1.    Summary and Analysis of Senate-Passed FY 10 Supplemental

On May 27^th the Senate passed (67-28) a $58.8 billion FY10 supplemental spending bill (H.R. 4899) for war funding, disaster assistance, and Haiti reconstruction. The Senate-passed measure includes $6.3 billion for International Affairs spending for Iraq, Afghanistan, Pakistan and Haiti, identical to the Administration’s total request, but with some modifications to specific allocations. The remainder of the Senate bill provides $33.5 billion for the Defense Department and $5.1 billion to replenish the FEMA disaster-relief fund.

Highlights of Senate Bill:

The Senate made a number of changes to the Administration’s supplemental request for programs that fall under the International Affairs Budget. Overall the bill slightly decreased funding for the “Frontline States” of Pakistan, Iraq and Afghanistan, while increasing assistance for Haiti. Other countries that received funding included Mexico, Jordan and the Democratic Republic of the Congo.

Diplomatic Operations in Afghanistan, Pakistan, Iraq, Haiti, and Mexico

The Committee made substantial changes to the Administration’s budget request in this area, which supports the State Department’s diplomatic operations:

• Provides $200 million for diplomatic and consular operations in Afghanistan, $11 million less than proposed, to support 457 new U.S. hires working at the district level and with the central government.
• Provides $26 million for Pakistan, as requested, which will support 56 new U.S. hires.
• Provides $1.03 billion for Iraq, a $540 million cut from the request. The vast majority of the cut ($527 million) was due to a decision not to fund the construction of permanent consulates in Basra and northern Iraq. The Appropriations Committee noted funding for those facilities should be included in regular appropriations, which will put pressure on the FY11 budget.
• Provides $65 million, as requested, for Haiti to support an expanded diplomatic presence after the earthquake and $5 million for additional security for US diplomats in Mexico after an American diplomat was killed in drug-related violence.

Office of Inspector General

The Senate declined to fund the Administration’s $14 million request for Special Inspector General for Afghanistan Reconstruction (SIGAR), arguing that SIGAR’s intention to audit Afghan ministries—rather than U.S. programs–was outside SIGAR’s mandate and that plans had not been adequately coordinated with USAID and  State IG offices. The Senate instead increased funding for USAID and State IG offices for increased oversight over programs in Afghanistan, Pakistan and Haiti.

Haiti Embassy, Security, Debt Reduction, and Aid Programs

• Economic Assistance. The Senate measure provides $770 million for Haitian reconstruction, $21 million higher than the request.  Most of the increases were targeted for larger programs for shelter, education, and community stabilization activities.
• International Disaster Assistance. $465 million was allocated for International Disaster Assistance, $114 million above the request.
• Debt Reduction. The Senate measure includes $212 million to cancel Haiti’s debt owed to several international financial institutions prior to the earthquake.
• International Narcotics Control and Law Enforcement. The Senate increased narcotics and law enforcement funding by $4 million, to $148 million total, covering governance, police training, counternarcotics, trafficking, and peacekeeping programs.
• Embassy Security, Construction and Maintenance. The Senate allocated $79 million for embassy reconstruction in Haiti, $5.5 million below the request.
• International Peacekeeping. $96.5 million was allocated to support an expanded UN Peacekeeping Mission in Haiti, matching the request.
• Broadcasting Board of Governors. $3 million was allocated to support expanded Creole-language Voice of America radio broadcasts; a $2.2 million proposal to establish a “permanent reporting facility” was not funded and instead directed to the regular appropriations process.

Afghanistan and Pakistan Economic Assistance

• Provides $1.31 billion for Afghanistan, $267 million below the request. The largest reduction came in the area of governance programs, reduced by $160 million, with a $50 million cut to the Afghan Reconstruction Trust Fund.
• Provides $259 million for Pakistan, slightly above the $244 million request, including $60 million for programs for women and $65 million for agricultural support.

Afghanistan, Pakistan, and Iraq Counternarcotics and Law Enforcement

• Provides $169 million for Afghanistan, $31 million below the request. The Senate expressed concern about Afghan political will to reform its weak and corrupt justice system and reduced support to prison, corrections, and justice activities by $35 million, 26% below the request.
• Provides $40 million for Pakistan, as requested, mainly for police training.
• Provides $650 million for Iraq, $133 million above the request, including $200 million in unrequested funds for management and security programs for the Iraqi police force, and $450 million for start-up and operational costs for the Iraqi police force. The Senate argued that the development of the Iraqi National Police was integral to Iraq’s future as the US military begins to withdraw.

Additional Funding Not Requested by the Administration

While the Administration’s proposal included only appropriations for Afghanistan, Pakistan, Iraq, and Haiti, the Senate-passed measure added almost $600 million in funding for other areas.  Congressional appropriation committees applied the same technique in the FY09 supplemental bill and counted a portion of those additional funds as “forward funding” (e.g., appropriations that would cover some of the spending requested in the regular FY10 budget).  “Forward funding” in the FY09 emergency supplemental totaled about $1.8 billion and enabled Congress to come closer in meeting the President’s FY10 request.

2.     Status of House Action on FY 10 Supplemental

As reported in our May 28^th Budget Update, reaction to a draft FY10 supplemental spending bill circulated by House Appropriations Committee leaders in advance of a May 27^th scheduled markup led to postponement of Committee consideration.  While the bulk of the supplemental tracks the Senate’s funding for the war and Haiti reconstruction, the addition of $23 billion to avoid teacher layoffs around the country (as well as resources for police, students, and other needs) pushed the draft bill’s price tag to $84 billion, $25.2 billion higher than the Senate-passed bill.

While the fate of the supplemental measure in the House remains uncertain, International Affairs Budget totals in the draft bill are virtually identical to the Administration’s overall request and the Senate-approved measure.