February 3, 2015

Is Our Budget Keeping Up with a Dangerous World?

By Liz Schrayer

The President’s budget request yesterday didn’t stir up as much excitement as the Super Bowl, but it kicked off the new budget season with some key changes in approach to global affairs. With an alarming number of crises and threats around the globe, how this budget comes out once Congress is done with it will be decisive for America’s future.

After a close look at the budget proposal, here’s my recap of how international issues fared:

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Learn how the Administration’s budget request affects America’s role in the world.

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The Takeaway: Right Direction, but Enough? The $54.8 billion request for International Affairs began to reverse dramatic reductions, a step in the right direction. But given today’s global challenges, I’m concerned that overall funding isn’t keeping pace with the threats — from Ebola and Boko Haram in Africa to ISIL and the Syrian refugee crisis to Russian aggression in Ukraine, and so many more.

Key Numbers: The most significant element of this year’s request is the urgently-needed reversal of cuts to non-war-related programs, or base funding. We have been calling for increases to these programs for some time, given the dramatic 16% cut over the past five years. So I was very pleased that the request includes a $6.1 billion (14.7%) rise in base funding. But this year’s total (including war spending and the Ebola supplemental), compared with the President’s new request (including war spending), would only provide 2.4% in additional overall resources for international affairs programs, hardly enough to contend with the host of crises and threats worldwide.

War Funding Declines. Now What? For years, the U.S. has been funding war programs with the off-budget Overseas Contingency Operations (OCO) account. This year’s international affairs OCO request is a 24% drop, as part of the Administration’s plan to fully phase it out by the end of 2020. With OCO covering nearly one of every five dollars for international affairs, as this account disappears, I’m worried that other sources may not provide adequate support.

Known Security Challenges and the Future: As expected, the budget request prioritized responding to the security challenges from the crises that arose in 2014. For instance: increased resources for Ukraine and countries in the region to counter Russian pressure and aggression; $3.5 billion for Syria and ISIL-related security programs; and a major $1 billion initiative to address the root causes of migration from Central America and Mexico. But what situations will take us by surprise in 2015?

Smart Investments in Economic Development. I was pleased to see substantial investments in advancing America’s economic interests through trade promotion, economic development and creating opportunities to partner with the private sector. It’s a smart choice to call for investing relatively small dollars to ensure a big impact through the Overseas Private Investment Corporation (OPIC), the Trade and Development Agency (USTDA), the Export-Import Bank, and USAID’s Development Credit Authority.

Reductions Causing Concern: Reductions in three accounts – humanitarian assistance, global health, and democracy – are cause for particular concern. With the horrific Syrian refugee situation and upheavals in Sudan and Central African Republic, cutting refugee services may hamstring our ability to respond. I would also flag a 3.2% cut to global health programs and decreases for democracy programs.

Transparency, Innovation and Reform: The priority placed on transparency, accountability, and results — cornerstones of the past two Administrations’ aid programs — will continue. USAID Administrator and chief architect of Agency reform Raj Shah is leaving, but his legacy is affirmed in a requested 43% increase for USAID’s innovative Global Development Lab, enhanced food aid delivery policies, and a strong operating budget. And with a 39% increase, the Millennium Challenge Corporation will be in good shape to build on its 10-year record as a world leader in innovative and transparent development.

Investing for the Long Term: Last but not least is the ongoing effort to rebuild civilian capacity, at the State Department and USAID, which were both severely eroded in the 1990s. This has been a high priority for me, and it’s good to see that this budget continues to invest in Diplomatic Security, as well as a steady growth in civilian operating costs.

All eyes now turn to Capitol Hill with hearings and heated budget debates ahead. But with help from friends on both sides of the aisle, the USGLC will remain on the playing field, blocking and tackling to support smart and effective development and diplomacy that advance America’s interests in today’s dangerous world.