Foreign Aid Budget Battle

The White House and the House Appropriations Committee have both released important budget documents in the last few days: the President released the 2012 Budget Request, and the House Appropriations Committee released the 2011 CR (Continuing Resolution).  These two documents highlight major differences between the budget plans from the GOP-controlled House and the administration.

Most of the foreign aid spending in the budget comes under the heading Department of State and Other International Programs.  This heading includes funding for USAID, the MCC, the Peace Corps, and other development initiatives in addition to funding directly controlled by the Department of State. 

The President’s 2012 Budget Request for the Department of State and Other International Programs

In the 2012 Budget Request, the President proposes a 1 percent increase from enacted 2010 funding levels in this heading, which is also a 1 percent decrease from the 2011 request.  You can find a fact sheet for the Department of State and Other International Programs on the OMB website here.  The President’s budget focuses on making investments in key areas, such as $1.4 billion to address the root causes of hunger and poverty, reducing malnutrition for millions of children under five years old by 2015 (one of the Millennium Development Goals).  It also makes cuts to certain programs and invests in reducing inefficiencies over time- the budget proposes eliminating foreign assistance to several countries, and changing USAID’s operating model to encourage local ownership, which would result in savings and more effective programs over time.  The budget request also reduces bilateral programs to Europe and Central Asia to focus on regions with greater needs such as in Africa, while cutting funding for the African Development Foundation and the Inter-American Foundation.

The House Appropriations Committee 2011 Continuing Resolution

By contrast, the House Committee on Appropriations introduced a CR (Continuing Resolution) with the “largest spending cuts in history” for the last 7 months of the 2011 fiscal year.  The CR makes large cuts to programs across the board, and the budget for foreign aid is not spared.  Here is the section on State and Foreign Operations from the Committee’s summary of the CR:

The State and Foreign Operations section of the CR contains a total of $44.9 billion in funding, which is $3.8 billion, or 8 percent, below last year’s level and $11.7 billion, or 21 percent, below the President’s fiscal year 2011 request.

In order to provide necessary and critical funding increases of $2.5 billion for national security priorities, including a total of $3 billion of military assistance to Israel and a total of $1 billion for the Pakistan Counterinsurgency Capability Fund, the legislation actually cuts a total of $6.3 billion in other programs bill-wide. The bill reduces almost all State and Foreign Operations Accounts, except for specific security assistance accounts. The bill reduces programs that have grown substantially since fiscal year 2008, scales back contributions to the United Nations and other international organizations and banks, and eliminates wasteful, duplicative and ineffective programs. Additional operational cuts are taken, which will force agencies to take substantial cost-cutting measures.

The CR supports civilian operations in frontline countries such as Iraq, Afghanistan and Pakistan and continues the fiscal year 2010 level of economic assistance to Egypt with the understanding that Egypt will undertake significant economic and democratic reforms. The bill also maintains long-standing pro-life provisions and includes new prohibitions on international family planning.

Compared to the President’s FY11 Budget Request, the 2011 CR would include cuts to the following foreign aid accounts: USAID operating expenses by $205 million; Global Health and Child Survival by $1.5 billion; Development Assistance by $1.2 billion; International Disaster Assistance by $431 million; Peace Corps by $115 million; Millennium Challenge Corporation by $490 million; and Food for Peace by $544 million.

If enacted, these spending cuts would have a huge impact on U.S. foreign assistance around the world, affecting millions of lives.  And the Department of State and USAID only account for about 1% of the total federal budget- so the overall cost savings are meager, while putting lives at risk.  See MFAN’s statement about the foreign aid budget here, written by MFAN co-chairs David Beckmann, George Ingram, and Jim Kolbe.

What Next?  The Budget Process

While the CR represents a very strong statement about the foreign aid budget from the House, it is by no means a done deal.  There are still many steps to this bill’s passage.

A CR, or continuing resolution, is a bill that continues funding for the federal government for a set period of time in the event that regular appropriations bills aren’t passed by Congress in time for the fiscal year.  This happens in Congress almost every year- sometimes appropriations bills are passed for some parts of the budget, and all the other parts get rolled into an omnibus CR.  We are currently in the 2011 Fiscal Year, which began in October 2010 and ends September 30, 2011.  There have already been 4 CRs this year, which will cover the federal budget through 3/4/11.  You can find a chart on the status of appropriations bills for FY 2011, including all CRs, here.

The latest CR, HR 1, was introduced by the House Appropriations Committee on Friday.  In order for it to pass, it will need to be passed by both the House Appropriations and the Budget Committee, and then the full floor of the House.  The Senate Appropriations Committee and the floor of the Senate will also need to pass this bill, and in the process they may make modifications to it.  After it has passed both the House and the Senate floors the bill will move into Conference, where members of the House and Senate will work together on a compromise between the two versions, which will then go back to the House and Senate floors for a vote.  After all this, the President must sign the bill in order for it to become law.

For a breakdown of the President’s budget request for international affairs and more information about the House proposal, see the USGLC analysis here.