May 18, 2012

International Affairs Budget Update, 5-17-12

1.    House Appropriations Committee Approves FY13 State-Foreign Operations Bill

This afternoon the House Appropriations Committee approved its FY13 State-Foreign Operations Appropriations Bill by voice vote. The $48.3 billion measure, approved last week by the State-Foreign Operations Subcommittee, was approved after consideration of several amendments offered by both Republicans and Democrats.

Approved amendments included: cutting assistance to countries that allow Sudanese president Omar al-Bashir into their country (Representative Frank Wolf, R-VA); urging the State Department to designate Boko Haram as a foreign terrorist organization (Representative Charles Dent, R-PA); and limiting funding to negotiate a UN arms treaty (Representative Denny Rehberg, R-MT).  Three family planning amendments related to the Mexico City Policy (Global Gag Rule) and UNFPA offered by Representatives Nita Lowey (D-NY), Rosa DeLauro (D-CT) and Barbara Lee (D-CA) were defeated.

As we reported last week, the FY13 State-Foreign Operations Appropriations Bill represents a mixed bag for development and diplomacy programs, with many programs flat funded compared to FY12 levels but significant cuts to multilateral organizations.  The House Committee report provides additional details on our analysis of the bill last week.  These details include:

  • Global Health: Of the $2.47 billion for global health programs, the report specifies that Maternal and Child Health should be maintained at “not less than” current (FY12) levels ($605 million).  Bilateral PEPFAR programs are flat-funded ($4.243 billion), with $1.3 billion for the Global Fund.
  • Democracy: The bill provides a total of $2.839 billion for democracy promotion activities, roughly equivalent to the Administration’s request.
  • State Operations: The bill provides no funding for additional hires above attrition levels.
  • Middle East/North Africa: While the bill denies the Administration’s request for a new $770 Middle East and North Africa Incentive Fund (MENA-IF), the report clarifies that the bill provides $200 million to “promote regional peace and security, political and economic reform, and stabilization efforts in the Middle East and North Africa.”  Of this total, $70 million is provided for the Middle East Partnership Initiative (MEPI), at least $50 million for Jordan, and $5 million for USAID’s Office of Middle East Partnerships.
  • Procurement Reform: The report states that the Committee “remains cautious about USAID’s rapid implementation of its procurement reform efforts” and that the USAID Administrator is required to consult with the Committee before issuing guidance that changes current regulations on acquisition and assistance.
  • Direct Government-to-Government Assistance:  The report states that “While the Committee supports efforts to develop capacity and sustainability of foreign recipient governments, the Committee remains concerned that USAID’s procurement goals are neither realistic nor in the best interest of the United States taxpayer.”

Next Steps
Floor action on the House’s State-Foreign Operations bill has yet to be scheduled, but it could potentially be considered as soon as early June and possibly as part of a multi-bill security “minibus” along with Defense, Military Construction-Veterans’ Affairs, and Homeland Security.  Such a move, however, would draw the ire of some Republican members.  Last week the Republican Study Committee sent a letter signed by 44 House Republicans to Speaker John Boehner (R-OH) and Majority Leader Eric Cantor (R-VA) calling for an open appropriations process, bringing all twelve appropriations bills to the floor individually and allowing Members to offer amendments under an open rule.  While not expressly stating they would vote against bills not called up individually, the threat of such action was made clear.  The Senate Appropriations Committee is scheduled to take up its State-Foreign Operations bill next week.

2.    Congress Passes Export-Import Bank Reauthorization

After passing the House last week by a vote of 330-90, the Senate Tuesday approved reauthorization of the Export-Import Bank (Ex-Im Bank) by a vote of 78-20.  The compromise legislation, forged by Majority Leader Cantor and Representative Steny Hoyer (D-MD), comes after months of delay stemming from controversy between Boeing and Delta Airlines, as well as opposition from some House Republicans.  Provisions seeking to make the Bank more transparent and accountable were added as part of the compromise.

The U.S. Chamber of Commerce expressed its support for Ex-Im reauthorization in a letter Monday, saying,Failure to enact this legislation would put at risk the nearly 300,000 American jobs at 3,600 companies that depend on Ex-Im to compete in global markets.”

During Senate debate, five amendments were considered and rejected, including one by Senator Mike Lee (R-UT) to phase-out the Bank entirely.  This measure failed by a vote of 12-86.  Senators Lindsey Graham (R-SC) and Maria Cantwell (D-WA) spoke frequently during the debate, defending the Ex-Im Bank’s importance for U.S. businesses with Senator Graham saying the Bank “doesn’t lose money, it makes money.” Notable votes against the measure included opposition from Senators Bob Corker (R-TN), Marco Rubio (R-FL), John McCain (R-AZ), and Senate Minority Leader Mitch McConnell (R-KY).

Part of the International Affairs Budget, the fees earned by the Ex-Im Bank exceed annual losses, thereby generating revenue for the Treasury Department while creating new opportunities for U.S. exports and supporting thousands of U.S. jobs.  Last year alone, the Bank facilitated about $40 billion in exports from U.S. companies of all sizes.  The bill has headed to the President’s desk for signature ahead of the May 31 expiration of Ex-Im’s current charter. 

3.    Senate Rejects Five Budget Proposals 

Yesterday Senate Republicans, critical of Democrats’ reluctance to take up an FY13 budget resolution, offered several budget proposals and took largely symbolic procedural votes on the measures.  Senate Majority Leader Harry Reid (D-NV) has rebuffed calls for the Senate to pass a budget this year, arguing that top-line numbers agreed to in last year’s Budget Control Act eliminated the need for a budget resolution.  The Senate failed to pass five budget proposals, including three alternative budgets that would result in deep cuts to the International Affairs Budget:

  • The House-passed FY13 budget resolution (Ryan proposal), which provides $49.1 billion for the International Affairs Budget, FAILED by a vote of 41-58;
  • A Republican-sponsored vote on the President’s FY13 budget request, which provides $56.2 billion for the International Affairs Budget, FAILED by a vote of 0-99;
  • Senator Pat Toomey’s (R-PA) alternative budget proposal, which provides $24.2 billion for the International Affairs Budget and zeroes out the Overseas Contingency Operations (OCO) account by FY15, FAILED by a vote of 42-57;
  • Senator Rand Paul’s (R-KY) alternative budget proposal, which provides $13 billion for the International Affairs Budget by freezing foreign assistance funding at $5 billion and fully funding OCO, FAILED by a vote of 16-83; and
  • Senator Mike Lee’s (R-UT) alternative budget proposal, based on the Heritage Foundation’s Saving the American Dream plan, which calls for returning most non-defense discretionary accounts to FY08 levels, FAILED by a vote of 17-82.

State-Foreign Operations Appropriations Snapshot*

FY12 Enacted

FY13 Request

FY13 Senate Allocation

FY13 House Allocation

($42.1b Base,
$11.2b OCO)

($46.5b Base,
$8.2b OCO)

($49.8b Base,
$3.2b OCO)

($40.1b Base,
$8.2b 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. A small amount of funding is provided in the State-Foreign Operations Appropriations bill for non-International Affairs programs.