which was that we would move away, move in the opposite direction.

A year ago, Deputy Secretary Armitage, who I do not want to ruin his reputation, but of all the people I have ever dealt with in my entire career of almost 32 years now he is the straightest, most up-front, and most honest interlocutor I have ever encountered. Now, that probably is going to cause him to be fired, but I really mean it. He is first rate. He testified, when we asked him on the crisis of North Korea, he said that he saw no crisis in North Korea because, "I think we have got some time to work with this." But he added: "I do not think, given the poverty of North Korea, that it would be too long after she got a good amount of fissile material that she would be inclined to engage with somebody, a non-state actor or a rogue state."

I hope the administration heeds your close friend's warning here. I know we have the multi-party talks, but quite frankly I do not see them going very far now, either. The administration has been working the North Korean issue with varying degrees of intensity since it took office. In that time the situation has gone from bad to worse. It may have happened anyway no matter what the administration was. It may not be controllable.

But North Korea has kicked out international inspectors, has removed the 8,000 fuel rods that have been stored in Yongbyon, and says it has reprocessed them, which is the most logical thing to happen, although we cannot confirm with absolute certainty that they have done that. We are left to wonder when the administration will view North Korea's growing stockpile of nuclear materials as an urgent matter that warrants serious, immediate negotiation. In Pakistan, after numerous assurances that no proliferation was occurring, we are now told that Dr. A.Q. Khan acted for years to sell nuclear technology without the knowledge or consent of the Pakistani Government. Quite frankly, I think that is incredibly fictitious. The idea-and I could be wrong; I am going to ask you about this that Dr. Khan could be loading up the equivalent of C141s and flying off material to other parts of the world and the ISI or the Pakistani military not know he is doing it, I find that absolutely, totally, completely beyond my comprehension.

I hope I can be proven to be wrong on that. But the fact of the matter is it is difficult to believe, and I look forward to hearing the administration's assessment of this matter and how the United States should respond from this point on.

A year ago the administration doubted the usefulness of international inspectors. Today we must conclude that inspectors, for example in Iraq, did a good job. The IAEA deserves credit for its inspections in Iran over the last year, and we have agreed that the IAEA will help monitor the dismantlement of Libya's program. Such an important institution I think deserves our strong support, not the sniping. It has not come from you, but it has come from this administration consistently since it has taken office.

Finally, let me say a few words about the budget. Once again, I commend you for securing a significant increase in the foreign affairs budget. I think we have had some great Secretaries of State, but in my time here I have known of no one who has engendered the loyalty, the thanks, and the gratitude of the employees of the

State Department more than you. You have done with them what you did when you were the commander of every unit you ever commanded and when you were the Chairman of the Joint Chiefs. You have instilled pride in them. They know you are fighting for them. I think it has had a marked increase in their ability, capability, and confidence, and I want to publicly commend you for that.

I happened to be with a group of State Department folks and two high-ranking people, who were high-ranking officials and Democrats in previous administrations, and to hear them talk about what you have done for the Department would please you very, very, very much. I do not think we recognize it often enough and how important that is. It is raw leadership you have provided, and once again you have fought for their budget and your budget.

The major increase is devoted to the Millennium Challenge Account and combating HIV-AIDS, two programs that are just getting off the ground, but these increases I am concerned may appear to have come at a price. Development assistance programs, which the President pledged would not suffer as a result of the Millennium Challenge Account, are reduced in the FY 2005 budget request. There may be a rationale for that I do not understand, but I would like to talk about that. So are refugee programs and aid to Russia and other neighboring states. Other important programs such as the anti-narcotics programs and international broadcasting are essentially straight-lined, with no increases for inflation.

I think one of the things-there is a lot of things that the chairman and I agree on and there is unanimity in this committee, one of which I think is the significant need for a fundamental reworking and beefing up of our public diplomacy. I think it takes a great deal more than we have in this budget.

I know you were I think you were there early on when the President asked several of us in the Oval Office right after 9-11 and after Afghanistan and we were worried about the Arab street to put together a program. I would like to resubmit to you a program that we put together, the total cost of which over a period of time is about a half a billion dollars.

I think we need something robust. I think we need something significant. I think that the chairman and Mr. Hyde are committed to, not working on the proposal I make, but working on such a proposal. So I hope, notwithstanding the fact it is basically flat-lined here, you will have an open mind to hearing some of our suggestions. We are a global power with global responsibilities and we cannot let our attention on Iraq and the Middle East cause us to lose our focus on other vital regions of the world.

There is a lot more to talk about. We could do this for a week. There is so much at stake here. Mr. Chairman, in the interest of time I am going to stop here. I look forward to having the opportunity today and, I know we cannot get it all done today, but over the next month or so to go into more depth on some of the issues that are raised here.

I will probably warn you-not warn you-advise you I want to talk a little bit about Pakistan at the front end of this meeting and then maybe about Iraq and nonproliferation if there is time. But again I compliment you on the esprit de corps you have created,

which has often been missing at the State Department. It is a big deal and you deserve all the credit, all the credit.

The CHAIRMAN. Thank you very much, Senator Biden.

I think, Secretary Powell, you can receive the ambience of a strong bipartisan support for the Department and for your work and on so many issues, and we appreciate that.

Would you please proceed now with your testimony.

STATEMENT OF HON. COLIN L. POWELL, SECRETARY OF STATE, U.S. DEPARTMENT OF STATE

Secretary POWELL. Thank you very much, Mr. Chairman. I have a prepared statement for the record and would submit it at this time.

The CHAIRMAN. It will be placed in the record in full.

Secretary POWELL. And I will provide some brief remarks summarizing that statement after I respond to a few of the points that you made, Mr. Chairman, and those made by Senator Biden.

Let me say what a pleasure it is for me to appear again before the Senate Foreign Relations Committee. It is always a joy to be with the members of the committee and your very professional, very experienced, very well-behaved staff. So I am very pleased to see that this morning.

Mr. Chairman, you listed so many areas that I could spend 5 hours talking about, but I will not do that. But it kind of was stunning to me to hear someone else list all the things that we have been working on. In the State Department we tend to be running the ground game. We tend not to be able to throw deep passes all the time. But every day, in so many different ways, wonderful diplomats and other individuals from all over the government, accredited to our missions around the world, are out there getting the job done for the American people.

Suddenly you find a Libya that is willing to give up its weapons of mass destruction. Suddenly you find a Sudan that is closer to peace than it has ever been in 20 years. Suddenly you go from a situation where India and Pakistan were almost at war with each other 18 months ago and we were worried about nuclear conflagration on the subcontinent, to a point now where they are cooperating with each other in moving forward and even starting to inch up on the difficult issue of Kashmir. And we find that Pakistan feels sufficiently confident in their position and, with our help and pressure, we are dealing with the the A.Q. Khan situation and we are going to get that network all ripped up.

The Moscow Treaty, the proliferation security initiative-all the things you have mentioned, Mr. Chairman, we are proud of, and especially proud of the young men and women of the Department who have done this for the American people, for the President, and for his foreign policy.

You paid me great tribute and I deeply appreciate that, but I could not have done it without the support that I received from this committee, from all the Members of Congress, and all the other committees that I report to. When I go out and visit our embassies and I give them a little pep talk, a "meet and greet," as they are called and you gentlemen and ladies have been kind enough to do it for us as you go out and visit our embassies-but I never finish

one of those meet and greets without saying: And by the way, I want you folks to know that Congress supports you and the American people support you.

I also tell them: I will go up and make the request for money and not only they give me what I ask for, they want to give me more, and I have to kind of say, no, that would not be right; I can only support the President's request, I cannot go any further, do not give me any more money.

But it is a reflection of the appreciation that you have for what they are doing, and it is so important to those young men and women to know that it is not just the Secretary who understands and appreciates what they are doing, but that you appreciate what they are doing, you support them, and that the American people support them. That is what makes it all work.

As I have told the committee on many occasions beginning I think at my very first hearing, I am a foreign policy adviser to the President, but I have also been given an organization to run, and I know a little bit about running organizations. I told you we would recruit. I told you we would fix the information technology system, we would fix our building operation, and our security procedures. I think the Department has done all of those things and done it in a manner that the Congress should have every reason to be proud of and approve of. We could not have done it without the support of this committee, and once again I thank you for that.

Mr. Chairman, I am sure in the course of our questioning we will get into all of the many issues that have been raised by you and by Senator Biden. What I would like to do is just go through my statement completely and then we can get into the various issues. The President's FY 2005 international affairs budget request for the Department of State, USAID and other foreign affairs agencies totals $31.5 billion and it is broken down as follows: foreign operations, $21 billion; State operations, $8.4 billion; P.L. 480 food aid, $1.2 billion; international broadcasting, $569 million-and I always am trying to see if we can raise that number because of the challenges that we face of the kind Senator Biden mentioned—and the U.S. Institute for Peace, $22 million.

The President's top foreign policy priority is winning the war on terrorism. Winning on the battlefield with our superb military forces is just one step in this process, just one element of our campaign. To eradicate terrorism altogether, the United States must help create stable governments in nations that once supported terrorism, nations like Iraq and Afghanistan, and we must go after terrorist support mechanisms as well as the terrorists themselves. We must also help alleviate conditions in the world that enable terrorists to bring in new recruits.

To these ends, our foreign affairs agencies will use the FY 2005 request money to continue to focus on the reconstruction of Iraq and Afghanistan. We will continue to support our coalition partners to further our counterterrorism, law enforcement and intelligence cooperation. And we will continue to do everything we can to expand democracy and help generate prosperity, especially in the Middle East as well as in other parts of the world.

Mr. Chairman, members of the committee, 48 percent of the President's budget for foreign affairs supports the war on ter

rorism, our No. 1 priority. For example, $1.2 billion supports Afghan reconstruction efforts, security efforts, and democracy building. More than $5.7 billion provides assistance to countries around the world who have joined us in the war on terrorism. And $3.5 billion indirectly supports the war on terrorism by strengthening our ability to respond to emergencies and conflict situations. Finally, $190 million is aimed at expanding democracy in the greater Middle East, which is crucial if we are ever to attack successfully the motivation to terrorism.

Mr. Chairman, two of the greatest challenges confronting us today are the reconstruction of Iraq and Afghanistan, and let me first turn to Iraq. The Coalition Provisional Authority and the Iraqi Governing Council have made great strides in the areas of security, economic stability, and growth, as well as in democratization. Iraqi security forces now comprise more than half of the total security forces in the country.

In addition, the Coalition Provisional Authority has established a new Iraqi Army, issued a new currency, and refurbished and equipped schools and hospitals. As you know, the CPA is taking steps to return sovereignty to the Iraqi people this summer.

Much work remains to be done. Working with our coalition partners, we will continue to train Iraqi police, border guards, and Civil Defense Corps, and the army in order to ensure the country's security as we effect a timely transition to democratic self-governance and a stable future. At the same time, we are helping provide critical infrastructure, including clean water, electricity, reliable telecommunications, and all the other infrastructure systems that are necessary for this country to get back up on its feet.

Thousands of brave Americans, in uniform and in mufti, are in Iraq now, working tirelessly to help Iraqi succeed in this historic effort. Alongside their U.S. military colleagues, USAID, State Department, and Departments of the Treasury and Commerce and so many other government organizations are working together to implement infrastructure, democracy building, education, health, and economic development programs. These efforts are producing real progress in Iraq.

As you know, Mr. Chairman, we are trying to implement the 15 November agreement. We are working hard to finish work on a basic administrative law that Iraq will use until they are able to put into place a full constitution. We are still committed to having a transitional government in place that we can turn responsibility over and sovereignty over to on the 30th of June.

We have been in touch with the U.N. team that is now in country, led by Ambassador Brahimi, who we know so well and who did such a great job in Afghanistan. He has met within the last 24 hours with the Ayatollah Sistani and we are waiting for a fuller report of his activities.

Clearly, we all would like to see elections as soon as possible, so there is no question about the legitimacy of the government to make sure that the new government is representative of all the people of Iraq. But elections take time, take preparations. We are hoping that Ambassador Brahimi will come out with some ideas as to how we can continue to march toward early transfer of sov