Appearing Tuesday before the Senate Appropriations Subcommittee on State-Foreign Operations, USAID Administrator Raj Shah testified in support of the President’s request for $18.8 billion for USAID for FY2011, a 15% increase above FY10 funding. The hearing was a sober one, with Chairman Leahy taking a hard line on the need for fundamental reforms within the agency.

While noting that “every member of this subcommittee supports USAID’s mission,” Leahy said “[USAID] is not doing what the U.S. taxpayers and this subcommittee expect it to do” and that “USAID has to change its culture and the way it does business.” At the same time, he emphasized that his criticisms were “not to diminish in any way the many extraordinary USAID staff, or to ignore the important – often life saving –work which they and USAID’s implementing partners are doing to help improve the lives of people in the world’s poorest countries. There are many, many examples of this.”

In his testimony before the subcommittee, Administrator Shah stated that he agreed with some of Senator Leahy’s statements about the need for agency reforms.  He noted the particular weakness in the agency’s reporting and measurement of results, as well as the model for the awarding of USAID contracts. Shah emphasized that “investment in development has never been more strategically important than it is today. The investments we make today are a bulwark against current and future threats – both seen and unseen – and a down payment for future peace and prosperity around the world.”

Shah noted that USAID’s FY 11 budget falls into three general categories:

• Securing Critical Frontline States – $7.7 billion in State and USAID assistance will support U.S. development efforts in Afghanistan, Pakistan, and Iraq.
• Meeting Urgent Global Challenges – $14.6 billion in State and USAID assistance will support local and global solutions to national and transnational problems, including global health, food security, poverty, disasters, and environmental threats.
• Enhancing Aid Effectiveness and Sustainability – $1.7 billion will support the ongoing rebuilding of USAID personnel and infrastructure.

Shah highlighted one program from his recent trip to Afghanistan, where a combination of technical training, infrastructure improvement and jobs programs had greatly increased agricultural productivity in an area of 35,000 people near Kandahar, and he argued that the area would necessitate fewer “kinetic operations” by the military as a result.

Ranking Member Judd Gregg (R-NH) associated himself with Senator Leahy’s concerns about the need for reform of the agency. He expressed skepticism that USAID would be able to accomplish its objectives in the current budget environment, with highly limited funds.

Senator Kit Bond (R-MO) noted the importance of development assistance and that it is  “integral…to a broader national policy of ‘smart power’, which Secretary Clinton has advocated so strongly and I believe in…I’ve seen where USAID can be a tremendous force for winning the hearts and minds in other countries.”

Senator Mary Landrieu (D-LA) focused her question on providing universal education to Haiti, as well the need for a family-driven approach to children’s development. In further comments, she was concerned about the lack of coordination inside USAID and between USAID and other NGO’s and international donors, especially in the case of Haiti. Shah responded that a “hub” had been set up in Haiti to coordinate the complex international donor support, and he believed that it had been effective.

Senator Sam Brownback (R-KS) highlighted concerns about the decrease in “economic support” for Sudan in the coming year, given the fact that the country is undergoing a pivotal year with elections. He also discussed “neglected diseases” and agriculture.