*EPF411 07/24/2003
House Approves $17.1 Billion FY04 Foreign Aid Spending Bill
(Measure includes funds for AIDS, Millennium Challenge Account) (610)

By Kathryn McConnell
Washington File United Nations Correspondent

Washington -- The House of Representatives has approved a $17.1 billion foreign aid and export assistance spending bill for the fiscal year beginning October 1 (FY04).

The measure passed 370-50 July 23 includes $1.43 billion for administration initiatives to combat HIV/AIDS in Africa and the Caribbean and $800 million for the Millennium Challenge Account (MCA), President Bush's program that would direct foreign aid to countries that meet such standards as investing in education, promoting economic and democratic reforms, and respecting human rights.

The approved funding is below the administration's $18.9 billion request for FY04 but slightly higher than the $16.5 billion enacted for fiscal year 2003.

The House voted July 16 by approximately the same margin to authorize the spending of the amount for foreign aid in FY04.

In cutting $500 million from the administration's request for the MCA, the House signaled that the new program was not yet ready for full funding, according to news reports.

Some members also said the AIDS effort is just beginning and could not appropriately use all of the $3 billion originally proposed by Bush; they cut off attempts to amend the bill by adding either $1 billion or $300 million.

The House did, however, separately approve an additional $644 million to fight AIDS, malaria and tuberculosis in a spending bill for the departments of Labor, Health and Human Services, and Education, bringing the AIDS total funding to more than $2 billion. The administration has pledged to spend $15 billion over five years to fight AIDS globally.

The foreign aid bill would provide $4.7 billion for the U.S. Agency for International Development (USAID), $46 million below the administration's request but $166 million more than FY03 spending. It also would provide $314 million for the Peace Corps.

After the Senate passes its version of the bill, both chambers must then negotiate and pass a final version before sending it to the president for signature or veto.

The bill would fund Bush's requests of $2.2 billion in military and $480 million in economic aid for Israel and $1.3 billion in military and $575 million in economic aid for Egypt. It appropriates $456 million in military and economic aid for Jordan and $35 million for aid to Lebanon. For the first time, it would provide $20 million in aid to the Palestinian Authority.

In approving the measure, the House rejected an attempt to include Syria on the government's list of state sponsors of terrorism ineligible to receive military training aid.

The bill would provide $600 million for humanitarian and reconstruction assistance for Afghanistan but does not include funding for reconstruction in Iraq. Lawmakers said the administration is expected to propose an emergency spending bill for Iraq later this year.

The bill appropriates $45 million for the new Middle East Partnership Initiative (MEPI), which supports economic and social reform initiatives in the region.

It includes $576 million for the republics of the former Soviet Union, $70 million for Kosovo, $46 million for Bosnia, $100 million for Serbia, $35 million for Montenegro, $39 million for Macedonia and $28 million each for Albania, Romania and Bulgaria.

The bill includes $731 million to fight illegal drugs in South America, $1.3 billion for international financial institutions, and $760 million for migration and refugee assistance.

The measure also includes a total of $187 million for export assistance programs, which would be fully offset by incoming loan payments of $306 million, according to news sources.

U.S. foreign aid is less than 1 percent of overall government spending, news sources say.

(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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