1. Greetings from AFSA President John Naland. Here is your update on what we are working on at AFSA headquarters. As always, I welcome your comments or suggestions at naland@afsa.org.

MEETING WITH SECRETARY RICE

2. AFSA State Vice President Steve Kashkett, AFSA attorney Neera Parikh, and I met with Secretary Rice on July 26. Please see my separate message reporting on that session.

OVERSEAS PAY DISPARITY

3. In a major step forward, legislation was introduced in the House on July 27 to correct the overseas pay disparity. As previewed in my last update message, there are two versions: one simply implementing Overseas Comparability Pay and the other closing the same pay gap in conjunction with implementing Pay for Performance. As previously explained, the Bush Administration supports the Pay for Performance concept while many Democratic members of Congress are wary of that model based on the experience of attempting to implement such a system for civilian employees at the Departments of Defense and Homeland Security. The AFSA Governing Board, meeting on August 1, re-affirmed AFSA’s position that we can live with either version.

4. The new House legislation is co-sponsored by Representatives Tom Davis (R-VA), Donald Payne (D-NJ), David Scott (D-GA), Chris Smith (R-NJ), Chris Van Hollen (D-MD), and Frank R. Wolf (R-VA). We thank them for their support. The two bills were referred to House Foreign Affairs and Oversight and Government Reform Committees. In the past week, AFSA Legislative Director Ian Houston and I met with Senator Sheldon Whitehouse (D-RI), Representative Mark Kirk (R-IL), and Representative Sam Farr (D-CA) seeking their support (Senator Whitehouse grew up in the Foreign Service and his father, Charles, served as AFSA President from 1981 to 1982).

5. Ian Houston and I met on July 31 with Bureau of Legislative Affairs Assistant Secretary Jeffrey T. Bergner and Deputy Assistant Secretary Joseph MacManus to discuss efforts to eliminate the overseas pay disparity and fully fund the State Department’s FY-08 budget request for personnel and operating costs. The H officials detailed the Department’s concerted efforts to achieve those legislative goals, which have already included personal contact with key Members of Congress by Secretary Rice, Under Secretary for Management Henrietta H. Fore, and other senior Department managers The H officials said that they were confident that such high-level involvement would continue as needed. I expressed appreciation for this advocacy of measures critical to the success of U.S. diplomacy in the coming years.

6. Finally, on August 1, the State Department and AFSA testified before the Senate Subcommittee on Oversight of Government Management chaired by Senator Daniel Akaka (D-HI) with Senator George Voinovich (R-OH) as Ranking Member (he is also on the Foreign Relations Committee). Acting Director General Heather Hodges made a strong pitch, both in her introductory remarks and in her responses to questions, for eliminating the overseas pay disparity and fully funding State’s FY-08 budget request. Needless to say, I made the same pitch on behalf of AFSA when my turn came to testify.

USAID

7. AFSA continues to proactively engage on issues of critical importance to USAID. We have taken leadership on advocacy related to the Operating Expenses (OE) for USAID in FY-08 budget. From the outset of when the President unveiled his budget request, we raised concerns at the proposed reduction in the OE for FY-08 in face-to-face meetings with State and USAID senior management. Since January, we have consistently engaged key appropriators in the House and Senate in a successful effort to draw attention to the proposed OE reduction. Our efforts have included efforts to forge an advocacy alliance with other organizations such as InterAction (a respected coalition of 170 international relief and development groups) to write joint letters designed to raise OE. We are happy to report that figures in the Senate and House for USAID OE have gone up from what the President requested. We will continue working to secure the highest possible number in the final passed appropriations bill.

8. New AFSA Executive Director John Mamone spent the better part of the day on July 18 at USAID. He met with USAID Vice President Francisco Zamora, AFSA staff, and a number of USAID employees. The purpose of the meeting was to learn more about USAID and the challenges facing the agency and its employees. After his meetings, Mr. Mamone stated, “AFSA president John Naland and I are committed to providing our USAID members with service at the highest possible level. We plan to spend a significant amount of our time working on the critical issues facing our members at USAID.”

9. Under Secretary of State and Acting Director of Foreign Assistance Henrietta Fore testified before Senate Foreign Relations Committee (SFRC) at her confirmation hearing to be USAID Administrator on July 23. Since May 7, Secretary Fore has been Acting USAID Administrator and has had the opportunity to engage on a number of fronts with issues and people at USAID. The SFRC is expected to vote on her nomination soon after to the Congressional August adjournment. If approved by the SFRC, the nomination would go to the full Senate for final vote.

TAX ISSUE

10. AFSA is looking at an issue related to tax provisions that impact Foreign Service family members employed in the private sector abroad. The Foreign Earned Income Exclusion allows citizens, who are not government employees and are living outside the U.S., to exclude some of their foreign-source income if they meet certain requirements. However, in 2006 the IRS changed the way they require the excluded amount to be calculated. Previously, families with one member employed on the local economy overseas took their total income and then removed the excluded income and paid tax on the remainder. The change now requires that you take your total income and figure what your tax would be, then deduct the tax that you would have paid on the excludable income. For example, in 2006 this produced a $3,745 tax increase for a Foreign Service member earning $80,000 with a teacher spouse earning $30,000. Before AFSA can engage on this issue, we need to find out how pervasive a problem this is so we can develop an advocacy strategy. If you are impacted by this IRS rule change, please send AFSA Legislative Director Ian Houston an email at houston@afsa.org with details.

PROFESSIONAL DEVELOPMENT

11. AFSA strongly encourages State Department members to sign up for the Foreign Service Institute’s new five-day course “Diplomatic History of the United States”. In contrast to the uniformed military which places great emphasis on studying the lessons of military history, many Foreign Service members work away with little knowledge of the lessons of diplomatic history. FSI created this course at the suggestion of Under Secretary for Political Affairs R. Nicholas Burns. The course is being offered starting on August 20 and then five times in Fiscal Year 2008. For more details, check the FSI Intranet site under course PG135. I plan to take the course this fall.

FOREIGN SERVICE JOURNAL

12. AFSA thanks the following outgoing Foreign Service Journal Editorial Board members for their dedicated service: Kent Brokenshire, Tony Chan, William Jordan, Kay Webb Mayfield, John Naland, Joyce Namde, and Christopher Teal. To fill those Editorial Board vacancies, the AFSA Governing Board appointed the following individuals to two-year terms: Joe Bruns, Julie Connor, Jim DeHart, Jeff Giauque, George Jones, and Yvette Malcioln. In addition, the Governing Board reappointed current Editorial Board Chairman Ted Wilkinson and returning members Stephen Buck, Josh Glazeroff, and Laurie Kassman to new two-year terms. Congratulations to all of these members who volunteer their time to make AFSA’s Foreign Service Journal the magazine for foreign affairs professionals.

BOOKFAIR ’07 ART CORNER

13. AAFSW’s annual Bookfair at the Harry S Truman Building will soon be upon us (October 13 to 21) which means that now is the time to consider donations to its ever-popular Art Corner. Many souvenirs purchased overseas are likely to find an enthusiastic buyer -- especially if they can learn something about where they came from. So please consider “art” broadly and contact the Bookroom at 202-223-5796 or aafsw.bookroom@erols.com for information or to arrange a pick-up.