In addition to USGLC’s State Leaders Summit, Capitol Hill was abuzz this week with activity related to the International Affairs Budget. Action included both the House and Senate Appropriations Committees advancing their FY19 State-Foreign Operations bills, the introduction of a House FY19 Budget Resolution that would cut the International Affairs Budget by 7%, the Senate’s rejection of the Administration’s proposal to rescind billions of dollars in prior-year spending, and movement on the reform agenda – including Senate passage of the Global Food Security Reauthorization Act and the release of the Administration’s plan to reorganize the government.

Keep reading for a brief round-up of this week’s important actions. Next week, we will provide a more detailed comparison of the House and Senate funding proposals for the FY19 International Affairs Budget.

1. House and Senate Advance State-Foreign Operations Bills

This week the House and Senate Appropriations Committees approved their respective FY19 State-Foreign Operations (SFOPS) bills, setting up potential floor votes in the coming weeks – particularly in the House where leadership’s stated goal is to approve all 12 funding bills before the August recess.

As previously reported, Congressional Appropriators set out strong funding levels for their FY19 SFOPS bills – with the House maintaining the current $54 billion level and the Senate providing $54.4 billion, $400 million above current levels. The SFOPS bills and accompanying reports also include strong language in support of U.S. global leadership, repudiating the Administration’s proposed cuts to America’s development and diplomacy programs.

State-Foreign Operations (SFOPS) Snapshot

*Based on CBO’s re-estimate of the Administration’s request.

Selected Program Highlights of the Senate State-Foreign Operations Bill

The Senate State-Foreign Operations (SFOPS) Appropriations Subcommittee approved its FY19 SFOPS bill on Tuesday, followed by unanimous passage in the full Committee on Thursday. At Thursday’s mark-up, Senators proposed several amendments on a variety of issues, including the Mexico City Policy, arms sales to Turkey, climate change, and internet freedom programs. A few amendments of note:

• An amendment offered by Senator Lindsey Graham (R-SC) recommending additional funding for democracy and human rights programs given that the Administration withdrew the U.S. from the UN Human Rights Council. Passed as part of the Manager’s Package.
• An amendment offered by Senator Patrick Leahy (D-VT) noting the severe humanitarian needs in Yemen and urging the Administration to ensure that life-saving assistance can enter the country. Passed as part of the Manager’s Package.
• An amendment offered by Senator Jeanne Shaheen (D-NH) to provide no less than $632 million for family planning programs, including $37.5 million for the UN Population Fund (UNFPA). Passed 16-15.

Below are several highlights from the Senate SFOPS bill and report:

• Global Health: The Senate bill provides $8.8 billion for Global Health, roughly $100 million more than the FY18 enacted level. This includes $59 million for polio eradication and $290 million for Gavi, the Vaccine Alliance.
• Development and Economic Assistance: The bill maintains current funding levels by providing $3 billion for Development Assistance. It increases the Economic Support Fund by $100 million to $4.1 billion.
• Central America: The bill provides $515 million for the U.S. Strategy for Engagement in Central America, which is $100 million below the FY18 enacted level, but $80 million above the Administration’s request.
• Humanitarian Assistance: The bill includes $3.4 billion for refugee assistance, $73 million more than current levels, and $4.4 billion for International Disaster Assistance, a $100 million increase.
• Peacekeeping: The Senate provides $1.7 billion for UN Peacekeeping Operations, a $302 million increase, and $477 million for non-UN peacekeeping, a $61 million cut.
• Multilateral and UN Funding: The Senate bill holds funding for U.S. contributions to international financial institutions flat at $1.5 billion. It also includes $311 million for voluntary contributions to the UN and other international organizations. It provides $1.45 billion for assessed contributions, roughly at the FY18 enacted level.
• International Security Assistance: The bill provides $8.8 billion for security assistance, $236 million less than current levels, but some $1.5 billion more than requested by the Administration.
• Diplomatic and Embassy Security: The Senate bill includes $8.9 billion for diplomatic operations, a $200 million increase compared to FY18 enacted levels. It sets out $5.7 billion for Diplomatic and Embassy Security, $337 million less than the current level, but $379 million above the Administration’s request.

Selected Program Highlights of the House State-Foreign Operations Bill

On Wednesday, the House Appropriations Committee approved its FY19 SFOPS bill by a vote of 30-21, following the Subcommittee’s approval of the bill last week. During the mark-up, Members offered amendments on several issues, including unaccompanied child migrants, international religious freedom, and the Green Climate Fund. Of note:

• Several amendments related to international family planning programs were considered and ultimately voted down, including an amendment offered by Rep. Nita Lowey (D-NY) to repeal the Mexico City Policy, an amendment offered by Rep. Tim Ryan (D-OH) to remove the bill’s ceiling on funding for bilateral family planning, and an amendment offered by Rep. Barbara Lee (D-CA) to restore funding for UNFPA.
• An amendment offered by Rep. Mark Pocan (D-WI) expressing concern about the humanitarian crisis in Yemen and urging parties to agree to a ceasefire. Failed by voice vote.
• An amendment offered by Rep. Marcy Kaptur (D-OH) to authorize a study on the feasibility of implementing an economic development program in Mexico to help prevent the flow of heroin into the U.S. Withdrawn.
• An amendment offered by Rep. Andy Harris (R-MD) to require the State Department to submit an annual report of countries with pending abduction cases of American children. Withdrawn.

Below are several highlights from the House SFOPS bill and report:

• Global Health: The House bill provides $8.7 billion for Global Health programs, the same as this year’s level. It maintains funding for polio eradication ($59 million) and Gavi, the Vaccine Alliance ($290 million), at FY18 levels.
• Development and Economic Assistance: The House bill provides $272 million (7%) less for the Economic Support Fund (ESF) compared to current levels. All other major development and economic assistance programs are essentially held flat except the Democracy Fund, which receives a $9 million boost.
• Central America: The bill provides $595 million for the U.S. Strategy for Engagement in Central America, a $20 million cut from current levels, but $160 million more than the Administration’s request.
• Humanitarian Assistance: The bill includes $3.4 billion for refugee assistance, the same as current levels, and $4.3 billion for international disaster assistance, again maintaining the FY18 funding level.
• Peacekeeping: The House provides $1.6 billion for UN Peacekeeping Operations, a $207 million increase, and $490 million for non-UN peacekeeping, a $48 million cut.
• Multilateral and UN Funding: The bill holds funding for international financial institutions at the FY18 level of $1.5 billion. It provides just $214 million for voluntary contributions to the UN and other international organizations, a $125 million (37%) cut. It funds assessed contributions at $1.4 billion, a $103 million (7%) cut from current levels.
• International Security Assistance: The House bill increases security assistance funding by $249 million (3%) compared to current levels, providing $2 billion more than the Administration requested.
• Diplomatic and Embassy Security: The bill provides $8.8 billion for diplomatic operations, a slight increase from FY18 levels. It includes a total of $6.1 billion for Diplomatic and Embassy Security, the same as current levels.

Next Steps

With committee action now complete on the House and Senate State-Foreign Operations (SFOPS) bills, both are primed for floor action. While the House could take up its SFOPS bill as part of an appropriations “minibus” – i.e. several spending bills packaged together – floor action in the Senate appears unlikely.

Of note, this week Office of Management and Budget (OMB) Director Mick Mulvaney sent a letter outlining a number of concerns with the House SFOPS bill, including that the approved topline exceeds the Administration’s request. The letter also expresses concern with the bill’s requirement that the Administration consult and notify Congress regarding any reorganization of or personnel shifts within the State Department and USAID.

2. House Budget Resolution Introduced: International Affairs Budget Cut by 7%

After months of delay, House Budget Committee Chairman Steve Womack (R-AR) released an FY19 Budget Resolution this week, which was approved by the Committee on a largely party-line vote of 21-13. Consistent with the Bipartisan Budget Act agreed to earlier this year that raised discretionary spending caps for FY18 and FY19, the resolution sets out $597 billion for non-defense discretionary spending. Specifically, it provides $52.2 billion for the International Affairs Budget, including $44.2 billion in base and $8 billion in OCO funding. This $52.2 billion topline for the International Affairs Budget represents a $3.7 billion (7%) cut compared to the FY18 enacted level.

Traditionally, the budget resolution provides important guidelines for topline spending but given that the House Appropriations Committee has already approved its own allocations, the resolution holds less weight in this regard. House Republicans are also reported to be less than enthusiastic about the resolution’s chances on the floor.

Across the Capitol, Senate Budget Committee Chairman Mike Enzi (R-WY) has said that he is working on a budget resolution but it appears unlikely his committee will take one up this year given the political realities of the Senate’s slim Republican majority.

3. Senate Rejects Administration’s Rescissions Package as Timeline Expires

On Wednesday, the Senate narrowly rejected an effort to bring the Administration’s rescission proposal to the floor by a vote of 48-50 – effectively ending its chances of becoming law. The House approved the bill with a slim 210-206 majority earlier this month, but the proposal has faced criticism from both Democrats and Republicans since its release last month.

As previously reported, the Administration’s initial proposal would have cancelled more than $15 billion in prior-year unobligated funds. Of that amount, approximately $334 million from the International Affairs Budget was targeted, including $252 million in Ebola response funding – the largest proposed rescission to international affairs programs – and $30 million from the Complex Crises Fund (CCF), and $52 million from the Millennium Challenge Corporation (MCC).

4. Administration Releases Long-Awaited Government Reorganization Plan, Plus Other Legislative Updates

On Thursday, the Administration released its long-awaited proposal to reorganize the government – implementing the President’s March 2017 executive order that called for a comprehensive plan to improve the “efficiency, effectiveness, and accountability” of every federal agency.

The Administration’s proposals include a number of recommendations to improve organizational structure, reduce duplication, and enhance coordination at the State Department and USAID, many of which are already being pursued under USAID’s Transformation Initiative, to “strengthen the Agency’s core capabilities.” Highlights include:

• Humanitarian Assistance: Nearly identical to USAID’s Transformation Initiative, the proposal seeks to consolidate the offices of Foreign Disaster Assistance (OFDA) and Food for Peace (FFP) into a newly elevated Bureau for Humanitarian Assistance. It would also establish a new Associate Administrator for Relief, Response, and Resilience, responsible for coordinating humanitarian assistance with resilience and food security efforts.

• Development Finance: Similar to the Administration’s FY19 budget request, the reorganization proposal establishes a new development finance institution by strengthening OPIC and consolidating it with USAID’s Development Credit Authority. This proposal is similar to the Better Utilization of Investments Leading to Development (BUILD) Act, introduced by Senators Bob Corker (R-TN) and Chris Coons (D-DE) in the Senate and Reps. Ted Yoho (R-FL) and Adam Smith (D-WA) in the House.

• Other Structural Changes: The proposal would also consolidate USAID’s budget, policy, and evaluation functions under one umbrella to improve and streamline program design, implementation, effectiveness, accountability, and procurement. The proposal also mirrors USAID’s Transformation Initiative to create new bureaus for Resilience and Food Security; Conflict Prevention and Stabilization; and Development, Democracy, and Innovation.

The Senate also took steps this week to advance several bipartisan bills that seek to strengthen and enhance America’s development and diplomacy tools.

• On Wednesday, the Global Food Security Reauthorization Act (S. 2269) passed the Senate by voice vote. The bill – introduced by Senators Bob Casey (D-PA) and Johnny Isakson (R-GA) – would reauthorize the 2016 law for an additional five years. Companion legislation authored by Reps. Chris Smith (R-NJ) and Betty McCollum (D-MN) was approved by the House Foreign Affairs Committee in April.

• The Senate Foreign Relations Committee announced that it would consider the Senate version of the BUILD Act (S. 2463) next Tuesday – a crucial step in moving the legislation forward. Introduced in February, the bill would streamline the tools of multiple agencies into a single, full-service international development finance institution. As previously reported, the House Foreign Affairs Committee approved its version of the bill last month.

During testimony before the Foreign Relations Committee this week, USAID Administrator Mark Green reiterated his support for a modernized development finance institution, calling the concept “a good one” and noting that he’s “written in favor of it over the years. It’s making sure that it’s closely linked to development that I think will determine its success.” He also contrasted the American model of development, “the model to self-reliance and which we incentivize capacity building and reform in our partners,” to the Chinese model, “in which they mobilize lots of resources up front, oftentimes with unsustainable debt at the back end.”