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Newsletter:  September 2002/ Issue 3
House International Relations Committee Hearing on the Debt Reduction for Nonproliferation Act of HR 3836
Excerpts from Testimony

Testimony by Rep. Ellen O. Tauscher (D-CA), Sponsor of HR 3836

Mr. Chairman, Ranking Member Lantos – I would like to thank you for the opportunity to testify before your committee on the issue of debt for nonproliferation.

The timing of this hearing could not be better. The May 24 arms agreement with Russia and the G-8 Summit in Canada this June together provide a critical framework for US-Russia relations that emphasize increased economic and security cooperation, and identifies preventing the spread of weapons of mass destruction as a top priority for both countries.

Secretary Powell called the Moscow Treaty an important element of a new strategic framework involving a broad array of cooperative efforts in political, economic and security areas.

As you know, they (the G-8) launched a new Global Partnership Against the Spread of Weapons and Materials of Mass Destruction to support specific cooperation projects that address nonproliferation, disarmament, counterterrorism, and nuclear safety issues.

This commitment to nonproliferation itself is important, but even more notable is the leaders’ agreement to fund nonproliferation programs at $20 billion dollars over the next 10 years and specify that “a range of financing options, including the option of bilateral debt for program exchanges, will be available to countries that contribute to this Global Partnership.”

As you know, more than a decade after the end of the Cold War, thousands of poorly guarded nuclear weapons and material still remain in Russia, increasing the possibility for their diversion or theft into the hands of terrorists. Existing US-Russian threat reduction programs have had an impressive track record over the last decade, but the challenge of securing Russia’s vast nuclear arsenal is far from having been met. A more robust investment and international participation is needed to accelerate and complement US efforts and debt for security swaps are the ideal investment.

For example, the Department of Energy’s Material Protection, Control and Accounting Program will not complete comprehensive security upgrades on fissile materials in Russia until 2011, but more focused funding and effort could enable at least rudimentary security improvements at these sites over the next nine months.

In January of last year, a bipartisan task force, chaired by former Senator Howard Baker and former White House Counsel Lloyd Cutler, highlighted this problem stating: “…the national security benefits to US citizens from securing and/or neutralizing the equivalent of more than 80,000 nuclear weapons and potential nuclear weapons would constitute the highest return on investment in any current US national security defense program.”

The Baker-Cutler task force strongly recommended that, at a minimum, investment in DOE nonproliferation activities should be increased to roughly one percent of the annual US defense budget, which would total about three billion dollars per year, or $30 billion over the next 10 years.

I welcome the administration’s pledge at the G-8 meeting to commit $10 billion dollars to threat reduction programs. But to actually improve on current funding levels, the $10 billion figure has to be a floor and not ceiling. Nonproliferation programs are the only proven way to literally buy down our risk that a loose Russian nuke will be stolen by a terrorist and aimed at us.

The G-8 agreement and its specific reference to debt reduction as a mechanism for combating the spread of weapons of mass destruction is a vital development as it does a number of things: it helps Russia reduce its outstanding debt; it involves Russia and the rest of the G-8 countries in programs that directly improve US national security; and it extends burden-sharing to our allies. In terms of Russia’s incentives, we know that Russia has identified $17 billion dollars in its fiscal year 2003 budget for servicing its debt.

Now is the time to seize this unique moment in history. Accordingly, I introduced bipartisan legislation supported by three members of this committee, Representatives John McHugh, Mark Green and Adam Schiff, the Russian Federation Debt Reduction for Nonproliferation Act of 2002.

The legislation would establish debt for nonproliferation swaps, is modeled on past successful debt reductions for environmental efforts, and authorizes the President to establish an office at the Treasury Department to administer the debt reduction and authorizes $150 million in appropriations over fiscal years 2002 and 2003 to offset the cost of debt reduction to the Treasury.

The bill gives the President authority to reduce the Lend Lease and agricultural portions of Soviet-era debt, and replaces those obligations with new obligations defined (Continued on page 9) through a “Russian Nonproliferation Investment Agreement” negotiated with the Russians and resulting in a Nonproliferation Fund.

Both my bill (HR 3836) and the Senate bill (S1803) would allow the President to sell the debt to an eligible third party or to the Russian government, provided that required nonproliferation plans, commitments, and transparency measures are in place.

The bill (HR 3836) further requires that nonproliferation programs be approved by the US government directly or via its representative on any governing board established to manage the funds, incorporate best practices from established threat reduction and nonproliferation assistance programs, be free of Russian taxes, be subject US audits, and that seventy-five percent of the funds be spent in Russia.

Finally, the bill mandates that the President or his designee enter into discussions with the Paris Club of creditor states on getting them to agree that a significant portion of their bilateral debt with Russia be devoted to nonproliferation and arms reductions activities.

I recognize that our bill and the Senate version are but one way of addressing debt for security, but I believe that it gives the President a vital tool to defend our nation and I look forward to working with my colleagues in Congress and the administration to move this measure forward.

Thank you, Mr. Chairman.