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LUNCHEON SPEAKER CONGRESSMAN JIM KOLBE, CHAIRMAN, HOUSE FOREIGN OPERATIONS APPROPRIATIONS SUBCOMMITTEE

FOR IMMEDIATE RELEASE April 3, 2001

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CONGRESSMAN KOLBE: Dan, thank you very much for that introduction. What he didn't include in that was that he, when I came to Congress 15 years ago, Dan was an intern working here in Congress, and I got to know him as he was working with another member, and we became very good friends.

You can see that I've been stuck in my career. I'm still just a congressman, 15 years later, but Dan is now a director here, a governor of the Export Import Bank, so he's done extraordinarily well and I'm delighted to be here. I'm delighted to be, of course, with Senator Bumpers, and Ambassador Strauss. Welcome. It's very nice for me to have this opportunity to join with you.

This could be called a very large caucus, I guess, that you have here, and it makes me think of a story that my former colleague used to tell, Mo Udall, who was one of the great wits of the United States Congress, and he always used to describe what the difference between a caucus and a cactus was. He said, really, the only difference between the two is that in the caucus all the pricks are on the inside.

But that would exclude this caucus, I assure you. That would be a caucus of the Congress that he was, clearly had in mind there. I just want to take a few minutes today to share with you--and I know you'll get a go-ahead, and eat your food, and that's fine, I understand we'll have lots of clanking of plates being cleared, we're doing this in the interests of time.

Those of us who are in Congress learn this goes with the territory.

But I want to just take a few minutes to talk to you a little bit about the foreign policy issues, particularly as it relates to the Export Import Bank.

And I want to begin by saying that I'm sometimes struck by a great disconnect that I see between the members of Congress whose--and the perception that they have of the U.S. role in international affairs, and the reality of the global and political--global, political and economic environment that we operate in.

There's no doubt that today, the United States has emerged from the end of the Cold War as a clear victor, a victor in the economic and the political world, in that sense, but very often it seems that we don't act very much like a winner, or having won it, we shrink back and don't want to exercise the responsibility that we have as the winner of that conflict.

We need to face the challenges that this country have, and they're substantial, as we're seeing every day. We need to face these countries, head on.

I have a lot of confidence in the foreign policy team that has been assembled by President Bush. I think it has, brings a, a breath of fresh air, but also a tremendous amount of expertise and experience to it.

We have, as a result of this, I think, an unprecedented opportunity to help shape the future of the world as we move into the 21st Century, as the, both the political and strategic, on one hand, and the economic relationships between the powers of the world begin to shake out.

This is not a time that we can afford to let our policies and our politics tilt towards unilateralism, towards protectionism, or towards isolationism. We must, as a nation, be engaged in the world.

We must, as a nation, be engaged in the world.

Today's world economy pays very little attention to national borders, and that's a truism that those of you who are engaged in this business know far, far better than I do from the work that you do every day.

As the leader of the number one economy in the world, we need to provide an example as a nation that not only follows the rules of trade and investment, but happens to advance the cause of the private sector, and its ability to facilitate economic growth.

This is the only long-term solution to helping peoples in less-developed countries, those who are underprivileged, those who are poor. In the long run, this is the only real solution to the problems that the rest of the world face, is if we do this, to lift them out of the grinding poverty that so much of the world finds itself in today.

With private investment flows to developing countries, now drowning out official developing assistance from the U.S. and the rest of the donor community, I say--some say that it's time for the U.S. to catch up with more foreign aid.

Instead I say let's help countries with no access to private capital develop that capacity and give people jobs, raise the standard of living for people, and the Export Import Bank is the critical player, it seems to me, in the panoply of agencies and tools that we, as the United States Government, have available to us. They play the central role in making this happen.

Most governments in developing countries understand this. I was just down in Latin America last weekend, and when we were there, looking at the problems of the drug trafficking in Colombia, what was asked for by the president of Colombia was not for more cash aid, but for assistance in extending and expanding the Andean Trade Preference Act, to make it possible for textiles to come into the United States from Colombia.

We were in El Salvador and looking at the devastation of the earthquake there, and they also understand the need for more economic aid. They want an extension of the sugar quota, to get some of the sugar quota that the United States is not using with other foreign countries. They would like that made available to them.

So these countries understand that when they have their own economic and political problems, it is economic aid that can help get them out of the--it is the bootstrap that can lift them up.

Slowly, I think the United States Congress is beginning to understand that as well. For those who believe that the developing world has little relevance to their lives, I think they need to look into the future. Look at the number of asylum seekers, political, but mostly economic asylum seekers, who come to this country, day after day, year after year, crossing the border into the United States and looking for a better job here in this country, for a better life for themselves.

And this is true also in the European Union and some of the other developed areas of the world, but primarily the United States and the European Union.

Look at the future of United States companies and all those stockholders who already realize that these companies' long-term future is based on establishing markets in the developing world, whether that is China or whether it is going to be in India, or Romania, or in Dominican Republic.

Raising the standard of living of these countries directly benefits the United States in terms of reducing the amount of disruption that comes from illegal immigration into the United States.

Turning now to the current political strategy that we find ourselves in, I think we can say that the post-Cold War era is actually, paradoxically, perhaps, a more dangerous, and a more difficult place for people to operate.

There is no more good versus evil, no clear-cut distinction between right and wrong, between the First and the Second World. You don't have the issue of the two superpowers, that pretty much kept a clamp on the world, and making sure that nothing boiled up in some other location, or very rarely did it boil up, and then use the two superpowers, arranged to put the lid back on it.

Now, those superpowers are not there to do that in the rest of the world, and so there is a tendency for other parts of the world to feel free to allow their conflicts, whether they are political conflicts or economic conflicts, or social conflicts, to come to the surface, in a way that probably would have been unthinkable 15 or 20 years ago.

The world community is much more dynamic, and that can either strengthen stability or it can threaten stability.

We need to act in a way that assures that we strengthen the political and economic stability in the world, to mold this international community into a place that fosters stability and prosperity, but we have many areas that of course need our help in actually making that happen.

There is growing fundamentalism and terrorism that threatens many parts of the world, particularly the Middle East. There, we have seen the violence which has erupted, and threatens all the advances that we have over these past several years, being wiped out as the effort to try to reach a permanent peace settlement in the Middle East seems to go--seems to be waning.

We find ourselves with deep and persistent poverty, and epidemics and disease, that ravages so much of Africa and parts of Asia, and of Latin America as well.

We have the threat of nuclear and chemical proliferation by Third World countries now, and that never seems to be very far from the surface.

All of these events, while they may take place off our shores and be a long ways away, affects each and every American.

Congress needs to grasp this reality by fighting back the forces that want isolationism, and unilateralism to creep into our foreign policy goals.

These same views contribute to efforts to further cut the foreign affairs budget and eliminate the Export Import Bank, and about which you know all too well.

Now, let me make it clear about my position on the federal budget and our efforts to try and balance the budget.

I am firmly, 100 percent committed to a balanced budget. I'm committed to a smaller Government, and I think it's imperative that we carefully examine every program, be it foreign or domestic, against the costs, and weigh the costs against the benefits that it has for the American people.

That is what Congress and the administration has to do every day. That is the role of Congress, to establish priorities for spending in our country.

But I also am a firm believer, that when it comes to international affairs, and to the national security of the United States, it is our foreign policy, our diplomatic arm, our economic arm, that is the first line of defense.

It is the military that only provides the backup and is the last line of defense, and that is why I can unequivocally stand here today and tell you that if we want to remain a world leader, Congress must assure that foreign affairs account remains sufficient to meet the challenges of today's world, and the Export Import Bank has a very necessary role to play in all of that.

The foreign affairs account is known as the 150 account of the Budget, and for those of you who want to know more than you need to about all this, it has in, experience in, in several cycles over the past several decades, and I'm sure you've seen them and been a part of all of that.

The last decade's funding levels for the national security, or the foreign affairs account, the 150 account, can be seen almost as symbolic of the U.S. search for its own role in the world, in the wake of the end of the Cold War.

Several developments have a direct impact on Function 150. Appropriately, our military aid and funding for information programs had to be reassessed as the threats to the United States changed with the end of the Cold War.

The number of U.S. embassies overseas grew as the USSR split up, and there were component states, and the number of other states in other countries have continued to grow.

And then we've had six years of tensions, of disagreements, of mistrust between a Republican and a Democratic--a Republican Congress and a Democratic President, that really played a detrimental role in the funding of the foreign affairs function.

Periods of rapid growth were followed by sharp declines during the 1980's. Then there were years in the 1980's and the early 1990's of relatively stable budgets, and then they again fell, first gradually, then sharply, through FY 1997.

Then the foreign policy budget began to rebound slightly in FY 1998 to $19 billion, and then significantly increased in 1999 to $23.4 billion in this last year, or the current year that we're operating in--or the year before, at $22.3 billion.

There's a caveat to this, however, when you look at all these numbers, it's--go like a ball bouncing all over the place. There's a caveat to this.

This includes one-time costs of nearly a billion dollars for U.S. arrearage payments to various international organizations like the United Nations and the multilateral development banks, and a billion and a half for security upgrades at American embassies and missions around the world, and a large amount of aid in the wake of Hurricane Mitch, and the Kosovo humanitarian relief aid.

Today, we spend--and I think this is important--we spend only about 1.3 percent of our total budget on foreign affairs, and yet that one percent buys us a diplomatic and commercial presence around the world.

It enables us to maintain an effective diplomatic corps, a corps that can and does serve as our first line of defense in resolving conflict; provides commercial assistance to U.S. companies around the world.

It provides diplomatic protection to American travelers, and I think that if we're going to remain a world leader, we have to be willing to support the costs of that leadership. That means, as members of Congress, we have to be willing to step up to the plate and say that the foreign affairs account, while it may not be the sexy account, while it may not be the one that most members like to be able to go home and talk about, it is extraordinarily important to the national security of the United States and we must step up to the plate and recognize that.

As the new Chairman, this year, of the Foreign Operations Appropriations Subcommittee, I will be focusing on a large portion of this foreign affairs budget. The bill that I will have to get out of the committee and out of the floor of the House of Representatives has over two-thirds of our U.S. international affairs spending.

In FY 2001, the number was back down to $15.5 billion. The largest program increase last year was--and you guessed it--the Export Import Bank, at 26 percent. But that amount alone doesn't tell the whole story of the Ex-Im Bank.

We need to look at the level of U.S. exports that this amount can support because of the higher risks for some countries. Now the budget that is being proposed this year by President Bush suggests a funding reduction of about 25 percent in the Ex-Im Funding line. That looks like a huge amount, and it is substantial, and I will be having my discussions with the President and his advisers over this.

But a footnote to that I think is important. About half of that, about 120 million of it, is really a result of favorable changes to risk factors in countries where the Ex-Im Bank does its lending, so that it is actually not a reduction in the amount of available cash, available funds for lending. Only about half of the amount, still a substantial amount, that does represent a reduction.

I personally believe, and will share this with the President and with Secretary Powell, and the President's national security team, that at a time when we are trying to, we are seeking to help the economies of developing countries, it is the wrong time for the United States to be cutting back on Ex-Im Bank funding. We need to be expanding, not reducing that.

The Ex-Im Bank has proven its worth. It's a huge benefit to the United States with very little impact on the budget. It enables our exporters to penetrate emerging markets. It enables them to compete with highly-subsidized companies for critical market share, and it assures that American exports are going to play a key role in the development of these emerging countries.

So let me just finish here by saying that I believe foreign affairs funding is a critical part of today's America, and we are the lone superpower that exists in the world today. We are the leader of the world, and with that comes a responsibility, a responsibility that sometimes we may not like to have to assume, a mantle of responsibility that we wish we could set aside at times. But it is a mantle of responsibility to help to secure the peace in the world and also to promote prosperity in the world, to raise the standard of living of those who are so much poorer than ourselves.

Millions of jobs, here, at home depend on our ability to export. The fact is the policy challenges that we're going to face are not going to be solved by pulling back, by isolationism, by unilateral approaches to foreign policy, and by protectionism.

We can either lead the way for others, or others will lead the way for us. The opportunity, the window of opportunity for us is here today

Our economic standing and political security will be determined by how well we position ourselves now.

So I say we need to grab this bull by the horns, to find the economic standards and political realities by which the world is going to trade and grow in the 21st Century, and then we need to turn to the institutions which have proven themselves, time and time again, as the way in which we can promote those economic interests of the United States and the Export Import Bank is one of those.

So I am excited about what we can accomplish. I'm excited about the challenges that lie ahead of us in the year ahead. I look forward to working with the export community, here, in the United States, as we work to try to convince the administration and other members of Congress, that we need to have an increase, not a decrease, in the size of the Export Import Bank's level of funding.

With that, let me say thank you very much for the opportunity to be with you here today.

Thank you.