August 1, 2011

International Affairs Budget Update, 7-29-11

1. House State-Foreign Operations Appropriations Subcommittee Passes FY12 Bill; Full Committee Markup Schedule for Next Week

2. Senate Foreign Relations Committee Chairman Kerry Releases FY12-FY13 State Department Authorization Bill


1. House State-Foreign Operations Appropriations Subcommittee Passes FY12 Bill; Full Committee Markup Schedule for Next Week

The full House Appropriations Committee is currently scheduled next week to take up the FY12 State-Foreign Operations Appropriations Bill, which was passed out of subcommittee earlier this week by voice vote. As reported in our July 27th Budget Update, the subcommittee’s $47.2 billion mark makes dramatic reductions in non-war related programs – overall 20% below FY10 levels, but in some specific accounts, the funding is more than 30% below current levels.

In speaking about the legislation, Subcommittee Chairwoman Kay Granger (R-TX) said, “this bill asks the most important question we can ever ask: how does each program we fund impact our national security interest? If that question couldn’t be answered, we reduced the spending, added restrictions, or cancelled the program altogether.” She also stated that the bill “reforms and refocuses the way we deliver our foreign aid.”Ranking Member Nita Lowey (D-NY) expressed her serious concerns about the significant cuts in the bill saying, “this legislation would be a step back from U.S. leadership and substantially weaken the United States’ efforts overseas by decreasing economic opportunity, stability, and access to critical services for millions of the world’s poorest people.”

The markup lasted roughly an hour, with limited debate by both parties but additional opening statements from Committee Chairman Hal Rogers (R-KY) and Ranking Member Norm Dicks (D-WA). Representative Jerry Lewis (R-CA) spoke candidly, saying, “None of us are happy with this [302(b)] allocation.” Representative Adam Schiff (D-CA) expressed his concern with the cuts to State Department and USAID operations and the impact it would have on U.S. national security interests, citing former Secretary of Defense Bob Gates’ consistent calls to boost these capabilities. Representative Jesse Jackson, Jr. (D-IL) stated his intentions to offer amendments eliminating aid to Pakistan, noting that those funds are “a treasure trove of offsets” to address deep cuts to other accounts in the bill.

2. Senate Foreign Relations Committee Chairman Kerry Releases FY12-FY13 State Department Authorization Bill

Also on Wednesday, Senate Foreign Relations Committee Chairman John Kerry (D-MA) released his State Department Authorization Bill. Senator Kerry stated that his legislation “demonstrates our commitment to building our nation’s civilian capacity and providing our diplomatic corps with the essential tools, authorities, and resources to succeed in the demanding jobs we continually require of them.” On both funding and policy, the bill is a marked improvement from the authorization bill (H.R. 2583) passed by the House Foreign Affairs Committee last week.

Highlights on Funding Levels

On funding issues, the Senate bill generally authorizes appropriations at levels requested by the Administration for FY12, levels much higher in most cases than the House authorization bill. In total, the Senate measure provides $21.4 billion in spending authorization for next year, including those for most State Department operations, contributions to international organizations and peacekeeping, and related activities. As a State Department authorization bill, the legislation provides authorization for the State Department and related accounts, while selectively providing authorization for four foreign assistance accounts: USAID’s Office Transitions Initiative, State Department’s regular and emergency refugee accounts, and the Peace Corps. For those programs that the House and Senate bills both provide authorizations, the Senate measure is $4.1 billion higher than the House and $161 million less than the President’s request.

Highlights on Policy and Reform Items

Global Development Policy

  • Establishes the principles for a broad-based global development policy, including reducing and eliminating poverty, supporting sustainable development, enhancing and utilizing public-private partnerships, investing in innovation – including supporting the USAID Development Innovation Ventures (DIV) initiative, which is defunded in H.R. 2583– and enhancing transparency and accountability.

Global Economic Engagement

  • Provides permanent authorization for the Overseas Private Investment Corporation (OPIC). OPIC promotes private U.S. investment in foreign markets and has been used by President Obama to support emerging democracies in the Middle East, such as Tunisia and Egypt.

Increases Engagement with International Organizations

  • As opposed to H.R. 2583, which cut U.S. contributions to the UN regular budget by 25% and capped the amount that the U.S. would contribute to peacekeeping missions at 25%, the Senate bill would increase peacekeeping contributions to 27.5% and urge the State Department to improve efforts to recruit and place U.S. citizens in international organizations such as the UN, World Bank and IMF.

Millennium Challenge Corporation

  • Affirms MCC as a positive model for promoting development and combating poverty, and provides more flexibility to MCC to initiate concurrent compacts and extend larger compacts for two years beyond standard five-year compacts.

Promotes Global Food Security

  • Exempts low income countries from a prohibition on U.S. assistance to a country for the production of an agricultural commodity that is available in surplus on the world market and would cause injury to American producers. This long-standing restriction is aimed at protecting U.S. farmers from foreign competitors that receive American assistance. Only poor countries that do not export on a consistent basis agricultural commodities related to U.S. aid are exempted.

Global Health Initiative

  • Requires the State Department to issue a report assessing the early impact of GHI programs and establishing a strategic plan for future GHI implementation.

Accountability, Transparency and Public Awareness

  • Provides hiring flexibility to the Office of the Inspector General in both the State Department and USAID to improve the OIG’s ability to recruit and retain qualified personnel
  • Calls for a presidential report on all U.S. government humanitarian assistance programs, including programs under the Department of Defense, with an aim to improve interagency coordination of foreign assistance.
  • Establishes the framework for building public awareness and dialogue about these critical programs, empowering the USAID Administrator to facilitate direct discussions with the American public.

Prioritizes Women in Development

  • Creates Office for Global Women’s Issues in the Department of State and a Senior Coordinator for Gender Equality and Women’s Empowerment in USAID.

USAID Working Capital Fund

  • Authorizes, as requested, USAID to utilize fees collected (1% on acquisition and assistance obligations worldwide) in order to support several agency reforms recently put in place. Importantly, the Working Capital Fund will enhance USAID’s procurement capacity, provide better service, and increase strategic sourcing of supplies and services.

Local Procurement

  • Permits USAID to award contracts of up to $5 million through limited competition, criteria that will allow additional opportunities for indigenous organizations to work with USAID. Part of the agency’s procurement reform effort is to build capacity in assisted countries. This provision will advance that goal.

Cyber and Internet Freedom

  • Makes clear that global cyber and internet freedom are top U.S. foreign policy and development priorities and provides a variety of tools to protect and promote these freedoms.