Payment to Foreign Service Retirement & Disability Fund.......................89 BUDGET SUMMARY "As long as the United States of America is determined and strong, this will not President George W. Bush Address to a Joint Session of Congress and the American People Overview At the start of last year, we were heavily engaged in the beginnings of not only a new Administration but also a new emphasis on the Department of State regarding what it does for America and the world. In the seven months leading to September, we made good progress in realizing the new emphasis by gaining the increased resources required for our first year and by putting those dollars to work effectively. Then the tragic events of September 11 changed the world. The counterterrorism campaign that the nation immediately launched upon still demands our attention today - and will continue to do so far into the foreseeable future. In the context of this campaign, the conduct of the nation's foreign affairs has taken on a heightened sense of urgency while gaining immensely in achieving the increased emphasis we were seeking. In the months since September, we have had enormous success in the war on terrorism - a new U.S.-Pakistan relationship, a reinvigorated U.S.-India relationship, a new interim authority in Afghanistan, the elimination of the repressive regime of the Taliban, the destruction of al-Qaeda in Afghanistan, the delivery of humanitarian relief to Afghanistan's citizens, and a strong global coalition of nations at work to disrupt and destroy terrorism worldwide. The State Department has been at the core of this tremendous effort. The new emphasis on foreign affairs that we sought to build slowly and carefully over several years was amplified immeasurably by the immediate challenge of one tragic day. And because of the dedicated, hard-working people in the Foreign Service, the Civil Service, and the Foreign Service Nationals around the world, we met the challenge. But there is much more work to be done - work associated with the war on terrorism and with our fundamental foreign policy interests - and we continue to need the resources to do it. What We Have Done Because the FY 2002 budget request resulted in an increase in resources for State operations, we are implementing our priority initiatives. We broke records in new employment recruits and are busy hiring, training, and putting these men and women to work. Our overseas building program has prospered significantly under new management practices that have cut costs and improved construction times, quality, and security; a more detailed and disciplined construction plan is in place; and new construction proceeds at a brisk pace. Our program to bring state-of-the-art information technology to all of the Department is well underway. Security enhancements →→ BUDGET SUMMARY including new security hiring - are also in process. But more needs to be done and the dollars we are requesting Congress provides us for Fiscal Year 2003 are much needed if we are to continue to bring the State Department into the 21 century. Details of the FY 2003 Budget Request The President's $7.721 billion request for the State Department will allow us to: Continue initiatives to recruit, hire, train, and deploy the right work force. The budget request includes $100 million for the next step in the hiring initiative we began in FY 2002. Further information on this hiring initiative can be found on page 32 (State Programs); Continue to upgrade the security of our overseas facilities. The budget request includes over $1.4 billion to improve physical security, correct serious deficiencies, and provide for security-driven construction of new facilities at high-risk posts around the world. Additional security construction program information can be found beginning on page 57 (Embassy Security, Construction & Maintenance). We are also seeking $52 million to consolidate the Department's anti-terrorism training programs by establishing a new Center for AntiTerrorism Security Training (CAST); see page 33 in the State Programs chapter; Continue our program to provide state-of-the-art information technology to our people worldwide. The budget request includes $177 million to continue projects aimed at extending classified connectivity to every post requiring it and to update desktop access to the Internet for Department employees. Additional information on information technology investments can be found beginning on page 41 (Capital Investment Fund); Prioritize Public Diplomacy resources - $287 million for FY 2003 – toward new projects to support the war on terrorism. More information on Public Diplomacy programs and activities starts on page 18 (State Programs). Continue and enhance our educational and cultural exchange programs. The budget request includes $247 million for strategic activities that help build the trust, confidence, and international cooperation necessary to sustain and advance the full range of our interests. Such activities have gained a new measure of importance since the brutal attacks of September. For more information on exchange programs to build mutual understanding and develop friendly relations between America and the people of the world, see page 69 (Educational and Cultural Exchange Programs). Continue to meet our obligations to international organizations – also vitally important as we pursue the war on terrorism to its end. The budget request includes $891.4 million to fund U.S. assessments to 43 international organizations, active membership of which furthers U.S. economic, political, security, social, and cultural interests. More information can be found beginning on page 93 (Contributions to International Organizations); and Continue to meet our obligations to international peacekeeping activities. The budget request includes $726 million to allow the U.S. to pay its United Nations peacekeeping assessments BUDGET SUMMARY all the more important as we seek to avoid increased UN arrearages. UN peacekeeping activities allow us to leverage our political, military, and financial assets through the authority of the UN Security Council and the participation of other countries in providing funds and peacekeepers for conflicts worldwide. Additional information is available at page 97 (Contributions to International Peacekeeping Activities). There is much more as well. We are well underway on our course to a future in which the conduct of the nation's foreign policy is a preeminent feature of our government. More and more Americans have come to realize that diplomacy - the management of international relations - is central to America's success. Whether it is combating international terrorism, improving trade, spreading freedom and democracy, or protecting our citizens overseas - and a host of other activities - the Department of State is essential to the successful pursuit of the nation's interests. America's future is in many ways in our hands. Fully Accruing Costs of Federal Programs The President's 2003 Budget corrects a long-standing understatement of the true cost of thousands of federal programs. For some time, the accruing charges of the various federal employees retirement systems has been allocated to agencies' salaries and expense accounts, and the remainder has been charged to centrally held mandatory accounts, distorting the true cost of federal programs The full cost of accruing benefits should be allocated to the affected salary and expense accounts, so that budget choices for program managers and budget decision-makers are not distorted by inaccurate cost information. The Budget presents the amounts associated with shifting this cost from central accounts to affected program accounts, starting in 2003. The amounts associated with the proposal are shown on a comparable basis for program accounts in 2001 and 2002. Agencies will also, for the first time, be charged for the accruing cost of retiree health care benefits for all civilian employees. These are also shown on a comparable basis for 2001 and 2002. The proposal does not increase or lower total budget outlays, or alter the surplus/deficit since the higher payments will be offset by receipts in the pension and health funds. The shift will reduce reported costs from central mandatory accounts and increase reported costs in the affected discretionary accounts. Consequently, these costs will be properly reported in the budget for the first time and considered as an annual cost of managing these programs, as they should be. This change in treatment of costs is the first in a series of steps that will be taken to ensure that the full annual cost of resources - including support services, capital assets and hazardous waste - are charged properly in the budget presentation. Budget Specifics Graphs and tables summarizing the Department's FY 2003 budget request, including funds and positions by appropriation account, appear on the following pages. |