August 6, 2015

International Affairs Budget Update, 8/6/15

1.  Fall Outlook: What to Expect in September

With both the House and Senate adjourned for August recess and the end of the fiscal year fast approaching, September is shaping up to be a busy month for Members of Congress. When Congress returns to Washington after Labor Day there are several must-pass bills on the table: a long-term highway reauthorization bill, legislation regarding the Iran nuclear deal, a stop-gap spending measure, and possibly the debt ceiling.

Prior to recessing, House Speaker John Boehner (R-OH) publicly acknowledged what many had been thinking—that a Continuing Resolution (CR) would be needed to keep the government running past September 30. While the details are unclear, policymakers are likely to pass a three-month CR in September. This would give Congress until December to negotiate a comprehensive agreement on the FY16 spending bills that would avert automatic, across the board cuts under sequestration. An overarching budget deal, similar to the one negotiated in 2013 by Senator Patty Murray (D-WA) and Representative Paul Ryan (R-WI), remains elusive, but Senate Majority Leader Mitch McConnell (R-KY) told reporters at CQ this week that “At some point we’ll negotiate the way forward”—a nod to the likelihood of budget negotiations this fall. If a budget deal is not reached by the end of the year, a year-long CR is the most likely outcome.

For the International Affairs Budget, as mentioned in last week’s update, the House- and Senate-approved FY16 levels come in far below the President’s request, but nearly maintain current spending levels. Assuming Congress passes a “clean” CR—one without major policy and funding riders—the International Affairs Budget would likely be funded at an annual rate of $50.9 billion for whatever length of time the initial CR turns out to cover.

2. Electrify Africa Reintroduced in Senate

On Tuesday Senate Foreign Relations Committee Chairman Bob Corker (R-TN) and Ranking Member Ben Cardin (D-MD), along with a bipartisan group of 15 Senators, reintroduced legislation that would increase access to electricity in Sub-Saharan African countries. The Electrify Africa Act of 2015 (S.1933) would direct the U.S. government to establish a comprehensive multi-year approach to assist countries in sub-Saharan Africa in developing an appropriate mix of power solutions, thus reducing poverty and driving economic growth. In addition, the legislation includes a three-year authorization for the Overseas Private Investment Corporation (OPIC).

The Senate legislation is nearly identical to the House version (H.R. 2847), which was reintroduced by House Foreign Affairs Committee Chairman Ed Royce (R-CA) and Ranking Member Eliot Engel (D-NY) in June, but there are three main differences:

  • The Senate version mandates OPIC report to Congress on its progress expediting procedures for approvals of loans and risk insurance for Sub-Saharan Africa energy projects;
  • The Senate bill also gives OPIC temporary authority to expand lending to foreign businesses that are majority-owned by Americans in order to encourage additional investments in Africa’s power sector; and
  • Lastly, the Senate bill calls on OPIC to report to Congress its ability to effectively meet its objectives based on the modifications to OPIC’s authority as mandated through the legislation.

During the 113th Congress, the full House passed the Electrify Africa Act by a vote of 297-117, and the Senate Foreign Relations Committee passed its version—the Energize Africa Act—out of Committee. However, the bill did not pass the full Senate before adjournment. Both Chairman Royce and Chairman Corker have indicated their intention to consider the bills when Congress returns to Washington this fall.