President and CEO Samuel A.

Worthington Chair Kathy Spahn

Helen Keller International

July 29, 2011 Dear Member of Congress: $14.5 Trillion! As I write this, you and your colleagues in Congress are very much focused on reducing our national debt. Some of you want to do that through spending cuts only, some of you think raising revenues should be part of the solution too. Regardless of where you fall on that issue, I know you agree that $14.5 trillion is a lot of debt, and it wont just disappear overnight. Thats an important point: reducing this debt is going to take some time. Federal tax receipts in FY2010 totaled about $2 billion. So even if we shut down the entire federal government (except for the IRS), it would still take something like seven years to pay off the debt. My point here is that this is not a sprint: this is a marathon. And that means we need to be smart, and we need to plan for the long-haul. If we burn ourselves up in the first mile, we wont get there. If we dont make provision for taking care of ourselves along the way, we wont get there. If we make dumb cuts, we wont get there. We need to make smart cuts and smart reassessments of our government revenues. Just as a marathoner needs to arrange to have water at the 22 mile, we as a nation need to arrange to have trade partners and economic sustenance ten and twenty years out. Just as a marathoner needs to invest in good shoes and plan a safe route to avoid injury along the way, so we as a nation need to invest in preventive measures and engage with the world to avoid expensive crises and head off security threats early. Consider the following: Eleven of our current top fifteen trading partners are graduates of U.S. foreign assistance. Decades ago smart investments were made, and we benefit from that today, economically and fiscally. We in turn need to invest today to have the longterm fuel for our economy. In 1989, when the Soviet Union withdrew from Afghanistan, we saved a little cash by more or less walking away. We made a dumb cut. We disengaged, and for the last several years, weve been paying the horrible price. I write to you today to make the case that the State, Foreign Operations bill that came out of the subcommittee July 27 contains cuts that are NOT smart. It ignores the hazards of disengaging from the world, making serious cuts now that put our security and our economic
nd

Vice Chair Tsehaye Teferra

Ethiopian Community Development Council

Treasurer Jonathan Quick

Management Sciences for Health

Board of Directors Nancy Aossey

International Medical Corps

David Beckman
Bread for the World

Nancy Boswell
Transparency International USA

Kim Brown
Holt International Childrens Services

Nan Dale
Action Against Hunger US

Christopher Elias
PATH

Anne Goddard
ChildFund International

George Hamilton
Institute for Sustainable Communities

Susan Hayes
ReSurge International

Sarah Holewinski
CIVIC

Charlie MacCormack
Save the Children

Melanie Macdonald
World Neighbors

Ruth Messinger
American Jewish World Service

Carol Peasley
CEDPA

Daniel Pellegrom
Pathfinder International

Robert Radtke
Episcopal Relief and Development

Farshad Rastegar
Relief International

Jonathan Reckford
Habitat for Humanity

William S. Reese
International Youth Foundation

Carter Roberts
World Wildlife Fund

Ron Sconyers
Physicians for Peace

Alison Smith
InsideNGO

Richard Stearns
World Vision

prosperity at risk down the road, hurting our ability to get to the finish line and pay off that debt. To review the worst, the bill: slashes operating expenses for the U.S. Agency for International Development by almost a third; cuts Development Assistance by 18%; cuts International Disaster Assistance by 12% (to a level that is fully 42% below the FY10 total!). cuts refugee assistance by 11% (19% relative to FY10) I could go on, but let me stop there and make a simple argument: Investing in international development and humanitarian assistance is not just about generosity and compassion. Making those investments is about America and our role in the world. Its about fulfilling your duty to your constituents, to chart a wise, safe, sustainable course for this nation not just for Miles 1, 2 and 3, but for Miles 24, 25, and 26 of our marathon to reduce our debt. Please oppose any amendments to further cut the development and humanitarian accounts, and please consider sponsoring or supporting amendments to reduce the disproportionate cuts these accounts suffer in this bill. For America, for our future, we can and need to do better. The attached document contains additional information about the accounts to which I refer. I hope you find it helpful in the coming days. Please dont hesitate to contact me or Ken Forsberg on our staff if you have any questions, at 202-667-8227, or kforsberg@interaction.org. Thank you for your consideration and for all your work on behalf of our nation. Sincerely,

Samuel A. Worthington President and CEO InterAction

Choose to Invest
InterAction respectfully submits the following recommendations for poverty-focused development and humanitarian assistance accounts for FY2012. We are fully aware of the extremely tight budget situation, and realize that the chances of all of these funding levels being achieved are slim. That fact notwithstanding, our purpose with this document is to express our strong support for the greatest funding possible for these accounts, and to present information about the urgent needs they address. The accounts we support here are those most focused on fighting poverty and responding to humanitarian crises around the world. They address both short-term crises and long-term economic and institutional development. They put into action American generosity and compassion. Funding for these accounts is investment in the stability, security, environmental sustainability, economic prosperity and continued democratic progress of the world the next generation will inherit from us. Prior generations made those investments, and today, eleven of our top fifteen trading partners are graduates of U.S. foreign assistance programs, and goodwill flowing from American generosity and compassion stands us in good stead in much of the world. It will be argued that the United States cannot now afford these investments, but this argument hides the presence of a choice. This country is a prosperous and productive one, and its government, like any government, faces the choice of how much of that wealth and productivity to collect as revenue, and then how to spend those tax dollars wisely. Congress can fully fund these accounts if it chooses to prioritize these investments. We respectfully urge Congress to choose to invest in these accounts. Questions and requests for further detail are welcome: please contact Ken Forsberg or Steven Rocker at InterAction at 202-667-8227, kforsberg@interaction.org, or srocker@interaction.org.

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7/29/2011

InterAction Fiscal Year 2012 Recommendations

($ in thousands)

Account
Global Health and Child Survival--USAID Development Assistance International Disaster Assistance Office of Transition Initiatives Migration and Refugee Assistance Emergency Refugee and Migration Assistance International Organizations and Programs
Millennium Challenge Corporation Global Health and Child Survival--State Contributions to International Peacekeeping Activities USAID Operating Expenses USAID Capital Investment Fund USAID Office of the Inspector General P.L. 480 Title II Food For Peace Grants McGovern-Dole Food Aid

InterAction FY2012 Recommendation

3,073,600 (Administration Request) 3,324,002 (Administration Request+) 1,300,000 (FY10 adjusted total ) 56,000 (Administration Request) 1,850,000 (FY10 total ) Full Replenishment 348,705 (Administration Request) 1,125,100 (Administration Request) 5,641,900 (Administration Request) 2,145,527 (Administration Request, adjusted) 1,503,420 (Administration Request) 189,200 (Administration Request) 51,500 (Administration Request) 1,690,000 (Administration Request) 200,500 (Administration Request)

Economic Support Fund USAID Working Capital Fund

Robust funding Authority

Explanatory Notes
1. Graphs: To provide a better visual sense of relative scale, graphs showing funding levels back to FY2006 have been standardized with a $5 billion vertical axis ($500 million if a smaller scale was needed to make the bars in the graph visible; these smaller graphs have dotted borders around them rather than solid). To provide some comparative scale: $5 billion is 0.03% of the U.S. GDP in 2010 or 0.14% of the total FY2012 federal budget request. This equals about what Americans spend on Halloween candy, costumes, and decorations each year, a quarter of what we spend on sports tickets each year, 10 days of war-fighting in Iraq and Afghanistan, and the cost of about one and half of the Navys DDG-1000 destroyers. Page 2 of 25

2. Funding Levels: As the chart above makes clear, we are supporting the administrations request except for some of the humanitarian accounts that received substantial supplemental funding in FY2010 (and are likely to need similar levels again), and except for sectors within accounts for which the request was low and for which there is already significant congressional support for returning funding to the FY2010 level (basic education, biodiversity, and water). In those cases, we have increased the overall account recommendation by the necessary increments over the request. 3. All accounts: In GHCS and DA, subaccount/sector numbers are for all accounts, including what might be spread into ESF, AEECA, and elsewhere.

Accounts
Global Health and Child SurvivalUSAID: $3.07 billion (Request)
Purpose: Supports improvements in maternal and child health, including immunization, nutrition, HIV/AIDS awareness and prevention, and reproductive health.

Justification: This administration has taken a smart, integrated approach to global health, linking together efforts on HIV, malaria, TB, maternal and child health and other programs in a coordinated, comprehensive approach that deserves congressional support. Appropriations for global health-- which are supported by an overwhelming majority of Americans across the political spectrum-- have provided funding that has enabled the U.S. to treat more than 3 million people living with HIV and prevent HIV transmission among millions more; reach 12 million people through malaria treatment programs; immunize more than 100 million children each year; treat 10 million people with tuberculosis; treat more than 168 million people for neglected tropical diseases; help millions of women prevent Page 3 of 25

unintended pregnancies; increased the number of skilled birth attendants present during deliveries; and support research to develop and deliver new vaccines, drugs, and other critical health tools. Note that while the numbers above are encouraging, they should be understood in the context of a world in which 1,800 million people live in poverty. The need is great. These resources allocated to global health are critical to advancing U.S. interests and other international development targets and objectives, mitigating the effects of the global financial crisis and securing a healthier, safer world. $846 million for Maternal and Child Health (MCH) (request), which would support some of the most cost-effective, efficient and results-driven programs the U.S. government funds. In fact, significant commitments from the United States and our partners have contributed greatly to reducing under-5 mortality in the developing world from 20 million in 1960 to 8.1 million in 2009. Unfortunately, despite this success, millions of children and their mothers continue to die from treatable and preventable causes. Funding for MCH programs over the years has barely kept pace with inflation and without significant investment in this critical area, the U.S. Government will not be able to exercise leadership in efforts to achieve the health-related Millennium Development Goals, which aim for significant reductions in maternal and child mortality. Support for the Administrations request would accelerate efforts to save mothers and children. Moreover, such American leadership also protects our security by ameliorating conditions that breed extremism: many countries with high child mortality rates or magnitude are also fragile states, recently emerging from conflict. Success Story Simple, LowCost Interventions Save Babies Lives

Safoura Amadu is the 19 yearold mother of Ibrahim, who was born preterm on March 8, 2011 at 1.46 kg (3.2 pounds). Baby Ibrahim did not grow well in his first days of life. Safoura was very worriedher first child had died at birthand she did not want to lose Ibrahim, her second child. Safoura sought help and when Ibrahim was ten days old she and the baby were admitted to the new Kangaroo Mother Care (KMC) center at the Maternit Issakha Gazoby in Niger. Ibrahims weight had dropped to 2.35 pounds. The KMC center cared for Safoura and her child by showing Safoura how to take two simple, lifesaving measures: provide skintoskin contact for Ibrahim by wrapping his unclothed body directly to her bare chest, and breastfeeding him exclusively. After 47 days at the KMC Centre, Safoura and two monthold Ibrahim were released to go home. Ibrahim weighed 4.67 pounds. Page 4 of 25

KMC, though simple and incredibly effective, has not been widely used in West Africa until recently. In December 2010, the MSHmanaged USAID AWARE II project collaborated with the West African Health Organization to set up two fully functional KMC demonstration centers in Accra, Ghana and Dakar, Senegal to train providers from Niger, The Gambia, Cameroon, Senegal, Sierra Leone, Burkina Faso, Togo and Mauritania in key essential newborn care and KMC. Safoura, who hails from a suburb of Niamey, says she now understands the benefits of antenatal care because of all the information she has received from staff at the facility and will be an advocate when she leaves the center. Twothirds of the worlds 8.5 million child deaths each year are preventable with lowcost interventions. Among these, 4 million die during the neonatal period. The most frequent causes of neonatal death are infections (36%), asphyxia (23%) and prematurity/low birth weight (27%). To address these causes of morbidity in Niger, Togo, Mauritania, and Burkina Faso, USAID AWARE II is introducing a package of essential newborn care activities, including initiation of early breastfeeding and KMC that can help reduce neonatal mortality up to 90%. Health Workforce Development: We urge Congress to call on the administration to develop a strategy on health workforce development to address core challenges in newborn and child survival and avert child deaths from preventable and treatable causes through identification, support and training of local community health workers. Success Story Community Health Workers - Bangladesh

In Bangladesh, Kamrul recognized the familiar symptoms of pneumonia when his 2-year old daughter Sweety was having difficulty breathing. Just three years earlier, he and his wife lost their son to complications of pneumonia. This time, realizing the need to act quickly, they took Sweety to see

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Momtaj, a trained volunteer community health worker. At her home, Momtaj was able to diagnose and treat Sweety with antibiotics, potentially saving her life. Momtaj is one of more than 1,600 local health workers trained by Save the Children, in coordination with USAID, and living in some of the most remote areas of Bangladesh and treating more than 40,000 case of pneumonia a year. In a country where respiratory infections claim the lives of more children under the age of 5 than any other illness, its good to know that Sweety, her family and others like them have access to a resource like Momtaj.

$722 million for investment in bilateral family planning and reproductive health (all accounts, request), which would represent an important step toward reaching the $1 billion required to furnish the appropriate U.S. share of the financial resources necessary to meet the need for contraception of the estimated 215 million women in the developing world whose contraceptive needs go unmet. The current FY 2011 investment by the United States government of $615 million in international family planning and reproductive health programs (of which $40 million is designated for UNFPA) pays dividends. According to a recent analysis, this assistance prevents an estimated 11.7 million unintended pregnancies, 5.1 million unplanned births, 5.1 million induced abortions (3.7 million of them unsafe), 140,000 children from losing their mothers, and 32,000 maternal deaths. For every additional $10 million invested, an estimated 610,000 more women and couples would receive contraceptive services and supplies, resulting in 190,000 fewer unintended pregnancies and 83,000 fewer abortions (of which 60,000 would be unsafe). $691 million for anti-malaria programs (request): Global malaria deaths have been reduced by 20% and many countries report impressive declines in malaria cases down by more than 50% in 43 countries around the globe. Our efforts save a minimum of 485 lives every single day, largely thanks to U.S. leadership and financing. The Presidents Malaria Initiative (PMI) has reached over 50 million people with prevention or treatment services. If the U.S. government backtracks on its commitment before the goal of near-zero malaria deaths is reached, the potential for malaria resurgence remains. Malaria is not only a public health problem, it is also a development issue. Economists estimate that malaria accounts for approximately 40 percent of public health expenditures in Africa and causes an annual loss of $12 billion, or 1.3 percent of the continents gross domestic product. Proven, cost-effective, and accountable bilateral and multilateral efforts, through PMI and the Global Fund to Fight AIDS, Tuberculosis, and Malaria (Global Fund) will continue to save lives, along with the development of innovative tools and technologies to combat this deadly disease. $236 million for anti-TB programs (request) which would move the U.S. closer to the Lantos-Hyde Act authorized levels of $4 billion over five years, the estimated US share of the cost to reach the international goals of the widely-adopted Plan to Stop TB, 2006-2015. A higher request of $650 million attracted significant political support this year in the form of a sign-on letter to Appropriations leadership endorsed by 31 members of the House. Tuberculosis is a contagious and airborne disease that disproportionately affects young adults in their most productive years. The disease threatens the poorest and most marginalized groups, disrupts the social fabric of society, and slows or undermines gains in economic development. USAID is working in 40 countries with national TB control programs to deliver high-quality services to find and treat TB earlier to prevent the spread of the disease and the development of drug resistance.

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$350 million for USAID global HIV/AIDS programs (request) $100 million for Neglected Tropical Diseases (request) to maintain USAIDs clear leadership in the control and, in some cases, elimination of such diseases through proven, cost-effective programs. Neglected tropical diseases (NTDs) such as sleeping sickness and river blindness are among the most common infections of the worlds poor. They debilitate or kill more than one billion people each year in the developing world. To date, more than 100 million people have received access to essential medicines for NTDs through funding from the US Agency for International Development . In addition to providing access to existing NTD therapies, there is a need to support the continued development, manufacture, and clinical testing of new drugs, diagnostics, and vaccines. Success Story Meningitis Vaccine

On the first day the vaccine was available in his village, Julien Bonboungou closed his hairdressing shop in the mid-afternoon and walked toward the local health center. There, he waited his turn to be vaccinated against a disease that, with terrifying regularity, kills or disables thousands in sub-Saharan Africa, including Juliens best friend from school, Herv Compaore. Herv died at age 17 in 2006, one of 3,802 people killed when an epidemic wave of meningococcal meningitis A swept through portions of Africa, including the West African country of Burkina Faso. Since the epidemics began more than a century ago, people who live in the meningitis beltfrom Senegal in the west to Ethiopia in the easthave had little protection against the disease. With devastating speed, it kills about one in ten people who get it and leaves one in four survivors permanently impaired by mental disorders or hearing loss. In December 2010, health officials in Mali, Niger, and Burkina Faso introduced a new vaccine that protects people from the type of meningitis that causes almost all epidemics of the disease in Africa. Called MenAfriVac, the vaccine can be given safely to children as young as one year old. And it is at a price that the health systems can affordless than US$0.50 a dose. For those reasons, many health authorities believe that MenAfriVac has the potential to end epidemic meningitis in sub-Saharan Africa. By the end of the month, almost 20 million people had been vaccinated. USAID contributed about $1.2 million for research to support introduction of this vaccine (surveillance, economic forecasting and regulatory issues. $150 million for Nutrition (request). More than 200 million children under age five and one in three women in the developing world suffer from undernutrition, which can be effectively countered with low-cost and high-impact interventions such as education to improve maternal diets, improved nutrition Page 7 of 25

during pregnancy, exclusive breastfeeding, diet diversification, and micronutrient supplementation. Nutrition activities are vital to the success of the Feed the Future Initiative as well as the Global Health Initiative, and funding will support the goal of reducing child undernutrition by 30 percent across foodinsecure countries.

Development Assistance: $3.3 billion (Request + enough to return basic education, biodiversity and water to FY10 levels)
Purpose: Builds the foundation for self-sufficiency through basic education, micro and small enterprise development, agricultural improvements, democracy and governance, and protecting the environment.

Justification: $1.1 billion for bilateral Food Security and Agriculture (all accounts). Food price volatility and extreme weather episodes, such as the current drought in the Horn of Africa, are just two factors which continue to overburden the world's poorest and most vulnerable people, pushing more and more into extreme hunger and malnutrition. These circumstances urgently underscore the continued need for a comprehensive and sustainable approach to agricultural development and food security offered by the United States Global Hunger and Food Security Initiative, also known as Feed the Future. Feed the Future focuses on investing in country-owned plans developed through engagement with local government and civil society; targeting small farmers and vulnerable populations; integrating gender, nutrition, climate change, and natural resource management; and monitoring and evaluating investment impacts. In addition to this request for bilateral assistance, InterAction also recognizes the importance of multilateral programs such as the Global Agriculture and Food Security Program (GAFSP) and the International Fund for Agricultural Development (IFAD). Sustaining the progress made in implementing Feed the Future is critical to ensuring the economic security and wellbeing of us all.
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Success Story: Feed the Future

As part of USAIDs Feed the Future program, Lydia Sasuthe Executive Director of Development Action Association (DAA)received critical training through the Africa Leadership Training and Capacity Building Program (Africa LEAD) on enhanced agricultural practices vital to achieving long term, sustainable food security. With the knowledge and skills she received through LEAD, Lydia and her colleagues have already trained more than 160 rural farmers, who are over 80 percent female, in dozens of communities around Ghana. They have adapted the Africa LEAD workshops to meet the needs of their communities, conducting trainings in their local language and using pictures to teach farmers about topics such as strategic planning and increasing production. Without USAIDs efforts to collaborate with local leaders like Lydia through initiatives like Africa LEAD, vital agricultural techniques and education would not reach the rural women farmers who can most readily impact food security in their homes and communities.

$925 million for basic education (all accounts, FY10 level)- Quality basic education drives economic growth, enables effective, sustainable development, enhances security and builds peace and respect for human rights. By maintaining current funding levels at $925 million, Congress will invest responsibly in programs that target the millions of children and youth across the globe that are uneducated, marginalized and without hope for gainful employment. The U.S. must proactively work to ensure that children and a burgeoning youth population are learning in school, so they are better able to participate in the economic and political life of their country. With some 70 million children out of school, and over half in conflict countries, basic education programs represent a relatively low-cost way to improve security and stability, and create global trading partners around the world. [Note: Overall DA request increased to allow 60% of this to be provided in DA.]

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Success Story Southern Sudan Radio Instruction

Sponsored by USAID and implemented by the Education Development Center, Southern Sudan Interactive Radio Instruction (SSIRI) uses radio-based learning and other technologies to deliver high quality education programs to nearly 100,000 learners in schools across Southern Sudan. The program has improved student learning across grade levels and subjects. First grade students participating in the program improved their math results by 22% in 2010, while non-participants raised their scores by just over 2%.

$205 million for biodiversity (FY10 level) Less than one-fifth of the world's forests remain intact; over half of global fish stocks are over-exploited; almost 3 billion people live in water-stressed areas; and by the end of the century up to 2/3rds of all species will be on the brink of extinction. It is often the poorest people that are most dependent on these resources for their livelihoods and wellbeing. These programs help protect some of the largest and most at-risk natural landscapes, as well as ensure clean water, promote rural peace and security, boost health, build democracies, secure environmental resources, and reduce poverty for millions of people. Success Story Conservation and Food Security in Quirimbas National Park, Mozambique Quirimbas National Park was established in 2002 to address deepening poverty due to overfishing, disease-related crop failures, exhausted agricultural lands and human/elephant conflicts. About 120,000 people live in and around the park, which contains vast woodlands and the largest marine protected area in Africa, home to elephants, lions, wild dogs, coral reefs and important turtle, whale and dolphin populations. The park is managed by the Government of Mozambique and local leaders with USAID support and technical assistance from conservation and development organizations. The Quirimbas Population Health Environment Project is enhancing food security and nutrition by establishing marine sanctuaries, reducing elephant-related crop damage and intensifying agricultural production. Eight notake fishing zones have significantly increased the number and size of fish caught; residents have been

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trained as community rangers; and 20 percent of Park revenue returns to communities, financing new water pumps and new schools.
Local Fishermen drying Fish, Island of the Doves, Quirimbas, Mozambique.

Tanya Petersen / WWF-Canon

$608 million for climate change response (all accounts, request) International investments to deal with the increasing challenges of climate change and extreme weather variability are essential to help meet the basic needs of people in extreme poverty and protect critical forest areas and biodiversity. These investments promote global security and minimize instability, especially in the most vulnerable countries. They can reduce costs by mitigating the need for disaster relief and avoiding costly interventions. Such investments also enhance international economic opportunities for U.S. businesses and workers, address global hunger and health challenges, as well as protect decades of U.S. investments in global development and conservation. In addition to this request for bilateral assistance, InterAction also recognizes the importance of multilateral programs such as the Strategic Climate Fund, the Clean Technology Fund, the Least Developed Countries Fund, and the Special Climate Change Fund. $315 million for clean water, sanitation and hygiene (FY10 level): We recommend $315 million, level funding from fiscal year 2010, for clean water, sanitation and hygiene (WASH) programs pursuant to the bipartisan Senator Paul Simon Water for the Poor Act of 2005 (P.L. No. 109-121). Around the world, one in eight people (884 million) lacks access to safe drinking water and two in five (2.5 billion) live without adequate sanitation facilities. Funding for water and sanitation programs helps address this crisis, safeguards progress made in health, education, security, poverty alleviation, and economic growth in the developing world, and is extremely cost-effective. A WHO study concluded that every dollar invested in clean water and sanitation yields $8 of increased productivity and decreased health costs. The 2011 Department of State Report to Congress on implementation of the Senator Paul Simon Water for the Poor Act states that as a result of USAID investments in 2010, over 2.8 million people gained improved access to safe drinking water and 2.9 million gained improved access to sanitation facilities. It is critical Page 11 of 25

that the U.S. maintain its support for these foundational and cost-effective programs in the countries and communities most in need. Success Story: Integrated Programming to Save Lives In Bangladesh, USAID is emphasizing wraparound services to ensure increased access to safe drinking water and hygiene promotion in a range of contexts. In so doing, USAID leverages WASH resources and improves the efficacy of a range of programs. For example, WASH programs are collaborating with the Safe Motherhood and Newborn Care project to enhance hygiene education and promote handwashing at the same time as traditional birth assistants are trained to protect mothers lives and keep infants healthy of infection. In 2009, this campaign reached more than 1.5 million people with messages about handwashing, and reached 60,000 married women with specific messages about the need for hygiene to protect infection among pregnant women and newborns. In addition, a Food for Peace program allocation to WASH led to the installation of wells and pipes that provided safe drinking water to 388,000 people in 2009. Under the same program, 423,000 people received access to sanitation facilities. These programs highlight the importance of WASH funding coming from multiple sourcesand giving necessary flexibility to integrate funding across areas for greater efficienciesas WASH is a critical element of the success of many of USAIDs programs, including newborn and child survival and nutrition and food security. $500 million for microfinance - Thanks to strong congressional leadership, USAID has been a global leader in microfinance and microenterprise development, one of the great success stories of U.S. foreign aid. This funding recommendation would ensure the current allocations keeps up with the tremendous potential and capacity of microfinance practitioners to make these sustainable and cost-effective programs available to the estimated 2.7 billion people around the world without access to formal financial services, which are both safer and less expensive than the informal alternatives. Public funding is critical to reaching the poorest and most marginalized, because very little of the private foreign investment capital in microfinance and microenterprise is going to the countries with greatest need especially in Africa or to support the microfinance services that reach the most marginalized. Resources provided to the microfinance and microenterprise sector, whether used to capitalize loan funds or build capacity, have proven to be able to leverage many multiples of resources provided by U.S. taxpayers, in the form of private sector investments and savings mobilized from poor and formerly poor clients.

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International Disaster Assistance: $1.3 billion (FY10 adjusted total)

Purpose: Enables quick and effective response by USAIDs Office for U.S. Foreign Disaster Assistance (OFDA) to humanitarian emergencies caused by natural and man-made disasters like famines, floods and earthquakes.

Justification: $845 million FY10 regular + $93 million FY10 non-Haiti emergency (estimated) + $62 million disaster risk reduction funding usually diverted to emergency response +300 million cash-based emergency food assistance = $1.3 billion The demands on this account have increased substantially in recent years as the number of people internally displaced by conflict and the number of natural disasters has risen. IDA funds are used to meet immediate needs that result from humanitarian crises and assist in critical recovery and rebuilding efforts. Additionally, funds in this account can be used to help people build the capacity to prepare for natural disasters and mitigate the damage disasters cause. In the past, USAID has been forced to rely on mid-year supplemental appropriations in order to address a long list of humanitarian crises, natural disasters and famines, a funding practice with serious human costs. During the FY2010 funding cycle, the administration and Congress committed to fully funding anticipated needs during the regular budget cycle. This shift is appreciated and should be continued. However, overall funding levels remain insufficient to meet the growing need. And, as the January 12, 2010 earthquake in Haiti demonstrated, when unexpected emergencies strike, OFDA does not have adequate contingency funding on hand and must reduce its response to protracted crises elsewhere in order to respond to the unanticipated. InterAction again supports an additional $300 million in this account to fund cash-based emergency food assistance for critical voucher programs, local and regional purchase of food, and

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related cash-based emergency assistance efforts. These resources are particularly important given the grim famine in the Horn of Africa, , and support more efficient use of taxpayer resources.

Office of Transition Initiatives: $56 million (Request)

Purpose: The Transition Initiatives (TI) account bridges the gap between emergency aid and long-term development through quick-impact political and economic reconstruction programs.

Justification: The recommended amount would allow the Office of Transition Initiatives (OTI) to continue its work as a key civilian instrument on the ground providing fast, flexible, short-term assistance targeted at key political transition and stabilization needs worldwide. OTI normally looks for matching funds from USAID regional bureaus and local USAID Missions to support portions of their work. One of the regions where their activities are most needed Africa is also the region where USAID regional bureaus and local USAID Missions have the least funding available to support match arrangements. Funding OTI at the level requested by the president would allow for more effective programs in Africa and in other countries like Haiti where since the weeks following the January 12, 2010 Haiti earthquake, OTI has played a significant role in providing assistance to the Government of Haiti. OTIs role in Haiti is continuing in 2011 with cholera prevention and response activities and will likely extend through 2012 in the ongoing earthquake recovery.

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Migration and Refugee Assistance: $1.85 billion (FY10 total)

Purpose: Funds protection and resettlement of refugees, displaced persons and victims of conflict. Implemented primarily through the United Nations High Commissioner for Refugees, the International Committee of the Red Cross, and other international humanitarian agencies.

Justification: This funding will enable the Bureau of Population, Refugees and Migration (PRM) to provide basic life-saving assistance for refugees and to maintain the U.S. commitment to resettlement for some of the most vulnerable. Funding for MRA has increased as the number of people displaced by conflict has grown, particularly in areas affected by conflicts in Iraq, Afghanistan, Pakistan, and Somalia. Unfortunately, the number of refugees and internally displaced persons has risen in recent years and at the end of 2009, developing countries were home to four-fifths of the worlds refugees. Not surprisingly, many lack access to the most basic life-saving serviceshealth care, safe shelter, clean water, and education. The displaced persons supported under the MRA account are almost entirely dependent on the international system to survive. Refugees often cannot safely return home and the countries that host them are typically poor themselves. Most refugees live under precarious conditions; reductions in assistance mean they will not have access to the most basic elements of survival including shelter, food, clean water and medical assistance. The funding level recommended for refugee admissions reflects the need for continued improvements in the U.S. admissions program. This program is a vital tool for protecting highly vulnerable refugees and it offers a long-term solution to some refugees trapped for years in protracted humanitarian crises.

Emergency Refugee and Migration Assistance: Full Replenishment

Purpose: A revolving fund established to ensure the availability of sufficient resources for refugee protection in unanticipated emergencies. Page 15 of 25

Justification: The ERMA account provides an important safety valve during times of emergency and the account should be fully funded at its authorized ceiling in FY 2012. The House-passed State Department Authorization Bill for FY2010 and FY2011 would have raised the ERMA ceiling to $200 million. The Senates FY11 long-term continuing resolution also included this provision. While neither of these measures made it into law, we strongly support increasing the ceiling and hope Congress will move quickly to do so. The current ceiling of $100 million has not been raised since the mid-1990s despite increased costs of providing emergency assistance. Raising the ceiling would allow the Administration to respond more fully to unanticipated crises like the 2011 crises in Libya and West Africa where ERMA funding was activated and would help reduce reliance on supplemental funding. InterAction also continues to advocate that the Secretary of State be given the authority to certify ERMA draw-downs. The current requirement of a Presidential certification is unnecessarily cumbersome and can result in unfortunate delays in the delivery of critical assistance.

International Organizations and Programs: $348.7 million (Request)

Purpose: Provides pledged U.S. contributions to United Nations-affiliated agencies such as the U.N. Development Program, UNICEF, and the U.N. Population Fund. Justifications: - UNICEF: $134 million to provide the U.S. Government's annual contribution to UNICEF, part of America's global investment in children. This funding enables UNICEF to partner with the United States to save and improve the lives of children around the world. UNFPA (United Nations Population Fund): $47.5 million to restore U.S. leadership in the key multilateral organization in the family planning and reproductive health field by providing a contribution at a level comparable to those of UNFPA's other leading bilateral donors. United Nations Women: $8 million, to provide financial and technical assistance for innovative programs and strategies promoting womens political participation and economic security in over 100 countries, particularly where they face the highest levels of insecurity. UNDP (United Nations Development Program): $71.535 million to support the UNs primary development agency as it works to encourage democratic governance, plays a lead role in coordinating the international long term responses to disasters and conflict around the world, and focuses on energy, environment, and health issues as they relate to human development. UNDP strives to ensure that all of its programs support gender equality and respect for human rights. UN HABITAT (Center for Human Settlements): $1.9 million to support the sole UN organization concerned with human settlements, which plays an important role in addressing housing and slum conditions in the developing world. IPCC (Intergovernmental Panel on Climate Change)/ UNFCCC (UN Framework Convention on Climate Change): $13.5 million to support an evidence-based and coordinated approach to addressing climate change. The IPCC provides independent assessments of climate science, and the UN Climate Change Secretariat as agreed to by 195 countries including the United States works to coordinate and support an effective global response to climate change.

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Millennium Challenge Corporation: $1.125 billion (Request)

Purpose: The Millennium Challenge Corporation (MCC) partners with impoverished countries that are committed to good governance, economic freedom and investing in their people to fund innovative projects that reduce poverty by removing obstacles to economic growth in sectors such as health, transportation, agriculture, power and fiscal transparency.

Justification: The MCC model clearly works. First, it works through the incentive for better governance it creates: the record clearly shows constructive and sustainable policy changes in multiple countries seeking to qualify for MCC candidacy. Second, it works through the country-owned and thus sustainable projects it funds, projects that are already being shown to succeed in creating economic growth and raising incomes. Fully funding the administrations modest request for the MCC will allow at least some of the compacts under development with currently eligible countriesIndonesia, Zambia, Georgia, Cape Verde and Ghanato move forward without further delay and without repeating the reductions in compact size caused by cuts in FY2011 funding. It will thus preserve momentum and reward good governance in these countries and avoid further erosion in MCCs reputation for reliability and its concomitant ability to motivate policy reforms. It will also provide support for the MCCs new initiative to expand private sector engagement in MCC compacts, leveraging private sector investments to encourage innovation in development projects and to increase the economic growth and poverty reduction achieved by MCC compacts.

Success Story: MCC Lesotho

In 2006, the MCC adopted a far-reaching policy, unprecedented in its scope, that incorporates gender analysis into all aspects of its programming. This commitment to gender is already impacting $2.3 billion worth of projects worldwide. In Lesotho, married women used to be considered legal minors and were denied the right to sign legal documents, open bank accounts, or own property without the consent of their husbands. In July 2007, Page 17 of 25

the MCC signed a compact with Lesotho to fund $362.6 million worth of development projects in that country, with specific investments towards improving the water, health, and private sectors. Recognizing that the status of women is a precondition for effective growth and poverty reduction and that this lack of rights prevented women from participating in the national economy, the MCC worked with the government of Lesotho to ensure that women were legally guaranteed equal economic rights something women in Lesotho had been advocating for years. As a result of this partnership between the MCC and the government of Lesotho, as well as the advocacy of local womens groups, the Parliament of Lesotho enacted a law to end the minority status of married women. This is a victory that not only opened doors to economic independence for thousands of women working to lift themselves and their families out of poverty, but also finally tapped the enormous potential of women in that country, who make up a highly educated two-thirds of the Lesothos formal workforce. This agreement has served as a unique example of how the MCCs gender policy has impacted womens lives before the projects have even begun. The MCC is now continuing its support for additional legal reform and is funding a training program and a public awareness campaign to strengthen womens rights in Lesotho. Further, the largest component of the Lesotho Compact is aimed at strengthening the delivery of essential health services, including for women, who in Lesotho, are infected with HIV/AIDS at a higher rate and at a younger age than men.

Global Health and Child SurvivalState: $5.64 billion (Request)

Purpose: Supports PEPFAR which combats HIV/AIDS through prevention, treatment and strengthening health systems as part of the administrations overall Global Health Initiative.

Justification: Thanks to the success of PEPFAR and similar efforts by our partner countries, we are now at a point where we may be able to hasten the end of the AIDS pandemic. UNAIDS recently issued a Page 18 of 25

report noting that the global annual rate of new cases of HIV dropped by 25 percent in the last decade. AIDS-related deaths have dropped and about 6.6 million people in low- and middle-income countries were receiving treatment at the end of 2010, turning what was once thought of as a death sentence into a chronic condition. Results of a recent pivotal NIH-funded study found that if an infected person was treated with drugs immediately, the risk of transmission to an uninfected partner was cut by 96 percent. Great strides are being made in the prevention of mother-to-child transmission, and HIV prevalence among young people (15-24) is declining. But these new promises for the future require resources, including funding for the nine million people who qualify for treatment but are unable to get it, and to reach the women and young people who will constitute a disproportionate share of new HIV infections. Through PEPFAR funding, the United States and other donors have strengthened health systems in affected countries, pushed recipient governments to assume more responsibility, and cut costs through the use of generic drugs and other measures. This recommendation includes $1 billion for the Global Fund to Fight AIDS, TB and Malaria, which together with the $300 million requested in the National Institutes of Health budget would keep the U.S. on track to meet the pledge it made to contribute $4 billion to the fund in the period 2011-2013. Through bipartisan support across two Administrations, the U.S. has provided strong support to the Global Fund. Due to a provision in U.S. law, for every $1 the U.S. provides to the Global Fund, $2 dollars must be matched by other international donors. Due to its principles of country ownership, accountability and performance-based funding, its ability to leverage funding from other donors and, most importantly, its proven results, the Global Fund is and should continue to be a critical component of the U.S. global health strategy. As of the end of 2010, the Global Fund has provided 3 million people with HIV/AIDS treatment, 7.7 million people with tuberculosis treatment, and disbursed 160 million insecticide-treated nets.

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Contributions to International Peacekeeping Activities: $2.145 billion (Request, adjusted)

Purpose: Provides pledged U.S. contributions to support UN peacekeeping missions.

Justification: The recommended amount is the number presented as necessary to meet this years peacekeeping requirements in the FY 2012 Congressional Budget Justification, adjusted upward to reflect over $200 million in assumed credits (primarily from exchange rate differences and closed peacekeeping mission surpluses) that have since been used up due to the significant cuts to this account in FY2011. $2.145 billion is required to pay our peacekeeping dues in full. By helping to support these operations, the U.S. stands with and leverages the contributions of other countries to cost-effectively further U.S. foreign policy objectives in volatile regions around the world. UN peacekeeping missions work to support and implement the terms of ceasefires and peace agreements, support elections, create safe space for the delivery of humanitarian assistance, build government capacity and protect people from genocide, war crimes, ethnic cleansing, and crimes against humanity.

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USAID Operating Expenses: $1.5 billion (Request)

Purpose: This account funds the operating costs of managing USAID programs, including salaries and benefits, overseas and Washington operations, and central support including human capital initiatives, planning, evaluation and security to keep U.S. personnel safe.

Justification: U.S. foreign policy objectives, both short-term and long-term, require USAID engagement around the world. Cuts to the USAID operating budget do not reduce those requirements, but rather stretch the agency ever thinner, leading to reduced efficiency, effectiveness, and oversight. After years of counter-productive hollowing out, recent increases have allowed the agency to begin to replace some of the valuable human capital it lost in the previous decades. Those increases must be sustained for USAID to hold up its part of the three legged stool that constitutes our national security, alongside diplomacy and development. Full funding for this account will also support the USAID FORWARD package of reforms designed to strengthen, streamline and optimize the way USAID does business for high-impact development and humanitarian response.

USAID Working Capital Fund: authority to establish and fund (Request)

Justification: InterAction encourages congressional authorization of a USAID Working Capital Fund, as recommended in the Quadrennial Diplomacy and Development Review and in the FY2012 Budget Request Appendix proposed legislative language. Modeled on an existing fund at the State Department and other agencies, this fund would allow USAID to use one percent of total obligations to fund improvements in procurement and contract management, providing valuable resources to increase the efficiency with which taxpayer dollars are spent and to better ensure that those dollars contribute to achievement of U.S. foreign policy goals with maximum possible effectiveness.

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USAID Capital Investment Fund: $189.2 million (Request)

Purpose: This account is utilized by USAID to modernize and improve information technology (IT) systems and finance construction of USAID buildings overseas in conjunction with the Department of State.

Justification: As USAID strives to increase accountability, transparency, and efficiency, up-to-date information management systems are vital. This funding will support continued modernization of such systems, as well as consolidation of USAID and State Department IT platforms as prescribed by the Quadrennial Diplomacy and Development Review.

USAID Office of the Inspector General: $51.5 million (Request)

Purpose: This account provides operating resourcesincluding salaries of Washington and overseas stafffor the Office of the Inspector General (OIG) for USAID, which provides audit and investigative coverage of USAID, African Development Foundation (ADF), and Inter-American Foundation (IAF) programs and activities.

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Justification: In a time of tight budgets, the Inspector Generals provision of information and advice to help these three agencies to improve performance and its detection and prevention of waste and fraud are more important than ever.

P.L. 480 Title II Food For Peace Grants: $1.69 billion (Request)
Purpose: The P.L. 480 Title II Food for Peace account provides for the donation of U.S. agricultural commodities to meet emergency and non-emergency food needs in other countries, reducing hunger and malnutrition and helping achieve food security goals.

Justification The current estimation for global emergency needs in FY2012 is approximately $5 billion. The U.S. has traditionally provided 40-50 percent of global emergency food assistance resources; 40% would translate into approximately $2 billion of the total $5 billion need. This $2 billion should be provided via P.L. 480 Title II and International Disaster Assistance (IDA), given that cash and commodity-based food assistance both target populations devastated by emergencies. We thus recommend providing $1.69 billion through Title II and $300 million through IDA. U.S. food assistance targets the world's most vulnerable populations in times of urgent need, whether provoked by natural disaster, conflict, or acute economic difficulties. A key principle of these recommended funding levels for emergency food assistance is moving toward greater parity between commodity- and cash-based assistance. A mixture of cash- and commodity-based resources will ensure the U.S. has a flexible toolbox of emergency response options. Success Story Food assistance has played a critical role in southern Sudan over the last few years and has been key in supporting families returning home. Grace Lado, a 25 year old mother of 2, fled fighting in Juba in southern Sudan when she was only 7 years old. When her family decided to move back a World Food Program food ration made it possible. In spite of the deteriorating security situation, WFP is currently feeding some 530,000 Page 23 of 25

people across southern Sudan. These lifesaving food rations are helping people to build a stable and secure foundation in a country that is hopeful for a brighter future.

McGovern-Dole International Food for Education and Child Nutrition: $200.5 million (Request)
Purpose: The McGovern-Dole account helps support education, child development, and food security for some of the worlds poorest children. It provides for donations of U.S. agricultural products, as well as financial and technical assistance, for school feeding and maternal and child nutrition projects in lowincome, food-deficit countries that are committed to universal education.

Justification: There are approximately 130 million school-age children in the world's poorest countries who are undernourished and would be eligible for school feeding programs. At a cost of $50 per student per year (based on 25 cents per meal per day for 200 days), the cost of reaching all children globally is approximately $6.5 billion. The United States is currently able to reach approximately 5 million children a year with a school meal. These school meals have been proven to encourage parents to send their children, especially their girls, to school and increases enrollment and attendance. School meals also help to improve cognition and nutrition and act as a safety net by freeing up to 10 percent of a familys income to be spent on other assets. Success Story Marie Anika, 8, lives in Haiti where McGovern-Dole provides funding for a school meals program. She currently lives in a tent with her family where their house stood before the 2010 earthquake. Marie and her sister dont always get to eat at home so they are eager to attend school everyday where they receive a hot meal of rice and beans. Maries principal, Sister Bernadette, sees the difference that the school meals can make: Theyd simply be too weak to study if they werent able to eat something at school. Its important for them to have a meal here, most of them come from very poor families. Now that Marie can continue her studies after the disruption of the earthquake she hopes to be a banker one day.

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Economic Support Fund: Robust funding

Purpose: The Economic Support Fund (ESF) advances U.S. interests by helping countries meet short and long-term political, economic, and security needs. These needs are addressed through a range of activities, from countering terrorism and extremist ideology to increasing the role of the private sector in the economy to assisting in the development of effective, accessible, independent legal systems to supporting transparent and accountable governance. Justification: The original intent of this account was to give political and budgetary support to U.S. friends and allies. However, in recent years, it has shifted focus to funding poverty alleviation and development programs administered by USAID. InterAction believes that funding placed in ESF should be used solely for the accounts original intent and not to supplant bona fide foreign assistance accounts. However, InterAction does recognize that ESF funds many important projects in developing countries, such as public health, education, non-partisan democracy promotion, and climate change response. InterAction supports robust funding for the account, but not at the expense of other development accounts, such as Global Health and Child Survival and Development Assistance.

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