Mr. Chairman, I do have a statement for the record, which I would like to submit, and then I have a short, oral statement I would like to present.

CHAIRMAN LUGAR: It will be printed, in full, in the record.

SECRETARY POWELL: Thank you very much, Mr. Chairman. Let me begin first by thanking the Committee for the strong support that you have provided to the Department over the past 2 years. It has been a source of great personal inspiration to me, but beyond that, it has been a source of inspiration to the men and women of the Department of State to know that their Congress, and especially this Committee is firmly behind them, firmly behind what they are doing on this front line of diplomacy.

At one point when I first came into the Department I would say we are the front line of -- we are the defense of our national interests. And my staff corrected this old soldier by saying, "No, we are on the offense and our diplomacy should be offensive in nature, taking our message and taking our value system and taking what we believe out to the rest of the world." And that is the attitude we have tried to convey throughout the Department.

We also take our casualties. Last year, I lost three members of my State Department family -- two dependents killed in a bomb attack in Pakistan and a member of our USAID family in an assassination in Amman, Jordan. But today, as we sit here, today as we worry about the military conflict that may or may not be ahead of us, diplomats of the United States of America and USAID employees and Peace Corps employees and all sorts of individuals who are out in our diplomatic force are at risk every single day from terrorism and from those who would try to destroy our way of life, those who believe that by attacking our diplomats they are attacking the United States directly. And I just am pleased that this Committee understands the sacrifice that they make -- them and their families -- and you support so strongly.

I was struck by one statistic you mentioned, Mr. Chairman, and that was, since the days of Ronald Reagan, the overall budget for this kind of assistance, our foreign assistance has dropped 44%. The other thing that is significant about that statistic is that it also suggests that the filter through which we used to look at foreign affairs funding has changed. It used to be through the filter of the Cold War. How do we influence different parties on different sides of the Cold War border?

Now, it's a lot different. Now we have to worry about poverty. We have to worry about HIV/AIDS, we have to worry about nations that are no longer behind an iron curtain or a bamboo curtain and are trying to find their way forward to democracy in the free enterprise system; and I think what we are trying to do reflects that changed world.

And that is why I believe that the budget I am defending today on behalf of the President is deserving of your full support. Obviously, I am here to defend the President's budget, but I know that there will be adjustments that will be made and different members of the Committee, different members of the Congress, will have different ideas as to priorities and as to amounts that should go to the various priorities; and we look forward to working with you on that prioritization as we go forward. The statistics as to whether it is an increase or how much of an increase will also be a factor that has to be considered later after we see what we get in 2003. So I once again encourage all support possible for bringing to a closure the 2003 process in a way that supports the efforts of the Department of State.

To my opening statement then, Mr. Chairman, I just want to say that I am pleased to appear before you to testify in support of the President's International Affairs Budget for Fiscal Year 2004. Funding requested for 2004 for the Department of State, USAID, and other foreign affairs agencies is $28.5 billion.

The President's budget will allow the United States to target security and economic assistance to sustain key countries supporting us in the war on terrorism and helping us to stem the proliferation of weapons of mass destruction. It will also help us launch the Millennium Challenge Account, a new partnership generating support to countries that rule justly, invest in their people, and encourage economic freedom, help us strengthen the U.S. and global commitment to fighting HIV/AIDS and alleviating humanitarian hardships, combat illegal drugs in the Andean Region of South America, as well as bolster democracy in one of that region's most important countries, a country that is under siege, Colombia. And, the budget will reinforce America's world-class diplomatic force focusing on the people, places and tools needed to promote our foreign policies around the world.

I am particularly proud of that last goal, Mr. Chairman, because for the past 2 years, I have concentrated on each of my jobs, first as primary foreign policy advisor to the President, but also, and in my judgment just as important, Chief Executive Officer of the State Department.

Under my CEO hat, we are asking for about $8.5 billion. And let me give you some highlights of what these funds are for. First, we have been reinforcing our diplomatic force for 2 years and will continue to do so in Fiscal Year 2004. We will hire 399 more professionals to help the President carry out the nation's foreign policy. This hiring will bring us to the 1,100-plus new foreign and civil service officers we set out to hire over the first 3 years of my tenure, to bring the Department's personnel back in line with its diplomatic workload.

Mr. Chairman, I am so proud of the young men and women who want to be a part of the diplomatic service and the civil service that supports the State Department. In the 2 years that I have been Secretary, and I really want to blow the Department's horn on this, 80,000 Americans, 80,000 Americans have turned up to take the Foreign Service Exam to be a part of this diplomatic force, to be a part of our outreach into the community. This is a significant increase over any other period you may wish to look at in past years. It didn't happen just because it happened. It happened because we made an effort to take our case to the American people and to encourage young people to come into the force.

I was distressed to find that for a number of years in the 1990s, we didn't hire any Foreign Service Officers. Some years, we didn't even have the test. That was outrageous. You know, if you want a battalion commander 15 years from now, you've got to hire a second lieutenant now. If you want an ambassador, a career ambassador, fully qualified, speaking four languages, knowing all that he or she should know 15 years from now, you've got to bring in a Foreign Service or Junior Officer now. And we had not done that for years.

It would be a tragedy after encouraging 80,000 young people to get interested in the Foreign Service, to discover that we can't even hire 399 in any one year. So please, I implore the members of this Committee to give me what I need to support our diplomatic readiness initiative, bringing live, live young people who really want to be a part of this Department, really want to be a part of our diplomatic force, to bring them into the Department so that they can come to the Department, learn what it is to be a young Foreign Service Officer, and I invite you to come down to one of our swearing-ins, when either Rich Armitage or I talk to these youngsters, they raise their right hand, and you have never seen such enthusiasm on the face of youngsters to go out and serve their nation. So please, support that initiative.

Second, I promised to the members of the Department that I would bring state-of-the-art telecommunications, and computer and Internet capability to the Department. Because people who can't communicate rapidly and effectively in today's globalizing world can't carry out our foreign policy. And we are approaching our goal in that regard, as well.

Internet capability on every desk, everywhere in the State Department, in every embassy, at every mission, at every far-flung post. Yesterday after I spoke at the UN, within minutes, it was all being translated, it was all being put on CD-ROM, it was all being fired over the Internet to every embassy in the United States' system in order to get the word out. It goes to one of the goals you touched on earlier, Mr. Chairman, getting the word out, touching the world, letting people know what we think, what we believe.

And this morning my staff was proudly showing me all of the website products that they had produced overnight and everything else they have done to get the word out. I was musing with my staff this morning that increasingly, we live in a world of pictures and a world of television.

My presentation yesterday went out around the world and people saw it. There was a picture in of our newspapers this morning of a group of young Marines sitting on an aircraft carrier watching the presentation live. They are not waiting for it to be written up. They are not waiting for somebody to comment on it. They are not waiting for a talking-head to tell them what they saw. They were seeing it 10,000 miles away in real time, and making their own judgment.

We have to make sure that we give all of our diplomats in every embassy the same kind of real time capability to know what is going on and to convey that message to all of the audiences that we have to deal with around the world. In both unclassified and classified communications capability, including desktop access to the Internet, every man and woman in the State Department must be connected. And this budget will put us there, or at least move us well along in that direction.

Finally, with respect to my CEO role, I really wanted to sweep the slate clean and completely revamp the way we construct our embassies and other overseas buildings, as well as improve the way we secure our men and women who occupy them -- men and women who are in danger. That task is a long-term one. It is an almost never-ending one, particularly in this time of heightened terrorist activity. But we are well on the way to implementing both the construction and the security tasks in a better way, in a less expensive way, in a way that subsequent CEOs of the State Department can continue and improve on.

I want to brag about our overseas building operation under the leadership of retired General Chuck Williams and what a great job they are doing in bringing the costs down of our embassy facilities around the world, and doing it in a way that makes maximum use of modern technology, modern construction techniques, and modern construction management techniques, standardization of our products, but at the same time, doing it in a way that is sensitive to the culture of each country in which our facilities are located.

Mr. Chairman, as the principal foreign policy advisor to President Bush, I have priorities, as well. Let me highlight our key foreign policy priorities before I stop and take your questions. And while I am talking about foreign policy, I want to thank this Committee for the 19 - 0 vote, yesterday, for the Moscow Treaty. I hope this Committee will continue to give its full support to this important treaty as the full Senate considers its ratification.

I would hope, Mr. Chairman, that it would be possible to have this treaty ratified by the end of this month if at all possible. Yesterday, I spoke to my Russian Federation colleague, Igor Ivanov, Foreign Minister Ivanov, and they are prepared to move it through the Duma, as well. And I hope that before this spring or perhaps maybe before the fall is out, we will be in a position to exchange the instruments of ratification between the United States of America and the Russian Federation.

Mr. Chairman, the 2004 budget proposes several initiatives to advance U.S. national security interests and preserve American leadership. The 2004 Foreign Operations Budget that funds programs for the Department of State, USAID and other agencies is $18.8 billion. Today, our number one priority is to fight and win the global war on terrorism. The budget furthers this goal by providing economic, military and democracy assistance to key foreign partners and allies, including $4.7 billion to countries that have joined us in the war on terrorism.

Of this amount, the President's budget provides $657 million for Afghanistan, $460 million for Jordan, $395 million for Pakistan, $255 million to Turkey, $136 million for Indonesia, and $87 million for the Philippines.

In Afghanistan, this funding will be used to fulfill our commitment to rebuild Afghanistan's road network. It's not just a road, it's something that will connect this country, connect its commercial centers, connect it politically, and start to bring this nation into a sense of unity and not just different regions that are off pursuing their own destiny.

In addition, it will establish security through a national military and national police force. It will establish broad-based and accountable governance through democratic institutions in an active civil society. It will ensure a peace dividend for the Afghanistan people through economic reconstruction and provide humanitarian assistance to sustain returning refugees and displaced persons. The United States' assistance will continue to be coordinated with the Afghan Government, the United Nations and other international donors.

Mr. Chairman, I also want to emphasize our efforts to decrease the threats posed by terrorist groups, rogue states and other non-state actors with regard to weapons of mass destruction and related technology. To achieve this goal, we must strengthen partnerships with countries that share our views in dealing with the threat of terrorism and in resolving regional conflicts.

The 2004 budget requests $35 million for the Nonproliferation and Disarmament Fund, more than double the 2003 request, increases funding for overseas Export Controls and Border Security to $40 million, and supports additional funding for Science Centers and Bio-Chem Redirection Programs. Funding increases requested for these programs will help us prevent weapons of mass destruction from falling into the hands of terrorist groups or states by preventing their movement across borders and by destroying or safeguarding known quantities of weapons or source material.

The Science Centers and Bio-Chem Redirection Programs support the same goals by engaging former Soviet weapons scientists and engineers, engaging them in peaceful scientific activities, providing them with an alternative to marketing their skills to states or groups of concern.

The budget also promotes international peace and prosperity by launching the most innovative approach to U.S. Foreign Assistance in more than 40 years -- the New Millennium Challenge Account, an independent, government corporation funded at $1.3 billion, will redefine development aid.

As President Bush told African leaders meeting in Mauritius recently, this aid will go to nations that encourage economic freedom, root out corruption, and respect the rights of their people. This, I think, is one of our most significant initiatives. I am so proud of it and the President really is showing enormous leadership by instituting this Millennium Challenge Account.

As opposed to looking at foreign aid through who was on the right or wrong side of the Cold War, now we want to know who is on the right or wrong side of democracy, economic democracy, the individual rights of men and women, transparency in government, the end of corruption -- who is on the right and wrong side of those values as we move into this new century. Those nations that are on the right side and are developing will find the United States is there to help them through the Millennium Challenge Account.

Moreover, this budget offers hope and a helping hand to countries that are facing health catastrophes, poverty and despair, and humanitarian disasters. The budget includes more than $1 billion to meet the needs of refugees and internally displaced peoples. The budget also provides more than $1.3 billion to combat the global HIV/AIDS epidemic. The President's total budget for HIV/AIDS is $2 billion, which includes the first year's funding for the new emergency plan for HIV/AIDS relief announced by the President in his State of the Union address.

These funds will target 14 of the hardest hit countries in Africa and the Caribbean. This budget also includes almost a half-billion dollars for Colombia. The funding will support Colombian President Uribe's unified campaign against terrorists and the drug trade that fuels their activities. The aim is to secure democracy, extend security, and restore economic prosperity to Colombia and prevent the narco-terrorists from spreading instability to the broader Andean Region.

To accomplish this goal requires more than simply funding for Colombia. Therefore, our total Andean Counterdrug Initiative is $731 million. Critical components of this effort include resumption of the Airbridge Denial program to stop internal and cross-border aerial trafficking and illegal drugs, stepped-up eradication, and alternative development efforts, as well as technology assistance to strengthen Colombia's police and judicial institutions.

Mr. Chairman, members of the Committee, to advance America's interests around the world, we need the dollars in the President's budget for FY 2004. We need the dollars under both of my hats, CEO and principal foreign policy advisor.

The times we live in are troubled, to be sure. But I believe there is every bit as much opportunity in days ahead as there is danger. American leadership is essential with regard to both the danger and the opportunity.

With regard to the Department of State, the President's 2004 budget is crucial to the exercise of that leadership.

I have given you far more detail on the President's budget in my written statement, and without objection, of course, you have accepted that statement.

I think I will stop at this point, Mr. Chairman and answer your questions. And I know in the course of your questioning, we will deal with the specific questions that you, Mr. Chairman, and Senator Biden raised with respect to Iraq and North Korea and other topical issues.