Washington, DC
March 11, 2019

MR PALLADINO: Thanks. Thank you all for coming today, for joining us for the rollout of the President’s Fiscal Year 2020 budget request for both the State Department and the U.S. Agency for International Development. Happy to at the top turn this over to the Deputy Secretary of State, John J. Sullivan, and the USAID Administrator Mark Green for opening comments. At the conclusion we’ll invite some subject matter experts up to kind of drill down on some of the detailed questions that you might have.

Thank you. Deputy Secretary Sullivan.

DEPUTY SECRETARY SULLIVAN: Thank you, Robert, for that introduction, and I want to thank my friend and colleague USAID Administrator Ambassador Mark Green for joining me here today to present the Fiscal Year 2020 budget request for the Department of State and USAID.

Before we get started, I want to say on behalf of the Department of State that we want to extend our deepest condolences to the families and loved ones of those killed in the tragic crash of Ethiopian Airlines Flight 302. There were a number of American citizens on that flight, people who worked for the United Nations, United Nations-affiliated organizations, friends, colleagues, partners of ours. It’s really an extremely sad and tragic moment for us, and our colleagues in Addis and Nairobi and Washington are working very hard to provide all the appropriate consular assistance that we can to the families of the victims at this difficult time.

Getting to the subject of hand – at hand, the President’s Fiscal Year 2020 budget request is for $40 billion for the Department of State and USAID. With this funding level, we will protect our citizens at home and abroad, advance American prosperity and values, and support our allies and partners overseas.

The State Department and USAID are on the front lines of the most pressing foreign policy and national security issues facing our country today. Staffing from both of our agencies are working very hard each day to protect American freedom; hold China and Russia accountable as members of a rules-based international system; support the people of Venezuela as they work toward a peaceful restoration of democracy in their country; prevent infectious disease outbreaks from reaching our borders; assist countries to become self-reliant economic and security partners; and so much more.

With all of this on the line, we need all of our colleagues – our entire team – to be safe, prepared, and ready to take on any new challenges at a moment’s notice. Keeping our citizens safe and secure requires constant vigilance and adequate resources.

Our Fiscal Year 2020 budget request prioritizes the safety of our diplomatic and foreign assistance staff overseas. It protects chief of mission personnel from emerging threats and invests in safe, secure, and functional facilities. It will enable both the State Department and USAID to recruit, sustain, and train our global diplomatic and development workforce. Our agencies are developing new capabilities for the 21st century.

Together, with so many critical goals to advance on behalf of the American people, the State Department and USAID need resources for both diplomatic and foreign assistance programs. The Fiscal Year 2020 budget request accounts for those resources and puts U.S. foreign policy on firm footing to move into the future. Our request is guided by the principle that taxpayer dollars must be used wisely. We want to maximize the investment made by the American people and deliver exceptional results on their behalf.

President Trump has made it clear that U.S. foreign assistance should serve America’s national interest and should support those countries that help us to advance our foreign policy goals. This budget maintains critical support for key U.S. allies, including Israel, Jordan, Egypt, and Colombia. Through strategic funding and programming, this budget positions the United States to win. This means ensuring our nation is fully engaged in regions of the world upon which our national security and future prosperity depend.

In recent years, we have seen China proactively applying its power to exert its influence in the Indo-Pacific region and beyond. Under President Trump’s leadership, the United States has taken decisive steps to respond to China’s aggressive actions. We recognize that the United States’ future security, prosperity, and leadership depends on maintaining a free, open, and secure Indo-Pacific region. To advance the Indo-Pacific strategy, the budget request nearly doubles U.S. foreign assistance and diplomatic engagement resources to the region.

Our budget request is also guided by the realization that the threats imposed by Russia have evolved beyond external or military threats and now include influence operations in the very heart of America and the Western world. This budget prioritizes countering Russian malign influence in Europe, Eurasia, and Central Asia.

As we speak, the people of Venezuela continue to fight for their freedom in the face of a tyrannical and corrupt leader who refuses to step down. The Fiscal Year 2020 budget request includes funding to support democracy in Venezuela and provides the flexibility to make more funds available to support a democratic transition, including up to $500 million in transfer authority.

In the past year, the United States has been out front in global efforts to help persecuted religious and ethnic minorities in the Middle East and elsewhere. On a trip to Iraq last fall, I experienced first-hand the positive impact of this kind of assistance and what it has done in these devastated communities. Working with local actors and community leaders, our assistance programs clear the explosive remnants of war to help keep families safe, restore access to services like health and education, improve economic opportunities, and more. But there is much more work that needs to be done.

The Fiscal Year 2020 budget supports an increase in our efforts to empower religious and ethnic minorities, including requesting funds for new opportunities among different communities in need, and continuing U.S. leadership to promote global religious freedom.

In addition, our budget request for Fiscal Year 2020 includes a Diplomatic Progress Fund so we can effectively respond to new opportunities arising from diplomatic and peace progress and emerging counter-Iran needs.

The diplomatic challenges we face today are particularly difficult due to rapid, continual advances in media and technology. Our human resources and organizational structures must keep pace with these changes. The Fiscal Year 2020 budget fully funds State and USAID's current workforce levels, enabling us to take on emerging policy challenges.

The priority we place on safety and security extends beyond physical facilities to our networks and data. The budget request will seek to strengthen the State Department and USAID IT systems, prioritizing cybersecurity enhancements.

And speaking of the threats to our homeland, there are few efforts as important to this administration and to the safety and security of the American people as securing our borders. The State Department and USAID budget request will support U.S. border security by strengthening visa vetting; targeting illicit pathways that transnational criminal organizations are using to traffic drugs, money, weapons, and even human beings from the Western Hemisphere; and enhancing governance and boosting local economies to discourage illegal immigration.

Our budget request for Fiscal 2020 also protects against infectious disease threats by bolstering country capacity to prevent, detect, and respond to any future outbreaks and prevent epidemics. These efforts mean retaining our place as a global leader in health assistance. With this budget, the United States will remain the single largest donor to global HIV/AIDS relief efforts.

Several other important additions to the Fiscal Year 2020 budget request will increase private sector involvement in global development, optimize our humanitarian assistance, and advance partner countries in their journey toward self-reliance. My colleague USAID Administrator Ambassador Mark Green will introduce those vital elements of the 2020 budget request shortly.

Through all of these efforts, and more, our budget promotes American interests while continuing our country’s legacy as a beacon of freedom to the world. The President’s budget request for Fiscal Year 2020 sets our agencies, and our country, up for success, and I appreciate the opportunity to introduce it to all of you this afternoon.

Again, thank you for joining us, and with that I will turn it over to Ambassador Mark Green.

MR GREEN: Thank you, Deputy Secretary Sullivan. John laid out well, I think, a number of the USAID and State shared priorities, so I’ll keep my remarks relatively brief. But I would like to begin in joining him in expressing our sadness over the many lives lost in yesterday’s Ethiopian Airlines crash. As was mentioned, we understand that it included at least eight U.S. citizens, as well as a number of members of USAID partner organizations. As many of you know, I have a really deep gratitude and admiration for the many heroes of humanitarian work, and this particular route and this particular flight was used regularly by humanitarian and development organizations in the region. People working each and every day to save lives and make the world just a little bit better place despite the risks. Our hearts go out to all of those who lost loved ones and our thoughts and prayers are truly with them during this difficult time.

With that, on to the more mundane subject of the budget.

While fiscally conservative, I believe this budget’s request will support our goal of advancing countries on their journey to self-reliance. It aims to help partner countries build capacity so they can eventually take on their own development challenges.

By supporting our tools aimed at reducing the reach of conflict, spreading the – or preventing the spread of pandemic diseases, and counteracting the drivers of violence, instability, and other security threats, this budget will strengthen U.S. national security.

It also strengthens American economic leadership by supporting our investments that expand markets for American goods, leveling the playing field for American businesses, as well as supporting more stable, more resilient, and more democratic societies.

As many of you have noted in recent months, many parts of the world have seen an exponential growth of predatory financing that is dressed up as foreign assistance.

This budget supports USAID’s efforts to aggressively communicate the stark differences between authoritarian financing tools and the approach that we and our allied donor nations use. Our approach is true assistance. It helps partner nations build their own self-reliance and a more dynamic, private enterprise-driven future. It incentivizes reform to spur private enterprise and free markets, attract investments, and again, foster self-reliance.

We also aim to help partner countries recognize the costs of alternative models, like those of China and Russia. Their approach seeks to weaken confidence in democratic and free market systems, saddle countries with unsustainable debt, lead to the forfeiture of strategic resources, and further the militaristic ambitions of those authoritarian actors. In coming weeks, we will unveil a framework that we’ll use to help counter malign Kremlin influence, especially in Europe and Eurasia and Central Asia, and this budget supports that work.

Our efforts in this regard will be made easier as the new development finance corporation is stood up later in the year.

It will also be made more clear as the Trump administration accelerates our partnerships in the Indo-Pacific. I firmly agree with the deputy secretary that our security and prosperity at home is closely tied to a stable and free Indo-Pacific region. Working with State and others, our strategic investments will promote open, transparent, and citizen-responsive governance across that Indo-Pacific region.

A third way we will be able to sharply contrast our approach is through the administration’s efforts to promote inclusive economic growth, especially at it relates to full economic participation by women around the world. The National Security Strategy clearly identifies women’s empowerment as a priority integral to economic prosperity and global stability. Last month, the President signed a presidential security memorandum decisively linking the ability of women to participate fully and freely in the economy with greater peace and prosperity across the world.

We have also officially launched the Women’s Global Development and Prosperity Initiative, known as WGDP, which aims to economically empower 50 million women in developing countries by the year 2025. The WGDP fund, established at USAID, included an initial commitment of 50 million U.S. dollar – 50 million U.S. funds from Fiscal Year ’18. Support is being doubled in this budget proposal to $100 million for the fund to support workforce development and skills training, greater access to capital, and changes to the enabling environment so that around the world, women all have the opportunity to reach their full economic potential.

As you all know, USAID is not only our lead agency in development assistance, but we are known around the world for our humanitarian assistance and crisis response as well. The U.S. will continue its role as the world leader in humanitarian assistance, but we’ll also call on others to do their part and we’ll work relentlessly to assure that assistance is delivered as effectively and as efficiently as possible.

The consolidation of our overseas humanitarian assistance program funding within our new Bureau for Humanitarian Assistance supports the administration’s commitment to optimize humanitarian investments by leveraging the strengths at both State and USAID.

Nowhere is America’s leadership in humanitarian assistance more important, or quite frankly, more timely, than in our continued response to the man-made, regime-driven crisis in Venezuela. The Department of State and USAID are committed to providing support to those affected by the ongoing humanitarian crisis. We are also both dedicated to supporting a future democratic transition for the people of Venezuela. We vow to stand with them as they fight for a government that represents their interests and is responsive to their needs.

This budget significantly expands our investments in another kind of freedom – as the deputy secretary mentioned, the freedom of religion. In particular, we will continue our important assistance to those religious and ethnic minorities in the Middle East whom ISIS sought to extinguish.

Finally, the 2020 budget aligns closely with and supports the implementation of USAID’s internal reform initiative or transformation. This will allow us to strengthen our core capabilities, increase our efficiency, and ultimately reduce costs. We’re creating an agency that is capable of leveraging our influence and authority and available resources to transform the way that humanitarian and development assistance are provided. And alongside the rest of the world, we will work hard and forcefully to meet the daunting challenges that we all face.

While the funding generously provided by Congress is never enough to meet every demand and every need in the world, we will ensure that USAID remains the world’s premier international development agency and continues the work we do each day and every day to protect America’s future security and prosperity.

And thank you for the honor of being able to be with you today. Thank you.

MR PALLADINO: Thank you, Administrator Green and Deputy Secretary Sullivan. Very wonderful to see you.

QUESTION: Wait. Wait, wait, wait, wait. You’re not going to take questions?

MR PALLADINO: Yeah, we’re inviting experts up now to --

QUESTION: I’d rather ask a general question.

MR PALLADINO: What’s the general question?

QUESTION: (Off-mike.)

QUESTION: The – this is --

MR PALLADINO: Come on, guys. We’ve got --

QUESTION: What, they’re --

MR PALLADINO: We have --

QUESTION: They can’t defend the entire budget?

MR PALLADINO: We have folks that can do that just now – right now, right before you.

And we have three subject matter experts: Eric Ueland, who is our director, Office of U.S. Foreign Assistance, from the State Department. We’ve got Doug Pitkin, who is our director for the Bureau of Budget and Planning from the State Department. And from USAID, Tricia Schmitt, who is our director, Office of Budget and Resource Management. They’re more than capable of answering your questions. Please.

QUESTION: Well, right. I was just hoping that the deputy or the administrator would give an answer.

MR PALLADINO: And they may – yes, here we go.

QUESTION: All right. So can I – so it’s opening – open for questions?

MR PALLADINO: Please, go ahead, Matt.

QUESTION: Okay. So this is the third year in a row, the third time this administration has gone to Congress with a proposal that would slash the funding for this – for diplomacy and development by roughly 25 percent – even more the first time around. Congress has soundly rejected those proposals the last two times, and those two times the party of the administration controlled both houses of Congress. This year it’s a little bit different. The chairman of the House Foreign Affairs Committee has just said that this budget proposal is dead on arrival; it’s a 24 percent cut.

So I’m wondering, given the fact that you can’t possibly think that Congress is going to go along with this, and that you’re going – and that these cuts are going to happen – in fact, you may end up getting more than you got – than you didn’t want last year – how do you argue against people who say that repeatedly bringing these massive cuts to the Hill doesn’t mean that the administration isn’t trying to gut diplomacy and development, gut the State Department, gut USAID, and doesn’t – really doesn’t have any regard for this – the institution?

MR PITKIN: I’d say twofold. First off, it’s important to look at this request in the context of the administration’s overall approach to non-defense discretionary spending, which, let’s make clear, is not sustainable given the U.S.’s current fiscal picture. And so this is part of an overall effort to constrain and reduce non-defense spending by about 5 percent starting now, and continue that path for the next 15 years to try to get our overall fiscal picture in some semblance of order while still prioritizing some things like defense, border security, veterans, and some other programs that OMB will speak to shortly. So I think it has to be looked at in that context.

It also sets priorities in terms of what programs the administration and the department believes should be prioritized for funding in the context of that constraint, and so there are certainly things that, relative to the last two requests, we’ve made new investments and we’re posed to sustain. So the last two budgets, for example, included reductions to State and AID personnel. This budget does not propose that. This budget sustains and enables new investments in the personnel workforce of both agencies. It continues to prioritize the security and safety of our diplomatic presence overseas and does target selected initiatives such as the Global Engagement Center for additional resources.

But otherwise, you’re right. It does contain some reductions in some programs and efforts that the administration, as outlined in the last year – and I’m sure it’ll be this year, Major Savings Volume – it believes are either a lower priority or perhaps are not the best use of taxpayer dollars. An example of that is continuing to request lower amounts for contributions, international organizations, than Congress has provided as an effort to try to drive greater burden-sharing among those organizations. And so there are some themes that’ll be continuous over this three-year period, but we recognize this is a back-and-forth with Congress, and just because they – Congress has not taken up some of the reductions that were reposed over the last three years does not change the administration’s position.

QUESTION: They haven’t taken up any of them. And if you want to reduce the overall budget by 5 percent, why does State and USAID have to take an almost 25 percent cut, not a 5 percent cut?

MR PITKIN: I mean, it’s two factors. One is they make this – the budget is decided both on specific programs, so it looks at specific programs like the contributions I mentioned. It proposes a lower amount based upon the merits of those investments relative to other domestic priorities. And also, again, because we are – there are going to be investments, as OMB will roll out, in other non-defense programs – there are going to be offsets in other parts of the budget.

QUESTION: Well, it just sounds to me like you can’t make a case against the argument that critics of this will make, which is that you’re – you cannot make a case that you’re not trying to gut diplomacy and development. That sounds like what your answer is. Is that wrong?

MR PITKIN: I would not – I would actually – we would argue this does support diplomacy and development, just at a different set of priorities with lower spending on some programs.

MR PALLADINO: Let’s go Bloomberg, Nick Wadhams.

QUESTION: Hi, Nick Wadhams with Bloomberg. Can you explain the message you’re trying to send by fulling eliminating the item for international disaster relief and also cutting migration and refugee assistance by $2.5 billion? So what’s the specific message with the decision – I mean, recognizing, as Matt says, that this won’t be acted on, what message are you trying to send specifically by essentially eliminating those two items?

MR UELAND: Well, actually, if you review the entirety of the proposal, you’ll see that while specific funding was proposed for elimination in those accounts, that funding has actually migrated to a new account, the international humanitarian assistance account, which is proposed for funding at a record – at a level over $6 billion, which ensures that United States continues to be a leader on humanitarian assistance throughout the world. The budget will recommend a series of potential changes for Congress’s consideration in the structure and delivery of humanitarian assistance, and so as you review +the details of the volume, you’ll see that President’s commission from June 2018, where they discussed potentiality of optimizing humanitarian assistance delivery, is reflected in this budget proposal.

So the ’20 request consolidates all overseas humanitarian assistance from the international disaster assistance and migration and refugee assistance accounts into this new single, flexible account, the IHA. The IHA is administered by the administrator of USAID under the authority of the Secretary of State. This new account and organizational structure will enable the U.S. Government to respond seamlessly to ongoing as well as new humanitarian needs – the most vulnerable displaced people in the world and other affected populations. The new proposed high-level dual-hat leadership recommended in the budget also elevates humanitarian assistance within the U.S. Government to more effectively address the continuum of response, including diplomacy, from relief to conflict resolution and to the eventual transition from aid. The request restructures our overseas humanitarian programming to enable to the United States to respond seamlessly to evolving humanitarian needs, achieve optimal UN reforms, an induce other donors to do their fair share while resolving ongoing crises.

QUESTION: Can I just ask a follow-up on that?

MR PALLADINO: Sure, go ahead.

QUESTION: For – the – in his statement at the start of this briefing, Deputy Secretary Sullivan made explicit as well that humanitarian assistance would go primarily to countries that support U.S. policies. Is that now the official government policy?

MR UELAND: I think you’re blending a couple of concepts that the Deputy Secretary of State discussed. There’s no question that there are a variety of priorities the Secretary’s laid out for us and the administrator in constructing this budget, one of which is working on behalf of the American taxpayer to provide appropriate resources and assistance to our friends and allies around the world. Second is to position ourselves to continue to compete strongly in the great power competition. Third is to support the opportunity and options for countries to evolve as they move on a journey to self-reliance, and finally, to focus on opportunities at every point possible to enhance burden-sharing. You’ll see many elements of the budget that reflect these four emphases of the Secretary.

MR PALLADINO: Washington Post.

QUESTION: The creation of that international humanitarian assistance account actually, I’m finding, makes it very difficult to make comparisons. Do you have some sort of figure that you can provide on how much was spent in settling migrants and refugees last – or this existing year compared to what is being proposed? Because it seems you’re not even spending what Congress has appropriated for you. And also, is there some sort of restructuring going on in PRM? And while I have you, if I could just also ask: I don’t understand why you’re making such deep cuts in global health.

MR UELAND: Couple of things. First, yes, we are certainly happy, as information develops, to provide specific numbers to you as we work through both the implications as well as the actual facts of what’s occurred on humanitarian assistance, both for us and USAID. So happy to provide that to you. When it comes to PRM, the restructuring here is an objective to try to replace outdated, fragmented structures. We’re spread across four accounts. Responsibility is in three offices. And so we’re attempting both to consolidate account, but also accountability when it comes to providing humanitarian assistance. PRM’s role will continue when it comes to significant refugee assistance work, as well as work they do in resettling migrants from Israel, as well as providing the Secretary and the entire integrated team a political and diplomatic strategy when it comes to dealing with refugee challenges around the world.

QUESTION: And what about global health? There seem to be really steep cuts being proposed in global health, including PEPFAR.

MR UELAND: Well, thanks for the question. I think just a couple points on global health in general, and then certainly PEPFAR in particular. The budget proposal that we’re sending to Congress today actually includes significant resources for global health, and certainly, year-to-year comparisons of the request demonstrate that we are not reducing proposed, recommended expenditures for global health. In fact, we are sustaining significant resources for global health, and happy to walk through the details on that. That includes both specific funding for PEPFAR as well as for the Global Fund. As you know, the Global Fund is about ready to launch its sixth replenishment cycle. And so we budget for both that as well as PEPFAR, PEPFAR to ensure that no single individual loses coverage versus where they are today by virtue of the resources that we provide to Dr. Birx and PEPFAR. And then, the Global Fund, by proposing both resources and a new way of funding to ensure that the amount unlocked by a U.S. pledge for the Global Fund would be the most ever in the Global Fund’s history if accepted by our international partners.

QUESTION: Seems to be going from $8.7 billion to 6.3. That’s $2.5 billion less.

MR UELAND: And again, I’m happy to provide details FY19 versus FY20 requests.

MR PALLADINO: We can get more details. Right here, please. Go ahead.

QUESTION: Thank you. I have a specific question about Colombia. In the INL budget, it says that it has been – there has been a significant increase in the funds requested for Colombia in the fight against drugs. And I was wondering why is that, and if the U.S. Government is worried about an increase in the coca production, and that’s why.

MR UELAND: Well, I appreciate the question, and the answer, you definitely do touch on it. The resources recommended for Colombia for consideration by Congress in the FY 2020 budget anticipate the potentiality of partnering with Colombia, not just on its current efforts (inaudible) of – related to the peace settlement, dealing with some of the regional consequences of the migration flows from Venezuela, and the current eradication process underway. But in the event the supreme court rules and allows the government to resume aerial eradication, provide resources from the United States for that program. So that’s why you see significant uptick in recommended resources for Colombia for FY 2020.

MR PALLADINO: This is the last question. Michel, why don’t you go right ahead.

QUESTION: Yeah, I had a question related to the – to foreign aids. Do you have numbers or figures related to the aids to Israel, Egypt, and Jordan?

MR PITKIN: Thank you for that question. In the recommended budget for FY 2020, the recommended amount for Israel, Egypt, and Jordan is a straight line extension of last year’s proposed amounts. So 3.3 billion for Israel, consistent with our memorandum of understanding with the government, and then concomitantly, consistent with our memorandum of understanding with Jordan, as well as our previous expenditures – recommended expenditures for Egypt from last year.

QUESTION: Do you have the numbers?

MR PITKIN: I can get those to you, but again, they’re consistent with last year’s numbers.

QUESTION: Thank you.

QUESTION: Nike has a question if you don’t --

QUESTION: (Off-mike.)

MR PALLADINO: Last question. Nike Ching, go ahead.

QUESTION: Yes. So there has been discussion to have a new cybersecurity bureau. I was reading the congressional justification budget – the fact sheet. I don’t seem to find the funding for a cybersecurity bureau. Could you please shed some light on that? And then, is it still a plan to have that bureau under the authority of the undersecretary of state for arms control and international security?

MR PITKIN: The department is working on a proposal. We’re still in the initial planning stage, and since we have not formally provided that proposal to Congress, it was not proposed in the budget. But the budget, once the proposal comes forward, will provide the flexibility to address that bureau should the administration and Congress move forward. But we’re still in the planning stages on that proposal, fairly close to the outlines that you mentioned, but because it had not been formally signed off on, and then informed the Hill of – prior to the release, it was not shown the budget. But once it’s released, we’ll be able to explain both to Congress and to all of you how it tracks with the funding levels in this request.

QUESTION: Structure wise, would that be under the arms control, international security bureau?

MR PITKIN: I don’t want to get ahead of the actual formal submission, but it’s something that the department is working on, and then once it’s released we’re happy to come back and provide details based upon the proposal that’s put forward.

MR PALLADINO: Great, thank you all very much, thanks.