May 21, 2013

International Affairs Budget Update, 5-17-13

1. House FY14 Appropriations Allocations Include Deep and Disproportionate Cuts for International Affairs

Next week the House Appropriations Committee will take up the FY14 appropriations allocations, known as 302(b)’s.  Details of the allocations now circulating in advance on Capitol Hill confirm that, as anticipated, the House is calling for deep cuts to most non-Defense discretionary programs, including the International Affairs Budget.  With the House using a total discretionary spending level of $967 billion, $91 billion below the cap permitted in the Budget Control Act for FY14, the allocations also fall well below the Administration’s proposal for next year.

For State-Foreign Operations, the spending bill that includes most International Affairs resources, the 302(b) allocation calls for further deep and disproportionate reductions that would bring International Affairs spending 34% below FY10 levels.  The FY14 302(b) provides a total of $40.6 billion for State-Foreign Operations — 19% ($9.5 billion) below both current FY13 levels (post-sequestration) and the President’s FY14 request.  The $34.1 billion allocation for non-war programs is nearly 14% below current levels and almost 27% below the President’s request.  For the war-related Overseas Contingency Operations (OCO) account covering operations in Afghanistan, Pakistan, and Iraq, which does not count against discretionary spending caps, the Committee allocates $6.5 billion — 71% more than requested.

As for comparisons to other bills, only three other appropriations bills – Financial Services, Interior, and Labor/HHS/Education – are cut deeper than State-Foreign Operations compared with FY13.  Of particular concern is that the State-Foreign Operations is the only measure among the “security cluster” of appropriation bills that is reduced.  Defense, Homeland Security, and Military Construction/Veterans each receive a modest increase over current amounts.

Next Steps

The House 302(b)’s are likely to be approved by the Appropriations Committee on May 21, despite very strong opposition from Democrats.  The Senate is expected to adopt their allocations in early June.  Even more so than in recent years, the House and Senate 302(b) allocations for State-Foreign Operations will vary considerably because the Senate will be using a total discretionary spending cap of $1.058 trillion, far higher than the House’s level. A Senate 302(b) for State-Foreign Operations above current levels and closer to the Administration’s request is expected.

While House and Senate appropriators would like to move appropriations bills through each chamber before the start of the new fiscal year on October 1st, like last year they are unlikely to make much progress.  In the House, the goal is floor action on three bills – Defense, Homeland Security, and Military Construction/Veterans Affairs – before the July 4 recess.  Beyond that, most of the other appropriations bills will be difficult to move because of their very low funding levels.  In the Senate, appropriations bills will have to contend with a number of competing priorities for floor time.

Last year only seven of the 12 appropriations bills were approved by the full House; the Senate didn’t act on any.  Neither the House nor the Senate took up the State-Foreign Operations appropriations bill.  Barring agreement on a grand bargain budget deal, a Continuing Resolution for FY14 will be needed again this year.

2. USGLC Board Members to Testify Before Senate Foreign Relations Committee Next Week

Next Wednesday morning, May 22, USGLC Co-President Bill Lane, Washington Director for Caterpillar, and Board Member John Murphy, Vice President for International Affairs at the U.S. Chamber of Commerce, will testify before the Senate Foreign Relations Committee’s Subcommittee on International Development and Foreign Assistance about the benefits of the International Affairs Budget for U.S. businesses and the economy.  They will be joined by Dr. Todd Moss, Vice President for Programs and Senior Fellow at the Center for Global Development.  The hearing, titled “Different Perspectives on International Development,” will be led by Subcommittee Chairman Tim Kaine (D-VA) and Ranking Member John Barrasso (R-WY).  The hearing, which will be webcast on the Committee website, is an important opportunity to showcase the important role development and diplomacy programs play in spurring economic and job growth, as well as the strong support that exists for the International Affairs Budget among America’s top business leaders.  We will provide a full report of the hearing later next week.