April 19, 2012

International Affairs Budget Update, 4-19-12

1.    Senate Appropriations Committee Approves Strong Allocation for FY13 State-Foreign Operations

The Senate Appropriations Committee approved today the all-important 302(b) allocations for FY13.  The allocations, approved this morning during the first Full Committee markup of the year, divide up the $1.047 trillion discretionary spending cap for FY13 (established last year under the Budget Control Act) into 12 smaller appropriations bills.

The Committee provided $53 billion for the State-Foreign Operations allocation$49.8 billion in base funding and $3.2 billion in Overseas Contingency Operations (OCO) funding.  The allocation is effectively flat (0.6% below) compared to total current funding and 3.1% below the President’s request. However, the Senate allocation provides a much-needed increase from the FY12 base funding level of $42 billion and would restore base funding to close to FY10 levels.  We expect the Senate’s strong 302(b) allocation to be a stark contrast with the House’s allocation, which is expected to be announced next week by House appropriators.

USGLC released a statement from our Executive Director Liz Schrayer applauding the allocation “for heeding the calls of America’s top military and business leaders to ensure strong funding for the International Affairs Budget” and commending Chairman Inouye and Senators Cochran, Leahy and Graham for their “extraordinary leadership.” Subcommittee action on the State-Foreign Operations Appropriations bill is possible in the next couple of weeks.

State-Foreign Operations Appropriations Snapshot*

FY12 Enacted

FY13 Request

FY13 Senate 302(b)

($11.2b OCO)

($8.2b OCO)

($3.2b OCO)

*95% of the International Affairs Budget is included in the State-Foreign Operations Appropriations bill. The remaining 5% includes international food aid programs in the Agriculture Appropriations bill and miscellaneous commissions in the Commerce-Justice-Science bill.  The State-Foreign Operations allocation includes a small amount for commissions not funded by the International Affairs Budget.

2.    Senate Budget Committee Considers Long-Term Budget Plan

Yesterday the Senate Budget Committee held a markup of Chairman Kent Conrad’s (D-ND) FY13 Budget Resolution and long-term budget plan, “The Fiscal Commission Budget Plan,” which is based on both the Simpson-Bowles plan and last year’s Budget Control Act.  Under Chairman Conrad’s direction, no amendments were considered or votes held on the plan. The Senate will not consider the plan on the floor, so the measure is largely irrelevant.

The plan provides a total $5.4 trillion of deficit reduction over 10 years and $1.043 trillion in discretionary spending for FY13, $4 billion below the $1.047 trillion spending cap agreed to in the Budget Control Act.  For the FY13 International Affairs Budget, it includes $52.15 billion, 5% less than FY12 and 7.3% less than the President’s request. The plan keeps a firewall between security (which includes the International Affairs Budget) and non-security spending and caps OCO spending at the level of the President’s request in order to prevent the use of OCO funding as a way around discretionary limits. This is an improvement over the FY13 House Budget Resolution, which cuts the International Affairs Budget 11% from current levels.

3. Update on House FY13 Appropriations Schedule

House action on the FY13 appropriations process officially got underway this week, following House passage on Tuesday of a “deeming” resolution that sets the $1.028 trillion discretionary spending cap in the House’s FY13 Budget Resolution as an enforceable limit for the FY13 appropriations bills.  Two Appropriations bills were already marked up in Subcommittee this week: the Energy-Water Appropriations bill and the Commerce-Justice-Science Appropriations bill.  The House 302(b) allocations are expected to be announced next week.  The House State-Foreign Operations Appropriations Subcommittee is not expected to mark up its bill before next month.

Adding to the debate between House and Senate over top-line spending levels, Office of Management and Budget (OMB) Acting Director Jeffrey Zients yesterday sent a letter to House Appropriations Committee Chairman Hal Rogers (R-KY) threatening a veto from President Obama for any appropriations bills that fall below the cap agreed to last year in the Budget Control Act.

Also this week in the House, as part of the reconciliation requirement in the budget resolution, six authorizing committees tasked with finding $261 billion in savings over 10 years began reporting out plans for offsetting automatic cuts to the Defense budget set to take effect in 2013 as part of sequestration. The House Foreign Affairs Committee is not among the authorizing committees in the reconciliation process, and the State-Foreign Operations Appropriations bill is not expected to be affected by additional cuts under the House’s reconciliation action.