April 27, 2015

International Affairs Budget Update, 4/24/15

1.  House FY16 Appropriations Allocation Spares International Affairs Base from More Cuts

On Wednesday, the House Appropriations Committee approved by voice vote the all-important FY16 subcommittee appropriations allocations, known as 302(b)s.  This came after the Committee rejected on a party-line vote a measure from Ranking Member Nita Lowey (D-NY) to set the allocations at the levels included in the President’s budget request.  The approved 302(b)s adhere to the $1.017 trillion FY16 discretionary spending cap established by the Budget Control Act (BCA), which is a slight increase from the FY15 spending cap of $1.014 trillion.

For State-Foreign Operations, which funds 97% of the International Affairs Budget, the 302(b) allocation is essentially flat compared to current levels for base programs at $40.5 billion. In addition, the Committee provides $7.0 billion for the war-related Overseas Contingency Operations (OCO) account, the same as requested by the Administration, but 24% below current levels. The House 302(b) allocation is a marked improvement from the funding levels recommended in the House Budget Resolution, which reduced base International Affairs funding by 7% and OCO by 57%.  The USGLC sent a letter thanking House Appropriations Chairman Hal Rogers (R-KY) and State-Foreign Operations Appropriations Chairwoman Kay Granger (R-TX) for their leadership, particularly on the base allocation level.

The challenge, however, is that the total State-Foreign Operations allocation (base and OCO) is $47.5 billion3% ($1.7 billion) below current FY15 levels and 11% ($5.6 billion) below the President’s FY16 request.  With four humanitarian global crises and threats from Yemen to Ukraine, it is hard to imagine how there will be adequate resources to meet the needs and advance America’s interests throughout the world.

SFOPs Funding Snapshot

FY15 Enacted* FY16 Admin Request FY16 House SFOPs 302(b) 
Base $40.0 billion $46.0 billion $40.5 billion
OCO $9.3 billion $7.0 billion $7.0 billion
Total $49.3 billion $53.0 billion $47.5 billion

 *The FY15 enacted total excludes $2.5 billion in supplemental funds to combat Ebola in West Africa.

Next Steps

The Senate may release their 302(b) allocations as early as next week with numbers for the State-Foreign Operations bill likely similar to the House levels.

The State-Foreign Operations Appropriations bills are generally among the last bills acted on by both the House and Senate Appropriations Committees.  The House State-Foreign Operations Subcommittee is expected to markup its FY16 spending bill in mid to late May, with full Committee markup in early June.  The Senate Appropriations Committee’s action on the State-Foreign Operations bill will likely follow a similar path, given Chairman Rogers and Senate Appropriations Chairman Thad Cochran (R-MS) are trying to coordinate to some degree the order of appropriations action in each of their chambers.  Both leaders have expressed a strong desire to restore “regular order” and have all 12 appropriations bills get floor votes, but it is unlikely that the calendar will allow all bills to see floor action before the August recess – particularly in the Senate.

The House has been moving its appropriations bills much quicker than usual this year, with floor action on two appropriations bills next week – Energy-Water and Military-Construction VA.  Last year, seven of the 12 appropriations bills were approved by the full House; the Senate did not act on any.  Neither the House nor the Senate took up the State-Foreign Operations appropriations bill last year.

2.  FY16 Budget Conference Negotiations Underway

While the House Appropriations Committee has already begun its work, this week, the bicameral Budget Conference Committee convened to reconcile the House and Senate Budget Resolutions (H.Con.Res.27 and S.Con.Res.11).  As previously reported, the Senate’s budget provides a total of $48.3 billion for the International Affairs Budget, $41.3 billion in base funding and $7.0 billion for OCO, while the House provides $42.9 billion: $38.9 billion in base funding and $4.0 billion for OCO.

The role of the Conference Committee is to reconcile budgets, producing a conference report that provides a binding FY16 discretionary spending cap along with reconciliation instructions for select committees to take action and amend existing law to bring spending, revenues, or the debt limit into alignment with the budget resolution.  The only binding impact of the budget for International Affairs programs is the 302(b) allocations, which the House Appropriations Committee has already approved.

House Majority Leader Kevin McCarthy (R-CA) expects the conferenced budget resolution to be on the floor next week.

3.  Senate Focuses on State Department Authorization and Food Aid Reform

The Senate Foreign Relations Committee held two hearings this week on an upcoming State Department Authorization bill, one of Chairman Bob Corker’s (R-TN) top legislative priorities.  The first on Tuesday, held by Subcommittee on State Department and USAID Management, International Operations, and Bilateral International Development Chairman David Perdue (R-GA), featured the State Department Inspector General (IG), Steve Linick.  Member statements and questions focused primarily on Benghazi and how State is implementing the recommendations from the Accountability Review Board. IG Linick was fairly critical in his assessment of “security deficiencies” at the Department. However, the hearing did offer some positive comments from Chairman Perdue, who used the opportunity to praise the Foreign Service, saying that “State Department people are an amazing group; dedicating their careers to multiple assignments around the world.”

On Wednesday, Chairman Corker held a hearing featuring Deputy Secretary of State for Management and Resources, Heather Higginbottom.  Corker highlighted that “one of our top priorities in this committee is to restore regular committee consideration of a State Department authorization bill, reviving a process that will help the department become more efficient and effective within a sustainable budget.”  In addition, the Committee spoke about the Quadrennial Diplomacy and Development Review (QDDR), which is expected to come out in the coming weeks, and the State Department’s top priorities.  Higginbottom explained that “The 2015 QDDR will make economic diplomacy a key focus, and it will make recommendations to ensure the competiveness of businesses abroad and job growth back home.”

Food Aid Reform

Another focus of the Senate Foreign Relations Committee has been food aid reform, with a hearing held last week where Senators emphasized the national security implications of U.S. food aid to prevent extremism. Ranking Member Senator Ben Cardin (D-MD) stated that there needs to be “a more robust federal budget for developmental assistance, including food aid. And I am very disappointed that we have not had an increase, but we’ve had a decrease.” Chairman Corker and Senator Chris Coons (D-DE) introduced the Food for Peace Reform Act (S. 525) in February, which would institute reforms to food aid and allow for the more effective and quicker delivery of food aid to those in need. The Committee has not indicated yet when this legislation may move forward.