SPEAKERS CONTENTS INSERTS
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2003
COMPACT OF FREE ASSOCIATION AMENDMENTS ACT OF 2003
MARKUP
BEFORE THE
SUBCOMMITTEE ON ASIA AND THE PACIFIC
OF THE
COMMITTEE ON
INTERNATIONAL RELATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
ON
H.J. Res. 63
JULY 18, 2003
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Serial No. 108–40
Printed for the use of the Committee on International Relations
Available via the World Wide Web: http://www.house.gov/international—relations
COMMITTEE ON INTERNATIONAL RELATIONS
HENRY J. HYDE, Illinois, Chairman
JAMES A. LEACH, Iowa
DOUG BEREUTER, Nebraska
CHRISTOPHER H. SMITH, New Jersey,
Vice Chairman
DAN BURTON, Indiana
ELTON GALLEGLY, California
ILEANA ROS-LEHTINEN, Florida
CASS BALLENGER, North Carolina
DANA ROHRABACHER, California
EDWARD R. ROYCE, California
PETER T. KING, New York
STEVE CHABOT, Ohio
AMO HOUGHTON, New York
JOHN M. McHUGH, New York
THOMAS G. TANCREDO, Colorado
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RON PAUL, Texas
NICK SMITH, Michigan
JOSEPH R. PITTS, Pennsylvania
JEFF FLAKE, Arizona
JO ANN DAVIS, Virginia
MARK GREEN, Wisconsin
JERRY WELLER, Illinois
MIKE PENCE, Indiana
THADDEUS McCOTTER, Michigan
WILLIAM J. JANKLOW, South Dakota
KATHERINE HARRIS, Florida
TOM LANTOS, California
HOWARD L. BERMAN, California
GARY L. ACKERMAN, New York
ENI F.H. FALEOMAVAEGA, American Samoa
DONALD M. PAYNE, New Jersey
ROBERT MENENDEZ, New Jersey
SHERROD BROWN, Ohio
BRAD SHERMAN, California
ROBERT WEXLER, Florida
ELIOT L. ENGEL, New York
WILLIAM D. DELAHUNT, Massachusetts
GREGORY W. MEEKS, New York
BARBARA LEE, California
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JOSEPH CROWLEY, New York
JOSEPH M. HOEFFEL, Pennsylvania
EARL BLUMENAUER, Oregon
SHELLEY BERKLEY, Nevada
GRACE F. NAPOLITANO, California
ADAM B. SCHIFF, California
DIANE E. WATSON, California
ADAM SMITH, Washington
BETTY McCOLLUM, Minnesota
CHRIS BELL, Texas
THOMAS E. MOONEY, SR., Staff Director/General Counsel
ROBERT R. KING, Democratic Staff Director
Subcommittee on Asia and the Pacific
JAMES A. LEACH, Iowa, Chairman
DAN BURTON, Indiana
DOUG BEREUTER, Nebraska
CHRISTOPHER H. SMITH, New Jersey
DANA ROHRABACHER, California
EDWARD R. ROYCE, California
STEVE CHABOT, Ohio
RON PAUL, Texas
JEFF FLAKE, Arizona
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JERRY WELLER, Illinois
THOMAS G. TANCREDO, Colorado
ENI F. H. FALEOMAVAEGA, American Samoa
SHERROD BROWN, Ohio
EARL BLUMENAUER, Oregon
DIANE E. WATSON, California
ADAM SMITH, Washington
GARY L. ACKERMAN, New York
BRAD SHERMAN, California
ROBERT WEXLER, Florida
GREGORY W. MEEKS, New York
JAMES W. MCCORMICK, Subcommittee Staff Director
LISA M. WILLIAMS, Democratic Professional Staff Member
DOUGLAS ANDERSON, Professional Staff Member & Counsel
TIERNEN MILLER, Staff Associate
C O N T E N T S
MARKUP OF
H.J. Res. 63, To approve the ''Compact of Free Association, as amended between the Government of the United States of America and the Government of the Federated States of Micronesia'', and the ''Compact of Free Association, as amended between the Government of the United States of America and the Government of the Republic of the Marshall Islands'', and otherwise to amend Public Law 99–239, and to appropriate for the purposes of amended Public Law 99–239 for fiscal years ending on or before September 30, 2023, and for other purposes
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Amendment to H.J. Res. 63 offered by the Honorable James A. Leach, a Representative in Congress from the State of Iowa, and Chairman, Subcommittee on Asia and the Pacific
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE RECORD
The Honorable James A. Leach, a Representative in Congress from the State of Iowa, and Chairman, Subcommittee on Asia and the Pacific: Prepared statement
COMPACT OF FREE ASSOCIATION AMENDMENTS ACT OF 2003
FRIDAY, JULY 18, 2003
House of Representatives,
Subcommittee on Asia and the Pacific,
Committee on International Relations,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:08 a.m. in Room 2172, Rayburn House Office Building, Hon. James A. Leach [Chairman of the Subcommittee] presiding.
Mr. LEACH. The Committee will come to order. The Chair notes the presence of a working quorum.
Pursuant to notice, I call up the resolution H.J. Res. 63 to approve the Compact of Free Association as amended between the Government of the United States of America and the government of the Federated States of Micronesia and the Compact of Free Association as amended between the Government of the United States of America and the government of the Republic of the Marshall Islands for purposes of a markup.
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Without objection, the resolution will be considered as read and open for amendment at any point.
And at this point, I would like to make several comments and ask if other Members may have comments.
As my colleagues are aware, the economic assistance provisions of the current Compact of Free Association expired in 2001, but were extended for 2 years while the U.S. renegotiated the expired provisions with the Freely Associated States. However, these negotiations were only completed late this spring, leaving Congress little time to act before the authorities expire on September 30. Hence, the need for expeditious action by this legislation.
In this regard, the Subcommittee held a hearing on the newly renegotiated compacts on June 18th, receiving extensive testimony from the Departments of State and Interior, as well as the General Accounting Office. In addition, we received testimony for the record from the governments of the FSM and RMI.
As Members are aware, the United States has shared a uniquely close and mutually beneficial relationship with the peoples of Micronesia and the Marshall Islands for the past half century. For nearly 40 years after the Second World War, the U.S. administered both islands as United Nations Trust Territories. In 1986, Micronesia and the Marshall Islands chose to become sovereign states and entered into a Compact of Free Association with the United States. The compact was intended to ensure self government for the new island nations to assist them in their economic development toward self-sufficiency and to advance mutual security objectives.
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It is my strong view that the interests of the peoples of the United States and these Pacific Islands have been well served by the compact. Our former trust territories have emerged as sovereign democracies and America's strategic interest in the western Pacific has been protected and the bonds of friendship forged during World War II have strengthened with the passage of time.
The passage of time, however has revealed a number of deficiencies in the first compact particularly concerning management of funds, planning, and oversight. Fortunately, however, drawing on the work of the Subcommittee under the leadership of our former Chairman, Doug Bereuter, and the expertise of the GAO the new agreement completely redesigns the way the compact funds are used and thereby strengthens these agreements.
Here I would like to draw the Subcommittee's attention to the impressive new accountability provisions of the amended compacts. According to GAO, the amended compacts include enhanced reporting and monitoring measures that should substantially improve accountability if fully implemented. For example, assistance under the amended compacts will be provided through grants targeted to priority areas including health and education with specific terms and conditions attached. The annual reporting and consultation requirements will be expanded and funds could be withheld for noncompliance with compact terms and conditions.
More broadly, the amended Compacts of Free Association with the FSM and RMI to renew expiring assistance would require about $3.5 billion in funding over the next 20 years with a larger amount being possible if the United States exercises its options to extend military use rights on Kwajalein Atoll. The amended compacts would provide decreasing levels of assistance over a 20-year period in order to encourage fiscal self-reliance. At the same time, the compacts will require the capitalization of a trust fund for each country to generate annual interest earnings that would replace U.S. grant assistance in 2023.
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The amended compacts and related agreements address other key issues. They preserve the United States ''defense veto'' and assure continued United States military access to Kwajalein Atoll defense sites until at least 2066 and possibly to 2086 at the United States option. The amended compact also strengthens one key additional area, immigration, by adding new restrictions and clarifying the applicability of the Immigration and Nationality Act to compact migrants.
The amended compacts are complex and should be generally supportable by Congress. There are, however, at least two potential areas of continuing concern: The proposed termination of FEMA's role in providing disaster assistance under the amended compacts and the future of educational assistance, such as Pell grants, provided to the FAS outside of the compact and its related agreements. Here I would like to inform Members that all of the relevant authorizing Committees are working together with the Administration to talk through these issues on a timely basis. I am hopeful that further clarification of several of these questions may be possible by the time the full legislation is considered by the House and possibly even by the time of the Committee markup next week.
I would like to also notice Members that I will be offering an amendment in the nature of a substitute which corrects several drafting errors and makes other technical corrections to the legislation. A list of proposed changes has been circulated to the membership.
I understand that due to a conflicts, our distinguished Ranking Member will not be with us this morning, but will be with us when the Full Committee meets next week.
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[The prepared statement of Mr. Leach follows:]
PREPARED STATEMENT OF THE HONORABLE JAMES A. LEACH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF IOWA, AND CHAIRMAN, SUBCOMMITTEE ON ASIA AND THE PACIFIC
The Subcommittee will come to order. Pursuant to notice we have before us today two measures for consideration by the Subcommittee: House Joint Resolution 63, to approve the Compacts of Free Association, as amended, with the Federated States of Micronesia (FSM) and the Republic of the Marshall Islands (RMI).
As my colleagues are aware, the economic assistance provisions of the current Compact of Free Association expired in 2001, but were extended for two years while the U.S. renegotiated the expiring provisions with the Freely Associated States. However, those negotiations were only completed late this Spring, leaving Congress with little time to act before those authorities expire on September 30. Hence the need for expeditious action by this legislation.
In this regard, the Subcommittee held a hearing on the newly renegotiated Compacts on June 18, receiving extensive testimony from the Departments of State and Interior, as well as the General Accounting Office. In addition, we received testimony for the record from the governments of the FSM and RMI.
The U.S. has shared a uniquely close and mutually beneficial relationship with the peoples of Micronesia and the Marshall Islands for the past half-century. For nearly forty years after the Second World War, the U.S. administered both islands as United Nations Trust Territories. In 1986, Micronesia and the Marshall Islands chose to become sovereign states and entered into a Compact of Free Association with the United States. The compact was intended to ensure self-government for the new island nations, to assist them in their economic development toward self-sufficiency and to advance mutual security objectives.
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It is my strong view that the interests of the peoples of the U.S. and these Pacific islands have been well-served by the Compact. Our former trust territories have emerged as sovereign democracies; America's strategic interests in the Western Pacific have been protected; and the bonds of friendship forged during World War Two have only strengthened with the passage of time.
The passage of time, however, has revealed a number of deficiencies in the first Compact, particularly concerning management of funds, planning, and oversight. Fortunately, however, drawing on the work of this Subcommittee under the leadership of our former Chairman Doug Bereuter and the expertise of the General Accounting Office, the new agreement completely redesigns the way Compact funds are used and thereby significantly strengthens these agreements.
Here I would like to draw the Subcommittee's attention to the impressive new accountability provisions of the amended Compacts. According to the GAO, the amended Compacts include enhanced reporting and monitoring measures that should substantially improve accountability if fully implemented. For example, assistance under the amended Compacts will be provided through grants targeted to priority areas, including health and education, with specific terms and conditions attached. Annual reporting and consultation requirements will be expanded and funds could be withheld for noncompliance with Compact terms and conditions.
More broadly, the amended Compacts of Free Association with the FSM and RMI to renew expiring assistance would require about $3.5 billion in funding over the next 20 years, with a larger amount being possible if the U.S. exercises its option to extend military use rights on Kwajalein Atoll. The amended Compacts would provide decreasing levels of annual assistance over a 20-year term (2004–2023) in order to encourage fiscal self-reliance. At the same time, the Compacts would require the capitalization of a trust fund for each country to generate annual interest earnings that would replace U.S. grant assistance in 2023.
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The amended Compacts and related agreements address other key issues. They preserve the U.S. ''defense veto'' and assure continued U.S. military access to Kwajalein Atoll defense sites until at least 2066, and possibly to 2086 at the U.S. option. The amended Compact also strengthens one key additional area, immigration, by adding new restrictions and clarifying the applicability of the Immigration and Nationality Act to Compact migrants.
The amended Compacts are complex and should be generally supportable by Congress. There are, however, two potential areas of concern that the Committee may want to address further or clarify as the legislation advances: the proposed termination of FEMA's role in providing disaster assistance under the amended Compacts, and the future of educational assistance, such as Pell Grants, provided to the FAS outside of the Compact and its related agreements. Here I would like to inform Members that all of the relevant authorizing Committees are working together with the Administration to talk through these issues on a timely basis. I am hopeful that further clarification on several of these questions may be possible by the time this legislation is considered by the full House and possibly even by the time of the Committee markup next week.
I would also like to notice Members that I will be offering an amendment in the nature of a substitute which corrects drafting errors and makes other technical corrections to the legislation. A list of proposed changes has been circulated to all Members.
I understand that due to a conflict our distinguished Ranking Member is unable to attend the markup today, so let me turn to Ms. Watson for any comments she might wish to make.
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Mr. LEACH. Ms. Watson, do you have a statement you wish to make? Mr. Blumenauer? Mr. Bereuter?
Ms. WATSON. Mr. Chairman, I want to thank you very much. I look forward to this markup that will further the United States relationships with the Freely Associated States. I have a personal interest in this particular program and this agreement. As you know, I served for 2 years as a United States Ambassador to the FSM because of our President, President Clinton at the time, giving me the privilege to represent the American people in the Federated States of Micronesia.
I am pleased and honored to be able to fill in for Representative Faleomavaega and in his absence. The significance of the region to America dates back to pre-World War II. The location of these two countries in the Pacific Ocean is of strategic importance to the United States, therefore, the first compact of free association came about.
Over the last 17 years, the relationship between the FSM, the RMI, and the U.S.A. has experienced growing pains, but the overall result is very positive. As we reauthorize the Compact of Free Association this year, 2003, we seek to be the FAS's friend and teacher whose goal is to assist the FAS to become fiscally solvent and economically independent.
Second, we have to assist in the islands's greatest commodity and that is its education for its people. Financial accountability is the issue that bureaucrats look at for justification to cut or curtail support for the FAS. Many of the official discussions that I have had with the FSM government was centered around this subject. The lessons learned over the past compact do not warrant any financial punishment. But we have learned as much about this unique compact arrangement as the FSM and the RMI learned about establishing their respective governments.
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I understand that our proposals sufficiently address the GAO's past recommendations regarding increased accountability. I look to this Subcommittee's leadership and diligence to address the GAO's concerns that the trust fund provisions will not support the FSM after the compact expires.
On the issue of education, I am deeply concerned by a message sent by this Congress to the FAS. The recent elimination of the IDEA and Head Start assistance, couple would with the threatened Pell grant eligibility next year could cripple the ability to cultivate the educational programs throughout these nations.
Again, under the guidance of Chairman Leach, I understand that these concerns are a top priority of this Subcommittee. In conclusion, I am pleased with the overall progress of the new compact of free association. With a few minor adjustments such as a reinstatement of FEMA assistance, this Congress can produce a compact that I think we can all be pleased with and proud of.
And I want to urge my colleague to heed the September deadline of the existing compact. A lapsed general appropriation would not be beneficial for either the FAS or the United States of America. I also urge my colleagues to understand the importance of our relationship with the FAS. This unique relationship is entrusted to the International Relations Committee. It is an opportunity to make a significant foreign policy decision that will affect America and its relationship to these nations for years to come. And so I am very pleased to be part of this, Chairman Leach, and I yield back the balance of my time.
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Mr. LEACH. Thank you very much Ms. Watson.
Mr. Bereuter.
Mr. BEREUTER. Thank you, Mr. Chairman. I commend you for your work and that of the Committee and the Ranking Member. I have not, I must admit, had much time to pay attention to this issue in the last couple of years. But I have great confidence in your ability to have looked at this and to make the right recommendations and to give us the right legislation.
I am particularly concerned about the accountability provisions. I trust we have as strong accountability provisions as possible and that the work that we did with the GAO has been taken into account. I know that you have made a special effort in that respect.
I raise these concerns because as a Member of the then-Interior Committee, I visited the Federated States of Micronesia, the Marshall Islands, the various islands of the Palau group and the Northern Marianas. I was appalled in many ways with what we saw in the way that the United States Government was delivering assistance and the way that it was being used.
I recall, for example, that many of the buildings that were fairly new had been built of a design which was really inappropriate for the tropics. In fact, some of the buildings built by the Japanese before World War II were much more usable even in the early 1980s. I saw a great misuse of funds in many places but particularly the Marshall Islands. Unfortunately, it meant that many people who deserved to receive assistance did not receive it.
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I also must say that a good share of the problem was from what I would call ''business pirates'' or charlatans from Asia, Europe, and other places who preyed on the people of these islands and the kind of contracts that were signed particularly in the area of energy. I am particularly pleased to hear that we have addressed a number of issues related to immigration, which I know was a concern to Guam and to the Marianas, and I trust we are going to keep a very close eye on this situation and report our legislation as forthrightly as we can, and as suggested, in a timely fashion.
So I thank you for hearing me on these comments.
Ms. WATSON. Mr. Chairman?
Mr. BEREUTER. I would be pleased to yield.
Ms. WATSON. I want to thank Congressman Bereuter, I watched very closely to the GAO report when I was in Micronesia and I looked at questions that were raised by the Committee when you were chairing the Subcommittee, and I raised those questions with the members of the Administration to give them guidance and some direction as to what the United States Congress would be looking for in terms of accountability. And I was very impressed with the sensitivity shown by yourself and I think Congressman Royce, I remember his comments and the fact that you went.
Mr. BEREUTER. And Mr. Faleomavaega.
Ms. WATSON. And Mr. Faleomavaega. And the fact that you did go. I urged the State Department to send people out to take a look and the various people that came out from our different agencies to actually see for themselves what some of the problems were so that we could correct as we went along in preparation for renewing and extending the compact. So I just wanted to add that and thank you very much for your concern, your buy-in and your visit.
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Mr. BEREUTER. Thank you very much. And thank you for your constructive leadership role that you pursued in your previous responsibilities.
Ms. WATSON. Thank you.
Mr. BEREUTER. Mr. Chairman, I yield back.
Mr. LEACH. Does anybody else wish to make an opening statement?
If not, I have an amendment in the nature a substitute at desk which without objection will be considered as read.
[The information referred to follows:]
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Mr. LEACH. Are there any amendments to the substitute?
The question now then occur on the amendment in the nature of a substitute, as amended.
All those in favor, signify by saying aye.
Opposed, no.
The ayes have it.
The Chair will now entertain a motion the resolution be reported favorably to the Full Committee, as amended by the amendment in the nature of a substitute.
Mr. BEREUTER. Mr. Chairman, I so move.
Mr. LEACH. There are any objections? The vote call comes on the motion.
All those in favor, signify by saying aye.
Opposed, no.
The motion carries.
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Without objection, the staff is directed to make any technical and conforming amendments.
There being no objection, the compacts are moved to the Full Committee and I would like to thank everybody for their participation and I am very appreciative. The Committee is adjourned.
[Whereupon, at 10:25 a.m., the Subcommittee was adjourned.]