305. Memorandum From the Special Representative for Economic Summits (Owen) to President Carter1


  • Legislative Constraints on Foreign Assistance

Secretary Vance’s memo at Tab A, prepared at your request,2 transmits a detailed list (Tab 1) of existing legislative constraints on our authority to carry out U.S. military and economic assistance programs and a list of proposed renewals or new constraints (Tab 2).3 He also recommends actions to deal with these restraints.

This list offers persuasive evidence that your complaint about legislative interference is well founded. Secretary Vance points out that the restrictions fall into three general categories:

1. Conditional Restrictions. These are provisions that allow certain actions to be taken only if it is first determined that specified criteria are met and that the Congress is so informed.

2. Prohibitions. These prevent the granting of assistance by naming countries explicitly or by setting forth criteria that trigger such action automatically.

3. Congressional Veto. Some restrictions provide for Congressional approval or veto of actions you propose to take.

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Secretary Vance recommends that we concentrate on resisting new restrictions and on avoiding renewal of those that would otherwise expire. This makes sense.

Secretary Vance also proposes we consult with the Congress on the possibility of introducing floor amendments to pending bills to remove certain restrictions during this session of Congress. This course seems to OMB, NSC staff, and me to involve serious problems:

—In almost all cases, floor amendments to pending bills would require an intensive lobbying effort by the Administration.

—This is probably not the proper moment for raising such new budgetary issues as a Security Assistance contingency fund and expanded military assistance, in light of your concern about budget discipline and our current aid troubles on the Hill.

—We need to review the restrictions in detail and obtain the views of all interested agencies before deciding which to try to repeal. Then we can undertake the Congressional consultations that Secretary Vance recommends.

Accordingly, OMB, NSC staff, and I have recommended to State that when Secretary Vance testifies Monday before the House International Relations Committee4 to provide an overview of the Administration’s foreign policy and an assessment of the legislative restrictions, he:

—focus on the present legislative constraints, citing some that seriously interfere with the conduct of U.S. foreign policy;

—avoid giving the impression that the Administration is seeking repeal of all restrictions, without regard to underlying Congressional concern;

—emphasize that the list should serve as a basis for joint Executive/Legislative branch consultations, and offer to work with Congress to see what should be done to improve present legislation and drop unnecessary constraints;

—reiterate our opposition to the new restraints proposed in the FY 79 aid bills;

—stress the importance of adequate funding for AID and IFI’s and the need to resist unjustified budgetary cuts in ongoing programs, since the meat-axe approach to aid funding is as much of a restraint on U.S. policy as the specific restrictions set forth in present legislation;

—lay the groundwork for a major Administration effort during the next budget cycle to “remove the barnacles” on U.S. economic and military assistance programs.

We will work with State on this testimony and move promptly to coordinate an Administration position on the proposals set forth in the attached memo, as well as other questions regarding these restrictions.

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Tab A

Memorandum From Secretary of State Vance to President Carter 5


  • Legislative Constraints on Foreign Assistance

This is a report on our review of legislative constraints on authority to carry on military and economic assistance programs. It includes recommendations of short-range and long-range efforts to head off further constraints and revise the existing laws.

I. Existing Legislation

The authority to conduct programs of military and economic assistance is derived primarily from two basic statutes, the Foreign Assistance Act of 1961 and the Arms Export Control Act (originally enacted in 1968). The Foreign Assistance Act governs bilateral economic assistance programs and grants of military equipment and training. The Arms Export Control Act governs foreign military sales and financing, as well as the licensing of commercial arms exports.

Both of these statutes originally were drafted in broad terms. In recent years, Congress has perceived that there has been abuses of the authority granted under those broad statutes. That, coupled with a Congressional desire for more active involvement in foreign policy matters, has spawned a gradually increasing array of statutory prohibitions, conditions, reporting requirements and complex procedures. The cumulative effect of these constraints has been to make assistance programs more cumbersome and inflexible, and less effective as foreign policy instruments.

At Tab 1 is a compilation of existing restraints. While it does not purport to include every provision that might be characterized as a constraint, it does illustrate graphically the extent to which and the ways in which the conduct of foreign relations of the United States can be regulated and controlled by legislation. While constraints imposed by other laws have been included, most of the restrictions enumerated relate to the Foreign Assistance and Arms Export Control Acts.

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As illustrated by the attached compilation, the existing statutory constraints take many forms and address a wide range of subjects. However, from the standpoint of their effect on military and economic assistance as implements of foreign policy, they fall into three general categories.

The first type consists of conditional restrictions—provisions of law which allow certain actions to be taken only if it is first determined that specified criteria are met and Congress is informed. (The statute which required your recent determination on assistance to Zaire is an example.)6 This type of restraint is intended to assure Congress that potentially controversial actions will be subject to high-level approval within the Executive Branch and that Congress will be informed of the decision in a timely way so that it can make its views known. These statutes may delay or impede action, but usually do not prevent you from carrying out programs you regard as important.

The second type of constraint is the prohibition against providing assistance. Some of these name specific countries as ineligible for U.S. assistance. Others refer to types of conduct (e.g., severance of diplomatic relations) that result in ineligibility. In either event, they may operate to prevent furnishing of assistance which is otherwise within the scope of your general statutory authority.

The third group is comprised of provisions for Congressional veto or approval of actions you propose to take. (Examples are major arms sales and nuclear exports.)

Many statutory prohibitions either provide for the possibility of waiver, or are subject to your general authority to waive most prohibitions against programs under the Foreign Assistance Act. Some waivable constraints are enacted with the expectation that they will be waived and, as a practical matter, fall into the category of conditional restrictions described above. In some cases, however, even though a waiver would be legally possible the political cost would be very high. For example, the thirty-day Congressional review for major arms sale proposals may be waived and the sale made immediately in any case where “the President states . . . that an emergency exists which requires such sale in the national security interests of the United States.” In the four years that the Congressional review procedure has been in effect, this waiver authority has never been exercised.

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II. Next Steps

In your May 25 statement, you indicated that any proposal for modification to the existing law would await our review of all restrictions and consultations with the appropriate committees of Congress. At the same time, you expressed your intention to oppose any further restrictions.

It is very late in the legislative cycle to propose major changes in the pending bills. Committee work has been completed on all five FY 1979 bills (development assistance and security assistance authorizations in each house, and foreign assistance appropriations in the House); the House has passed its development bill, and floor action on all of the others will probably occur in the next few weeks.

This means that any legislative initiative at this time would have to take the form of floor amendments to the pending bills. The prospects for success of floor amendments are always difficult to judge, and success or failure is highly visible. Careful preparation is therefore essential. Moreover, once a bill is opened up with proposed floor amendments, there is an increased risk that others will also propose amendments of their own.

III. Short-Range Recommendations

I recommend that we now concentrate primarily on minimizing new restrictions and on avoiding the renewal of those that would otherwise expire. (At Tab 2 is a list of principal constraint provisions in FY 1979 foreign assistance bills pending in Congress.) We therefore should initiate immediate consultations with Congress to determine whether it would be feasible to propose floor amendments to the pending bills. In these consultations, we would try to determine whether any initiatives at this time would undermine other objectives of the Administration’s legislative program (e.g., repeal of the Turkish arms embargo), detract from our efforts to resist new restrictions, or dissipate Congressional support for a more comprehensive revision of the legislation at a later date. I would begin the consultations by discussing our approach with Bob Byrd and Tip O’Neill.7

If you agree that we should begin consultations with the Congress on the possibility of introducing floor amendments to pending bills, I recommend the following proposals as worthy of consideration:

1. Economic Development and Security Supporting Assistance for the Same Country.

The Senate development assistance bill retains an existing prohibition against long-term development assistance and short-term eco [Page 969] nomic support (security supporting assistance) for the same country. The bill passed by the House repeals this prohibition. A floor amendment in the Senate to repeal this prohibition would avoid the likelihood of Senate Foreign Relations Committee insistence on its retention when the bill goes to conference. This would increase our ability to respond to immediate economic needs without foregoing longer term development projects. Some members are certain to oppose this amendment as a “politicization” of aid.8

2. Contingency Fund.

Economic Assistance:

The House security assistance bill authorizes $10 million for the Foreign Assistance Act’s economic assistance contingency fund. The Senate bill authorizes only $2.5 million. Unless the Senate bill is amended on the floor, a compromise in conference (probably $3 to $5 million) is likely. We would need to explore with the Congressional leadership whether a major increase in the contingency fund (of up to $50 million) could be achieved without incurring a reduction in some other program. However, strong opposition to an increased contingency fund can be expected, based on Congressional reluctance to provide funds without a specific intended use in mind. Those who work most closely with the Congressional Committees believe that we would be fortunate to achieve $10 million.9

Military Assistance:

The Foreign Assistance Act authorizes the President to draw on Defense Department stocks for emergency military assistance needs involving vital U.S. security interests. Grants up to $67.5 million may be made in any fiscal year under this authority, subject to the same constraints as apply to other military assistance. However, the availability of this authority in any year requires appropriation act language. This latter requirement, added in 1976, has never been met because of Appropriations Committee opposition and, therefore, you cannot exercise this authority. Some members would strongly oppose a floor amendment to permit the use of this authority. They would argue that it is a form of a contingency fund and is also a possible opening for the resumption of grant military assistance programs Congress has terminated.10

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3. Waiver Authority.

You have authority under section 614(a) of the Foreign Assistance Act to waive most limitations contained in the Foreign Assistance Act and in acts appropriating funds for Foreign Assistance Act programs. However, this waiver authority does not apply to constraints unless they are in the Foreign Assistance Act or an appropriations act. Thus, country specific prohibitions in the annual appropriation acts may be waived to allow assistance under the Foreign Assistance Act, but not under any other law. (Had Zaire not paid its delinquent debt, assistance would have been prohibited by the appropriations act. This prohibition could have been waived to provide economic assistance under the Foreign Assistance Act, but not military credits under the Arms Export Control Act.) We should attempt by consultation to determine whether a broadened waiver authority would be supported in Congress, in view of the likely opposition to what would be widely seen as an erosion of hard won Congressional powers.11

IV. Long-Range Recommendations

Together with Congressional Committees, we are beginning an extensive revision of the foreign assistance legislation for the next session that will simplify and restructure the applicable legal requirements. In this process we will strive for a better balance between Congressional oversight needs and Executive requirements for flexible authority, including sufficient authority to be able to deploy foreign assistance resources rapidly to serve priority foreign policy needs. This effort will be coordinated with other agencies. We plan intensive consultations with a view to developing legislative revisions that both the Administration and the Congress can endorse. We hope that the new legislation will be ready for the new Congress.

In addition, I have asked the Department to study the effect of these constraints on the ability of American companies to sell their goods and services abroad.12

  1. Source: Carter Library, Records of the Office of the Staff Secretary, Presidential File, Box 92, 6/19/78 [2]. Confidential. Sent to Carter under cover of a June 17 note from Hutcheson, who wrote: “The attached memorandum was received by my office midday today. Dr. Brzezinski’s office has requested that you review this memo at your soonest convenience as the State Department must testify on Monday [June 19]. Due to time constraints, I have been unable to get thorough White House staff review of this memo, particularly from Frank Moore’s office. This is being forwarded to you at this time for your information.” (Ibid.)
  2. During a May 25 news conference in Chicago, Carter made a statement on foreign assistance programs in which he said: “Some of the legislation governing these foreign aid programs has the effect of placing very narrow limits on where and when they can be used. Some of these limitations, though they were enacted many years ago and under special circumstances, continue to be entirely appropriate and advisable today. Others may be outmoded. For that reason, I have concluded that we should review the full range of legislation which now governs the operation of these programs. I’ve asked the Secretary of State to conduct this review and to consult with Congress constantly in preparing the study for me. We want to take a careful look at whether our legislation and procedures are fully responsive to the challenges that we face today.” For the text of Carter’s statement, as well as the ensuing question-and-answer session with members of the press, see Public Papers of the Presidents of the United States: Jimmy Carter, 1978, Book I, pp. 972–979. No written request to Vance to undertake this review was found.
  3. Neither of the tabs to Vance’s memorandum was attached.
  4. Vance’s June 19 statement focused on U.S.-Soviet relations and U.S. policies in Africa. See the Department of State Bulletin, August 1978, pp. 14–16.
  5. No classification marking. Carter wrote at the top of the page: “Cy—Consult & minimize restrictions as much as you can. No time for me to decide now on each item. Consult with Baker and Rhodes also. J.” Senator Howard Baker (R–Tennessee) was Senate Minority Leader and Congressman John Rhodes (R–Arizona) was House Minority Leader.
  6. In accordance with the International Security Assistance Act of 1977, Carter issued Presidential Determination No. 87–11 on May 18, in which he determined that providing military and economic aid to Zaire was in the interests of U.S. national security. For the text, see Public Papers of the Presidents of the United States: Jimmy Carter, 1978, Book I, pp. 930–931.
  7. Carter indicated his approval of this recommendation.
  8. Carter indicated his approval of this recommendation.
  9. Carter underlined the phrase “achieve $10 million.” He indicated his approval of the recommendation.
  10. Carter indicated his approval of this recommendation.
  11. Carter highlighted the portion of this paragraph that begins with “but not military credits” through the end of the paragraph. He indicated his approval of the recommendation.
  12. Carter indicated his approval of this recommendation.