May 22, 2015

International Affairs Budget Update, 5/22/15

1. Senate Allocation Improvement Over House By Maintaining Current Level; But Base Still Down

Yesterday the Senate Appropriations Committee approved on a party-line vote (16-14) the all-important 302(b) spending allocations for FY16. The approved allocations divide up 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 the State-Foreign Operations Subcommittee, which funds 97% of the International Affairs Budget, the total allocation is improved over the House allocation, maintaining total funding nearly at current levels. The 302(b) allocation of $49.0 billion includes $39.0 billion in base funding, $9.3 billion for Overseas Contingency Operations (OCO), and $759 million in emergency spending. Taken together, the Senate’s total State-Foreign Operations allocation (base + OCO + emergency) is 1% below enacted spending, 2% above the House, and 8% below the President’s request.

While the overall levels are significantly better than the House (by $1.2 billion), the primary concern of the Senate allocation is that base spending is cut by $1 billion from current levels and is $1.5 billion less than the House’s allocation. However, the Senate makes up for that cut by maintaining current spending levels for OCO (providing roughly $2 billion more than the President’s request and the House’s allocation) and also adding the emergency funding.

The Committee rejected on a party-line vote an alternative measure from Vice Chairwoman Barbara Mikulski (D-MD) to set the allocations using the top-line number included in the President’s budget request. The alternative allocations proposed by the Senate Democrats would have funded State-Foreign Operations at the President’s request of approximately $53 billion: $46 billion in base funding and $7 billion in OCO.

The USGLC has long argued first and foremost to ensure adequate overall funding to address the global needs, especially given the numerous humanitarian crises and threats throughout the world. With OCO now funding nearly 20% of the International Affairs Budget, including some core, on-going programs, we have expressed serious concerns about the increasing reliance on the OCO account to fund non-emergency, war-related programs. We have argued that as OCO funding comes down, base funding needs to be increased to ensure adequate funding of key priorities, including humanitarian assistance.

FY16 State-Foreign Operations 

FY15 Enacted* FY16 Admin Request FY16 House SFOPs 302(b) FY16 Senate SFOPs 302(b)*
Base $40.0 billion $46.1 billion $40.5 billion $39.0 billion
OCO $9.3 billion $7.0 billion $7.3 billion $9.3 billion
Total $49.3 billion $53.2 billion $47.8 billion $49.0 billion

*The table excludes $2.5b in emergency funding, which was provided specifically to combat the Ebola crisis in West Africa in FY15, but includes the Senate’s FY16 302(b) allocation of $759 million in emergency spending.

Next Steps
The House has continued to move its appropriations bills quickly this year with the full Committee approving five bills thus far: MilCon/VA; Energy-Water; Legislative Branch; Transportation/Housing and Urban Development; and Commerce/Science/Justice. Three of those measures – MilCon/VA; Energy-Water; and Legislative Branch – have been approved by the full House. The Senate Appropriations Committee has only approved two of the bills: MilCon/VA and Energy-Water.

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 the week of June 1st, with a full committee markup the week of June 8th. The Senate Appropriations Committee’s action on the State-Foreign Operations will be delayed and may not take place until after the July 4th recess.

With the Administration and most Democrats in opposition to the appropriations allocation required by sequestration, significant progress on appropriations bills before the end of the fiscal year appears highly unlikely, particularly in the Senate where floor time is likely to be very limited. In the House, completing action on all twelve appropriations bills also appears to be optimistic.  Therefore, lawmakers on both sides of the aisle are laying the groundwork for a potential budget deal later this year that would scrap the sequester caps and boost both defense and non-defense spending, similar to the 2013 Murray-Ryan agreement. If an agreement is not reached, a Continuing Resolution will likely be the end result for FY16.

2. Senate Passes AGOA Reauthorization; House Hearing Focuses on Trade – Development Agencies

The Senate took a big step last week towards extending the African Growth and Opportunity Act (AGOA). During floor debate on the Trade Promotion Authority legislation, the Senate overwhelmingly voted 97-1 in favor of an amendment introduced by Senate Finance Committee Chairman Senator Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) to extend AGOA for another ten years. The legislation will now move to the House for its action. Congress first authorized AGOA in 2000 and expanded it in 2004 with broad bipartisan support to encourage export-led economic development in 39 sub-Saharan African countries and improve U.S. economic relations with the region.  AGOA’s current authorization expires on September 30, 2015.

Over in the House, this week the House Foreign Affairs Subcommittee on Terrorism, Nonproliferation, and Trade held a hearing on trade promotion agencies, including many of the key agency heads of the International Affairs Budget: the Export-Import Bank, the Overseas Private Investment Corporation (OPIC), and the U.S. Trade and Development Agency (USTDA). Many subcommittee Members expressed their support for the agencies, with Chairman Ted Poe (R-TX) highlighting trade as the “lifeblood” of Houston and noting Ex-Im’s important role in helping several businesses there. The witnesses, Ex-Im Bank Chairman and President Fred Hochberg, OPIC President and CEO Elizabeth Littlefield, and USTDA Director Leocadia Zak used the hearing to highlight how their respective agencies are a critical and effective part of our nation’s trade and development agenda. All made strong arguments about how their agencies play an important role in not only helping U.S. businesses compete in the global economy but also promote our national security interests by contributing to building more stable and secure nations. As Zak said, “Robust diplomatic trade relationships mean a resilient economy and a secure nation.” A few Members expressed concerns about the Ex-Im Bank, including Reps. Scott Perry (R-PA), Reid Ribble (R-WI), and Dana Rohrabacher (R-CA), who joined the hearing despite not serving on the subcommittee.

3. Girls Count Act Advances in House and Senate

The Senate Foreign Relations and House Foreign Affairs Committees yesterday unanimously passed their respective versions of the Girls Count Act (S.802/H.R.2100). The legislation, which is sponsored by Senators Marco Rubio (R-FL) and Jeanne Shaheen (D-NH) and Reps. Steve Chabot (R-OH) and Betty McCollum (D-MN), would authorize the State Department to work with other nations to support efforts to issue birth certificates and develop national registries for children in developing nations. In addition, the bill promotes policies that prevent discrimination against girls and works to create better livelihoods for women. Last year the bill was passed by the House in December but was not taken up by the Senate before it adjourned.