Today the House State-Foreign Operations Appropriations Subcommittee (SFOPs) approved by voice vote its FY16 Appropriations bill, which funds about 97% of the International Affairs Budget.  The SFOPs bill provides a total of $47.8 billion, including $40.5 billion in base and $7.3 billion in Overseas Contingency Operations (OCO) funding. Overall, this represents about a $1.4 billion (3%) cut from FY15 enacted levels, and a $5.4 billion (10%) cut from the President’s request.

As has been the case with previous House SFOPs bills, subcommittee Chairwoman Kay Granger (R-TX) prioritizes security assistance, saying that the bill is “first and foremost a national security bill.”  The House bill is also similar to prior years in that it cuts multilateral programs, including zeroing out voluntary contributions to International Organizations and funding for activities relating to climate change.

Absent an accompanying authorization bill, the FY16 SFOPs bill is once again the default vehicle for Congress to express its views on a number of foreign policy issues, for example: the bill does not reauthorize the Export-Import Bank, contains a prohibition on funding for any new diplomatic facilities in Cuba, and zeroes out funding for the IMF and several international climate change funds.

Among the highlights, the FY16 House bill:

Boosts International Security Assistance and Diplomatic Security

• The bill provides a $165 million boost over FY15 levels for international security assistance.  Programs such as Foreign Military Financing, International Narcotics Control and Law Enforcement, International Military Educational Training, and Peacekeeping Operations are cumulatively funded at the Administration’s request, while anti-terrorism programs receive the majority of the increase.

• The bill also increases spending for Diplomatic and Embassy Security over FY15 levels.

Cuts Multilateral Assistance, Economic Support Funds and USAID Operating Expenses

• Multilateral Assistance: The bill cuts funding for Multilateral Assistance by $1.3 billion (47%) from FY15, primarily for support to International Financial Institutions. Among other things, the bill provides no funding for the IMF and it also zeros out funding for voluntary contributions to International Organizations and Programs.

• Economic Support Funds (ESF): The bill cuts this account by $823 million (17%) from FY15 levels.  The Middle East and the Western Hemisphere are currently the regions receiving the largest amounts of ESF, and the Administration would be forced to make trade-offs between these and other regions to live within the levels set by the House.

• USAID Operating Expenses: The bill cuts $93 million (8%) from FY15. This account covers USAID salaries and benefits, overseas and Washington operations, and central support, including human capital initiatives, security, and information technology.

Funds Other Accounts At or Above FY15 Levels

• Humanitarian Assistance and Global Health programs are significantly higher ($759 million and $273 million, respectively) than those sought by the Administration in its FY16 request, but relatively similar to current levels.

• In other cases, flat funding means foregoing major increases sought by the President in his FY16 request — for example, UN peacekeeping (cut $811 million), Development Assistance (cut $493 million) and the Millennium Challenge Corporation (cut $351 million).

Policy Provisions

The bill does not extend the authorization of the Export-Import Bank, which will expire at the end of the month if Congress does not act to reauthorize it.  The bank’s renewal has become a contentious battle in Congress, with conservatives split about whether to support the bank, and many Democrats calling for reforms of the institution such as focusing more of its programs toward small businesses.

Among the other policy-oriented provisions in the bill is a prohibition on funds for an embassy or other diplomatic facility in Cuba. There is also language in the bill relating to Congress’ investigation of the attack on the U.S. consulate in Benghazi, stipulating that 15% of the State Department’s operational funds will be withheld until certain requirements are met concerning State’s management of Freedom of Information Act requests and electronic communications.
Next Steps

The Subcommittee is expected to release the bill’s report language early next week, shortly ahead of a full House Appropriations Committee markup expected mid-next week.  USGLC will provide a full analysis of the bill once the report language is released. The House is continuing action at a brisk pace on the twelve annual appropriations bills.  Thus far six bills have been approved by the full Committee and three have been taken up by the full House, with at least one other on the floor this week.  Click here for more details on House appropriations action.

The Senate Appropriations Committee’s action on the State-Foreign Operations Appropriations bill is not expected to take place until after the July 4^th recess.  As we reported last month, the Senate’s 302(b) allocation for SFOPs provides a total of $49.0 billion: $39.0 billion in base funding, $9.3 billion for OCO, and $759 million in emergency spending. Taken together, the Senate’s total SFOPs allocation is 2% above the House, though there is concern that the Senate allocation relies too heavily on OCO funding.

The Administration and most Congressional Democrats are opposing the appropriations allocations, as the Republican-proposed levels presume a return to sequestration.  Given the wide ideological divide between the parties, significant progress on appropriations bills before the end of the fiscal year appears to be growing more unlikely by the day, particularly in the Senate where floor time is likely to be very limited. Therefore, lawmakers on both sides of the aisle are already 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 could very well be the end result for FY16.