Leaders in Congress and the White House surprised Washington earlier this week when they announced a two-year budget deal that would lift discretionary spending caps and increase the debt ceiling.  The deal, which had been worked on secretly for several weeks, will allow for an additional $66 billion in discretionary funding for FY16, including an additional:

• $25 billion for Defense spending
• $25 billion for Non-Defense Discretionary (NDD) spending
• $16 billion for Overseas Contingency Operations (OCO), split equally between Defense and Non-Defense

What Could This Mean for International Affairs?

For NDD, total (base plus OCO) funding would be 6.3% higher than in FY15. While the deal does not specify funding levels for individual spending accounts, if the International Affairs Budget were to receive a proportional share of the increase (6.3%) overall funding for FY16 would be approximately $54.1 billion. This is $3.2 billion more than provided in FY15. However, Appropriators will determine the overall spending allocations in the coming days and could decide to allocate the accounts differently. We will be watching this closely and are urging proportional allocations for base funding.

The Big Unknown

There are two big questions around OCO funding:

• First, how much of International Affairs programs will be funded by OCO versus base appropriations? Over the years, we have strongly urged for strong base funding while ensuring adequate OCO resources to address emergency needs.  In the past, Appropriators have used the OCO account to free up funding for other NDD programs. If Appropriators similarly employed OCO in this manner it could lead to a cut in base International Affairs funding. This is concerning because — given the temporary nature of the account — an over-reliance on OCO significantly threatens funding for programs that address long-term, enduring challenges.

• Second, how much flexibility will the Administration have to use OCO funding to address emerging global crises? Initially, OCO funds were to be used solely for operations and programs in Iraq, Pakistan and Afghanistan.  Congress has allowed funds to be used for other emergencies or extraordinary circumstances over the years, and given the growing humanitarian crisis in Syria and other global challenges greater flexibility in OCO funds will be necessary and welcome.

Next Steps

Congress is expected to approve the budget deal in the coming days.  Once approved, Appropriators will revise the spending allocations for each individual spending bill (known as 302(b) allocations) and each subcommittee will determine program funding levels.

We will be closely watching the following questions:

• Will the International Affairs Budget receive a proportional increase in its 302(b) allocation compared to the other NDD accounts?
• What type of programs and activities will be funded in the expanded OCO account?
• Will Appropriators protect the critical needs in International Affairs base funding even with a strong OCO funding level?

As more details become available, we will be providing additional Budget Updates and analysis.