No Bailout For Ailing Peace Corps

No Bailout For Ailing Peace Corps

NEW YORK - As the U.S. government continues its planning for a 700-billion-dollar bailout of the financial sector, the Peace Corps -- one of the United States' most successful foreign policy programmes -- is being cut back due to a budget shortfall of 18 million dollars.

In 2001, President George W. Bush announced he would double the size of the Peace Corps by fiscal 2007, to 14,000 volunteers. But the popular programme is currently some 6,000 volunteers short of that goal, and budgetary problems are forcing it to eliminate 400 new volunteers as well as postponing -- in some cases, indefinitely -- the deployment of volunteers already approved.

The Corps is also seeking to cut costs by consolidating some of its recruiting offices in the U.S. and deferring the hiring of some new personnel overseas. It has asked its managers in Washington and its 11 regional offices to reduce their budgets by 15.5 percent. Overseas, many of the Corps' foreign posts are reducing spending by consolidating two or more employee positions into one and reducing time devoted to volunteer training.

Foreign policy experts have expressed dismay at the programme's current dilemma. Among them is Patricia Kushlis, a retired veteran of more than 20 years with the U.S. Foreign Service.

She told IPS, 'I think the budget shortfall is ridiculous particularly compared to the amount the military has for recruiting. It's an underreported story because the Peace Corps appears to be intentionally keeping it quiet. It's not an administration priority and besides it makes the administration look bad.'

Kushlis's articles appear on the widely respected website, 'Whirled View' (

The Peace Corps was started by President John F. Kennedy in 1961, and has been one of the most successful foreign affairs programmes in recent U.S. history. Since its inception, some 190,000 volunteers have served in 139 less-developed countries.

These volunteers carry out a vast array of person-to-person tasks ranging from building wells and irrigation systems, to teaching school children, providing advice to subsistence farmers on increasing crop yields, counseling expectant mothers on pre- and post-natal child care, and assisting would-be micro-entrepreneurs.

The Corps currently has 8,079 volunteers working in 74 less-developed countries. Recruiting reached a peak of about 15,000 in 1966.

The cutbacks come at a time when both Republican and Democratic presidential candidates are encouraging the expansion of similar person-to-person 'soft power' programmes and increased citizen involvement in public service and civic engagement. The candidates, Democrat Barack Obama and Republican John McCain, made their enthusiastic endorsement of increased public service clear during a recent 'ServiceNation Summit' at Columbia University in New York City.

The Peace Corps' budgetary problems also come amid frenzied negotiations between the U.S. Treasury Department and Congress to work out the details of a proposed 700-billion-dollar rescue plan for the country's troubled financial services sector.

Treasury has proposed the fund in order to buy non-performing assets held by banks and other financial institutions, largely resulting from runaway mortgage lending, dramatically increased levels of mortgage defaults, a precipitous decline in U.S. property values, and the over-leveraging of financial sector borrowing in relation to its capital reserves.

Treasury says the objective of the bailout is to stabilise the U.S. financial system by injecting the liquidity it requires to continue to provide credit to businesses and individuals. Some critics, however, worry that the proposal will amount to a massive giveaway for banks and are calling on lawmakers to help homeowners facing foreclosure, cut bank CEO pay and boost the economy for the long term.

The Peace Corps budget shortfall has been caused primarily by the declining value of the dollar and the consequent increases in the cost of overseas leases, living costs for volunteers, energy outlays, and foreign staff salaries. The agency, which has a budget of 330.8 million dollars, estimates its foreign currency losses from 2008 alone to be 9.2 million dollars.

The Corps' dilemma has been compounded by the failure of Congress to approve its 2009 budget. The House of Representatives subcommittee with jurisdiction over Peace Corps funding has accepted the Bush administration's request for 343.5 million dollars, and its counterpart in the Senate has approved 337 million dollars.

But Congress may not pass that budget until after the presidential inauguration in January. Meanwhile, the agency must operate with its existing funding.

In a letter to Rep. Betty McCollum, a Minnesota Democrat who is a member of the House Appropriations Subcommittee that oversees Peace Corps funding, Corps Director Ronald A. Tschetter wrote, 'Tough budgetary decisions must be made now in order to ensure a financially healthy agency next fiscal year.'

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