April 15, 2011

International Affairs Budget Update, 4-15-11

1.        FY11 Spending Agreement Passes House and Senate
2.        House Passes FY12 Budget Resolution

3.        Administration Officials Testify Before Congress on International Affairs Budget
4.        Snapshot: International Affairs Budget


1.        FY11 Spending Agreement Passes House and Senate

The FY11 spending agreement (H.R. 1473) reached by the White House and Congressional negotiators late last week passed the House (260-167) and Senate (81-19) yesterday. One-quarter of House Republicans opposed the measure, an indication of the push for far deeper cuts by a significant portion of the Republican caucus.  The agreement, which completes Congress’ work on FY11 spending, cuts $38.5 billion in discretionary spending and provides $50.1 billion for the International Affairs Budget, an 11.4% cut from  FY10 levels and 14.8% below the President’s FY11 request.

USGLC released an analysis earlier this week of the International Affairs Budget provisions in the final agreement. Additional information on funding levels can also be viewed at the House and Senate Appropriations Committee websites.

2.        House Passes FY12 Budget Resolution
Today the House passed the House Budget Committee’s FY12 budget resolution along largely partisan lines by a vote of 235-193.The budget resolution cuts the International Affairs Budget 18% from the newly adopted FY11 funding level and 27% from FY10 levels. The budget resolution’s $41 billion allocation for the International Affairs Budget is not a binding number, however.  Only the resolution’s top-line funding cap on total discretionary spending (the 302a allocation) is binding. Therefore, in the coming weeks the Appropriations Committee will ultimately set the funding allocation for the International Affairs Budget and the other subdivisions of the budget.

During House debate on the FY12 Budget Resolution, four other budget alternative proposals were voted on but were defeated:

  • House Democrats, which fully funded the President’s International Affairs Budget request ($61 billion) and noted that “U.S. national security depends upon a well-coordinated strategy that involves the Department of Defense, the National Nuclear Security Administration, the Department of Homeland Security, and international affairs programs – including those at the Department of State and the Agency for International Development”; REJECTED by a vote of 166-259.
  • Republican Study Committee, which reduced overall non-defense discretionary spending (including International Affairs Budget) by 50%; REJECTED by a vote of 119-136.
  • Congressional Black Caucus, which funded the International Affairs Budget at $59 billion (nearly the President’s requested level); REJECTED by a vote of 103-303.
  • Congressional Progressive Caucus, which boosted funding well beyond the request level, to a total of $106 billion; REJECTED by a vote of 77-347.

USGLC sent a letter to the House this week opposing the deep and disproportionate cuts to the International Affairs Budget in the FY12 budget resolution. USGLC’s Co-Presidents Bill Lane (Caterpillar) and George Rupp (International Rescue Committee) wrote, “Now is not the time to retreat in support of programs that protect America’s national security and create conditions for growth and prosperity at home.”

In addition, on Wednesday morning Ambassador Mark Green (Ret.), USGLC’s Senior Director, and former Secretary Dan Glickman, Chairman of our Center for U.S. Global Leadership, testified before the House Appropriations Subcommittee on State-Foreign Operations regarding  the importance of the International Affairs Budget. “For literally a penny on the dollar,” they stated, “this is a cost-effective way to advance our security, prosperity and open hearts and minds to America’s message of liberty, fairness, and free markets.”  You can read their full testimony here and also their piece yesterday on Fox News.

Next Steps

Congress will be in recess for the next two weeks and return for legislative work on May 2.  It’s unclear exactly when the Senate will move to its FY12 budget resolution, though additional delay is expected.  Budget Committee Chairman Kent Conrad has been awaiting the final proposal of the bipartisan “Gang of Six” (of which he is a member), which has been working for months to craft a bill tracking the recommendations of last year’s bipartisan Deficit Reduction Commission (National Commission on Fiscal Responsibility and Reform).  The “Gang of Six” is expected to unveil its proposal early next month.

This week also saw full engagement of the President on the FY12 budget.  On Wednesday he announced his own plan to reduce the deficit.  The President’s plan would cut $4 trillion from the deficit over the next 12 years.  Of the $4 trillion, $2 trillion would come from spending cuts, $1 trillion from increased revenues, and $1 trillion from reduced interest payments on the debt.  During his announcement of his proposal, he said that “Our politicians suggest that we can somehow close our entire deficit by eliminating things like foreign aid, even though foreign aid makes up about 1 percent of our entire federal budget.”

To further complicate matters, Congress is also preparing for a heated debate over the debt ceiling, which is projected to be breached by mid-May.  House and Senate Republicans have made clear that they are likely to oppose an increase in the debt ceiling unless such action includes additional restraints on spending.

3.        Administration Officials Testify Before Congress on International Affairs Budget

Administration officials appeared before Congressional committees this week, stressing the importance of the International Affairs Budget and the danger of deep cuts to these programs.  USAID Administrator Raj Shah testified before the Senate Appropriations Subcommittee on State-Foreign Operations and the Senate Foreign Relations Committee, where he was joined by Millennium Challenge Corporation (MCC) CEO Daniel Yohannes.

Senator Patrick Leahy (D-VT), Chairman of the State-Foreign Operations Appropriations Subcommittee referenced some of the struggles USAID has had in the past in being “risk averse” but also stressed that “USAID has an essential role to play in projecting U.S. global leadership and protecting our national interests. I hear that from people in business, I hear that from our military, I hear that from everybody.”

Sen. Ron Johnson (R-WI) noted that he had recently returned from a trip to Afghanistan where he saw the good work of USAID personnel on the ground there: “They are working hard to try and do good things, and I certainly believe that U.S. foreign aid can be a real positive influence throughout the world and enhance the U.S.’s reputation.”

During the Senate Foreign Relations Committee hearing, Senator Ben Cardin (D-MD) highlighted the public’s misperception of the amount of money the U.S. spends on foreign assistance and emphasized how critical these programs are to our national security.  Ranking Member Richard Lugar (R-IN) raised concern about some of the funding request for the MCC, particularly for compacts with Mali, Moldova, Namibia and Vanuatu.  Senator Bob Menendez (D-NJ), who chairs the Western Hemisphere subcommittee, raised concerns with Administrator Shah about funding for Latin America, stressing his views that the region is not receiving sufficient attention or funding.

Senator Johnny Isakson (R-GA), speaking at a Senate Foreign Relations Subcommittee hearing on the FY12 budget request for Africa, spoke of the important benefits of the MCC, saying, “That investment has a tremendous payback for the United States of America in more than one way, but in particular, for companies to go and have a predictable investment opportunity with–and joint venture opportunity with—African countries…. So that’s an investment that has a huge benefit and payback to…the taxpayers of the United States.”