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Calendar No. 1093
110th Congress Report
SENATE
2d Session 110-510
======================================================================
ENHANCED PARTNERSHIP WITH PAKISTAN ACT OF 2008
_______
September 26 (legislative day, September 17), 2007.--Ordered to be
printed
Mr. Dodd, from the Committee on Foreign Relations,
submitted the following
REPORT
[To accompany S. 3263]
The Committee on Foreign Relations, having had under
consideration the bill S. 3263, to authorize appropriations for
fiscal years 2009 through 2013 to promote an enhanced strategic
partnership with Pakistan and its people, and for other
purposes, reports favorably thereon and recommends that the
bill do pass.
CONTENTS
Page
I. Purpose..........................................................1
II. Committee Action.................................................1
III. Discussion.......................................................1
IV. Cost Estimate....................................................3
V. Evaluation of Regulatory Impact..................................6
VI. Changes in Existing Law..........................................6
I. Purpose
The purpose of this legislation is to authorize
appropriations for fiscal years 2009 through 2013 to promote an
enhanced strategic partnership with Pakistan and its people.
II. Committee Action
S. 3263 was introduced on July 15, 2008 by Senators Biden
and Lugar. At a meeting on July 29, 2008, by unanimous voice
vote, the committee ordered the bill favorably reported,
without amendment.
III. Discussion
S. 3263, the Enhanced Partnership with Pakistan Act of
2008, seeks to transform the relationship between the United
States and Pakistan from a transactional, tactically-driven set
of short-term exercises in crisis-management, into a deeper,
broader, long-term strategic engagement. The legislation aims
to properly balance the relationship between United States and
Pakistan by acknowledging and supporting the national security
interests of the United States as well as the economic and geo-
political interests. United States economic and military
assistance for Pakistan enhances our mutual security while
helping to build a more economically and politically stable
country important in a regional and strategic sense. Economic
assistance is as critical an element as strengthening the
capacity of the Pakistan military to counter terrorism,
especially for projects that provide direct and concrete
benefit to Pakistani citizens as a whole. The overall level of
economic assistance authorized would be raised substantially,
with the bulk of this aid intended for projects such as
schools, roads, medical clinics, and infrastructure
development.
The significant increase in assistance authorized by this
legislation is intended to broaden and deepen non-military
programs across a country of some 170 million people, where
less than 50 percent of the population can read and write and
whose Global Hunger Index ranking is nearly on par with that of
North Korea. The legislation highlights the essential economic
assistance pillar to achieve mutual goals of improved human
security through basic services, education, economic
opportunity, political participation and human rights. The
legislation contains Sense of Congress language urging that
security-related assistance be provided in close coordination
with the Government of Pakistan, designed to improve the
Government's capabilities in areas of mutual concern, and
maintained at a level that will bring significant gains in
counterterrorism, counterinsurgency, and regional harmony. The
legislation does not preclude an increase or a decrease in the
level of security-related aid.
The legislation mandates that funds appropriated or
otherwise made available to carry out section 5 shall be
utilized to the maximum extent possible as direct expenditures
for projects and programs. It does not preclude the use of some
portion of the authorized funds for temporary budgetary support
(for example, in order to help the Government of Pakistan deal
with economic crises resulting from sudden increases in the
price of food and fuel), but the intent of the legislation is
to shift most Economic Support Funds from budgetary support to
direct expenditures for projects and programs with effective
United States oversight of such assistance.
The legislation permits up to 7 percent of the funds
authorized to be used for administrative expenses of Federal
departments and agencies in connection with the provision of
assistance authorized by this section, or to be made available
to the Inspector General of the United States Agency for
International Development to provide audits and program reviews
of projects funded pursuant to this section. It is the intent
of this legislation that this provision provides important
flexibility to the U.S. Agency for International Development,
which has a limited overall budget for operational expenses.
Given the magnitude of the assistance and the critical nature
of the purpose of such funds, the Committee expects that the
Agency will, however, endeavor to keep administrative expenses
to a minimum, while at the same time, the Committee also
expects that sufficient program funds will be made available,
pursuant to subsection (f)(2), to the Office of Inspector
General (OIG) to ensure adequate oversight of all programs. The
significant growth of economic assistance contemplated by this
Act warrants close oversight, by the Agency and by OIG.
Specifically, the legislation:
Authorizes $7.5 billion over the next 5 fiscal years
($1.5 billion annually) under the Foreign Assistance
Act. Advocates an additional $7.5 billion over the
subsequent 5 years, subject to improvements in the
political and economic climate; and
Conditions military grant assistance and Foreign
Military Financing assistance beginning in 2010, and
new military sales beginning in 2012, on certification
by Secretary of State that Pakistani security forces:
are making concerted efforts to prevent al
Qaeda and associated terrorist groups from
operating in the territory of Pakistan;
are making concerted efforts to prevent the
Taliban from using the territory of Pakistan as
a sanctuary from which to launch attacks within
Afghanistan;
are not materially interfering in the
political or judicial processes of Pakistan.
Urges a reorientation of engagement towards the
Pakistani people rather than merely towards the
Pakistani government (civilian or military).
Urges accountability and transparent reporting of
Coalition Support Funds.
Directs the Secretary of State (in consultation with
other officials) to develop a comprehensive strategy
for the Afghan-Pakistan border area.
A premise for this plan is a simple thought-exercise:
Following the earthquake in Kashmir in 2005, the United States
devoted nearly $1 billion to relief efforts, and reaped a
greater reward in popular support than any amount of public
diplomacy could generate. The sight of American servicemen and
women saving the lives of Pakistani citizens was worth ten
times the cost of operating the Chinook helicopters. For a
brief period, America was challenging the terrorists in a true
battle of hearts and minds-and winning. S. 3263 seeks to
recreate such conditions--to materially and powerfully
demonstrate the true friendship of the American people for the
Pakistani people--without waiting for a natural (or man-made)
disaster.
IV. Cost Estimate
In accordance with Rule XXVI, paragraph 11(a) of the
Standing Rules of the Senate, the committee provides this
estimate of the costs of this legislation prepared by the
Congressional Budget Office.
United States Congress,
Congressional Budget Office,
Washington, DC, September 26, 2008
Hon. Joseph R. Biden, Jr.,
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 3263, the Enhanced
Partnership with Pakistan Act of 2008.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is John Chin.
Sincerely,
Peter R. Orszag.
------
Congressional Budget Office Cost Estimate
September 26, 2008.
S. 3263
Enhanced Partnership With Pakistan Act of 2008
AS ORDERED REPORTED BY THE SENATE COMMITTEE ON FOREIGN RELATIONS ON
JULY 29, 2008.
SUMMARY
S. 3263 would authorize the appropriation of up to $1.5
billion a year over the 2009-2013 period-a total of up to $7.5
billion over five years-for nonsecurity assistance to Pakistan.
CBO estimates that implementing S. 3263 would cost $344 million
in 2009 and about $5 billion over the 2009-2013 period,
assuming appropriation of the authorized amounts. (Additional
spending over the 2014-2018 period would total about $2.5
billion, CBO estimates.) Enacting the bill would not affect
direct spending or revenues.
S. 3263 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act (UMRA) and would not affect
the budgets of state, local, or tribal governments.
S. 3263 could impose a private-sector mandate, as defined
in UMRA, on exporters of major defense equipment. If the
Secretary does not certify that the security forces of Pakistan
have met certain security standards by 2012 or does not waive
the requirement for such certification, the bill would prohibit
the export of major defense equipment to Pakistan. CBO cannot
determine whether the cost of the mandate, if imposed, would
exceed the annual threshold established in UMRA for private-
sector mandates ($136 million in 2008, adjusted annually for
inflation).
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of S. 3263 is shown in the
following table. The costs of this legislation fall within
budget function 150 (international affairs).
Changes in Spending Subject to Appropriation by S. 3263
By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
2009 2010 2011 2012 2013 2009-2013
----------------------------------------------------------------------------------------------------------------
Authorization Level................................ 1,500 1,500 1,500 1,500 1,500 7,500
Estimated Outlays.................................. 344 854 1,098 1,296 1,401 4,993
----------------------------------------------------------------------------------------------------------------
BASIS OF ESTIMATE
For this estimate, CBO assumes that S. 3263 will be enacted
near the start of fiscal year 2009, that the authorized amounts
will be provided in annual appropriation acts each year, and
that outlays will follow historical spending patterns for
existing programs.
Assistance to Pakistan
Section 5 would authorize the appropriation of up to $1.5
billion a year over the 2009-2013 period for assistance
programs in Pakistan and would require the administration to
prepare annual reports on the implementation of those programs.
Those funds would be used for projects that promote democratic
governance and private-sector growth, and for education,
construction of physical infrastructure, and other programs
intended to benefit the people of Pakistan. Consistent with the
bill's provisions on use of funds, CBO assumes that
appropriations would be made through Economic Support Funds.
Assuming appropriation of the authorized amounts, CBO estimates
that implementing this provision would cost about $5 billion
over the 2009-2013 period.
Limitations on Security Assistance
Section 6 would limit certain military assistance after
2010 and arms transfers after 2012 to Pakistan unless the
Secretary of State certifies that Pakistani security forces are
not materially interfering in their country's judicial or
political processes and that they are making concerted efforts
to prevent terrorists from operating in Pakistan or using it as
a sanctuary. The bill would allow the Secretary to waive those
certification requirements in the interests of national
security. CBO expects that the Secretary would exercise the
waiver authority if she were unable to make the necessary
certification, and thus, that implementing that section would
have no significant effect on spending subject to
appropriation.
ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS
S. 3263 contains no intergovernmental mandates as defined
in UMRA and would not affect the budgets of state, local, or
tribal governments.
ESTIMATED IMPACT ON THE PRIVATE SECTOR
S. 3263 could impose a private-sector mandate, as defined
in UMRA, on exporters of major defense equipment to Pakistan if
the Secretary of State does not certify that the security
forces of Pakistan have met certain security standards by 2012.
If the Secretary does not issue such certification, the bill
would prohibit the necessary licenses and programs for private
entities to export major defense equipment to Pakistan. The
bill would, however, allow the Secretary of State to waive the
prohibition of exports of major defense equipment if the
Secretary determines it is in the national security interest of
the United States to provide such waiver. CBO assumes that the
Secretary would exercise such a waiver. In the event that such
exports are prohibited, the cost to comply with the mandate
would be the forgone net income attributed to the sale of major
defense equipment to Pakistan. According to industry experts
and the Defense Security Cooperation Agency, the value of major
defense equipment exported to Pakistan has varied from hundreds
of millions of dollars per year to billions of dollars per
year. Because of this variation, CBO cannot determine whether
the cost of the mandate, if imposed, would exceed the annual
threshold established in UMRA for private-sector mandates ($136
million in 2008, adjusted annually for inflation).
Estimate Prepared By:
Federal Costs: John Chin.
Impact on State, Local, and Tribal Governments Melissa
Merrell.
Impact on the Private Sector: Jacob Kuipers.
Estimate Approved By:
Theresa Gullo, Deputy Assistant Director for Budget
Analysis
V. Evaluation of Regulatory Impact
Pursuant to Rule XXVI, paragraph 11(b) of the Standing
Rules of the Senate, the committee has determined that there is
no regulatory impact as a result of this legislation.
VI. Changes in Existing Law
In compliance with Rule XXVI, paragraph 12 of the Standing
Rules of the Senate, the committee has determined that there
are no changes in existing legislation as a result of this
legislation.
