VZCZCXYZ0000
OO RUEHWEB

DE RUCNDT #0696/01 1972112
ZNR UUUUU ZZH
O 162112Z JUL 09
FM USMISSION USUN NEW YORK
TO SECSTATE WASHDC IMMEDIATE 6941

UNCLAS USUN NEW YORK 000696 
 
SIPDIS 
SENSITIVE 
 
DEPUTY SECRETARY FOR MANAGEMENT & RESOURCES LEW, 
UNDER SECRETARY FOR MANAGEMENT KENNEDY, 
ASSISTANT SECRETARY FOR LEGISLATIVE AFFAIRS VERMA, 
ASSISTANT SECRETARY FOR INTERNATIONAL ORGANIZATIONS BRIMMER 
 
E.O. 12958: N/A 
TAGS: PREL AMGT AORC UN
SUBJECT: PROTECTING U.S. EQUITIES ON UN SCALES OF ASSESSMENT 
 
REF: A. USUN 518 
     ¶B. USUN 562 
     ¶C. USUN 655 
     ¶D. USUN 663 
 
1.(U)This is an action request, please see paragraph 8. 
 
¶2. (SBU) Summary: During the 64th General Assembly this Fall, 
Member States will again negotiate the scales of assessment, 
for both the regular and peacekeeping budgets, as well as the 
2010/2011 regular budget. The scale of assessment for the 
regular UN budget is negotiated every three years, while the 
scale for the peacekeeping budget is negotiated every six 
years. This will be the first time in nine years where both 
are negotiated simultaneously. The regular budget scale is 
the basis for the calculation of the peacekeeping scale, and 
changes to the regular budget scale will affect the 
peacekeeping assessment. Any changes to the scales will have 
implications for two core U.S. issues: the U.S. share of both 
the regular and peacekeeping budgets and, indirectly the 
overall size of the regular budget. In regard to the regular 
budget scale, our objective is to maintain the 22 percent cap 
in place since 2000. In regard to the peacekeeping budget 
scale, our objective is to maintain our current peacekeeping 
assessment. Proposals to modify the peacekeeping scale could 
open up the issue of the regular budget scale-potentially 
putting at risk the 22 percent cap. Moreover, as a political 
matter, efforts to change the status quo could complicate the 
parallel discussion on the 2010/2011 regular budget, where we 
will be seeking to limit its growth. 
 
¶3. (SBU) In order to protect USG equities, the Mission will 
require technical expertise to address the various 
models/proposals put forward as well as to assist in 
developing our own models/proposals. Given the dollar amounts 
at stake and the precedent of Congress imposing caps on the 
regular and peacekeeping budget assessments, Congress will 
also be particularly sensitive to the implications of any 
changes in the scales or the budget. The Mission also will 
require support from the Department with other capitals to 
ensure a successful conclusion of these negotiations. END 
SUMMARY 
 
 
------------------------------- 
Implication of Changes in Scale 
------------------------------- 
¶4. (SBU) In 2006, the US fended off efforts, primarily by the 
European Union (EU), to raise the 22 percent ceiling on the 
US regular budget assessment established in 2000. During the 
First (March) Resumed session of the 63rd General Assembly, 
the EU introduced ten new models for possibly revising the 
regular budget scale, including one that would lift the 22% 
ceiling on the US assessment. The G77 also introduced a 
number of models, including one that would raise the ceiling 
from 22 percent to 25 percent. Moreover, the UK and France 
have raised the possiblility of making changes to the 
peacekeeping scale that could potentially increase the U.S. 
peacekeeping assessment to 28 percent. (See Reftels) Based on 
preliminary analysis, we anticipate the USG's percentage 
under the peacekeeping scale will increase even if the 
existing scale on the regular budget is maintained, raising 
the peacekeeping scale for the US from about 26 percent to 
about 27 percent. While seeking to work with our G7 
colleagues, the US will need to negotiate carefully with them 
on these matters without antagonizing the G77 who, through 
their numbers, will have a major role in defining the final 
outcome. This will require diplomacy in New York and also 
high-level outreach in capitals. 
 
 
-------------------------- 
Need for Technical Support 
-------------------------- 
¶5. (SBU) In order to maintain the 22 percent cap and deflect 
proposals that unacceptably increases our 
peacekeeping assessment, USUN will need expert assistance to 
fully address the technical aspects of the different 
proposals advanced by Member States. In October 2006, in 
response to proposals from the EU and others to revise the 
scale methodology and to prepare the U.S. for the scale 
negotiations, USUN engaged a private contractor to provide 
expert assistance. The highly technical and complex nature of 
the scale of methodology model requires construction of a 
statistical model that incorporates economic data from 192 
member states. The principal measure is a country's world 
share of GNI, as averaged over a statistical base period of 3 
and 6 years. However, the methodology requires other inputs, 
e.g. per capita income, conversion rates based on market 
 
exchange rates, debt burden, etc. In 2006, USUN and IO 
informally surveyed various entities within the USG, in an 
effort on an urgent basis to identify an appropriate USG 
expert, without success. Given the short time frame imposed 
at the time by the negotiations, the Mission broadened the 
search to the private sector. Through informal channels, the 
Mission identified one company, Katzenbach Partners, who 
could provide the necessary assistance. A contract was 
entered with the company in November 2006 on a sole source 
basis. 
 
¶6. (SBU) USUN believes that the required expertise may exist 
within the USG. If not within a single agency, a joint 
initiative, for example through establishment of a task force 
consisting of statistical/ ecenomic experts from various 
government offices e.g., the Office of Management and Budget, 
the Department of Treasury, may be able to be formed. If 
utilizing USG expertise on an expedited basis is not 
practical, a private contractor may need to be engaged as was 
done previously. 
 
------------------------- 
Congress Engagement 
-------------------------- 
¶7. (SBU) Given the political sensitivity regarding changes to 
the scales of assessment, Congress needs to be engaged early 
on these issues in order to avoid surprises that could prompt 
challenges and limitations. 
 
¶8. (SBU) Action Request: USUN recommends that the Department 
seek to identify on an expedited basis the needed expertise 
within the Department or more broadly within the Executive 
Branch to assist the Mission's team on the scales 
negotiations. If such assistance is not available, USUN 
recommends that the Department authorize the Mission to 
engage an outside contractor on an expedited basis to provide 
such assistance. USUN also recommends that the Department 
develop a strategy for engaging Congress on this issue and 
prepare to engage at high levels key capitals to support 
these scales of assessment negotiations. 
RICE