Millennium Challenge Account Achieves Final Passage

The passage of the FY 2004 Omnibus Appropriations bill and signature by the President on January 23, 2004, paves the way for the Administration to begin implementing the historic Millennium Challenge Account, an initiative announced almost two years ago at the UN's Financing for Development Conference in Monterrey, Mexico. He announced the new fund to "fight global poverty" and endorsed a set of internationally-agreed targets to meet that challenge, known as the "Millennium Development Goals."

The key elements in the bill include the establishment of a new, independent Millennium Challenge Corporation (MCC) governed by a Board comprised of nine members: the Secretary of State (Chair), the MCC CEO, the USAID Administrator, the Secretary of Treasury, the United States Trade Representative and four civil society members appointed by the President, pursuant to a list provided by the Majority and Minority leaders of the House and Senate.

The authorizing language incorporates a number of NGO recommendations including a section on expanded eligibility, an emphasis on local ownership and gender, consultation with civil society, and limitation on the amount of MCA funds eligible to lower middle-income countries. The section on expanded eligibility is a one year provision that allows up to ten percent of MCA funds to help countries who miss qualifying for the MCA due to missing data or who fail not more than two indicators. The bill limits the amount of MCA funds to be used for lower middle-income countries to 25%.

The bill also appropriates $1billion for the MCA to be used in FY2004. The majority of that amount, $650 million, comes from the Foreign Operations portion of the bill while last minute pressure from the White House resulted in $350 million of additional funds from elsewhere in the omnibus.

View the text of the MCA authorizing language.