General Assembly Committee Lifts a Cap on U.N. Spending 
By Warren Hoge
June 29, 2006
The New York Times
Original Source: http://www.nytimes.com/2006/06/29/world/29nations.html

UNITED NATIONS, June 28 — The General Assembly budget committee lifted a cap on United Nations spending Wednesday night, thus averting a showdown that once threatened to shut down the organization's activities by the end of June.
The measure passed by consensus, without a vote, in the 191-nation committee, but the United States, Australia and Japan declared that they were officially disassociating themselves from the decision.
The three countries, which together account for 43 percent of the assessed budget of the United Nations, said that not enough reform measures had been put into place to justify removing the restriction.
The six-month cap on the 2006-2007 budget was adopted under pressure in December in a United States-led effort that called for real progress to be made on steps to streamline the management of the United Nations to guarantee continuation of financing.
The decision and debate since then have led to deep division at the United Nations between wealthy nations and countries of the developing world.
This spending cap has turned into poison — it has turned into abuse and begun to affect the trust we need to work together, Dumisani Kumalo, the ambassador of South Africa and head of the Group of 77 that represents 132 developing nations, told the committee on Wednesday.
Robert Hill, the ambassador of Australia, and Kenzo Oshima, the ambassador of Japan, held out the possibility that progress over the next two days could persuade them to drop their objections when the final budget decision is made Friday in the full General Assembly.
But John R. Bolton, the American ambassador, said the United States would not change its position.
We've made clear we thought that insufficient reform had been accomplished today, and that will be the case on Friday as well, just given the nature of steps that are being considered, Mr. Bolton said.
The United States pays 22 percent of the assessed budget, Japan 19.5 percent and Australia 1.6 percent.
Though the European countries have been at the forefront of calling for significant change at the United Nations, they have been unenthusiastic about trying to achieve it through the budget cap, and none of them joined in objecting to Wednesday's action.
The United Nations' ability to function and deliver services is imperative to the E.U. and, I believe, to the rest of us, said Gerhard Pfanzelter, the ambassador of Austria, speaking for the European Union.
He said the United Nations had already achieved a remarkable amount of reform and expressed regret at the atmosphere of polarization that he said had arisen over the matter.
Before taking action, delegates to the meeting received a document from Jan Eliasson, the president of the General Assembly, listing gains already achieved and plotting the way forward.
He noted that the organization had created a new Human Rights Council, a Peacebuilding Commission to restore postconflict societies, an ethics office and a system of whistleblower protection. And he argued that negotiations were under way on establishing management oversight, accountability and transparency and eliminating hundreds of tasks and committees that were outdated or redundant.
Mr. Eliasson said the lifting of the cap would make developing nations more amenable to the changes being sought, but Mr. Bolton disagreed.
With the expiration of the expenditure cap here in New York, we have no leverage, he said. So I don't know how much success we'll have.
Mr. Bolton has frequently warned that Congress was losing patience with the slow pace of change at the United Nations and might cut back its annual contributions. I think Congress is concerned about the real result here, how much reform will be achieved, he said Wednesday.
Referring to an earlier statement by Secretary of State Condoleezza Rice, he said Washington would base its decisions on whether we have approached Secretary Rice's 'lasting revolution of reform,' which we manifestly have not.
In Washington, Senator Norm Coleman, a Minnesota Republican who has been a harsh critic of the way the United Nations is run and has called for the resignation of Secretary General Kofi Annan, said, It appears that the reform of the United Nations has been left in the dust.
He said, I intend to urge my colleagues in the Senate to use our funding to the U.N. as leverage for reform, including withholding funds if reform fails to move forward.