May 23, 2014

International Affairs Budget Update, 5/22/14

1.    Senate Appropriations Committee Cuts Base International Affairs Funding

The Senate Appropriations Committee this morning approved on a party line vote of 16-14 the all-important 302(b) spending allocations for FY15.  The allocations divide up the $1.014 trillion FY15 discretionary spending cap established by last December’s “Murray-Ryan” budget agreement, which is essentially the same as current (FY14) funding levels.  Republicans on the Committee objected to the allocations because they believe they circumvent the budget caps by shifting money from base programs to the off-budget Overseas Contingency Operations (OCO) account and by other miscellaneous accounting adjustments.

In order to avoid cuts to domestic programs due to a $4.3 billion drop in anticipated revenues from the Federal Housing Administration’s mortgage program, the Committee cut State-Foreign Operations base funding $3 billion (-7%) from current levels and added $2.7 billion to the request for the OCO account to mitigate the base cuts.  In total, the Senate Appropriations Committee provides $48.26 billion for FY15 State-Foreign Operations – $39.66 billion in base funding and $8.6 billion in war-related OCO funding.

While the boost in OCO funds will mitigate the impact of the base cuts, it is a troubling short-term solution that would erode base programs.  The Senate’s funding reduction is in contrast to the House’s stronger allocation for base programs of $42.4 billion.  Because the House provides a lower OCO level of $5.9 billion (the same as requested by the Administration), the total funding levels for State-Foreign Operations in the House and Senate bills only differ by $33 million.

USGLC released a statement yesterday from Executive Director Liz Schrayer expressing deep concern about the cut to base funding, stating: “While OCO funds will mitigate the impact in the short term, another round of budget cuts to base programs is extremely dangerous to our security and economic interests.”

Also yesterday USGLC members were on Capitol Hill for our Appropriations Lobby Day, meeting with House and Senate appropriators to raise alarm about the Senate cut and to urge Members to support the House’s level which protects base programs from cuts.  We also activated our rapid response group and urge you to contact Senate appropriators to register your concern about the base cut, if you have not done so already.

FY15 Budget Snapshot
State-Foreign Operations

Administration’s Request

House 302(b)

Senate 302(b)

$42.54 billion Base

$42.38 billion Base

$39.66 billion Base

$5.91 billion OCO

$5.91 billion OCO

$8.6 billion OCO

$48.45 billion Total

$48.29 billion Total

$48.26 billion Total

Next Steps

Thus far the House has approved four appropriations bills in full Committee – MilCon/VA; Legislative Branch; Commerce/Science/Justice; and Transportation/Housing and Urban Development.  Two of those measures, MilCon/VA and Legislative Branch, have been approved by the House.  The Senate has only marked up two of the 12 appropriations bills – Agriculture and MilCon/VA.

The State-Foreign Operations Appropriations bills are expected to be among the last bills acted on by both the House and Senate Appropriations Committees. The House State-Foreign Operations Subcommittee is not expected to markup its bill before mid-June, and that date could slip to after the July 4th recess.  The Senate will likely follow a similar path. Chairwoman Barbara Mikulski (D-MD) stated in this morning’s markup that she intends to have all markups completed by July 10th.

While both she and Chairman Hal Rogers (R-KY) have expressed a strong desire to have all 12 appropriations bills get floor votes in their chambers, it is highly unlikely that the calendar will allow all the bills to see floor action before the August recess. That means a Continuing Resolution for FY15 will likely be needed before Congress adjourns by early October for election campaigning.  The outcome of the November mid-term elections will then dictate whether Congress returns for a post-election lame duck session to finalize FY15 appropriations or waits to act in early 2015 and a new Congress.

2.    FY15 Agriculture Appropriations Bills Move Forward

Today the Senate Appropriations Committee also approved the FY15 Agriculture Appropriations bill, which includes two International Affairs accounts.  The House Agriculture Appropriations Subcommittee approved its bill earlier this week.  For international food assistance (Food for Peace), both Committees provide $1.466 billion, the same as enacted for FY14 but $66 million above the President’s request.  For the McGovern-Dole International Food for Education and Child Nutrition account, House appropriators propose $198 million, 7% more than FY14 and the President’s request.  The Senate bill provides $185 million, the amount approved for FY14.

During the Senate markup today, the Committee approved 16-14 an amendment cosponsored by Senators Mike Johanns (R-NE) and Pat Leahy (D-VT) to continue a $35 million cash set-aside for non-emergency programs, approved last year, which increases flexibility and reduces the need for the inefficient practice of monetized food assistance.

Other food aid modifications previously enacted or requested for FY15 are not included in the House and Senate bills.  Both pieces of legislation exclude a provision sought by the Administration to allow 25% of emergency food aid to be provided as cash vouchers or purchased locally, something that would help get food commodities to victims more quickly and at less cost.  House and Senate bills also do not fund an $80 million USDA Local and Regional Procurement Program authorized earlier this year in the Farm Bill.