C before we say or do anything else today i want to pause to extend our thoughts and our prayers for the wellbeing of with scalise and our colleagues. Police and staff who were attacked by gunman this morning in virginia. Several members of this committee were there. This is a sad day for our country. We still dont have all the details but we do know that there are those who want to use acts of violence to create chaos , to disrupt our democracy. The American People will not let them when. So after deliberation with the Ranking Member, we have decided to proceed. The secretary has a very challenging schedule. Given the circumstances of the delayed start of our hearing, i want to appeal to members who intend to use less than their full five minutes so that more of our colleagues have a chance to speak and i will be abbreviating my Opening Statement. Today secretary tillerson will testify on the administrations budget and reorganization plans for the department of state. First off mr. Secretary let me welcome you to this committee. This committee and your department manage an essential responsibility for our government set at its founding. That is defending our nation. The committee strives to be bipartisan. We are fortunate to have a Ranking Member, mr. Ingle who shares this approach. We look forward to working with you mr. Secretary. We wish you success in your tenure. For generations america has been the leader of the world. This has required great sacrifice that our commitment to stability, to the rule of law, open markets, human rights and our work through alliances all paid off greatly. We have made mistakes, no doubt sometimes by overreaching and our commitments and sometimes by not reaching at all but our nation has certainly been a force for good. If we do not lead in security and commerce as well and in values and in ideas, the vacuum will be filled by others including jihadists and others wishing us great harm. Leaving takes resources. Sufficient resources are needed for our military for sure but also for her diplomats working to and the many conflicts impacting your security. Thats what the generals say. Todays wellconnected age in which threats can come from anywhere we need a very broad diplomatic process and that takes resources too especially to keep our diplomats safe. Resources are also needed to support our humanitarian relief to support development. Their work abroad benefits america at home. Consider that a modest emergency investment and west africas health stopped cold what looks like and emerging ebola epidemic in our country a few years ago. Mr. Secretary i am confident that you will find new efficiencies in your department. There are ways to attack but many here remain concerned by the hand that you were dealt with in the budget and look forward to strengthening. Congress also has a responsibility not to hamstring the department with mandates and with restrictions and these have accumulated over years compounding your management challenges. For our partnership to succeed we need to communicate often, too often administrations go it alone. Its frankly the last administration did. Iran and cuba policy are examples. Lets break that pattern and i will now turn to mr. Ingle. Thank you very much mr. Chairman. I know that the shooting in alexandria this morning is on our minds. Its shocking and we are hoping for the best for our colleague Steve Scalise and the other victims of the attack wish them a speedy recovery and we are thinking of their loved ones this morning. Mr. Secretary we are glad to have you here. I wish you well but i have to tell you im deeply skeptical about this budget which in my view is part of a broad policy strategy that would cripple american diplomacy and Development Efforts around the world to the strategy has two carry out first and foremost an action with an initial purge that pushed out some of our most accomplished career diplomats. The administration had lemonade tears of expertise expertise and experience in one fell swoop. With a few exceptions the president simply has not nominated anyone to help you run the department. Mr. Chairman i ask my graphic he displayed. This is an organizational chart within the state department with boxes of President Trump confirmed nominees. Officials in place in the last administration. The yellow boxes are nominees waiting for action and all the right boxes forward to president hasnt even submitted a nomination. Far behind where president bush and obama were this point and that doesnt cover the dozens of vacant ambassadorships. We shall keep this in mind the next time there is talk about construction in congress. People have not been confirmed not because of the destruction but because they havent been submitted. Career diplomats devoted Public Servants but there unable to direct their Foreign Policy. What is the presence approach to russias hacking or election or nonproliferation or Human Trafficking or africa or the arctic . When will we have the under secretary and assistant secretary and ambassadors at large but these policies in place . The second indication of the administrations view of the state department is document. Its the budget. The 2018 state Department Budget submitted to congress by the secretary of state. Calls for 32 cut to our International Affairs budget. Ive never seen a Budget Proposal so reckless in all the years i have been here so its insulting to our personnel and quick to have bipartisan opposition. Mr. Secretary when we spoke he said we hope to put the state department glide path to reduce spending levels. A one third cut is more like a nosedive. Imagine being an american diplomat learning this is the value the administration puts on your service would imagine waking up every morning a dangerous place and the other side world knowing the officials responsible for your safety havent even been nominated and americas top diplomat which is you mr. Secretary coming to umatilla asked us for a 32 budget cut. Some consequences of his budget will hit us down the road if we fail to invest in diplomacy and develop now. The concepts welcome back to us and the worst well need to fight. Senator Lindsey Graham said it well and that will make him implement this budget to put a lot of he said we would have quote a lot of them got a in the making up we actually implemented the state department cuts unquote. He is right, the budget cuts Embassy Security by more than a billion dollars, 62 Embassy Security cut 62 . On this Point Congress retains the power of the purse so we will have the last word on this issue. So i think we need a lot of clarity on this and i think this committee should keep pressing these issues until we have the answers we need. Im going to stop the mr. Chairman. I will submit the resume statement for the record. Thank you mr. Engel. This point we are pleased to be java mr. Rex tillerson the 69th secretary of state. Prior to his appointment as secretary spent four years at exxonmobil culminating as the chairman and chief executive officer. Secretary tillerson also has long been involved with the boy scouts of america most recently serving as the Boy Scouts National president. Mr. Secretary welcome to our committee. Without objection the witnesses both appeared statement will be made part of the record. Members will have five calendar days to submit any statements or any questions they might have of the secretary or any extraneous material for the record. Also we want as many members as possible to have a chance to question the secretary so to accomplish that i just ask that everyone respect the time limit and if that means leaving an adequate amount of time for the secretary to answer your questions. We will begin with secretary tillersons testimony. Thank you chairman royce, Ranking Member angle and distinguished members of the committee. Of course we were all stunned by the news of the shooting involving your colleague members of Congressional Staff and Capitol Police. Congressman scalise is a friend of mine and he is a friend and represents many friends of mine back in louisiana. My prayers and those of my colleagues at the state department are with the injured and with those members of Law Enforcement who responded to this mornings attack. Today i would like to continue the conversation that we have started about the administrations state department and usaid budget request for fiscal year 2018. Before i begin my testimony on the budgeted like to offer a point of view on the russian sanctions legislation currently being considered by congress. I certainly agree with the sentiment that has been conveyed by several members from both parties that russia must be held accountable for its meddling in u. S. Elections. I would urge congress to ensure any legislation allowing the president to have the flexibility to adjust sanctions to meet the needs of what is always an evolving diplomatic situation. Essentially would ask for the flexibility to turn the heat up when we need to but also to ensure that we have the ability to maintain a constructive dialogue. As we all know americas Global Competitive advantages and standing as a leader are under constant challenge to the dedicated men and women of the state department and usaid carry out the important and often perilous work of advancing americas interests every single day. That mission is our unchanged however the state department and usaid like many other institutions here and around the world have not evolved in their responsiveness as quickly as new challenges and threats to our National Security have changed and are changing. We are challenged to respond to a postcold war world that set in motion new Global Dynamics and they post 9 11 world characterized by extraordinary threats that present themselves in ways never seen before enabled by technological tools that we have been ill prepared to engage. The 21st century is argued presented many evolving challenges to the u. S. National security and economic posterity. We must develop more accurate responses to protect and advance the interests of the American People. With such a broad array of threats facing the United States in fiscal year 2018 budget request 6 billion in the demonstrations objective of making americas security are top priority. The First Response ability of government is a the security of its own citizens and we will orient their diplomatic efforts for fulfilling that commitment. While our mission will also be focused on advancing the economic interest of the American People the state departments primary focus will be to protect our citizens at home and abroad. Our mission is at all times guided by our longstanding values of freedom, democracy, individual liberty and human dignity. The conviction of our countrys founders is enduring that all men are endowed by their creator with certain inalienable rights. As a nation we hold high the aspiration that all will one day experience the freedom we have known. Our young administrations foreignpolicy where motivated by the conviction that the more we engage with other nations on issues of security and prosperity the more we will have opportunities to shape the human rights conditions in those nations. History has shown that the United States leaves a footprint of freedom wherever it goes. Ensuring the security prosperity to the American People and advancing our values has necessitated difficult decisions in other areas of our budget. Fiscal year 2018 budget request includes substantial funding for many foreign assistance programs under the auspices as the usaid and the state department but we have made our choice is to resist funding for other initiatives. Even with reductions in funding we will continue to be the leader in international development, Global Health, democracy and Good Governance initiatives and humanitarian efforts. If natural disasters arent epidemic to strike overseas or america wrote respond with care and support. I am convinced we can maximize the effectiveness of the programs for americas helping hand in the world. This budget request also requested every tax dollar spent is aligned with the department of usaids missioncritical object gives Greater Press focuses the state department and usaid efforts on missions which deliver the greatest values and opportunity for success for the American People. The state department usaid budget increased over 60 from fiscal year 2007 reaching a record high of 85. 6 billion in fiscal year 2017. Recognizing that this rate of increasing funding is not sustainable for fiscal year 2018 budget request seeks to align the Core Missions of the state department with historic funding levels. We believe this budget also represents the interest of the American People including responsible stewardship of the publics money. I know there is intense interest in the state department usaid redesign efforts. We just completed information on our organizational processes and culture through survey made available to every one of our state and usaid colleagues. Over 35,000 surveys were completed and we have held in person listening sessions with creative individuals to obtain their perspective on what we do and how we do it. I met personally with dozens of team members and spoke candidly about their experiences. From this feedback we have been able to get a clear overall view of our organization. We have no preconceived outcomes in our discussions of the goals priorities and directions the state department and usaid are not token exercises. The principles for listening sessions and subsequent evaluation of our organization are the same as those which i stated in my confirmation hearing for our Foreign Policy. We will see the world for what it is and be honest with ourselves and the American People, follow the facts where they lead us and hold ourselves and others accountable. We are still analyzing the feedback we have received and we expect to release the findings of the survey said. From all of this one thing is certain, and listening what my people are telling me are the challenges facing them and how we can produce a more efficient and effective state department at at usaid and we will work with the team and work with congress to improve both organizations. Throughout my career ive never believed nor have i ever experienced that the level of funding devoted to a goal is the most important factor in achieving. Our budget will never determine our ability to be effective. Our people will pick my colleagues at the state department and usaid are deep source of inspiration and their patriotism professionalism and willingness to make sacrifices for country our greatest resource. Im confident the u. S. State department and usaid will continue to deliver results for the American People. Thank you for the time and ill be happy to answer your questions. Thank you very much mr. Secretary. This committee has worked to make the state department more efficient and as you know the first Aid Authority and over decades was signed into law. That was our work product. We stand ready to work with you to reform the department and reorganization on this question i just asked that you commit to it intensify consultation between your staff and the committee and plans for reform. We certainly will do that and we welcome your input. I only have one question that goes to the issue of north korea secretary tillerson. The situation we were encouraged yesterday first to hear news that auto warm beer would be returning to the niceties but then we found out about his condition. We were horrified to learn that he was in a coma. This is outrageous and on monday we heard secretary mattis call north korea the top Security Threat to the United States. You have been working a strategy to ratchet pressure on the regime. The last congress we passed and signed into law a comprehensive north korea sanctions bill to go after those assisting the regime and recently passed out of this committee again another piece of legislation. This one to exact north koreas use of overseas labor indentured servitude and the check goes to the regime and they use it for hard currency and they can use it for their Nuclear Weapons program. We heard to mix reports on chinas cooperation on this and there is a new report out this week that shows by cracking down on a relatively small number of interlinked Chinese Companies that deal with north korea we can really crank things up and reportedly the administration has asked china to act on some tim entities. If they do that every prepared for the sanctions we put on the books now to act unilaterally with thirdparty sanctions in order to cut off the hard currency. The very expensive program to run costing billions and billions of dollars a year and frank a. They dont make much of anything so they need the hard currency coming in and order to fund this program. This is what i wanted to ask you. Thank you chairman. I am familiar with the reports you are referencing. The Treasury Department has that report and will examine the study that was done and the results they found. The approach we are taking with north koreas as your where is one of the eliciting countries all over the world to support us in putting pressure on the regime to change and alte