Committee on International Relations
U.S. House of Representatives
Henry J. Hyde, Chairman

CONTACT: Sam Stratman, (202) 226-7875, June 12, 2003

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Committee Approves Historic Change
in U.S. Foreign Assistance Programs

Hyde-Lantos Millennium Challenge Act Passes 31-4

(WASHINGTON) -- Legislation authorizing a historic shift in U.S. foreign assistance programs, drafted by U.S. Rep. Henry J. Hyde (R-IL) and Tom Lantos (D-CA), was approved Thursday by the House International Relations Committee.

The legislation, the Millennium Challenge Account Authorization and Peace Corps Expansion Act of 2003, was approved by a vote of 31-4.

The measure also doubles the size of the Peace Corps and includes a provision requiring the Department of State to develop an annual report on the effectiveness of all U.S. foreign assistance programs, a requirement Hyde has sought for more than a decade.

The Millennium Challenge Account (MCA) expands U.S. economic assistance to high-performing countries in the developing world with a proven track record of accomplishment in the areas of economic freedom, democracy, and investments in health and education sectors.

The Hyde-Lantos MCA legislation authorizes funding levels of $1.3 billion in FY04, $3 billion in FY05, and $5 billion in FY06.

"The philosophical underpinning of the MCA, and correctly so, is that the United States must be more selective in distributing its assistance by rewarding only those recipients who willingly adopt good policies and institutions," Hyde said.

Hyde added that, of the 70 countries currently eligible for all types of U.S. development assistance, only a select number of high-performing countries will meet the strict criteria stipulated by the MCA legislation.

"Too often in the past, U.S. assistance has allowed leaders and governments to abdicate responsibility for effective governance and pursue detrimental, self-destructive, or personally self-enriching policies. Other assistance has gone to consultants or middlemen, with little results to show in the end. These failures of the past should not lead us to turn our backs on the developing world – just the opposite," Hyde said.

Under provisions of the proposed law, implementation of the program would be done through a new entity to be known as the Millennium Challenge Corporation, with a mandate to negotiate contracts with foreign governments for projects.

"Now is the time for American leadership and for America to recognize, through its aid, those countries that respect the rights of citizens, promote democracy, and encourage economic freedom and prosperity," Hyde added.

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