SECRETARY RICE: Thank you very much, Mr. Chairman, Senator Leahy, Senator Bennett. I thank you very much for this opportunity and I will ask to enter my entire statement into the record, but I’ll just make a few comments so that we may have ample time for discussion and questions.

I do want to thank the members of this Committee for the tremendous support that you’ve given to our need to support our men and women who practice diplomacy. The funding requested by the President for the State Department and for foreign operations, of course, does more than just support diplomacy because it is really strengthening our national security. The challenges that we face are, of course, sometimes military but overwhelmingly they are political and economic and they are a matter of helping to create a cadre of states that are well governed and that are democratic.

America is, of course, a nation at war and we are engaged in a conflict against terrorists and violent extremists. Across the world, our nation’s men and women in uniform and the members of the Foreign and Civil Service, as well as our Foreign Service Nationals, are shouldering great risks and responsibilities in advancing America’s diplomatic mission, working in dangerous places far away from friends and family and loved ones. They’re performing with courage and fortitude and heroism, and I would just like to take this opportunity to honor them, particularly those who have given their lives, and to recognize the courageous public servants and their families who endure long times of service abroad.

Mr. Chairman, the President’s budget is in support of a number of core missions: first of all, of course, to defeat the extremism and terrorism that we face in the world. You will see that there is support for coalition partners and for frontline states that are literally on the front lines against terrorists. But of course we know that it is not enough to have a short-term solution to terrorism, that is, defeating the terrorists who on a daily basis plot and plan to destroy innocent life, but also to deal with the creation — with the circumstances that created those terrorists. And we believe that the ideology of hatred which they espouse can only be met by advancing liberty and democracy. That is the goal that we have in the support for the young democracies of Iraq and Afghanistan, for a Broader Middle East Initiative that seeks to press authoritarian regimes throughout a region that for 60 years has had an absence of freedom, to press for change in that region. And change is coming. It comes with turbulence. It comes with difficulty. But change in the Middle East is coming.

And of course our democracy agenda is not limited to the Middle East but also to continuing to press for the democratization of those places that are still not democratic in Europe, in Asia. You mentioned Burma, Mr. Chairman, and we have been very active in that front. But also to press for change — for the stabilization of democracy in places that have already had democratic elections, for instance in Latin America.

We face global challenges: HIV/AIDS — the President’s Emergency Plan for AIDS is having an effect on those afflicted with AIDS and on those who might be afflicted with AIDS; we fight the counter-drug fight with allies around the world, and; of course, we’ve taken on recently the new challenge of the possible pandemic of avian flu.

Finally, we are engaged in working with transformational states. Those are the states that we believe have the capacity to make a great leap forward. They are states that are very poor, where poverty is still a problem but where they can be recognized for their democratic tendencies, for their good governance, for their desire to fight corruption. It is really a new paradigm for the delivery of foreign assistance and the President’s Millennium Challenge Account has been a real tool in pressing countries to deal with the kinds of problems that retard development and that retard the development of state capacity, so that American foreign assistance is not simply a crutch but rather an enabling mechanism for states to one day become independent of foreign assistance and to be able to attract trade and investment, which is after all how states really grow.

Let me say that we have a number of initiatives underway in the Department, what we call transformational diplomacy and I would only mention two. That is, that we have done a good deal now of global repositioning. We have repositioned 100 people from posts that are, we believe, posts that can afford to have fewer personnel, to reposition them to frontline posts in places like India and China where we really need more people. We’re also requesting more positions, but I just want the Committee to know that we’ve made a commitment that we will also reposition existing resources; that we will not just ask for new resources; that we will indeed make the hard choices about changing our global posture, which still looks more like the 1980s and 1990s than it should in 2006.

Finally, we have also made changes in our foreign assistance under the authorities that are granted to me for the direction of foreign assistance with the creation of a post in the Department which will help us to better align the programs of USAID and the State Department; that’s about 80 percent of all foreign assistance. We believe that with this program, which I’ve asked Randy Tobias to take on, and should he be confirmed by the Senate, he would also be the USAID Administrator.

The point here is to make sure that we make the best use of the very precious resources that we’re given. We recognize that the American people have been generous in their support of the diplomatic mission, of foreign assistance. We recognize that the American people want to be generous because we are compassionate when we look to helping developing societies, when we deal with humanitarian crises. But we also recognize that we have an obligation of stewardship and efficient use of those resources, and we believe that this new structure should give us a better opportunity to do so.

Thank you very much, Mr. Chairman.