January 25, 2019
A SPECIAL NOTE ON THE GOVERNMENT SHUTDOWN
After several failed votes in the Senate yesterday to end the partial government shutdown, now in its 35th day, Congress and the White House today reached a short-term deal to reopen the government for three weeks while negotiations over border wall funding continue. The Senate quickly approved the short-term Continuing Resolution (CR), which would restore funding at current levels through February 15 and allow federal employees – including the workforce of our civilian international affairs agencies – to go back to work. The House is expected to follow suit later today. It remains to be seen whether this temporary reprieve will result in a long-term solution to fund the government through the end of the fiscal year. The USGLC is monitoring the situation closely and will send updates as appropriate.
As a reminder, Congress passed five of its twelve FY19 spending bills before the end of the fiscal year last September – ensuring part of the federal government would be funded in FY19. However, none of the bills that fund the International Affairs Budget – the State-Foreign Operations (SFOPS), Agriculture, or Commerce-Justice-Science Appropriations bills – were approved. In December, Congress passed a short-term Continuing Resolution (CR) to extend current funding levels for the International Affairs Budget and other affected agencies and programs and allow for further negotiations on finalizing FY19 spending.
When Congress and the Administration failed to reach an agreement on the remaining seven spending bills due to a dispute over funding for a border wall, a partial government shutdown was triggered – resulting in a funding lapse for America’s diplomatic and development programs. In an op-ed earlier today, USGLC President and CEO Liz Schrayer noted, “Looking at the threats around the world, from extremism to Ebola to an expansionist China, it is clear that we cannot ignore the damage from taking our civilian corps off of the playing field, even for a moment.”
In recent days, both the House and Senate released the text of six appropriations bills that reflect bipartisan agreements reached late last year to finalize FY19 spending. While these bills are unlikely to become law until a long-term deal is struck on the border wall issue, they could become part of a broader agreement to finalize FY19 spending once and for all.
When it comes to the FY19 International Affairs Budget, the agreement struck by Congressional negotiators not only rejects the deep and disproportionate cuts proposed by the Administration, but also slightly increases funding by $193 million (0.3%) compared to current levels. Specifically, the International Affairs Budget receives a total of $56.1 billion, split between $48.1 billion in base and $8 billion in Overseas Contingency Operations (OCO) funding.
International Affairs Budget Snapshot
|FY18 Enacted||FY19 Request*||FY19 Conferenced Package|
|Base||$43.9 billion||$42.2 billion||$48.1 billion|
|OCO||$12.0 billion||$0||$8.0 billion|
|Total||$55.9 billion||$42.2 billion||$56.1 billion|
*Based on CBO’s re-estimate of the Administration’s request
This topline reflects a bipartisan commitment in Congress to strengthen America’s development and diplomacy programs despite back-to-back budget requests from the Administration that, if enacted, would have taken funding back to levels not seen since 9/11 (inflation adjusted).
HIGHLIGHTS OF INCREASES AND DECREASES
Increases Compared to FY18 Enacted
Decreases Compared to FY18 Enacted
Below is an analysis of notable security, economic, and humanitarian programs and how they fared in the conferenced package. Importantly, Congress funds all five agencies proposed for elimination in the Administration’s FY19 budget request at current levels. Those agencies include the U.S. Trade and Development Agency (USTDA), the Asia Foundation, the African Development Foundation, East-West Center, and the Inter-American Foundation.
NOTABLE SECURITY PROGRAMS
International Security Assistance: Increases for INCLE and FMF
The conferenced package includes a total of $9.2 billion for international security assistance, $128 million (1%) more than current levels. International Narcotics Control and Law Enforcement (INCLE) programs receive a sizeable $129 million (9%) increase, while the Foreign Military Financing (FMF) account sees a $60 million (1%) boost. At the same time, Nonproliferation, Anti-Terrorism, Demining, and Related (NADR) programs are cut by $12 million (1%) and funding for the International Military Education and Training (IMET) account is held flat. The measure also rejects, for a second year, the Administration’s proposal to provide some FMF assistance through loans.
State Operations: Steady Funding for Diplomatic and Embassy Security
The conferenced package provides $9.2 billion for Diplomatic and Consular Programs (D&CP), $454 million (5%) more than current funding, and maintains the current level of $6.1 billion for Diplomatic and Embassy Security funding. Embassy Security Construction and Maintenance (ESCM) saw a $339 million (15%) cut.
NOTABLE ECONOMIC PROGRAMS
Trade Agencies: Funding Maintained at Current Levels
The conferenced package funds all export promotion agencies at FY18 levels. The Export-Import Bank and Overseas Private Investment Corporation (OPIC) receive $110 million and $79 million for administrative expenses respectively, while the USTDA – which the Administration had proposed to eliminate – is funded at $80 million.
Last fall, Congress passed bipartisan legislation to consolidate OPIC, USAID’s Development Credit Authority (DCA), and several other investment-related programs into a modernized U.S. International Development Finance Corporation (USIDFC). However, noting the time needed to stand up the new agency, Congress does not include in the conferenced package funding that the Administration requested for the USIDFC in FY19, and instead continues to fund OPIC and the DCA at current levels.
Development and Economic Assistance: Mixed Results
The conferenced package cuts the Economic Support Fund (ESF) by $251 million (6%), but otherwise holds funding for development and economic assistance programs flat at current levels or includes slight increases. Similar to FY18, it rejects the Administration’s proposal to combine four of these accounts – ESF, Development Assistance (DA), Assistance to Europe, Eurasia, and Central Asia (AEECA), and Democracy Fund – into a new State Department-led Economic Support and Development Fund (ESDF).
It also provides level funding for DA and the Millennium Challenge Corporation (MCC), while providing slight increases for USAID Operating Expenses ($25 million), the USAID Capital Investment Fund ($28 million), Democracy Fund ($12 million), AEECA ($10 million), and the Peace Corps ($1 million).
|Development and Economic Assistance||FY18 Enacted||FY19 Request||FY19 Conferenced Package|
|DA||$3.0 billion||$0||$3.0 billion|
|MCC||$905 million||$800 million||$905 million|
|Peace Corps||$410 million||$396 million||$411 million|
|USAID OE||$1.35 billion||$1.12 billion||$1.37 billion|
|ESF||$4.0 billion||$0||$3.7 billion|
|AEECA||$750 million||$0||$760 million|
|Democracy Fund||$216 million||$0||$227 million|
The conferenced package sets out $38.6 million for the U.S. Institute of Peace (USIP) – a nearly $1 million increase from FY18 levels. The additional funding is designated to facilitate the Syria Study Group, which Congress authorized last year to make recommendations on a Syrian diplomatic and military strategy. This funding level is a clear rejection of the Administration’s FY19 proposal to cut funding for USIP in half.
NOTABLE HUMANITARIAN PROGRAMS
Humanitarian Assistance: Modest Increase
The conferenced package not only rejects the Administration’s proposed deep cuts to humanitarian assistance, but also sets out $7.8 billion for these programs – a $173 million (2.3%) increase from current levels. This boost in funding, while small, comes at a time of looming famine in Yemen, the ongoing crisis in Syria, and unprecedented global migration with 68.5 million forcibly displaced people around the world, among many other challenges.
|Humanitarian Assistance||FY18 Enacted||FY19 Request||FY19 Conferenced Package|
|Disaster Aid (IDA)||$4.29 billion||$3.56 billion||$4.39 billion|
|Refugees (MRA)||$3.36 billion||$2.8 billion||$3.43 billion|
|Emergency Refugees||$1 million||$0||$1 million|
|Total||$7.6 billion||$6.4 billion||$7.8 billion|
Global Health: Slight Increases
Reflecting continued strong bipartisan support for global health, Congress includes $8.84 billion for these programs, $148 million (2%) more than in FY18. It provides a slight increase of $50 million for HIV/AIDS programs and maintains flat funding for the U.S. Global Fund contribution. The conferenced package also increases funding for Tuberculosis ($41 million), Nutrition ($20 million), Maternal and Child Health ($7 million), Neglected Tropical Diseases ($3 million), and Vulnerable Children ($1 million) compared to FY18.
The conferenced package provides a total of $100 million for Global Health Security, a $27 million increase from current levels. In addition, it directs $40 million in prior-year Ebola funds be repurposed for Global Health Security including $2 million to be added to the Emergency Reserve Fund, which was established in the FY17 Omnibus Appropriations bill to respond to emerging threats.
The text also holds funding for family planning flat, rejecting the Administration’s proposal to slash funding for these programs by half. It also maintains current level funding for addressing polio at $59 million and for Gavi, the Vaccine Alliance, at $290 million.
|Global Health*||FY18 Enacted||FY19 Request||FY19 Conferenced Package|
|Bilateral PEPFAR||$4.32 billion||$3.85 billion||$4.37 billion|
|Global Fund||$1.35 billion||$925 million||$1.35 billion|
|USAID HIV/AIDS||$330 million||$0||$330 million|
|Malaria||$755 million||$674 million||$755 million|
|Tuberculosis||$261 million||$178 million||$302 million|
|Maternal/Child Health||$830 million||$620 million||$835 million|
|Vulnerable Children||$23 million||$0||$24 million|
|Nutrition||$125 million||$79 million||$145 million|
|Family Planning||$608 million||$302 million||$608 million|
|NTDs||$100 million||$75 million||$103 million|
|Global Health Security||$73 million||$0||$100 million|
|Total||$8.69 billion||$6.71 billion||$8.84 billion|
*State Department and USAID Global Health accounts only, except for family planning.
Food Aid: Proposed Eliminations Rejected
Congress maintains FY18 funding levels for the Food for Peace program, rejecting the Administration’s proposal to eliminate it for a second year in a row. In the case of the McGovern-Dole International Food for Education and Child Nutrition program, Congress provides a modest $3 million (1.3%) increase. Of the program’s total, $15 million is designated available to purchase some food aid locally or regionally, $5 million more than last year.
FY19 Agriculture Appropriations International Programs Snapshot
|FY18 Enacted||FY19 Request||FY19 Conferenced Package|
|Food for Peace/PL 480 Title II||$1.72 billion||$0||$1.72 billion|
|McGovern-Dole||$207.6 million||$0||$210.3 million|
|Local and Regional Procurement||$0*||$0||$0**|
|Total||$1.93 billion||$0||$1.93 billion|
*10 million of McGovern-Dole funding is included for local and regional procurement.
**$15 million of McGovern-Dole funding is included for local and regional procurement.
NOTABLE MULTILATERAL PROGRAMS
Multilateral Assistance: Held Flat Across the Board
The conferenced package maintains current level funding for multilateral assistance. Notably, it rejects the Administration’s request to eliminate the International Organization and Programs (IO&P) account, which funds voluntary contributions to various UN-affiliated and other international organizations, and instead includes $339 million for this account – the same as current funding. The conferenced package also rejects the Administration’s proposal to cut Treasury International Programs by $112 million and provides $1.5 billion for these programs, again equivalent to current levels.
The conferenced package holds funding flat for International Financial Institutions (IFIs) as well. In line with the FY18 Omnibus Appropriations bill and the Administration’s FY19 request, the conferenced package eliminates funding for the Treasury Department’s contribution to the Green Climate Fund – although, as in the past, it does not explicitly prohibit contributions to the Fund.
International Peacekeeping: Mixed Results
While the negotiated package includes a $169 million (12%) increase in funding for Contributions to International Peacekeeping (CIPA), which covers assessed contributions for UN peacekeeping missions, unlike in FY18 the account will not be able to draw on significant carryover balances from previous years. In addition, the package cuts funding for Peacekeeping Operations (PKO) by $49 million (9%). The PKO account funds non-UN peacekeeping forces and operations. As in past years, the negotiated package maintains the 25% legislative cap on UN peacekeeping contributions rather than the negotiated rate of 28%. As a result, the U.S. will not be able to meet its peacekeeping obligations and will again accumulate arrears. America’s total arrears now stand at $750 million.
|Peacekeeping||FY18 Enacted||FY19 Request||FY19 Conferenced Package|
|UN Operations (CIPA)||$1.38 billion||$1.2 billion||$1.55 billion|
|Non-UN Ops (PKO)||$538 million||$291 million||$489 million|
|Total||$1.92 billion||$1.49 billion||$2.04 billion|
NOTABLE POLICY PROVISIONS
Reform and Congressional Oversight
Building on the strong language in the House and Senate’s respective State-Foreign Operations Appropriations (SFOPS) bills, the SFOPS portion of the conferenced package and accompanying explanatory statement include several important requirements related to oversight, accountability, and reform. Key provisions include:
Additional Items of Note
With a deal in place to fund the government for the next three weeks, the Administration and Congressional leadership are now tasked with reaching a long-term agreement to fund the government through the end of the fiscal year. The delays caused by the partial government shutdown could also impact the timing of the Administration’s upcoming FY20 budget request, which is historically released in early February, and potentially delay the start of a new Congressional appropriations cycle.
However, Members of Congress on both sides of the aisle have acknowledged that a new bipartisan budget deal to lift the caps on defense and non-defense discretionary spending must be reached in order to fund the government in FY20. Reaching a new budget deal that avoids the severe cuts associated with a return to sequestration will be a top priority for the 116th Congress. It will be critical for any budget deal to increase the cap on non-defense discretionary spending in order to properly fund America’s development and diplomacy programs.
Download the account-by-account details here.