April 25, 2017

Administration Recommends Additional Severe Cuts in FY17; Proposal Foreshadows Plans for FY18

With just eight legislative days until the FY17 Continuing Resolution expires, this week the Administration sent Congress a proposal to cut non-defense discretionary spending by $18 billion for the remaining part of the fiscal year, including a $3.38 billion—or 5.7%—cut to the International Affairs Budget.

The State Department and USAID are two of the hardest hit agencies in the proposal, being cut more deeply than most other major departments—but not as disproportionately as in the Administration’s FY18 “skinny” budget (see our analysis here).

The good news is that lawmakers have largely rejected such deep cuts in non-defense discretionary programs, noting that the spending bills for the rest of FY17 are almost complete and deep cuts would drive the already sensitive negotiations into the unknown with just days to spare before a government shutdown.

Details of the Request Paint a Stark Picture

These proposed cuts for FY17 likely foreshadow the proportion of cuts to programs that will accompany the full FY18 budget proposal expected in early May. Among the hardest hit programs in the FY17 proposal—Food for Peace faces a 21% cut and the McGovern-Dole Food for Education program faces a 67% cut. While total spending on global health is cut by 5%, certain sectors—like TB, nutrition, and polio eradication—are cut much more steeply. The Development Assistance account would take a 20% cut.

With a historic number of refugees and 20 million people in four countries facing famine, cuts to the very programs that assist these vulnerable populations would pose a significant national security challenge, not to mention a grave humanitarian emergency. Notably, given the threat of famine, the UN Secretary General António Guterres confirmed former South Carolina Governor David Beasley as the new Executive Director of the World Food Programme. USGLC’s statement on Governor Beasley’s confirmation can be found here.

Next Steps

As mentioned above, Congress has pushed back against the Administration’s proposal noting that it could throw a wrench in the process.

While Congress is itching to wrap up spending for this fiscal year, contentious debate over funding for the proposed border wall—not to mention health care, tax reform, and other policy priorities—could complicate negotiations. At this point, Republicans and Democrats are working in good faith to finalize FY17, but with over 200 unresolved policy and funding issues still needing agreement, negotiations could falter. Additionally, it remains to be seen whether the many different factions of the Republican Party agree on a path forward. If not, finding the votes in the House to pass a major spending bill could be complicated.

All of this means that the FY18 budget and appropriations process will be significantly delayed. The Administration is still expected to release a full budget in early May, at which point Congress will begin the FY18 budget and appropriations process in earnest—months behind the normal schedule.