Challenges facing the foreign service - Ronald L. Spiers' address at the State Department's 22nd annual Foreign Service Day on May 1, 1987 - transcript

US Department of State Bulletin, July, 1987

Challenges Facing the Foreign Service

Address at the State Department's 22nd annual Foreign Service Day on May 1, 1987. Ambassador Spiers is Under Secretary for Management.

This is the third annual report I have been privileged to give on this occasion since I became Under Secretary of State for Management in November 1983. It is a practice I hope future Under Secretaries for Management will follow. We have a responsibility to you. You are members of our extended Foreign Service family, bonded by your continuing interest in the institution you have served loyally and well.

Last year, I said that 1985 had been a difficult year for the Department and for the Foreign Service. I reported then that the picture for 1987 was clouded but threatened to worsen. That, unfortunately, turned out to be an understatement.

I would like to focus on three subjects today:

The resource situation for the Department of State as we look ahead to 1988;

The personnel problems we face this year when large numbers of talented senior and midlevel officers will leave the Foreign Service involuntarily; and, equally important,

Diplomatic security at a time when the Department of State is under intense criticism in light of recent events in Moscow involving Marine security guards and our new chancery now under construction.

The State Department Resource Crisis

Few, even in the Department, fully understand the seriousness of the resource situation we now confront as a consequence of the executive-congressional impasse over how to control the Federal deficit. I want to give you, today, a somewhat more focused report on our resource situation than you may have heard on the nightly news. Unfortunately, this means citing some figures.

The overall budget of the Department of State is somewhat over $3.5 billion. About half of this, however, is what I call "transfer' payments. These funds have nothing to do with running the Department but pay our membership dues to international organizations, our contributions to international commissions of one kind or another, and the money to finance international refugees and narcotics programs.

To convey the real dimensions of our problems, I have to telescope in on our salaries-and-expenses account. This is the money that pays all of the normal expenses of our over 23,000 American and Foreign Service national employees at more than 250 posts overseas and in the United States. This account finances our salaries and allowances. It pays for storing and transporting our household effects. It buys our vehicles and furnishings. It finances our communications, our computer systems, our security programs, our training, our travel, and so on.

For 1986, the President proposed a lean budget of $1.47 billion for this account. However, the Congress cut it by over $80 million, and we were forced to absorb the shortfall from our ongoing activities after the fiscal year was well underway. In a time of trillion-dollar deficits, $80 million may not seem like a lot of money. But for a small agency like State, whose annual budget is less than the cost of a single Trident submarine, an $80-million cut assumes monstrous proportions. We spend more than 65 cents out of every dollar on people-related costs. Therefore, to absorb the $80 million from personnel expenses, we would have had to put all of our employees worldwide on unpaid leave for 44 days. Obviously, this did not make sense.

We tried to make up for this short-fall by asking for slightly more money--$1.84 billion--for 1987. However, Congress again cut the Administration's request for State, this time by $314 million, and earmarked $127 million of what we got for security. As a result, when the dust settled in 1987, we ended up with only $6 million more than last fiscal year; but bear in mind that last year we had to cut out a lot of our important activities to stay within the appropriated amounts.

So this is the key figure, the bottom line, to keep in mind: we have $6 million more to spend in 1987 than in 1986. Six million dollars is a lot of money. However, let me describe what this $6 million has to cover:

$76 million in overseas inflation and exchange rate losses (at one point last December, our West German posts were losing a half million dollars a day due to the drop in the dollar's value);

$55 million in domestic mandatory wage and price increases, including the recent American pay increase and the cost of managing the new retirement system; and

$20 million in new programs, such as opening several new posts, establishing a new congressionally mandated Inspector General's office, implementing the new immigration law, and so on.

That adds up to a minimum of $151 million in mandatory increases in our expenses. Where were we going to find the funds to pay for these increases? In a salaries-and-expenses agency such as State, the only possibility is out of current day-to-day operations. That is the genesis of the following cuts we were forced to make in 1987.

We took $114 million out of equipment and furnishings programs, postponing the modernization of our aging communications and computer systems. Noncareer ambassadors have asked me repeatedly why the State Department personnel in their missions are so poorly equipped compared to our colleagues from other agencies. This is the answer.