1.    Senate Appropriations Committee Approves FY12 State-Foreign Operations Bill
2.    Congress Still Working to Pass Continuing Resolution
3.    Senate Overwhelmingly Rejects Paul Amendment to Cut State and USAID Funding

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1.    Senate Appropriations Committee Approves FY12 State-Foreign Operations Bill

The Senate Appropriations Committee late yesterday approved its FY12 State-Foreign Operations Appropriations bill, which is a significant improvement over the House bill, providing $5 billion more in funding for non-war related programs.  The $53.34 billion measure, authored by Subcommittee Chairman Patrick Leahy (D-VT), includes $44.64 billion for non-war related “base” programs and $8.7 billion for the Overseas Contingency Operations (OCO) account.

While the Senate’s $44.6 billion for non-war related programs still represents a cut of 12.2% below the President’s request, it essentially is the same as current funding and is a significant improvement from the House’s level of $39.6 billion – which represents a devastating 20 percent cut from FY10 levels.  The Senate bill avoids the deep cuts made by the House to areas such as development and multilateral assistance and State and USAID operations.

USGLC issued a press release expressing support for the Senate actions and calling on Congress to enact no less than the Senate’s funding level.

In their opening remarks, both Chairman Leahy and Subcommittee Ranking Member Lindsey Graham (R-SC)made strong statements in support of the International Affairs Budget.  Chairman Leahy noted the constraints on this budget at a critical time for our nation, saying: “At a time when China is rapidly expanding its influence, including in our own hemisphere, and when we face growing challenges around the globe, our budget for critical regions and programs is shrinking.  Despite that, this bill, which was drafted in a bipartisan manner, does a good job of balancing priorities.” Ranking Member Graham made the case for the critical role these programs play in our national security, saying “this bill is very important to defending America” and that “the right assistance at the right time can do more to the enemy than a brigade of troops.”

As it did last year, the Committee adopted by a vote of 18-12 an amendment offered by Senator Frank Lautenberg (D-NJ) to permanently repeal the “Mexico City Policy,” also known as the Global Gag Rule, which imposes additional abortion-related restrictions on U.S. family planning.  By voice vote, the Committee also adopted an amendment offered by Ranking Member Graham to establish reporting requirements to address the Palestinian Liberation Organization’s status in the United States if Palestine seeks statehood in the United Nations.  Senator Mark Kirk (R-IL) aggressively challenged language in the bill regarding cooperation from Pakistan, expressing major concerns about our relationship with the Pakistani government.  Senators Dan Coats (R-IN) and Mary Landrieu (D-LA) expressed their disappointment about cuts to the President’s Emergency Plan for AIDS Relief (PEPFAR).

Highlights of the Senate’s FY12 State-Foreign Operations Appropriations Bill

Development Assistance: Development assistance, including food security, education and economic growth programs, is funded at $2.55 billion.  This is $30 million (+.7%) above FY11 levels and $480 million (23%) above the House mark.  Food security programs under the Feed the Future initiative and largely funded through development assistance receive $1.3 billion from the Senate, a 4.6% increase over current funding but 7% below the President’s request.

• Of the $1.3 billion for Feed the Future, the bill recommends $200 million for the Global Agriculture and Food Security Program, a multilateral fund promoting food security projects administered through the World Bank.  While it is still 35% below the President’s request, this represents a 100% increase over FY11 levels and is in stark contrast to no funding in the House bill.

Multilateral Assistance: The Senate provides $3.2 billion for multilateral assistance, a 32% increase over FY11 and more than double the $1.58 billion provided by the House.  This funding includes vital replenishments to multilateral development banks that were cut significantly or, in some cases, fully denied by the House.

State Department and USAID Operations: Funding for State Department and USAID operations is significantly higher than the dramatic cuts suffered in the House bill.

• State Department receives $9.26 billion in core funding, more than $1.2 billion (18.5%) above House levels.
• USAID receives $1.35 billion, including $106 million in OCO funding, a slight increase over current levels and 37% higher than the $985 million provided by the House.

Global Health: The Senate mark provides $7.9 billion, slightly more than current funding and $800 million (11.5%) higher than House.

• Within that total, amounts for Maternal/Child Health, GAVI, Malaria, Family Planning, Nutrition, and Neglected Tropical Diseases are all funded modestly higher than FY11.
• Senate allocations for the Global Fight to Fight AIDS, TB, and Malaria was flat funded at $750 million (plus an additional $299 million in the Labor-HHS appropriation), as was bilateral TB resources.
• Bilateral HIV/AIDS receives $4.85 billion in the Senate mark, about $50 million less than FY11.
• The House did not specify levels for most health activities, although the Senate’s Family Planning level of $585 million is $124 million above the House.

Humanitarian Aid: To respond to a growing number of humanitarian crises in the world caused by political unrest in the Middle East and famine in the Horn of Africa, the Senate provides notable increases to disaster relief and refugee assistance.

• For the combined USAID disaster assistance and State Department refugee programs, the Senate provides $2.8 billion, 9.6% above FY11 levels and 22% above the House bill.  This includes $250 million in OCO funds to respond to internally displaced persons (IDP) crises in Afghanistan, Pakistan, Somalia, Yemen and Kenya.

Other Accounts:

• Millennium Challenge Corporation: The Senate provides $898 million, effectively flat compared to FY11 levels and equal to the House’s FY12 funding.
• Economic Support Fund: The Senate provides $5.6 billion (combined base and OCO), -6% below FY11 funding and $400 million (7.7%) above House level.  This includes $400 million to the West Bank and Gaza, and $250 million in funds to Egypt.  Funding to Palestinian territories will be restricted should Palestine become a member or non-member state of the UN outside of a negotiated agreement with Israel.
• Voluntary Contributions to International Organizations: The Senate provides $355 million for voluntary contributions to international organizations, roughly equal to FY11 levels and $55 million (14.5%) above House levels.  This includes $40 million for the UN Population Fund that was defunded in the House bill.
• Contributions to International Peacekeeping: The Senate provides $1.9 billion for international peacekeeping, slightly above current levels and $209 million (12%) above the House bill.  The bill includes language urging the State Department to work with the UN to ensure that peacekeepers are properly vetted and will not commit abuses.
• Peace Corps: The Senate provides $375 million, equivalent to FY11 and House FY12 funding.
• East-West Center: The Senate provides $16.7 million in funding for the East-West Center.  While this is still a 20% reduction from FY11 levels, it is a significant improvement over the House, which defunded the organization.
• Clean Technology Fund: The Senate provides $350 million for the International Clean Technology Fund under the Senate bill, a 49% increase over FY11 levels and a substantial increase over no funding provided by the House.

Overseas Contingency Operations: The fully funded $8.7 billion OCO account provides funding for operations in countries such as Afghanistan, Pakistan, Iraq and Yemen, as well as funding for activities previously funded under the Defense Appropriations bill.  Provisions include:

• Pakistan Counterinsurgency Capability Fund: The Senate provides $1 billion ($100 million below the President’s request).
• Complex Crisis Fund: The Senate provides $45 million, 12% above FY11 levels.  An additional $30 million is provided in core funding, providing a total $75 million for the State Department and USAID to respond to emerging crises.
• Global Security Contingency Fund: The Senate bill fully funds the $50 million request for the new $500 million joint DOD/State Department fund to address emerging threats more effectively through pooled resources.  DOD will provide the remaining $450 million in the request.
• U.S. Institute of Peace: Of the combined $40 million provided for USIP, $8.4 million is funded through OCO to support operations in the Frontline states.

Next Steps on FY12

The focus on State-Foreign Operations appropriations – and the International Affairs Budget overall – now shifts to conference negotiations to reconcile the differences between the House and Senate bills. The final products of these negotiations are likely to be combined into an omnibus appropriations bill late this year.  Complicating these negotiations is the new security cap put in place for FY12 and FY13 under the debt ceiling-budget deal last month.

As part of the debt ceiling-budget deal, total FY12 discretionary spending is separated between security and non-security accounts, with the International Affairs Budget classified as security spending (along with Defense, Homeland Security, Veterans Affairs, and Intelligence).  The agreement’s FY12 security cap of $684 billion is $4 billion below current levels and $10 billion below the House appropriations allocations for security accounts.  As a result, there is a large difference in each of their allocations for the International Affairs Budget and their allocations for Defense are also quite different.  Whereas the House increases FY12 Defense funding by $17 billion, or 3.3%, the Senate allocation keeps it flat at current levels.

Because of these discrepancies, non-Defense accounts under the security cap, especially International Affairs, are very vulnerable to deep and disproportionate cuts in the final FY12 negotiations between the House and Senate.

2.  Congress Still Working to Pass Continuing Resolution

With Congress set for a week-long recess next week and the fiscal year beginning on October 1, congressional leaders are hoping to quickly pass a continuing resolution (CR) to avert a government shutdown.  The CR would cut 1.5 percent across-the-board from FY11 levels to meet the $1.043 trillion cap required by the budget deal.  House and Senate leaders strongly disagree about whether or not to offset emergency disaster assistance – the House supports the offset, while the Senate does not.  Yesterday, by a 230-195 vote, the House failed to pass its CR.  48 Republicans opposed the measure because they want more cuts in spending, while only six Democrats supported it due to concerns about insufficient levels of disaster aid and the offsets for that assistance.  Congressional leaders are determined to pass the CR by the end of the week, so leaders will have to resolve their differences very soon.

3.  Senate Overwhelmingly Rejects Paul Amendment to Cut State and USAID Funding

In a strongly bipartisan vote, the Senate last Thursday rejected 78-20 an amendment offered by Senator Rand Paul (R-KY) that would have cut $7 billion in State Department and USAID funding in order to offset the cost of U.S. disaster relief appropriations.  Slashing development and diplomacy programs by this magnitude, on top of the dramatic cuts already being shouldered by these accounts, would have had a devastating impact on America’s global leadership.

Speaking out against the amendment during debate were several champions of the International Affairs Budget:

• Senator John Kerry (D-MA), Chairman of the Senate Foreign Relations Committee, spoke passionately against the amendment, saying such a cut would be “absolutely devastating to our foreign aid and development programs. It would decimate agencies that have already taken huge funding cuts in fiscal year 2011.” He reminded Senators that “foreign assistance is an investment in our national security, it is not a gift.”
• Senator Patrick Leahy (D-VT), Chairman of the State-Foreign Operations Appropriations Subcommittee, echoed these comments, saying “it’s a terrible idea to cut critical national security programs to offset funding for emergency disasters.”
• Senator Lindsey Graham (R-SC), Ranking Member of the State-Foreign Operations Appropriations Subcommittee, said “We’re broke at home and there are a lot of things we could and should be doing for our states.  I want to try to get our fiscal house in order, but we have to defend this country.  The foreign operations account is national security in another form.”