WHY YOU ARE RECEIVING THIS ALERT: The House International Relations Committee is expected to consider legislation on Thursday, June 12, to authorize the Millennium Challenge Account (MCA), a new foreign aid program proposed by President Bush.

BACKGROUND: As envisioned, the MCA could increase U.S. development assistance by 50 percent if added to the current foreign aid budget. The MCA would impose strict criteria to grant this new money, requiring countries to demonstrate performance on specific standards, including good governance, investment in people and economic freedom. The MCA should be considered as one tool in a broader, more comprehensive approach to U.S. foreign assistance. Significant funding increases for existing development programs will be needed for those very poor countries that will not qualify for the MCA. Regular development programs can also be made more effective. Catholic Relief Services and the U.S. Conference of Catholic Bishops welcome this new initiative but have several recommendations to ensure that the MCA accomplishes its goal to reduce poverty in the world's poorest countries (see the USCCB/CRS June 6th letter to the House International Relations Committee, www.usccb.org/sdwp/international/hirc.htm).

HOW YOU CAN HELP: Attached is a list of House International Relations Committee members. Please identify your Representative and call or email him/her today, urging them to ensure that they draft the MCA to include the following important provisions:

1. Target only the world's poorest countries to receive MCA funds. Only about 20 percent of all U.S. foreign assistance now goes to the poorest countries. MCA funding would most effectively reduce global poverty if it targets low-income countries whose access to other funding is extremely limited.
   
2. Access to the MCA should allow the participation of as many deserving nations as possible by establishing a "second tier" class of eligible countries. A substantial number of very poor countries that can use aid funds effectively would be ineligible for MCA funds under the President's proposal. A "second tier" composed of countries that meet most, although not all, of the Administration's eligibility criteria should be established. At least one-third of MCA funds should be allocated to the second tier countries beginning in FY 2005.
   
3. The MCA should be implemented in a manner that supports and strengthens poverty reduction by increasing transparency and the level and quality of civil participation. To ensure that MCA funds are used efficiently, local civil society organizations and international private voluntary organizations that partner locally, like Catholic Relief Services, should have direct access to funding under the program.

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