Budget Update - August 27, 2010
1. Congress Finalizes FY10 International Affairs Budget
With a few weeks remaining before the new fiscal year begins, Congress returns the week of September 13th having finally completed the FY10 spending bills with the enactment on August 10th of a FY10 Supplemental for Education, Jobs, and Medicaid support. The bill included numerous rescissions of existing spending in order to offset part of the cost of the bill, including $120 million in rescissions from three International Affairs Budget accounts. The measure cut $50 million from the Millennium Challenge Corporation (MCC) and $40 million and $30 million from the Civilian Stabilization Initiative run by the State Department and USAID, respectively.
With this action, the final FY10 International Affairs Budget stands at $58.94 billion, $145 million or 0.2% higher than President Obama’s request for FY11. The FY10 total is $6.7 billion more than FY09, a 13.1% increase due to the supplemental. The FY10 figures include: $50.9 billion in FY10 base appropriations, $6.3 billion in the war and Haiti supplemental, $120 million in rescissions, and about $1.8 billion forward-funded from FY09 to cover FY10 expenses.
2. Appropriators Set FY11 State-Foreign Operations Levels, but with Major Differences and an Uncertain Future
Before departing for the August recess, House and Senate Appropriators took steps forward toward approving FY11 funding totals for the State-Foreign Operations spending bill. What became clear by these actions is that major differences remain between House and Senate drafts, not only in the top-line levels but also for specific account levels and activities. Moreover, pressure to hold down spending for next year is growing, with indications coming out of the Senate that Majority Leader Reid is seriously considering an additional $6 billion cut to FY11 discretionary appropriations. This leaves an uncertain picture as to whether current appropriations bill allocations will stay the same or be adjusted lower, which would certainly have an impact on the International Affairs Budget. The most likely scenario is that Congress will pass a Continuing Resolution in September that will keep the government operating at FY10 levels until after the November election.
Spending Differences between House-Senate Bills:
The Senate Appropriations Committee wrapped up consideration of its version of the State-Foreign Operations measure on July 29th, agreeing to $53.9 billion in International Affairs funding. This level is $2.6 billion or 4.6% below the President’s request and $2.6 billion above current funding.
The House State-Foreign Operations Subcommittee, acting on June 30th, voted out $52.5 billion for International Affairs programs — $1.4 billion lower than the Senate. However, the House Appropriations Committee subsequently in July adopted subcommittee 302(b) allocations for each of its 12 spending bills, which restored $1.3 billion of funding to the State-Foreign Operations bill. This now makes the House and Senate State-Foreign Operations funding levels virtually the same.
Policy Differences between House and Senate Bills
In a number of areas, the House and Senate draft bills are similar. Highlights on similarities of the bills:
Highlights of differences of the bills:
While the Senate has filed and published its bill and report, clarifying many details that lie below the overall account totals, the House measure remains unpublished, with only account levels and statements by Committee leaders to inform a House-Senate comparison. Nonetheless, based on information currently available, key differences include:
3. FY11 International Affairs Budget Snapshot (as of 08/27/10)
|Comparison of Base Request|
|International Affairs 150 Account*|
|FY2011 Senate||$ 56.20 billion|
|FY2011 House||$ 54.85 billion|
|FY2011 Request||$ 58.80 billion|
|FY 2010 Enacted**||$ 58.94 billion|
|House Decrease from FY11 Request||-$ 3.94 billion (6.7% decrease)|
|Senate Decrease from FY11 Request||-$ 2.60 billion (4.4% decrease)|
|Foreign Operations Account|
|FY2011 Senate||$ 36.76 billion|
|FY2011 House||$ 36.17 billion|
|FY2011 Request||$ 39.40 billion|
|FY 2010 Enacted**||$ 38.78 billion|
|House Decrease from FY11 Request||-$ 3.23 billion (8.2% decrease)|
|Senate Decrease from FY11 Request||-$ 2.64 billion (6.7% decrease)|
|State Department Operations & Related Accounts***|
|FY2011 Senate||$ 17.144 billion|
|FY2011 House||$ 16.34 billion|
|FY2011 Request||$ 17.10 billion|
|FY 2010 Enacted**||$ 17.72 billion|
|House Decrease from FY11 Request||-$ 0.77 billion (4.5% decrease)|
|Senate Increase from FY11 Request||$ 0.04 billion ( 0.2% increase)|
|International Agriculture Programs|
|FY2011 Senate||$ 1.90 billion|
|FY2011 House||$ 1.96 billion|
|FY2011 Request||$ 1.90 billion|
|FY 2010 Enacted**||$ 2.05 billion|
|House Increase from FY11 Request||+$0.06 billion (3.2% increase)|
|Senate Change from FY11 Request||Equal to request|
* International Affairs totals for each year include additional amounts (ranging between $77 million and $89 million) appropriated in the Treasury spending bill for the International Trade Commission and the Foreign Claims Settlement Commission and $300 million for the Global Fund to Fight HIV/AIDS, Tuberculosis, and Malaria, included in the Labor-HHS bill. The Administration does not include the Global Fund appropriations in the International Affairs budget but the Congressional Budget Office does. This table follows the CBO scoring calculation.
** FY2010 and FY2009 enacted have been adjusted to reflect “forward funding”, amounts Congress appropriated in an emergency FY2009 supplemental in order to cover about $1.8 billion of the FY2010 request.
*** State Department Operations amounts exclude small accounts (about $150 million) that are funded in the bill but are not part of the International Affairs Budget.