305. Memorandum From the Special Representative for Economic Summits
(Owen) to President Carter1
Washington, June 15, 1978
SUBJECT
- 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.
[Page 966]
Tab A
Memorandum From Secretary of State Vance to President Carter
5
Washington, June 10, 1978
SUBJECT
- 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
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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
[Page 970]
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
