to
not more than $10,000 in any fiscal year.
Chief Executive Officer
Subparagraph (1) (1) amends section 401(e) (4) of Public Law
91-175 by changing the designation of the chief executive officer of
the Foundation from that of 'Executive Director" to "President."
Experts and Consultants
Subparagraph (1) (2) further amends section 401(1) of Public Law
91-175 to authorize the Foundation to employ experts and consultants
i
in accordance with the authority contained n 5 U.S.C. 3109.. Under
the provisions of that section experts and consultants are limited to
temporary or intermittent employment. Temporary employment is de-
fined as not in excess of 1 year.
Section 405?Annual Authorizations for State Department and USIA
The purpose of this section is to require annual authorizations for
appropriations for the Department of State and the United States
Information Agency. Existing law now contains a permanent authori-
zation for the activities of both.
A principal objective of the Legislative Reorganization Act of 1946,
as amended, is to ensure more effective oversight and review by Con-
gress of Executive Branch departments and agencies. Section 136 of
the Act states that ". ?. . each Standing Committee of the Senate shall
review and study, on a continuing basis, the application, administra-
tion, and execution of those laws, or parts of laws, the subject matter
of which is within the jurisdiction of that Committee." This section
further requires that after January 1, 1973 each Standing Committee
must report biennially to the Senate on its legislative review activities.
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The Committee of Foreign Relations has legislative jurisdiction
over the operations of both the Department of State and the United
States Information Agency. Thus, requiring annual authorization for
both will enable the Committee to carry out its oversight functions
more effectively. It would also make both State, and the USIA more
responsive to the Committee and Congress. Much improvement is
needed in this respect. For example, the bill which is the original basis
for this amendment, S. 1894, was forwarded on May 25 to the Depart-
ment of State for comment. The Department replied on Septem-
ber 29?some six months later, and only after the press carried reports
that the Committee had tentatively adopted the proposal as an amend-
ment to the foreign aid bill. Similarly, the Committee did not receive
Executive Branch comments on the House-passed version of this bill
(H.R. 9910) until September 30?even though the House passed the
bill before the August recess. These examples are but the tip of a vast
iceberg evidencing Departmental indifference to Congressional
responsibilities.
The Committee has not had similar difficulties with the Peace Corps
and the Arms Control and Disarmament Agency for which the Com-
mittee considers regular authorization bills. If this degree of over-
sight is maintained with respect to these two relatively minor agencies,
whose combined annual authorizations are less than.$100 million' then
similar legislative surveillance should be maintained over the State
Department and USIA, whose current annual budgets total almost
$700 million.
The section also provides that all departments and agencies with
operations abroad furnish, upon request, information concerning their
activities to the Committee on Foreign Relations or the House Com-
mittee on Foreign Affairs.
Sec. 406?Withdraw. of U.S. Forces from Indochina
Section 302, hereafter referred to as the Cooper-Chiirch amend-
ment, is designed to bring an end to American involvement in hostili-
ties in Indochina., to secure the release of U.S. prisoners of war, and
to bring about a political settlement of the war by requiring that any
funds made available for U.S. military forces in Indochina be Used
only for the purpose of withdrawing those forces and providing them
with protection against imminent danger during the withdrawal
process.
Subsection (a) contains a sense of Congress statement relative to
United States participation in the hostilities in Indochina. It states
that the repeal of the Gulf of Tonkin Resolution (P.L. 88-408) has
left the, Government of the United States without Congressional
authority for continued participation in the war and that the United
States should proceed expeditiously to withdraw all members of our
armed forces from Indochina. It, thus, states the principle that the
President does not have authority to use our armed forces in a war
without the approval of Congress and that, in the present situation,
the only authority the President has is to protect our forces against
imminent danger while they are being withdrawn.
Subsection (b) provides that fund's authorized for use by U.S.
forces in Indochina shall be used Only for the purpose of withdrawing
our forces and cannot be used to engage them in hostilities in North or
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South Vietnam, Cambodia, or Laos, except as necessary to protect
them against "imminent danger." as they are being withdrawn.
Since massive United States involvement in the Indochina war
began in 1965 the Committee on Foreign Relations has directed most
of its attention and efforts as the war has progressed to,
at first, pre-
venting expansion of our involvement, then to bringing about negotia-
tions to end the war, and finally, with the failure of the negotiations
thus far, to bring about a more rapid termination of our military in-
volvement. Many members of the Committee have always questioned
the existence of any binding treaty commitment to send troops to as-
sist South Vietnam. And most members believe that if there was ever
such a thing as a "moral" commitment to fight a war in South Viet-
nam's behalf, that commitment has long since been fulfilled. The pro-
vision recommended here, approved by a vote of 11 to 5, is a logical
culmination of the Committee's principal policy efforts over the last
several years. It is also a logical extension of the Committee's efforts in
recent years to restore the proper Constitutional balance between Con-
gress and the Executive Branch in matters of war and peace.
This provision is a further step in the Senate's effort to reassert its
proper role in the making of foreign policy. On February 4, 1969, by
a vote of 70 to 16, the Senate passed a resolution, initiated by the Com-
mittee, to define what constitutes a national commitment. Hopefully,
the Senate's action will prevent a repeat of the disastrous process of
entering almost inperceptibly into a 'commitment" which led our na-
tion into war in Southeast Asia. As a second step to restore Congress'
voice in policy in Souheast Asia, in December 1969 the Defense Appro-
priation Bill was amended in the Senate to prohibit the sending of
American ground forces into Laos or Thailand. Following the Cam-
bodian incursion, the Senate, after seven weeks of debate, approved an
amendment to the Foreign Military Sales Bill, offered by Senators
Cooper, Church, Aiken and Mansfield which prohibited:
"(1) retaining United States forces in Cambodia;
"(2) paying the compensation or allowances of, or otherwise
supporting, directly or indirectly, any United States personnel in
Cambodia who furnish military instruction to Cambodian forces
or engage in any combat activity in support of Cambodian forces;
"(3) entering into or carrying out any contract or agreement
to provide military instruction in Cambodia, or to provide per-
sons to engage in any combat activity in support of Cambodian
forces; or
"(4) conducting any combat activity in the air above Cam-
bodia in direct support of Cambodian forces."
The modified version of that provision, which prohibited the send-
ing of ground troops or advisors to Cambodia, finally became law on
January 5, 1971.
Twice this year the Senate has gone on record in favor of withdraw-
ing all United States forces from Indochina by a date certain. The
Senate approved the Mansfield amendment to the draft bill by a vote
of 57 to 42 on June 22, and the Mansfield amendment to the Defense
Authorization Bill on September 30 by a vote of 57 to 38. The Com-
mittee views the Cooper-Church and the Mansfield amendments as
complementary. The Cooper-Church provision states, in effect, that
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military funds can be used in Indochina only for the purpose of with-
drawal and the Mansfield amendment states that the withdrawal
should be completed in not more than six months from the date of en-
actment, contingent upon the release of all American prisoners of war.
The Cooper-Church amendment, as approved by the Committee,
and recommended to the Senate, when enacted, will ensure that United
States participation in hostile actions shall end, except for actions
absolutely essential to protect our forces from attack as they are be-
ing withdrawn. No military operation?land, sea, or air?could be
financed that is not directly connected with the expeditious with-
drawal of all U.S. forces. The Committee has not attempted to. define
"imminent danger" since it is impossible to spell out all of the many
unforeseen situations that may develop as our forces are withdrawn.
But it is not the Committee's intent that it could be stretched to
justify, for example, U.S. participation in any more large-scale offen-
sive operations such as those that took place in Cambodia and Laos.
It is intended by the amendment that all United States armed forces
be withdrawn from Indochina, including all air personnel. The pro-
vision does not require withdrawal of U.S. forces in Thailand but it
prohibits those forces from engaging in any further combat activities
in North and South Vietnam, Cambodia, or Laos except as absolutely
necessary to protect our forces in any of those countries from imminent
danger as they are being withdrawn. Naval forces operating in Indo-
china waters would be prohibited from participating in any combat
or combat-related activities unless necessary, also, for protection of the
withdrawing forces. It would not prohibit, in any way, continuation
of other forms of military aid to South Vietnam, Laos, or Cambodia.
As of October 9, 1971, the war in Indochina has cost our nation
55,385 dead, 301,936 wounded, and incalculable sums of tax dollars.
But the costs of the war cannot be measured in blood and money alone.
They represent only the tip of a vast iceberg. There is no way to cal-
culate in mathematical terms the damage to our society, our demo-
cratic institutions, our sense of values as human beings, or the tragic
consequences for the people of Indochina whose land has been the
cockpit for a war that has lasted over a quarter century.
Perhaps the war will continue indefinitely after United States forces
leave. No one can foresee the final military or political outcome in the
area. But the Committee is convinced that the continued presence of
our forces works to prevent the operation of natural political factors
that might result in a settlement between the parties and assures the
continued imprisonment of captured Americans. The Committee be-
lieves that the best way to get American prisoners home, other than
through a negotiated settlement, and indeed the best way to obtain a
negotiated settlement, is to bring all of our troops, airmen, and sailors
home. That is the objective of this provision.
Sec. 407?Termination of U.S. military operations in Indochina
Section 407, the Mansfield amendment, would declare it to be the
national policy that the United States should 'terminate military
operations in Indochina at the earliest practicable date, and that all
U.S. forces be withdrawn not later than six months after date of enact-
ment, subject to the release of all American prisoners of war held by
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the enemy. Under its terms, Congress would urge the President to take
the following actions:
(1) Establish a final date for withdrawal of all U.S. forces
from Inochina, contingent upon the release of all prisoners of
war, the date to be not later than six months after date of
enactment;
(2) Negotiate with North Vietnam for an immediate cease-fire
by all parties; and
(3) Negotiate with North Vietnam for an agreement pro-
viding for the phased withdrawal of U.S. forces coupled with
the phased release of prisoners of war with the remaining prison-
ers to be released concurrently with the withdrawal of the last
U.S. forces.
The substance of this provision has been approved by the Senate
twice this year. First, on June 22, 1971, as an amendment to the Draft
Extension Bill, by a vote of 61 to 38. The amendment to the draft bill
provided for a nine-month deadline for withdrawal, instead of six
months as contained in this provision. The second approval came on
September 30, 1971, when an amendment to the Defense Authoriza-
tion Bill, identical to the provision recommended by the Com-
mittee, was adopted by a vote of 57 to 38. The Mansfield amendment
was approved by the Foreign Relations Committee by a vote of 12 to 4.
There is no doubt that the Senate as a body wants the Nation to dis-
engage itself from the tragic morass of Southeast Asia. What the
war is doing morally and physically to the youth that serve on the
battlefields is well documented. What it is doing to our resources is
clear beyond question. And, perhaps most important, every thought-
ful American senses what it has done, and is doing, to the moral fibre of
our Nation.
The Senate has a responsibility for helping to determine and set
the policy of this government on the broad issues of national import-
ance. Congress is a co-equal of the Executive Branch and it is unfair
as well as unwise for Congress to look to the President to assume the
full burden of these decisions.
Last session the Senate initiated the repeal of the Gulf of Tonkin
Resolution. That Resolution had been cited by the previous Adminis-
tration as the functional equivalent of a Congressional declaration of
war and a justification and endorsement of a policy of escalation in
Vietnam. Many members of the Committee have objected to the broad
interpretation put on that resolution. Whatever it was?functional or
otherwise?it has been repealed. But with its demise has gone the only
expressed government policy?openly participated in by the Con-
gress?with respect to U.S. involvement in Indochina. There is no
longer a joint policy.
The Mansfield and the Cooper-Church amendments fill that void;
together they declare a clear national policy for Indochina.
The Mansfield amendment states a government policy to terminate
military operations in Indochina at the earliest practicable date; to
provide for the withdrawal of all our forces within six months from
the date of enactment, provided a release of all prisoners is accom-
plished within that timeframe, and it urges the President to proclaim
a date within this timeframe to accomplish those ends. The Cooper-
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Church amendment ensures that funds for military purposes in Indo-
china can be used only to effectuate the withdrawal of our forces and
to protect them from imminent danger" while in the process of with-
drawing. The Mansfield amendment sets the timeframe for withdrawal
and the Cooper-Church amendment restricts spending to accomplish
that objective.
There is much evidence that the overwhelming sentiment of the
American people is for total withdrawal as soon as possible. The
selection of a date for withdrawal, coupled with the restriction on
use of funds only for that purpose, should end the stalemate, effect
the return of our fighting men, the return of our prisoners and hope-
fully set the stage for the rebuilding process that is needed for the
future of American hope and confidence.
Section 408?Limitations on United States Activities in Cambodia
This section amends section 7(a) of the Special Foreign Assistance
Act 1971 to prohibit the expenditure of public funds for U.S. advisers
"to or for military, paramilitary, police, or other security or intelli-
gence forces in Cambodia."
The purpose of this amendment is to expand the scope of the exist-
ing prohibition of the Cooper-Church amendment against providing
U.S. advisers to Cambodian military forces. It would also prohibit
any U.S. government personnel from advising Cambodian paramili-
tary and police forces as well as Cambodian security and intelligence
units. The intent of this amendment is consistent with, and is a logical
extension of, the existing prohibition designed to prevent direct U.S.
involvement in the war in Cambodia. Our Vietnam experience teaches
that the first fatal step toward direct involvement comes with the fur-
nishing of U.S. advisers to the military and related forces of another
country. This provision is another effort aimed at preventing this fatal
step from being taken in Cambodia.
Section 409?Restriction Relating to Foreign Forces
Subsection 409 (1 ) amends section 401(a) of Public Law 89-367, as
amended, to prevent "any department, agency or independent estab-
lishment of the United States" from paying allowances to free world
forces in Vietnam that are greater than similar allowances paid to
members of the United States Armed Forces for service in Vietnam or
"in any other hostile fire area ... "
This provision expands the existing prohibition against paying for-
eign troops at higher levels than U.S. troops. At the present this pro-
hibition applies only to funds appropriated for use by the Armed
Forces of the United States. Hence, other appropriated funds, such
as those available to the Central Intelligence Agency could be used to
circumvent this prohibition. The amendment would close this loophole.
Subsection 409(s) requires that the conditions in Sec. 401(a) (2)
of P.L. 89-367, as amended, governing the grant of defense articles to
Vietnam, Thailand, or Laos out of Defense Department funds also
apply to the grant of defense articles to those countries paid for out of
funds of any other department or agency.
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Section 410?Repeal of the Formosa resolution
This section repeals the joint resolution entitled "Joint Resolution
Authorizing the President to Employ the Armed Forces of the United
States for Protecting the Security of Formosa, the Pescadores and
Related Possessions and Territories of That Area". This resolution,
commonly referred to as the Formosa Resolution, was approved by
Congress on January 29,1955.
The repeal of this resolution would revoke the power of the Presi-
dent to employ unilaterally the Armed Forces of the United States
to protect Taiwan and the Pescadores and, in connection therewith,
the offshore islands referred to in the Formosa Resolution. It would
not affect the validity of the Mutual Defense Treaty of 1954 between
the United States and the Republic of China. Under that treaty, how-
ever, any action taken by the United States in the event of an
armed attack directed against Taiwan or the Pescadores must be taken
in accordance with its constitutional processes." Hence, use of U.S.
Armed Forces in such a situation would require specific authorization
by the Congress. The repeal of the Formosa Resolution would restore
the constitutional balance of authority with regard to the use of Armed
Forces in this area.
In addition, this repeal would clear away a legislative obstacle to a
new China policy. The Formosa Resolution reflects a perception of
China at variance with the view of that country and the situation in
the Taiwan Strait which has prevailed for so many years. Removing
this Resolution from the books would constitute a timely recognition
of the changed conditions in this region.
Section 411?Use of Foreign Currencies
Section 411 amends Section 502(b) of the Mutual Security Act of
1954, as amended, which deals with expenditures of foreign currencies
by Congressional committees. Under present law, Members and em-
ployees of committees are authorized to draw not to exceed the equiva-
lent of $50 per day (exclusive of transportation costs) in foreign cur-
rencies to meet their subsistence expenses in connection with official
travel outside the, United States. As a practical matter, in most in-
stances' these currencies have been purchased by the Executive Branch
of the Government with appropriated funds. It is only in those few
countries where local currencies are in excess of the amounts needed
to meet U.S. requirements that dollars are not used to purchase for-
eign currencies. The amendment approved by the Committee would
have the effect of requiring expenditures made in connection with
travel abroad to be financed directly out of appropriated funds, ex-
cept in the so-called "excess" currency countries (i.e., where the supply
of currencies is more than enough to cover U.S. needs).
In such countries the equivalent of not to exceed $100 per day (ex-
clusive of transportation costs) could be made available to each Mem-
ber or employee to meet his subsistence expenses. The amendment also
prohibits the use of excess currencies to pay the expenses or fees of
witnesses appearing before Congressional committees in the United
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States. This latter provision would result in Congressional committees
paying witness fees out of their own funds at rates authorized by the
Senate or the House of Representatives, as the case may be.
SUPPLEMENTAL VIEWS OF SENATOR SPONG
I voted against reporting the Foreign Assistance Act of 1971 favor-
ably. I believe it should have been reported without recommendation.
My vote against reporting the bill favorably was cast with reluctance,
because while there are authorizations and approaches to which I
object, there is much in the bill I support.
These supplemental views are, therefore, filed as a protest, a general
protest against the entire approach to foreign aid and a specific pro-
test against three aspects of the foreign aid authorization process
which have presented particular problems this year. First, I am op-
posed to the consideration of security assistance, i.e., military assist-
ance, foreign military sales and economic supporting assistance, in the
same legislation in which economic and development assistance is con-
sidered. These two general categories of foreign spending have dif-
ferent goals and objectives and should be separated. Furthermore,
almost two-thirds of the Administration's request in this legislation
was for military and security assistance rather than for economic and
development assistance, a factor which should be more fully evident
but which is obscured when the two are considered together. Secondly,
I am opposed to increased authorizations at a time when the United
States must combat inflation and make new moves to re-secure the
dollar and when there are so many pressing domestic needs. I am aware
that the previous authorization bill was one of the lowest in the history
of the foreign aid program and that argument can be made for in-
creases, but I believe our economic situation dictates that we restrict
government spending at this time. Thirdly, I am opposed to trying
to draft foreign aid legislation on the basis of the limited information
which has been available to the Committee. This problem has been
documented in a report prepared by the General Accounting Office
and issued on September 20, and it has received widespread press
coverage during recent months. It should be obvious that it borders
on the impossible to draft good legislation without the pertinent back-
ground material and that it is unreasonable to expect a Congressional
committee to authorize expenditure of the American taxpayers' money
without adequate information.
Consequently, I am hopeful that these supplemental views will con-
tribute in some small way to achieving a new approach to foreign aid.
CHANGES IN EXISTING LAW
In compliance with paragraph 4 of rule XXIX of the Standing
Rules of the Senate, changes in existing law made by the bill, as re-
ported, are shown as follows (existing law proposed to be omitted is
enclosed in black brackets, new matter is printed in italic, existing
law in which no change is proposed is shown in roman) :
I. FOREIGN ASSISTANCE ACT OF 1961
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PART I
Chapter 2?DEVELOPMENT ASSISTANCE
TITLE I?DEVELOPMENT LOAN FUND
SEC. 202. Authorization.?(a) There is hereby authorized to be ap-
propriated to the President for the purposes of this title [$685,000,000
for the fiscal year 1967, $450,000,000 for the fiscal year 1968, $350,000,-
000 for the fiscal year 1969, $350,000,000 for the fiscal year 1970, and
$350,000,000 for the fiscal year 1971] $320,000,000 for each of the fiscal
years 1972 and 1973, which sums shall remain available until ex-
pended: Provided, [That any unappropriated portion of the amount
authorized to be appropriated for any such fiscal year may be appro-
priated in any subsequent fiscal year during the above period in addi-
tion to the amount otherwise authorized to be appropriated for such
subsequent fiscal year: Provided further) That in order to effectuate
the purposes and provisions of sections 102, 201, 601, and 602 of this
Act, not less than 50 per centum of the funds appropriated pursuant
to this subsection [for each of the fiscal years ending June 30, 1970,
and June 30, 19713 for each of the fiscal years ending June 30, 1972,
and June 30,1973, shall be available for loans made to encourage eco-
nomic development through private enterprises.
SEC. 203. Fiscal Provisions.?Dollar receipts from loans made pur-
suant to this part and from loans made under the Mutual Security Act
of 1954, as amended, are authorized to be made available for the fiscal
year [1970 and for the fiscal year 19711 1972 and for the fiscal year
1973 for use for the purpose of this title, for loans under title VI, and
for the purposes of section 232. Such receipts and other funds made
available under this section shall remain available until expended.
[SEC. 205. In order to serve the purposes of this title and the policy
contained in section 619, 10 per centum of the funds made available
for this title shall be available for transfer, on such terms and condi-
tions as the President determines, to the International Development
Association, the International Bank for Reconstruction and Develop-
ment, the International Finance Corporation, or the Asian Develop-
ment Bank for use pursuant to the laws governing United States par-
ticipation in such institutions, if any, and the governing statutes
thereof and without regard to section 201 or any other requirements
of this or any other Act.]
SEc. 209. Multilateral and Regional Programs.?[ (a) Multilateral
Programs.?The Congress recognizes that planning and administra-
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tion of development assistance by, or under the sponsorship of, multi-
lateral lending institutions and other international organizations may,
in some instances contribute to the efficiency and effectiveness of that
assistance through participation of other donors in the development
effort, improved coordination of policies and programs, pooling of
knowledge, avoidance of duplication of facilities and manpower, and
greater encouragement of self-help performance.] (a) The Congress
recognizes that the planning and administration of development as-
sistance by, or under the sponsorship of the United Nations, multi-
lateral lending institutions, and other multilateral organizations con-
tribute to the efficiency and effectiveness of that assistance through par-
ticipation of other donors in the development effort, improved coordi-
nation of policies and programs, pooling of knowledge, avoidance of
duplication of facilities and manpower, and greater encouragement of
self-help performance. It is the sense of Congress that an increasino?
proportion of United States assistance to the developing countries
should be channeled through multilateral organizations and that the
United States Government should undertake such measures as may be
necessary to help increase the competency and capacity of such
organizations.
(b) [Regional Programs.?] It is further the sense of the Congress
(1) that where problems or opportunities are common to two or more
countries in a region, in such fields as agriculture, education, trans-
portation, communications, power, watershed development, disease
control, establishment of development banks, these countries often can
more effectively resolve such problems and exploit such opportunities
by joining together in regional organizations or working together on
regional programs, (2) that assistance often can be utilized more effi-
ciently in regional programs than in separate country programs, and
(3) that to the maximum extent practicable consistent with the pur-
poses of this Act assistance under this Act should be furnished so as to
encourage less developed countries to cooperate with each other in
regional development programs.
(c) Notwithstanding any other provisions of law, the President
shall reduce the amounts and numbers of loans made by the United
States directly to individual foreign countries with the objective of
phasing out the bilateral loan program by not later than June 30,
1975.
(d) In furtherance of the provisions of subsection (a) of this sec-
tion, any hauls appropriated under this part I may be transferred by
the President to the International Development Association, the Inter-
national Bank for Reconstruction and Development, the International
Finance Corporation, the Asian Development Bank or other multi-
lateral lending institutions and multilateral organizations in which
the United States participates for the purpose of providing funds to
enable any such institution or organization to make loans to foreign
countries. Any such transfer shall be made--
(1) only if the institution or organization agrees that, in making
loans out of funds 80 transferred, it will emphasize and take into
account those matters emphasized and taken into account by the
President under sections 201(b) and (f), 207, and 208 of this Act;
(2) without regard to any other provision of this title ? and
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(3) upon such other terms and conditions as the President may
determine.
TITLE TI?TECHNICAL COOPERATION AND
DEVELOPMENT GRANTS
SEC. 212. Authorization.?To carry out the purposes of section 211,
there is authorized to be appropriated to the President [$183,500,000
for the fiscal year 1970, and $183,500,000 for the fiscal year 1971]
$208,270,000 for each of the fiscal years 1972 and 1973, which amounts
are authorized to remain available until expended.
* * * * * * *
SEC. 214. American Schools and Hospitals Abroad.?
* * * * * * *
(c) There is hereby authorized to be appropriated to the President
for the purposes of this section, [for the fiscal year 1970, $25,900,000,
and for the fiscal year 1971, $12,900,000] for each of the fiscal years
1972 and 1973, $30,000,000, which amounts are authorized to remain
available until expended. Amounts appropriated under this subsec-
tion for the fiscal year 1970 shall be available solely in accordance with
the allocations set forth on pages 25 and 26 of House Report No. 91-
611 and on page 23 of Senate Report No. 91-603.
SEC. 220A. SUEZ CANAL.?The President is authorized to furnish
financial assistance, on such terms and conditions as he may determine,
for assisting in the reopening of the Suez Canal after agreement has
been reached by the parties involved, which agreement provides for the
use of the Canal by the ships of all nations, including Israel, on a non-
discriminatory basis. For the purpose of carrying out this section, there
are authorized to be appropriated not to exceed $10,000,000 in Egyptian
pounds now owned by the United States and determined by the Presi-
dent to be excess to the normal requirements of departments and agen-
cies of the United States. Amounts appropriated under this section
are authorized to remain available until expended.
TITLE III?HOUSING GUARANTIES
SEC. 221. Worldwide Housing Guaranties.?In order to facilitate and
increase the participation of private enterprise in furthering the devel-
opment of the economic resources and productive capacities of less
developed friendly countries and areas, and promote the development
of thrift and credit institutions engaged in programs of mobilizing
local savings for financing the construction of self-liquidating housing
projects and related community facilities, the President is authorized
to issue guaranties, on such terms and conditions as he shall determine,
to eligible investors as defined in section 238(c), assuring against loss
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of loan investments for self-liquidating housing projects. The total
face amount of guaranties issued hereunder, outstanding at any one
time, shall not exceed [$130,000,000] $180,000,000. Such guaranties
shall be issued under the conditions set forth in section 222(b) and sec-
tion 223.
SEC. 223. General Provisions.?
*
(i) The authority of section 221 and section 222 shall continue until
[June 30, 1972] June 30, 1974.
TITLE IIIA.?INTERNATIONAL DRUG CONTROL
ASSISTANCE
SEC. 225. AurHoRITy.?(a) The President is authorized to furnish
assistance to any foreign country, on such terms and conditions he
determines necessary, in order to encourage and enable that country
to control or eliminate the production, processing, or distribution of
drugs within or across its boundaries.
(b) The President is authorized to furnish assistance to any inter-
national organization, such as the United Nations Special Fund for
Drug Abuse Control, involved in efforts to control or eliminate the
production, processing, Or distribution of drugs.
(c) Of the funds provided to carry out the provisions of this Act,
not less than $25,000,000 shall be available each fiscal year only to carry
out the provisions of this title.
(d) For purposes of this section, "drug" means any matter wh,ich,i8
included within the definition of controlled substance under title II
of the Comprehensive Drug Abuse Prevention and Control Act of
1970.
TITLE IV?OVERSEAS PRIVATE INVESTMENT
CORPORATION
* * * * * * *
SEC. 238. Definitions.?As used in this title?
* * * * * * *
(c) the term "eligible investor" means: (1) United States citizens;
(2) corporations, partnerships, or other associations including non-
profit associations, created under the laws of the United States or any
State or territory thereof and substantially beneficially owned by
United States citizens; and (3) foreign corporations, partnerships,
of other associations wholly owned by one or more such United States
citizens, corporations, partnerships, or other associations: Provided,
however, That the eligibility of such foreign corporation shall be
determined without regard to any shares, in aggregate less than 5
per centum of the total of issued and subscribed share capital, [re-
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quired by law to be] held by other than the United States owners:
Provided further, That in the case of any loan investment a final de-
termination of eligibility may be made at the time the insurance or
guaranty is issued; in all other cases, the investor must be eligible at
the time a claim arises as well as the time the insurance or guaranty
is, issued ; and
* * * * * *
SEC. 239. General Provisions and Powers.?
* * * * * * *
(g) Except for the provisions of this title, no other provision of
this or any other Act shall be construed to prohibit the operation in a
particular country of the programs authorized by this title, if the
President determines that the operation of such program in a par-
ticular country is important to the national interest.
SEC. 240. Agricultural Credit and Self-Help Community Develop-
ment Projects.?
(h) The authority of this section shall continue until [June 30,
1972] June 30, 1973.
TITLE VI?ALLIANCE FOR PROGRESS
SEC. 252. Authorization.?(a) There is authorized to be appro-
priated to the President for the purposes of this title, in addition to
other funds available for such purposes, [for the fiscal year 1970,
$428, 250,000, and for the fiscal year 1971, $428,250,000] for each of the
fiscal years 1970 and 1973, $309,400,000 which amounts are authorized
to remain available until expended, and which amounts, except for not
to exceed [$90,750,000] $109,650,000 for each such fiscal year, shall be
available only for loans as to principal and interest in United States
dollars. In order to effectuate the purposes and provisions of sections
102, 251, 601, and 602 of this Act, not less than 50 per centum of the
loan funds appropriated pursuant to this section for any fiscal year
shall be available for loans made to encourage economic development
through private enterprise.
TITLE X?PROGRAMS RELATING TO POPULATION
GROWTH
SEC. 292. Authorization.?[Of the funds provided to carry out the
provisions of part I of this Act for the fiscal year 1970, $75,000,000, and
for the fiscal year 1971 $100,000,000, shall be available only to carry
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out the purposes of this title and, notwithstanding any other provision
of this Act, funds used for such purposes may be used on a loan or
grant basis.] To carry out the purposes of this title, there is authorized
to be appropriated to the President $125,000,000 for each of the fiscal
years 1972 and 1973, which amounts are authorized to remain avail-
able until expended. Other funds provided to carry out the provisions
of this part I shall also be available to carry out the purposes of this
title and, notwithstanding any other provisions of this Act, funds
used for such purposes may be used on a loan or grant basis. The Pres-
ident shall not exercise any special authority granted to him under
section 610(a) or 614(a) of this Act to transfer any amount appropri-
ated under this paragraph to, and to consolidate such, amount with,
any funds made available under any other provision of this Act.
CHAPTER 3?INTERNATIONAL ORGANIZATION AND
PROGRAMS
Sc. 302. Authorization.?(a) There is authorized to be appropri-
ated to the President for grants to carry out the purpose of this chap-
ter, in addition to funds available under any other Act for such pur-
poses, [for the fiscal year 1970, $122,620,000, and for the fiscal year
1971, $122,620,000] for each of the fiscal years 1972 and 1973, $139,000,-
000.
(b) (1) There is authorized to be appropriated to the President for
loans for Indus Basin Development to carry out the purposes of this
section, in addition to funds available under this or any other Act for
such purposes for use beginning in the fiscal year 1969, $51,220,000.
Such amounts are authorized to remain available until expended.
(2) There is authorized to be appropriated to the President for
grants for Indus Basin Development, in addition to any other funds
available for such purposes, for use in [the fiscal year 1970, $7,530,000,
and for use in the fiscal year 1971, $7,530,000] each of the fiscal years
1972 and 1973, $15,000,000, which amounts shall remain available un-
til expended. The President shall not exercise any special authority
granted to him under section 610(a) or 614(a) of this Act to transfer
any amount appropriated under this paragraph to, and to consolidate
such amount with, any funds made available under any other provision
of this Act.
(c) None of the funds available to carry out this chapter shall be
contributed to any international organization or to any foreign govern-
ment or agency thereof to pay the costs of development or operating
any volunteer program of such organization, government, or agency
relating to the selection, training, and programing of volunteer man-
power.
(d) There is authorized to be appropriated to the President, for
the fiscal year 1969, $1,000,000 for contributions to the United Na-
tions Children's Fund during the calendar year 1969. Funds made
available under this section shall be in addition to funds available
under this section shall be in'addition to funds available under this or
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any other Act for such contributions and shall not be taken into ac-
count in computing the aggregate amount of United States contribu-
tions to such fund for the calendar year 1969.
(e) There is authorized to be appropriated F1,000,000 for the fiscal
year 1970 and $1,000,000 for the fiscal year 1971] $1, 000, 000 for each
of the fiscal years 1972 and 1973, to provide added contribution to the
United Nations Relief and Works Agency for expansion of technical
and vocational training of Arab refugees.
(f) There are authorized to be appropriated to the President for
each of the fiscal years 1972 and 1973, in addition to other amounts
available for such purposes, $1,000,000 in Egyptian pounds owned by
the United States and determined by the President to be excess to the
requirements of departments and agencies of the United States, for the
purpose of providing technical and vocational training and other
assistance to Arab refugees. Amounts appropriated under this sub-
section are authorized to remain available until expended.
[Chapter 4?SUPPORTING ASSISTANCE
[SEC. 401. General Authority.?The President is authorized to fur-
nish assistance to friendly countries, organizations, and bodies eli-
gible to receive assistance under this part on such terms and conditions
as he may determine, in order to support or promote economic or
political stability. The authority of this chapter shall not be used to
furnish assistance to more than twelve countries in any fiscal year.
[SEC. 402. Authorization.?There is authorized to be appropriated
to the President to carry out the purposes of this chapter for the fiscal
year 1970 not to exceed $414,600,000, and for the fiscal year 1971 not
to exceed $414,600,000: Provided, That where commodities are fur-
nished on a grant basis under this chapter under arrangements which
will result in the accrual of proceeds to the Government of Vietnam
from the sale thereof, arrangements should be made to assure that
such proceeds will not be budgeted by the Government of Vietnam for
economic assistance projects or programs unless the President or his
representative has given his prior written approval. Amounts appro-
priated under this section are authorized to remain available until
expended. None of the funds authorized by this section shall be made
available to the Government of Vietnam unless, beginning in January
1971, and quarterly thereafter, the President of the United States shall
determine that the accommodation rate of exchange between said
Government and the United States is fair to both countries.
[SEc. 403. United States Refund Claims.?It is the sense of the
Congress that the President should seek the agreement of the Govern-
ment of Vietnam to the establishment and maintenance of a separate
special account of United States dollars, which account shall be avail-
able solely for withdrawals by the United States, at such times and in
such amounts as the President may determine, in satisfaction of
United States dollar refund claims against the Government of Viet-
nam arising out of operations conducted under this Act. Such account
should be established in an amount not less than $10,000,000 and main-
tained thereafter at a level sufficient to cover United States refund
claims as they arise.]
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Chapter 5?CONTINGENCY FUND
SEC. 451. Contingency Fund.? (a) There is hereby authorized
to be appropriated to the President [for the fiscal year 1970 not to ex-
ceed $15,000,000, and for the fiscal year 1971 not to exceed $30,000,-
0003 for each of the fiscal years 1972 and 1973 not to exceed- $30,000,-
000, for use by the President for assistance authorized by part I in
accordance with the provisions applicable to the furnishing of such
assistance, when he determines such use to be important to the national
interest: Prorided, That, in addition to any other sums available for
such purpose, $15,000,000 of the amount authorized for the fiscal year
1971 may be used only for the purpose of relief, rehabilitation, and re-
construction assistance for the benefit of cyclone, tidal wave, and flood
victims in East Pakistan.
Chapter 8.?REFUGEE RELIEF ASSISTANCE
SEC. 481. REFUGEE RELIEF ASSISTANCE.?There is authorized to be
appropriated to the President for the fiscal year 1972, in addition to funds
otherwise available for such purpose, not to exceed $250,000,000, to remain
available until expended, for use by the President in providing assistance
for the relief and rehabilitation of refugees from East Pakistan and for
humanitarian relief in East Pakistan. Such assistance shall be distributed,
to the maximum extent practicable, under the auspices of and by inter-
national institutions and relief agencies or United States voluntary
agencies.
PART II
*
Chapter 2?MILITARY ASSISTANCE
SEC. 504. Authorization.?(a) There is authorized to be appro-
priated to the President to carry out the purposes of this part not to
exceed [$350,000,000 for the fiscal year 1970, and $350,000,000 for the
fiscal year 1971] $565 ,000 ,000 for the fiscal year 1972: Provided, That
funds made available for assistance under this chapter (other than
training in the United States) shall not be used to furnish assistance
in more than forty countries in any fiscal year: Provided further, That
none of the funds appropriated pursuant to this subsection shall be
used to furnish sophisticated weapons systems, such as missile system
and jet aircraft for military purpose, to any underdeveloped country,
unless the President determines that the furnishing of such weapons
systems is important to the national security of the United States and
reports within thirty days each such determination to the Congress.
Amounts appropriated under this subsection are authorized to remain
available until expended. Amounts appropriated under this subsection
shall be available for cost-sharing expenses of United States participa-
tion in the military headquarters and related agencies program.
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SEC. 505. Conditions of Eligibility.?
(b) No defense articles shall be furnished on a grant basis to any
country at a cost in excess of $3,000,000 in any fiscal year unless the
President determines?
(1) that such country conforms to the purposes and principles
of the Charter of the United Nations;
(2) that such defense articles will be utilized by such country
for the maintenance of its own defensive strength, [and] or the
defensive strength of the free world;
(3) that such country is taking all reasonable measures, con-
sistent with its political and economic stability, which may be
needed to develop its defense capacities; and
(4) that the increased ability of such country to defend itself
is important to the security of the United States.
[(e) From and after the sixtieth day after the day of enactment
of the Foreign Assistance Act of 1966, no assistance shall be provided
under this chapter to any country to which sales are made under title
I of the Agricultural Trade Development and Assistance Act of 1954
until such country has entered into an agreement to permit the use of
foreign currencies accruing to the United States under such title I to
procure equipment, materials, facilities, and services for the common
defense including internal security, in accordance with the provisions
of section 104(c) of such title
SEC. 506. Special Authority.?(a) During the fiscal year [1970
and the fiscal year 1971] 1972 the President may, if he determines it
to be vital to the security of the United States, order defense articles
from the stocks of the Department of Defense and defense services for
the purposes of part II, subject to subsequent reimbursement therefor
from subsequent appropriations available for military assistance. The
value of such orders under this subsection in [each of the fiscal years
1970 and 1971] the fiscal year 1972 shall not exceed $300,000,000.
[Prompt notice of action taken under this subsection shall be given
to the Committees on Foreign Relations, Appropriations, and Armed
Services of the Senate and the Speaker of the House of Representa-
tives.]
SEC. 507. Restrictions on Military Aid to Latin America.?(a)
The value of grant programs of defense articles for American Repub-
licans, pursuant to any authority contained in this part other than
chapter 3, in any fiscal year beginning with the fiscal year 1962, shall
not exceed $25,000,000, of which any part may be used for assistance
on a cost-sharing basis to an inter-American military force under the
control of the Organization of American States.] Except as otherwise
provided in this section, the value of defense articles furnished by the
United States Government under this Act to Latin American countries
shall not exceed $10,000,000. Not to exceed $25,000,000 in value of
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defense articles may be furnished under this part on a cost-sharing basis
to an inter-American military force under the control of the Organization
of American States.
SEC. 511. MILITARY ASSISTANCE ADVISORY GROUPS AND MIS-
sroNs.?(a) it is the sense of Congress that the need for large United
States military assistance advisory groups and military aid missions in
foreign countries has diminished substantially during the last few years.
In the words qf the Peterson Task Force Report on Internatii9nal Develop-
ment, "The United States now can reduce its supervision and advice to a
minimum, thus encouraging progress toward self-reliance. United States
military missions and advisory groups should be consolidated with other
elements in our overseas missions as soon as possible."
(b) In accordance with the provisions of subsection (a) of this section,
the total number of United States military personnel assigned and de-
tailed, as of September 30, 1971, to United States military assistance
advisory groups, military missions, and other organizations of the United
States performing activities similar to such groups and missions, shall be
reduced by at least 25 per centum by September 30, 1972.
SEC. 512. MILITARY ASSISTANCE AUTHORIZATIONS FOR THAILAND,
LAOS, AND SOUTH VIETNAM.?After June 30, 1972 no military assistance
shall be furnished by the United States to Thailand, Laos, or South
Vietnam directly or through any other foreign country unless that assistance
is authorized under this Act or the Foreign Military Sales Act.
SEC. 513. LIMITATIONS ON AVAILABILITY OF FUNDS FOR MILITARY
OPERATIONS. ?(a) No funds authorized or appropriated under any
provision of law shall be made available by any means by any officer,
employee, or agency of the United States Government for the purpose of
financing any military operations by foreign forces in Laos, South
Vietnam, North Vietnam, Thailand, Cambodia, or Burma outside the
borders of the country of the government or person receiving such funds
unless Congress has specifically authorized or authorizes the making of
funds available for such purpose and designates the area where military
operations financed by such funds may be undertaken outside such borders.
(b) Upon requesting Congress to make any such authorization, the
President shall provide to Congress a copy of any agreement proposed to
be entered into with any such government or person and the complete
details of the proposed military operation. Upon such authorization by
Congress, the President shall provide a copy of any such agreement and
thereafter of all plans and details of such operation.
SEC. 514. SPECIAL FOREIGN COUNTRY ACCOUNTS.?(a) Except as
otherwise provided by subsection (b) or (c) of this section, no defense
article may be given, and no grant of military assistance may be made,
under this or any other law to a foreign country unless the country agrees?
(1) to deposit in a special account established by the United States
Government the following amounts of currency of that country:
(A) in the case of any excess defense article to be given to that
country, an amount equal to 25 per centum of the fair value of the
article, as determined by the Secretary of State, at the time the
agreement to give the article to the country is made; and
(B) in the case of a grant of military assistance to be made to
that country, an amount equal to 25 per centum of each such grant;
and
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(2) to allow the United States Government to use such amounts from
that special account as may be determined, from time to time, by the
President to be necessary to pay all official costs of the United States
Government payable in the currency of that country, including all costs
relating to the financing of international educational and cultural exchange
activities in which that country participates under the programs authorized
by the Mutual Educational and Cultural Exchange Act of 1961.
(b) The President may waive any amount of currency of a foreign
country required to be deposited under subsection ( a)( 1) of this section
if he determines that the United States Government will be able to pay all
of its official costs payable in the currency of that country enumerated
under subsection (a)( 2) of this section without the deposit of such amount
and without having to expend United States dollars to purchase currency
of that country to pay such costs.
(c) The provisions of this section shall not apply in any case in which
an excess defense article is given, or a grant of military assistance is made,
to a foreign country under an agreement with that country which allows
the United States Government to operate a military or other similar base
in that country in exchange for that article or grant.
(d) Section 1415 of the Supplemental Appropriation Act, 1968 (31
U.S.C. 724), shall not be applicable to the provisions of this section.
Chapter 4?SECURITY SUPPORTING ASSISTANCE
SEC. 531. GENERAL AUTHORITY.?The President is authorized to
furnish assistance to freindly countries, organizations, and bodies eligible
to receive assistance under this Act on such terms and conditions as he
may determine, in order to support or promote economic or political
stability. The authority of this chapter shall not be used to furnish as-
sistance to more than twelve countries in any fiscal year.
SEC. 532. AUTHORIZATION.?There are authorized to be appropriated
to the President not to exceed $614,400,000 to carry out the purposes
of this chapter for the fiscal year 1972 and not to exceed $85,000,000
for such purposes for that fiscal year for Israel only. Where commodities
are furnished on a grant basis under this chapter under arrangements
which will result in 'the accrual of proceeds to the Government of Vietnam
from the sale thereof, arrangements should be made to -assure that such
proceeds will not be budgeted by the Government of Vietnam for economic
assistance projects or programs unless the President or his representative
has given prior written approval. Amounts appropriated under this section
are authorized to remain available until expended. None of the funds
authorized by this section shall be made available to the Government of
Vietnam unless, beginning in January 1971, and quarterly thereafter,
the President of the United States shall determine that the accommodation
rate of exchange, and the rate of exchange for United States Government
purchases of piasters for goods and services, between said Government
and the United States is fair to both countries.
SEC. 533. UNITED STATES REFUND CLAIMS.?It is the sense of the
Congress that the President should seek the agreement of the Government
of Vietnam to the establishment and maintenance of a separate special
account of United States dollars, which account shall be available solely
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for withdrawals by the United States, at such times and in such amounts
as the President may determine, in satisfaction of United States dollar
refund claims against the Government of Vietnam arising out of operations
conducted under this Act. Such account should be established in an amount
not less than $10,000,000 and maintained thereafter at a level sufficient
to cover United States refund claims as they arise.
PART III
Chapter I?GENERAL PROVISIONS
SEC. 619. Assistance to Newly Independent Countries.?Assistance
under part I of this Act (other than title I of chapter 2 of such part)
to newly independent countries shall, to the maximum extent appro-
priate in the circumstance of each case, be furnished through multi-
lateral organizations or in accordance with multilateral plans, on a
fair and equitable basis with due regard to self-help.
SEC. 620. Prohibitions Against Furnishing Assistance.?
(v)(1) The President shall determine annually, before furnishing any
military, economic, and other assistance to a foreign country under this
or any other law, whether such country has undertaken appropriate
measures to prevent drugs, partially or completely processed or produced
in or transported through such country, from unlawfully entering the
United States or from being unlawfully supplied to citizens of the United
States.
(2) Except as otherwise provided under paragraph (3) of this sub-
section, if the President determines that a foreign country has not under-
taken appropriate measures to prevent any such drugs from unlawfully
entering the United States or being unlawfully supplied to United States
citizens, he shall immediately cease to furnish all military, economic, and
other assistance to such country authorized under this or any other law. The
President is urged also to seek, through the United Nations or any other
international organization, the imposition of international economic
sanctions against such country.
(3) If the President finds that a foreign country referred to under
paragraph (2) of this subsection has undertaken, after his determination,
appropriate measures to prevent such drugs from unlawfully entering the
United States or being unlawfully supplied to United States citizens or
finds that the overriding national interest requires that military, economic,
or other assistance be furnished to such country, the provisions of such
paragraph shall not apply to that country unless the provisions of such
paragraph would apply further to that country as a result of a further
determination.
(4) The President shall utilize such agencies and facilities of the
United States Government as he may deem appropriate to assist foreign
countries in their efforts to prevent the unlawful entry of drugs into the
United States or from being unlawfully supplied to United States citizens.
(5) No provisions of this or any other law shall be construed to authorize
the President to waive the provisions of this subsection.
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(6) For purposes of this subsection?
(A) 'drug" means any matter which is included within the
definition of controlled substance under title II of the Comprehensive
Drug Abuse Prevention and Control Act of 1970; and
(B) "foreign assistance" means any tangible or intangible item
provided by the United States Government (by means of gift, loan,
sale, credit sale, guaranty, or any other means) under this or any
other law to a foreign country, including, but not limited to, any
training, service, or technical advice, any item of real, personal, or
mixed property, any agricultural commodity, United States dollars,
and any currencies owned by the United States Government of any
foreign country.
(w) No assistance shall be furnished under this Act, and no sales
shall be made under the Foreign Military Sales Act, to Greece. This
restriction may be waived when the President finds that overriding re-
quirements of the national security of the United States justify such a
waiver and promptly reports such finding to the Congress in writing,
together with his reasons for such finding. Notwithstanding the preceding
sentence, in no event shall the aggregate amount of (1) assistance furnished
to Greece under this Act, and (2) sales made to Greece under the Foreign
Military Sales Act, in any fiscal year, exceed the aggregate amount
expended for such assistance and such sales for the fiscal year 1971.
(x) (1) All military, economic, or other assistance, all sales of defense
articles and services (whether for cash or by credit, guaranty, or any
other means), all sales of agricultural commodities (whether for cash,
credit, or by other means), and all licenses with respect to the transporta-
tion of arms, ammunitions, and implements of war (including technical
data relating thereto) to the Government of Pakistan under this or any
other law shall be suspended on the date of enactment of this subsection.
(2) The provisions of this subsection shall cease to apply when the
President reports to the Congress that the Government of Pakistan is
cooperating fully in allowing the situation in East Pakistan to return
to reasonable stability and that refugees from East Pakistan in India
have been allowed, to the extent feasible, to return to their homes and to
reclaim their lands and properties.
(3) Nothing in this subsection shall apply to the provision of food
and other humanitarian assistance which is coordinated, distributed, or
monitored under international auspices.
Chapter 2?ADMINISTRATIVE PROVISIONS
SEC. 634. Reports and Information.?[(a) The President shall,
while funds made available for the purposes of the Act remain avail-
able for obligation, transmit to the Congress after the close of each
fiscal year a report concerning operations (other than those reported
pursuant to section 240A) in that fiscal year under this Act. Each
such report shall include information on progress under the free-
dom of navigation and nondiscrimination declaration contained in
section 1021
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(d) * * * In addition, the President shall promptly notify the
Committee on Foreign Relations and the Committee on Appropria-
tions of the Senate and the Speaker of the House of Representatives of
any determination under section 303, 610, [614(a),] or 614(b) and
of any finding, including his reasons therefor, under section 503 or
521(c).
SEC. 637. Administrative Expenses.?(a) There is hereby author-
ized to be appropriated to the President [for the fiscal year 1970,
$51,125,000, and for the fiscal year 1971, $51,125,000] for each of the
fiscal years 1972 and 1973, $51,800,000, for necessary administrative
expenses of the agency primarily responsible for administering part I.
The agency administering part I shall reduce the number of personnel,
particularly administrative personnel, employed by it in order to con-
duct operations with the reduced amount of funds authorized for
fiscal year 1969, except that such agency shall not take any action to
limit or reduce auditing or training activities of such agency.
Chapter 3?MISCELLANEOUS PROVISIONS
SEC. 644. Definitions.?As used in this Act?
*
"(m) "Value" means, other than in section 657 of this Act?
*
[SEc. 652. Limitation Upon Additional Assistance to Cambodia.?
The President shall not exercise any special authority granted to him
under sections 506(a), 610(a) and 614(a) of this Act for the purpose
of providing additional assistance to Cambodia, unless the President,
at least thirty days prior to the date he intends to exercise any such
authority on behalf of Cambodia (or ten days prior to such date if
the President certifies in writing that an emergency exists requiring
immediate assistance to Cambodia), notifies the Speaker of the
House of Representatives and the Committee on Foreign Relations
of the Senate in writing of each such intended exercise, the section of
this Act under which such authority is to be exercised, and the justi-
fication for, and the extent of, the exercise of such authority.]
SEC. 652. LIMITATION UPON EXERCISE OF SPECIAL AUTHORITIES.?
The President shall not exercise any special authority granted to him
under section 506(a), 610(a), or 614(a) of this Act unless the P: esident,
at least ten days prior to the date he intends to exercise any such authority,
notifies the Speaker of the House of Representatives and the Committee on
Foreign Relations of the Senate in writing of each such intended exercise,
the section of this Act under which such authority is to be exercised, and
the justification for, and the extent of, the exercise of such authority.
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SEC. 653. CHANGE IN ALLOCATION OF FOREIGN ASSISTANCE.?(4)
Not later than thirty days after the enactment of any law appropriating
funds to carry out any provision of this Act (other than section 451 or
637), the President shall notify the Congress of each foreign country and
international organization to which the United States Government intends
to provide any portion of the funds under such law and of the amount of
funds under that law, by category of assistance, that the United States
Government intends to provide to each. Notwithstanding any other provi-
son of law, the United States Government shall not provide to any foreign
country or international organization any funds under that law which is
in excess of 10 per centum of the amount of each category of assistance
which the President notified the Congress that the United States Govern-
ment intended to provide that country or organization under that law,
unless the President (1) determines that it is vital to the security of the
United States that such country or organization receive funds in excess
of the amount included in such notification for that country or organiza-
tion, and (2) reports to Congress, a, least ten days prior to the date on
which such excess funds are to be provided to that country or organization,
each such determination, including the name of the country or organiza-
tion to receive funds in excess of such per centum, the amount of funds
in excess of that per centum which are to be provided, and the justification
for providing the additional assistance.
(b) The provisions of this section shall not apply in the case of any
law making continuing appropriations and may not be waived under
the provisions of section 614(a) of this Act.
SEC. 654. PRESIDENTIAL FINDINGS AND DETERMINATIONS.?(a) In
any case in which the President is required to make a report to the Con-
gress, or to any committee or officer of either House of Congress, concern-
ing any finding or determination under any provision of this Act, the
Foreign Military Sales Act, or the Foreign Assistance and Related
Programs Appropriation Act for each fiscal year, that finding or de-
termination shall be reduced to writing and signed by the President.
(b) No action shall be taken pursuant to any such finding or determina-
tion prior to the date on which that finding or determination has been
reduced to writing and signed by the President.
(c) Each such finding or determination shall be published in the Federal
Register as soon as practicable after it has been reduced to writing and
signed by the President. In any case in which the President concludes
that such publication would be harmful to the national security of the
United States, only a statement that a determination or finding has been
made by the President, including the name and section of the Act under
which it was made, shall be published.
(d) No committee or officer of either House of Congress shall be denied
any requested information relating to any finding or determination
which the President is required to report to the Congress, or to any com-
mittee or officer of either House of Congress, under any provision of
this A,ct, the Foreign Military Sales Act, or the Foreign Assistance and
Related Programs Appropriation Act for each fiscal year, even though
such report has not yet been transmitted to the Congress or to the appro-
priate committee or officer of either House of Congress.
SEC. 655. LIMITATIONS UPON ASSISTANCE TO OR FOR CAMBODIA.?(a)
Notwithstanding any other provision of law, no funds authorized to be ap-
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propriated by this or any other Act may be obligated or expended in any
amount in excess of $250,000,000 for the purpose of carrying out directly
or indirectly any economic or military assistance, or any operation, project,
or program of any kind, or for providing any goods, supplies, materials,
equipment, services' personnel, or advisers in, to, for, or on behalf of
Cambodia during the fiscal year ending June 30, 1972.
(b) In computing the $250,000,000 limitation on obligation and ex-
penditure authority under subsection (a) of this section in fiscal year 1972,
there shall be included in the computation the value of any goods, supplies,
materials, or equipment provided to, for, or on behalf of Cambodia in such
fiscal year by gift, donation, loan, lease, or otherwise. For the purpose of
this subsection, value" means the fair market value of any goods, supplies,
materials, or equipment provided to, for, or on behalf of Cambodia but
in no case less than 33% per cent urn of the amount the United States
paid at the time such goods, supplies, materials, or equipment were ac-
quired by the United States.
(c) No funds may be obligated or expended for any of the purposes
described in subsection (a) of this section in, to, for, or on behalf of
Cambodia in any fiscal year beginning after June 30, 1972, unless such
funds have been specifically authorized by law enacted after the date of
enactment of this Act. In no case shall funds in any amount in excess of
the amount specifically authorizea by law for any fiscal year be obligatea
or expended for any such purpose during such fiscal year.
(d) The provisions of subsections (a) and (c) of this section shall not
apply with respect to the obligation or expenditure of funds to carry out
combat air operations over Cambodia.
(e) After the date of enactment of this Act, whenever any request is
made to the Congress for the appropriation of funds for use in, for or
on behalf of Cambodia for any fiscal year, the President shall furnish, a
written report to the Congress explaining the purpose for which such
funds are to be used in such fiscal year.
(f) The President shall submit to the Congress within thirty days after
the end of each quarter of each fiscal year, beginning with the fiscal year
which begins July 1, 1971, a written report showing the total amount of
funds expended in, .for, or on behalf of Cambodia during the preceding
quarter by the United States Government, and shall include in .such report
a general breakdown of the total amount expended, describing the different
purposes for which such funds were expended and the total anti ant
expended for such purpose, except that in the case of the first two quarters
cf the fiscal year beginning July 1, 1971, a single report may be submitted
for both such quarters and such report may be computed on the basis
of the most accurate estimates the President is able to make, taking into
consideration all information available to him.
(g) Enactment of this section shall not be construed as a commitment by
the United States to Cambodia for its defense.
SEC. 656. LIMITATIONS ON UNITED STATES PERSONNEL AND PER-
SONNEL ASSISTED BY UNITED STATES IN CAMBODIA.?The total number
of civilian officers and employees of executive agencies of the United States
Government who are citizens of the United States and of members of the
Armed Forces of the United States (excluding such members while actually
engaged in air operations in or over Cambodia which originate outside
Cambodia) present in Cambodia at any one time shall not exceed two
hundred. The United States shall not, at any time, pay in whole or in part,
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directly or indirectly, the compensation or allowances of more than fifty
individuals in Cambodia who are citizens of countries other than Cambodia
or the United States. For purposes of this section, "executive agency of
the United States Government" means any agency, department, board,
wholly or partly owned corporation, instrumentality, commission, or
establishment within the executive branch of the United States Government.
SEC. 657. ANNUAL FOREIGN ASSISTANCE REPORT.?(a) In order
that the Congress and the American people may be better and more cur-
rently informed regarding the volume and cost of assistance extended by
the United States Government to foreign countries and international
organizations, and in order that the Congress and the American people
may be better informed regarding the sale of arms to foreign countries
and international organizations by private industry of the United States,
not later than December 31 of each year the President shall transmit to
the Congress an annual report, for the fiscal year ending prior to the
fiscal year in which the report is transmitted, showing?
(1) the aggregate dollar value of all foreign assistance provided by
the United States Government by any means to all foreign countries
and international organizations, and the aggregate dollar value of
such assistance by category provided by the United States Govern-
ment to each such country and organization, during that fiscal year;
(2) the total amounts of foreign currency paid by each foreign
country or international organization to the United States Govern-
ment in such fiscal year, what each payment was made for, whether
any portion of such payment was returned by the United States
Government to the country or organization from which the payment
was obtained or whether any such portion was transferred by the
United States Government to another foreign country or international
organization, and, if so returned or transferred, the kind of assist-
ance obtained by that country or organization with those foreign
currencies and the dollar value of such kind of assistance;
(3) the aggregate dollar value of all arms, ammunitions, and other
implements of war, and the aggregate dollar value of each category
of such arms, ammunitions, and implements of war, exported under
any export license, to all foreign countries and international or-
ganizations, and to each such country and organization, during
that fiscal year; and
(4) such other matters relating to foreign assistance provided by
the United States Government as the President considers appropriate,
including explanations of the information required under clauses
(1)?(3) of this subsection.
(b) All information contained in any report transmitted under this
section shall be public information. However, in the case of any item of
information to be included in any such report that the President, on an
extraordinary basis, determines is clearly detrimental to the security of the
United States, he shall explain in a supplemental report why publication
of each specific item would be detrimental to the security of the United
States. A supplement to any report shall be transmitted to the Congress at
the same time that the report is transmitted.
(c) If the Congress is not in session at the time a report or supplement
is transmitted to the Congress, the Secretary of the Senate and the Clerk of
the House of Representatives shall accept the report or supplement on behalf
of their respective Houses of Congress and present the report or supplement
to the two Houses immediately upon their convening.
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(d) For purposes of this section?
(1) 'foreign assistance" means any tangible or intangible item
provided by the United States Government under this or any other
law to a foreign country or international organization, including, but
not limited to, any training, service, or technical advice, any item of
real, personal, or mixed property, any agricultural commodity, United
States dollars, and any currencies owned by the United States
Government of any foreign country;
(2) "provided by the United States Government" includes, but is
not limited to, foreign assistance provided by means of gift, loan, sale,
credit sale, or guaranty; and
(3) "value" means value at the time of transfer except that in no
case shall any commodity or article of equipment or material be
considered to have a value less than one-third of the amount the
United States Government paid at the time the commodity or article?
was acquired by the United States Government.
SEC. 658. LIMITATION ON USE OF FUNDS.?(a) Except as otherwise
provided in this section, none of the funds appropriated to carry out the
provisions of this Act or the Foreign Military Sales Act shall be obligated
or expended until the Comptroller General of the United States certifies
to the Congress that all funds previously appropriated and thereafter
impounded during the fiscal year 1071 for highway construction, low-rent
public housing, Model Cities, water and sewer grants, urban renewal,
regional economic development, farm credit, and mass transportation have
been released for obligation and espenditure.
(b) The provisions of this section shall not apply?
(1) to funds being withheld in accordance with specific requirements
of law; and
(2) to appropriations obligated or expended prior to January 1,
1972.
II. FOREIGN MILITARY SALES ACT
Chapter 3?MILITARY EXPORT CONTROLS
SEC. 31. Authorization and Aggregate Ceiling on Foreign Military
Sales Credits.?(a) There is hereby authorized to be appropriated
to the President to carry out this Act not to exceed [$250,000,000 for
each of the fiscal years 1970 and 1971] $459,000,000 for the fiscal year
1972. Unobligated balances of funds made available pursuant to this
section are hereby authorized to be continued available by appro-
priations legislation to carry out this Act.
(b) The aggregate total of credits, or participations in credits, ex-
tended pursuant to this Act (excluding credits covered by guaranties
issued pursuant to section 24(b)) and of the face amount of guaranties
issued pursuant to sections 24 (a) and (b) shall not exceed [$340,000,
000 for each of the fiscal years 1970 and 19713 $523,800,000 for the
fiscal year 1972.
SEC. 33. Regional Ceilings on Foreign Military Sales.?(a) The
aggregate of the total amount of military assistance pursuant to the
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Foreign Assistance Act of 1961, as amended, of cash sales pursuant to
sections 21 and 22, of credits, or participations in credits, financed pur-
suant to section 24(b)), of the face amount of contracts of guaranty
issued pursuant to sections 24 (a) and (b), and of loans and sales in
accordance with section 7307 of title 10, United States Code, shall,
excludinv training, not exceed [$75,000,0003 8?/00,000,000 in each
fiscal year for Latin American countries.
(b) The aggregate of the total amount of military assistance pur-
suant to the Foreign Assistance Act of 1961, as amended, of cash sales
pursuant to sections 21 and 22, of credits, or participations in credits,
financed pursuant to section 23 (excluding credits covered by guar-
anties issued pursuant to section 24(b)), and of the face amount of
contracts or guaranty issued pursuant to sections 224 (a) and (b) shall,
excluding training, not exceed $40,000,000 in each fiscal year for
African countries.
[(c) The President may waive the limitations of this section when
he determines it to be important to the security of the United States,
and promptly so reports to the Speaker of the House of Representa-
tives and the Committee on Foreign Relations of the Senate.]
III. SECTION 8 OF AN ACT TO AMEND THE FOREIGN
MILITARY SALES ACT, AND FOR OTHER PURPOSES
(22 U.S.C. 2321b)
SEC. 8. (a) Subject to the provisions of subsection (b), the value
of any excess defense article granted to a foreign country or interna-
tional organization [under part II of the Foreign Assistance Act of
1961 shall be considered to be an expenditure made from funds
appropriated under that Act for military assistance. When] by any
department, agency, or independent establishment of the United States
Government (other than the Agency for International Development) shall
be considered to be an expenditure made from funds appropriated under
the Foreign Assistance Act of 1961 for military assistance. Unless such
department, agency, or establishment certifies to the Comptroller General
of the United States that the excess defense article it is ordering is not to be
transferred by any means to a foreign country or international organiza-
tion, when an order is placed for a defense article whose stock status is
excess at the time ordered, a sum equal to the value thereof shall (1) be
reserved and transferred to a suspense account, (2) remain in the
suspense account until the excess defense article is either delivered to a
foreign country or international organization or the order therefor is
cancelled, and (3) be transferred from the suspense account to (A)
the general fund of the Treasury upon delivery of such article, or (B)
to the military assistance appropriation for the current fiscal year
upon cancellation of the order. Such sum shall be transferred to the
military assistance appropriation for the current fiscal year upon
delivery- of such article if at the time of delivery the stock status of the
article is determined, in accordance with sections 644(g) and (m) of
the Foreign Assistance Act of 1961, to be nonexcess.
(b) The provisions of subsection (a) shall apply during any fiscal
year only to the extent that the aggregate value of excess defense
articles ordered during that year exceeds [$100,000,0003 $150,000,000.
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(c) For purposes of this section, "value" means not less than 33%
per centum of the amount the United States paid at the time the excess
defense articles were acquired by the United States.
(d) The President shall promptly and fully inform the Speaker of
the House of Representatives and the Committee on Foreign Relations
and the Committee on Appropriations of the Senate of each decision to
furnish on a grant basis to any country excess defense articles which
are major weapons systems to the extent such major weapons system
was not included in the presentation material previously submitted to
the Congress. Additionally, the President shall also submit a quar-
terly report to the Congress listing by country the total value of all
deliveries of excess defense articles, disclosing both the aggregate orig-
mal acquisition cost and the aggregate value at the time of delivery.
(e) Except for excess defense articles granted under part II of the Foreign
Assistance Act of 1961, the provisions of this section shall not apply to any
excess defense article granted to South Vietnam prior to July 1, 1972.
IV. AN ACT TO AUTHORIZE PARTICIPATION BY THE
UNITED STATES IN THE INTERPARLIAMENTARY
UNION (22 U.S.C. 276)
That an appropriation of [$53,550] $102,000 annually is authorized,
[$26,650] $57,000 of which shall be for the annual contributions of
the United States toward the maintenance of the Bureau of the Inter-
parliamentary Union for the promotion of international arbitration;
and [$26,900] $45,000, or so much thereof as may be necessary, to
assist in meeting the expenses of the American group of the Inter-
parliamentary Union for each fiscal year for which an appropriation
is made, such appropriation to be disbursed on vouchers to be approved
by the president and the executive secretary of the American group.
V. PART IV, FOREIGN ASSISTANCE ACT OF 1969
(22 U.S.C. 2901)
PART IV?[INTER-AMERICAN SOCIAL DEVELOPMENT INSTITUTE]
THE INTER-AMERICA1V FOUNDATION ACT
SEC. 401. [INTER-AMERICAN SOCIAL DEVELOPMENT INSTITUTE.?(a)
There is created as an agency of the United States of America a body
corporate to be known as the "Inter-American Social Development
Institute" (hereafter in this section referred to as the "Institute").]
INTER-AMERICAN Fouiv DATION.?(a) There is created as an agency of
the United States of America a body corporate to be known as the Inter-
American Foundation (hereafter in this section referred to as the
"Foundation").
(b) The future of freedom, security, and economic development in
the Western Hemisphere rests on the realization that man is the foun-
dation of all human progress. It is the purpose of this section to pro-
vide support for developmental activities designed to achieve condi-
tions in the Western Hemisphere under which the dignity and the
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worth of each human person will be respected and under which all men
will be afforded the opportunity to develop their potential, to seek
through gainful and productive work the fulfillment of their aspira-
tions for a better life, and to live in justice and peace. To this end, it
shall be the purpose of the [Institute] Foundation primarily in co-
operation with private, regional, and international organizations, to?
(1) strengthen the bonds of friendship and understanding
among the peoples of this hemisphere;
(2) support self-help efforts designed to enlarge the opportu-
nities for individual development;
(3) stimulate and assist effective and ever wider participation
of the people in the development process;
(4) encourage the establishment and growth of democratic in-
stitutions, private and governmental, appropriate to the require-
ments of the individual sovereign nations of this hemisphere.
In pursuing these purposes, the [Institute] Foundation shall place
primary emphasis on the enlargement of educational opportunities at
all levels, the production of food and the development of agriculture,
and the improvement of environmental conditions relating to health,
maternal and child care, family planning, housing, free trade union
development, and other social and economic needs of the people.
(c) The [Institute] Foundation shall carry out the purposes set
forth in subsection (b) of this section primarily through and with pri-
vate organizations, individuals, and international organizations by
undertaking or sponsoring appropriate research and by planning, ini-
tiating, assisting, financing, administering, and executing programs
and projects designed to promote the achievement of such purposes.
(d) In carrying out its functions under this section, the [Institute]
Foundation shall, to the maximum extent possible, coordinate its un-
dertakings with the developmental activities in the Western Hemi-
sphere of the various organs of the Organization of American States,
the United States Government, international organizations, and other
entities engaged in promoting social and economic development of
Latin America.
(e) The [Institute] Foundation as a corporation?
(1) shall have perpetual succession unless sooner dissolved by
an Act of Congress;
(2) may adopt, alter, and use a corporate seal, which shall be
judicially noticed;
(3) may make and perform contracts and other agreements
with any individual, corporation, or other body of persons how-
ever designated whether within or without the United States of
America, and with any government or governmental agency, do-
mestic or foreign;
(4) shall determine and prescribe the manner in which its obli-
gations shall be incurred and its expenses, including expenses for
representation (not to exceed $10,000 in any focal year), allowed
and paid;
(5) may, as necessary for the transaction of the business of the
[Institute] Foundation, employ and fix the compensation of not
to exceed one hundred persons at any one time;
(6) may acquire by purchase, devise, bequest, or gift, or other-
wise lease, hold, and improve, such real and personal property as
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it finds to be necessary to its purposes, whether within or without
the United States, and in any manner dispose of all such real and
personal property held by it and use as general funds all receipts
arisincrts from the disposition of such property;
(7)shall be entitled to the use of the United States mails on the
same conditions as the executive departments of the Government;
(8) may, with the consent of any board, corporation, commis-
sion, independent establishment, or executive department of the
Government, including any field service thereof, avail itself of the
use of information, services, facilities, officers, and employees
thereof in carrying out the provisions of this section;
(9) may accept money, funds, property, and services of every
kind by gift, device bequest, grant, or otherwise, and make ad-
vances grants, and loans to any individual, corporation' or other
body Of persons, whether within or without the United States of
America, or to any government or governmental agency, domestic
or foreign, when deemed advisable by the [Institute] Foundation
in furtherance of its purposes;
(10) may sue and be sued, complain, and defend, in its corpo-
rate name in any court of competent jurisdiction; and
(11) shall have such other powers as may be necessary and in-
cident to carrying out its powers and duties under this section.
(f) Upon termination of the corporate life of the [Institute] Foun-
dation all of its assets shall be liquidated and, unless otherwise pro-
vided by Congress, shall be transferred to the United States Treasury
as the property of the United States.
(g) The management of the [Institute] Foundation shall be vested
in a board of directors (hereafter in this section referred to as the
"Board") composed of seven members appointed by the President, by
and with the advice and consent of the Senate, one of whom he shall
designated to serve as Chairman of the Board and one of whom he shall
designate to serve as Vice Chairman of the Board. Four members of
the Board shall be appointed from private life. Three members of the
Board shall be appointed from among officers or employees of agencies
of the United States concerned with inter-American affairs. Members
of the Board shall be appointed for terms of six years, except that of
the members first appointed two shall be appointed for terms of two
years and two shall be appointed for terms of four years, as designated
by the President at the time of their appointment. A member of the
Board appointed to fill a vacancy occurring prior to the expiration of
the term for which his predecessor was appointed shall be appointed
only for the remainder of such 'term; but upon the expiration of his
term of office a member shall continue to serve until his successor is
appointed and shall have qualified. Members of the Board shall be
eligible for reappointment.
(h) Members of the Board shall serve without additional compen-
sation, but shall be reimbursed for actual and necessary expenses not
in excess of $50 per day, and for transportation expenses, while
engaged in their duties on behalf of the corporation.
(i) The Board shall direct the exercise of all the powers of the
[Institute] Foundation.
(j) The Board may prescribe, amend, and repeal bylaws, rules,
and regulations governing the manner in which the business of the
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[Institute] Foundation may be conducted and in which. the powers
granted to it by law may be exercised and enjoyed. A majority of the
Board shall be required as a quorum.
(k) In furtherance and not in limitation of the powers conferred
upon it, the Board may appoint such committees for the carrying out
of the work of the [Institute] Foundation as the Board finds to be
for the best interests of the [Institute] Foundation, each committee
to consist of two or more members of the Board, which committees,
together with officers and agents duly authorized by the Board and to
the extent provided by the Board, shall have and may exercise the
powers of the Board in the management of the business and affairs
of the [Institute] Foundation.
[(1) The chief executive officer of the Institute shall be an Execu-
tive Director who shall be appointed by the. Board of Directors on
such terms as the Board may determine. The Executive Director shall
receive compensation at the rate provided for level IV of the Execu-
time Schedule under section 5315 of title 5, United -States Code.]
(1)(1) The chief executive officer of the Foundation shall be a
President who shall be appointed by the Board of Directors on such
terms as the Board may determine. The President shall receive com-
pensation at the rate provided for level IV of the Executive Schedule
under section 5315 of title 5, United States Code.
(2) Experts and consultants, or organizations thereof; may be
employed as authorized by section 3109 of title 5, United States Code.
(m) In order to further the purposes of the [Institute] Founda-
tion there shall be established a Council to be composed of such num-
ber of individuals as may be selected by the Board from among indi-
viduals knowledgeable concerning developmental activities in the
Western Hemisphere. The Board shall, from time to time, consult
with the Council concerning the objectives of the [Institute] Founda-
tion. Members of the Council shall receive no compensation for their
services but shall be entitled to reimbursement in accordance with sec-
tion 5703 of title 5, United States Code, for travel and other expenses
incurred by them in the performance of their functions under this
subsection.
(n) The [Institute] Foundation shall be a nonprofit corporation and
shall have no capital stock. No part of its revenue, earnings, or other
income or property shall inure to the benefit of its directors, officers,
and employees and such revenue, earnings, or other income; or prop-
erty shall be used for the carrying out of the corporate purposes set
forth in this section. No director, officer, or employee of the corpora-
tion shall in any manner directly or indirectly participate in the de-
liberation upon or the determination of any question affecting his per-
sonal interests or the interests of any corporation, partnership, or or-
ganization in which he is directly or indirectly interested.
(o) When approved by the [Institute] Foundation, in furtherance
of its purpose, the officers and employees of the [Institute] Founda-
tion may accept and hold offices or positions to which no compensation
is attached with governments or governmental agencies of foreign
countries.
(p) The Secretary of State shall have authority to detail employees
of any agency under his jurisdiction to the [Institute] Foundation
under such circumstances and upon such conditions as he may deter-
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mine. Any such employee so detailed shall not lose any privileges,
rights, or seniority as an employee of any such agency by virtue of
such detail.
(q) The [Institute] Foundation shall establish a principal office.
The [Institute] F owndation is authorized to establish agencies, branch
offices, or other offices in any place or places within the United States
or elsewhere in any of which locations the [Institute] Foundation
may carry on all or any of its operations and business.
(r) The [Institute] Foundation, including its franchise and in-
come, shall be exempt from taxation now or hereafter imposed by the
United States7 or any territory or possession thereof, or by any State,
county, municipality, or local taxing authority.
(s) Notwithstanding any other provision of law, not to exceed an
aggregate amount of $50,000,000 of the funds made available for the
fiscal years 1970 and 1971 to carry out part I of the Foreign Assist-
ance Act of 1961 shall be available to carry out the purposes of this
section. Funds made available to carry out the purposes of this sec-
tion under the preceding sentence are authorized to remain available
until expended.
(t) The [Institute] Foundation shall be subject to the provisions of
the Government Corporation Control Act.
VI. AN ACT TO PROVIDE CERTAIN BASIC AUTHORITY
FOR THE DEPARTMENT OF STATE (22 U.S.C. 2680)
* * *
SEC. la. * * * [There is hereby authorized to be appropriated such
amounts as may be necessary to provide capital for the fund.]
[SEc. 15. Appropriations to carry out the purposes of this Act are
hereby authorized. When so provided in an appropriation law, an
appropriation made to the Department of State may remain available
until expended.]
SEG. 15. (a) Notwithstanding any other provision of law, no appro-
priation shall be made to the Department of State under any law for
any fiscal year commencing on our after July 1,1972, unless previously
authorized by legislation hereafter enacted by the Congress.
(b) The Department of State shall keep the Committee on Foreign
Relations of the Senate and the Committee on Foreign Affairs of the
House of Representatives fully and currently informed with respect to
all activities and responsibilities of all departments, agencies, and
independent establishments of the United States Government con-
ducted outside the United States or its territories or possessions. Any
such department, agency, or independent establishment shall furnish
any information requested by either such committee relating to any
such activity or responsibility.
VII. SECTION 701, UNITED STATES INFORMATION AND
EDUCATIONAL EXCHANGE ACT OF 1948 (22 U.S.C. 1476)
GENERAL AUTHORIZATION
SEC. 701. Appropriations to carry out the purposes of this Act are
hereby authorized.]
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PRIOR AUTHORIZATIONS BY CONGRESS
8E0.701. N othwithstanding any other provision of law, no appropri-
ation shall be made to the Secretary of State, or to any Government
agency authorized to administer the provisions of this Act, under any
law for any fiscal year commencing on or after July 1, 1972, unless
previously authorized by legislation hereafter enacted by the Congress.
VIII. SECTION 7(a), SPECIAL FOREIGN ASSISTANCE ACT
OF 1971 (22 U.S.C. 2411 note)
SEC. 7. (a) In line with the expressed intention of the President
of the United States, none of the funds authorized or appropriated
pursuant to this or any other Act may be used to finance the introduc-
tion of United States ground combat troops into Cambodia, or to
provide United States advisers to or for [Cambodian military forces]
military, paramilitary, police, or other security or intelligence forces
in Cambodia.
IX. SECTION 401(a) OF PUBLIC LAW 89-367,
APPROVED MARCH 15, 1966
SEC. 4. (a) (1) Not to exceed $2,800,000,000 of the funds authorized
for appropriation for the use of the Armed Forces of the United
States under this or any other Act are authorized to be made available
for their stated purposes to support: (A) Vietnamese and other free
world forces in Support of Vietnamese forces, (B) local forces in Laos
and Thailand; and for related costs, during the fiscal year 1971 on such
terms and conditions as the Secretary of Defense may determine. None
of the funds appropriated to or for the use of the Armed Forces of the
United States or of any department, agency, or independent establish-
ment of the United States may be used for the purpose of paying any
overseas allowance, per diem allowance, or any other addition to the
regular base pay of any person serving with the free world forces in
South Vietnam if the amount of such payment would be greater than
the amount of special pay authorized to be paid, for an equivalent
period of service, to members of the Armed Forces of the United
States (under section 310 of title 37, United States Code) serving in
Vietnam or in any other hostile fire area, except for continuation of
payments of such additions to regular base pay provided in agree-
ments executed prior to July 1, 1970. Nothing in clause (A) of the
first sentence of this paragraph shall be construed as authorizing the
use of any such funds to support Vietnamese or other free world forces
in actions designed to provide military support and assistance to the
Government of Cambodia or Laos.
(2) No defense article may be furnished to the South Vietnamese
forces, other free world forces in Vietnam, or to local forces in Laos
or Thailand with funds authorized for the use of the Armed Forces of
the United States or of any department, agency, or independent estab-
lishment of the United States under this or any other Act unless the
government of the forces to which the defense article is to be furnished
shall have agreed that?
(A) it will not, without the consent of the President?
(i) permit any use of such article by anyone not an officer,
employee, or agent of that government,
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(ii) transfer' or permit any officer, employee, or agent of
that government to transfer such article by gift, sale, or other-
wise, or
(iii) use or permit the use of such article for purposes other
than those for which furnished;
(B) it will maintain the security of such article, and will pro-
vide substantially the same degree of security protection afforded
to such article by the United States Government;
(C) it will, as the President may require, permit continuous
observation and review by, and furnish necessary information to.
representatives of the United States Government with regard to
the use of such article; and
(D) unless the President consents to 'other disposition, it will
return to the United States Government for such use or disposi-
tion as the President considers in the best interests of the United
States, any such article which is no longer needed for the purposes
for which it was furnished.
The President shall promptly submit a report to the Speaker of the
House of Representatives and the President of the Senate on the im-
plementation of each agreement entered into in compliance with this
paragraph. The President may not give his consent under clause (A)
or (D) of this paragraph with respect to any defense article until the
expiration of fifteen days after written notice has been given to the
Speaker of the House of Representatives and the President of the
Senate regarding the proposed action of the President with respect to
such article. As used in this paragraph the term "defense article" shall
have the same meaning prescribed for such term in section 644(d) of
the Foreign Assistance Act of 1961. In order to allow a reasonable
period of time for the Department of Defense to comply with the
requirements of this paragraph, the provisions of such paragraph shall
become effective sixty days after the date of enactment of this
paragraph.
X. JOINT RESOLUTION AUTHORIZING THE PRESIDENT
TO EMPLOY THE ARMED FORCES OF THE UNITED
STATES FOR PROTECTING THE SECURITY OF FOR-
MOSA, THE PESCADORES, AND RELATED POSITIONS
AND TERRITORIES OF THAT AREA, APPROVED JANU-
ARY 29, 1955 (69 STAT. 7; PUBLIC LAW 84-4)
(That the President of the United States be and he hereby is author-
ized to employ the Armed Forces of the United States as he deems
necessary for the specific purpose of securing and protecting Formosa
and the Pescadores against armed attack, this authority to include the
securing and protection of such related positions and territories of
that area now in friendly hands and the taking of such other measures
as he judges to be required or appropriate in assuring the defense of
Formosa and the Pescadores.
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[This resolution shall expire when the President shall determine
that the peace and security of the area is reasonably assured by inter-
national conditions created by action of the United Nations or other-
wise, and shall so report to the Congress.]
XI. SECTION 502(b), MUTUAL SECURITY ACT OF 1954
(b) Notwithstanding section 1415 of the Supplemental Appropria-
tion Act, 1953, or any other provision of law, local currencies owned
by the United States, which are in excess of the amounts reserved under
section 612(a) of the Foreign Assistance Act of 1961, [(as amended),
and of the requirements of the United States Government in payment
of its obligations outside the United States, as such requirements may
be determined from time to time by the President, and any other local
currencies owned by the United States in amounts not to exceed the
equivalent of $50 per day per person exclusive of the actual cost of
transportation] and which are determined by the Secretary of the
Treasury to be excess to the normal requirements of the United
States, shall be made available to appropriate committees of the
Congress engaged in carrying out their duties under section 136
of the Legislative Reorganization Act of 1946, (as amended), and to
the Joint Committee on Atomic Energy and the Joint Economic Com-
mittee and the Select Committees on Small Business of the Senate and
House of Representatives for their local currency expenses [:Provided,
That each member or employee of any such committee shall make, to
the chairman of such committee in accordance with regulations pre-
scribed by such committee, an itemized report showing the amounts
and dollar equivalent values of each such foreign currency expended
and the amounts of dollar expenditures made from appropriated funds
in connection with travel outside the United States, together with the
purposes of the expenditure, including lodging, meals, transportation,
and other purposes. Within the first sixty days that Congress is in
session in each calendar year, the chairman of each such committee
shall prepare a consolidated report showing the total itemized expendi-
tures during the preceding calendar year of the committee and each
subcommittee thereof, and of each member and employee of such
committee or subcommittee, and shall forward such consolidated report
to the Committee on House Administration of the House of Repre-
sentatives (if the committee be a committee of the House of Repre-
sentatives or a joint committee whose funds are disbursed by the Clerk
of the House) or to the Committee on Appropriations of the Senate (if
the committee by a Senate Committee or a joint committee whose funds
are disbursed by the Secretary of the Senate). Each such report sub-
mitted by each committee shall be published in the Congressional
Record within ten legislative days after receipt by the Committee on
House Administrative of the House or the Committee on Appropria-
tions of the Senate.]. Any such excess local currencies shall not be made
available (1) to defray subsistence expenses or fees of witnesses ap-
pearing before any such committee in the United States, or (2) in
amounts greater than the equivalent of $100 a day for each person,
exclusive of the aetual cost of transportation.
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XII. NEW PROVISIONS OF LAW RELATING TO
INDOCHINA
WITHDRAWAL OF UNITED STATES FORCES FROM INDOCHINA
SEC. 406. (a) The Congress hereby finds that the repeal of the joint
resolution entitled "Joint Resolution to promote the maintenance of
international peace and security in Southeast Asia", approved
August 10, 1964 (Public Law 88-408), known as the Gulf of Tonkin
Resolution, has left the Government of the United States without
congressional authority for continued participation in the war in
Indochina. Therefore, in order to bring an end to the involvement of
the armed forces of the United States in the hostilities in Indochina,
to secure the, safe return of United States' prisoners of war Weld by
North Vietnam and its allies, and to help bring about a political set-
tlement of the war in Indochina., it is the sense of the Congress that
it should be the policy of the United States to provide for the expedi-
tious withdrawal froni Indochina of all United States armed forces.
(b) On and after the date of enactment of this Act, in order to
carry out the policy of withdrawal of all United States armed forces
from Indochina, funds authorized for use by such forces by this or
any other Act may be used only for the purpose of withdrawal of all
such forces from Indochina and may not be used for the purpose of
engaging such, forces in hostilities in North or South, Vietnam, Cam-
bodia, or Laos, except for actions necessary to protect those forces
against imminent danger as they are withdrawn.
TERMINATION OF UNITED STATES MILITARY OPERATIONS IN INDOCHINA
SEC. 407. t is hereby declared to be the policy of the United States
to terminate at the earliest practicable date all military operations of
the United States in Indochina, and to provide for the prompt and
orderly withdrawal of all United States military forces not later
than six months after the date of enactment of this section subject to
the release of all American prisoners of war held by the Government of
North Vietnam and forces allied with such Government. The Congress
hereby urges and requests the President to implement the above ex-
pressed policy by initiating immediately the following actions:
(1) Establishing a final date for the withdrawal from Indochina of
all military forces of the United States contingent upon the release
of all American prisoners of war held by the Government of North
Vietnam and forces allied with such Government, such date to be
not later than six months after the date of enactment of this Act.
(2) Negotiate with the Government of North Vietnam for an im-
mediate cease-fire by all parties to the hostilities in Indochina.
(3) Negotiate with the Government of North Vietnam for an agree-
ment which would provide for a series of phased and rapid with-
drawals of United States military forces from Indochina in exchange
for a corresponding series of phased releases of American prisoners
of war, and for the release of any remaining American prisoners of
war concurrently with the withdrawal of all remaining military forces
of the United States by not later than the date established by the
President pursuant to paragraph (1) hereof or by such earlier date as
may be agreed upon by the negotiating parties.
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Approved For Release 2002/05/02 : CIA-RDP73600296R000400170001-9