Groundhog Budgeting?

Despite Growing Dangers Facing America, Budget Request Once Again Calls for Draconian Cuts to International Affairs

Liz Schrayer is President and CEO of the U.S. Global Leadership Coalition

 

A WEAKENED NATIONAL SECURITY FRAMEWORK

The budget request again rejects the decades-long bipartisan consensus that funding for defense and international affairs proportionally ebbs and flows together as a percentage of GDP. For the first time since the State Department and USAID began relying on a critical wartime account alongside the Defense Department eight years ago – an account known as Overseas Contingency Operations (OCO) – the Administration’s budget includes no OCO resources for non-defense programs while at the same time proposing to increase OCO funding for defense.

THE ECONOMIC DEVELOPMENT TOOLKIT

Building on the economic competitiveness theme in the National Security Strategy, the budget proposes doubling down on a new standalone U.S. Development Finance Institution (DFI). With bipartisan Congressional interest in modernizing America’s development finance capabilities, this proposal is expected to garner significant support and attention on Capitol Hill. See our press statement from the USGLC welcoming this proposal.  

TILLERSON’S REDESIGN EFFORT NARROWS

As reported recently in the media, the budget proposal confirms that the Secretary’s signature Redesign agenda has been replaced with a smaller-scale “Impact Initiative” to implement keystone modernization projects focused on processes, procedures and technologies. Under the leadership of Administrator Mark Green, USAID has undertaken its own redesign effort, which will focus on implementing process and policy reforms to ensure USAID programs promote developing countries’ “journey to self-reliance.”  

PERSONNEL CUTS

The new budget request also proposes cuts to several accounts that fund the U.S. diplomatic and development presence around the world and appears to implement the Administration’s goal of reducing State Department and USAID personnel by 8%. Members of Congress have already expressed concerns about the proposed reductions in career personnel and the drawdown of America’s ability to conduct foreign policy. Learn more in the USGLC fact sheet.  

DEVELOPMENT ASSISTANCE DOWN

In their proposal, the Administration again tries to consolidate economic and development assistance into a new Economic Support and Development Fund (ESDF) managed by the State Department – pulling programs from USAID – and suggesting that this would streamline four separate accounts to increase efficiency and ensure development is focused on strategic priorities. In either case, this consolidated development fund is dramatically cut once again, this time by 43%.  

HUMANITARIAN PROGRAMS CUT

On the humanitarian front, the Administration’s budget proposes to cut humanitarian assistance by 33% compared to current levels. Even with this cut, the Administration states that “the U.S. will remain the largest single donor of global humanitarian assistance” while at the same time encouraging international partners to provide a greater share of this assistance. The Administration also proposes eliminating the Emergency Refugee and Migration Assistance (ERMA) account while cutting the Migration and Refugee Assistance (MRA) account by 17%.  

GLOBAL HEALTH DROPS

The budget proposes a 23% cut to Global Health Programs compared to current levels and as PEPFAR marks its 15th anniversary, the request includes a 20% proposed cut to these life-saving programs even after receiving a $400 million boost after the budget deal was announced. Moreover, most other global health programs are cut even more deeply than PEPFAR, and taken as a whole are cut by 30%.  

NEW WINNERS AND LOSERS

While most of the proposed cuts mirror those in last year’s budget request, there are some important differences worth noting from the Administration’s request:

• 24 of the 37 countries saw funding restored that were slated to be zeroed out last year

• International family planning – which was eliminated last year – is funded at $302 million, the same level included in the Bush Administration’s final budget request

• The U.S. Institute of Peace (USIP) is funded at $20 million, after being eliminated in last year’s budget

• Educational and Cultural Exchange programs are cut by a staggering 75% compared to 55% last year

• The National Endowment for Democracy is slashed by 60% compared to 39% cut last year

• Contributions to the Global Fund, a critical tool in the fight against HIV/AIDS, is cut by 31% compared to 17% last year

WHAT’S NEXT?

While Congress is already raising alarms that this FY19 budget request doesn’t keep pace with today’s unprecedented global crises, Appropriators are working at this very moment to hammer out FY18 spending levels as a result of the budget deal. With a potential shortfall of $8.8 billion (15%) for the International Affairs Budget – a decision that was made during the bipartisan budget deal – the USGLC is urging lawmakers to support no less than current level funding for FY18.