MCC Expresses Disappointment Regarding Fiscal Year 2008 Senate Appropriations Committee Markup for the State-Foreign Operations Bill

Washington, D.C.—The Senate Appropriations Committee completed its markup of the fiscal year 2008 State-Foreign Operations Appropriations bill. Today’s bill provides $1.2 billion for the Millennium Challenge Corporation, an innovative foreign aid program that targets grant assistance to countries based on their good performance on 16 policy indicators.

“The Senate provision of $1.2 billion comes as a great disappointment. Not only is it less than half the President’s request of $3 billion for MCC, it is a 33% decrease from the House recommended level of $1.8 billion and a substantial cut from current levels,” said MCC CEO Ambassador John Danilovich. “Congress established the Millennium Challenge Account in 2004 as a different model for delivering development assistance by providing incentives for countries to make the difficult political, social, and economic reforms for aid to be used effectively. Countries are responding to this incentive, but the Senate funding level significantly undercuts the effectiveness of the MCC model and communicates an unfortunate message to those countries seeking a partnership with the United States. Moreover, the Senate’s $1.2 billion allocation will deny MCA Compacts to countries that have already developed results-oriented proposals that will lift millions of people out of poverty.”

Yesterday, MCC’s Board of Directors approved Compacts with Lesotho and Mozambique. The five-year $362.6 million grant for Lesotho will fund programs to increase potable water and to mitigate the devastating effects of poor maternal health, HIV/AIDS, tuberculosis and other diseases. Mozambique’s five-year $506.9 million Millennium Challenge Compact aims to reduce poverty levels through increased incomes and employment by improving water, sanitation, roads, land tenure, and agriculture. In total, both Compacts will improve the lives of nearly 6 million people.

In addition to the $870 million in these new Compacts, MCC has already signed Compacts totaling $3 billion with eleven partner countries: Madagascar, Cape Verde, Honduras, Nicaragua, Georgia, Armenia, Vanuatu, Benin, Ghana, Mali, and El Salvador. Under its Threshold program, MCC has also committed a total of $316 million to help 14 countries improve governance, root out corruption, and make social investments in the health and education of their citizens, particularly children.

Ambassador Danilovich added, “MCC’s work directly promotes U.S. security interests by creating hope and opportunity for the world’s poor and we strongly urge Congress to fund MCC at the President’s request. We look forward to working with appropriators to find the means to continue our innovative approach to development assistance and to build on our early success. We believe that MCC programs demonstrate the best aspirations of Congress and the American people to ensure that our generosity is matched by tangible results in our partner countries.”

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Millennium Challenge Corporation (MCC), a United States government corporation designed to work with some of the poorest countries in the world, is based on the principle that aid is most effective when it reinforces good governance, economic freedom, and investments in people that promote economic growth and elimination of extreme poverty.