1.        Agreement Reached on FY11 Spending; International Affairs Budget Cut 11.4%

White House and congressional negotiators  reached agreement on a spending plan for the remainder of FY11 late Friday evening, only a couple of hours before a government shutdown would have begun. The agreement cuts a total of $38.5 billion in spending compared to FY10 funding, a compromise level from the $61 billion in cuts passed by the House earlier this year in H.R. 1

The government is currently operating under a one-week short-term CR while the details of the deal are worked out.  The short-term CR, which passed the Senate by voice-vote and the House by a vote of 348-70 late Friday, cuts an additional $2 billion (in transportation accounts) from current spending.

The FY11 spending deal (H.R. 1473) funds the International Affairs Budget at $50.1 billion, $6.5 billion (-11.4%) below the FY10 adjusted base level and $8.7 billion (-14.8%) below the President’s FY11 request.  While this returns the International Affairs Budget to slightly less than FY09 levels, it marks a better outcome than the deep 19% cuts adopted by the House in H.R. 1 earlier this year. USGLC appreciates the efforts of supporters on Capitol Hill to successfully oppose much more significant cuts to these vital programs.

Here is a summary of  funding levels, most of them cuts relative to FY10 levels, for major program areas within the International Affairs Budget:

• Development Assistance. The bill provides $2.525 billion for development assistance, $5 million (0.2%) aboveFY10 enacted levels and $460 million below the FY11 request, but well above H.R. 1’s allocation of $1.68 billion.
• Feed the Future. Although there is no specific directive in the bill, the initiativeshould be supported at about the same level as in FY2010 ($813 million in bilateral funding).  In addition, the multilateral Global Agriculture and Food Security Program is funded at $100 million, an activity that had been zeroed in H.R. 1. 
• Global Health. The bill provides $7.845 billion for global health programs, which is $66 million (+0.85%) above the FY10 enacted level but $668 million below the FY11 request. This is an $850 million increase from the amount provided in H.R. 1. The Global Fund to Fight AIDS, Tuberculosis and Malaria received $1.05 billion, $750 million from State-Foreign Operations and $300 million from the Labor-HHS appropriation.  This is the same funding level provided in FY2010.
• Climate Change (multilateral funds): the bill provides $235 million for U.S. contributions to the Clean Technology Fund and Strategic Climate Fund, $140 million (-37.3%) below the FY10 enacted level and $400 million below the FY11 request.  It is a noteworthy improvement from H.R. 1, however, which zeroed out funding these programs.
• Migration and Refugee Assistance. The bill provides $1.69 billion for assistance for refugees and displaced persons, which is $160 million (-8.6%) below the FY10 enacted level and $85 million above the FY11 request.  It is an increase of $667 million above the very low amounts provided in H.R. 1.
• International Disaster Assistance. The bill provides $865 million for IDA, which is $20 million (+2.4%) above the FY10 enacted level and $4 million below the request. Similarly to Migration and Refugee Assistance, the final spending levels are significantly higher (+$431 million) than the amounts provided in H.R. 1.
• Contributions for International Peacekeeping Activities received a nearly $300 million cut from the FY11 request and about $243 million (-11.4%) below FY10.
• The State Department’s Diplomatic and Consular Programs account, which supports U.S. diplomatic operations in Afghanistan, Pakistan, and Iraq, is funded at $755 million below the FY11 request and $1.07 billion (-11%) below FY10.
• The Millennium Challenge Corporation (MCC) received a large cut of $380 million relative to the FY11 request and $205 million (-18.6%) below the FY10 level.  It is funded at $900 million, about $100 million higher than the level provided in H.R.1.
• International Financial Institutions received a $130 million (-6.5%) reduction relative to FY10 and $1.05 billion relative to the FY11 request.  However, this funding level is about $750 million higher than the level in H.R. 1.
• The Peace Corps, funded at $375 million, was reduced by $71 million relative to the request and $40 million (-6.25%) relative to the FY10 level.
• The U.S. Institute of Peace, which was zeroed out in H.R. 1, was restored under the agreement but with a $7 million (-19.7%) cut relative to the FY11 request and $10 million relative to FY10.
• The Pakistan Counterinsurgency Capability Fund, originally funded through both the Department of State and Defense, was moved to the Department of Defense ($800 million), partially freeing up funds to be used for other programs in the State-Foreign Operations bill.
• Total food aid (Food for Peace/PL480 and McGovern-Dole) is set at $1.7 billion, 10.5% lower than the President’s $1.9 billion request and 17% lower than the roughly $2 billion provided in FY10, but significantly higher than H.R. 1’s allocation.

Further details on specific spending cuts can be viewed at the House and Senate Appropriations Committee websites.

The House and Senate are expected to take up the FY11 spending bill on Thursday. The measure is expected to pass both houses, although several conservative Republicans in the House have already declared they will oppose the measure.

2.     House to Debate FY12 Budget this Week

The House Budget Committee passed late Wednesday its FY12 budget resolution on a party-line 22-16 vote.  In total, the measure cuts nearly $6 trillion in spending over the next decade.  The budget resolution provides $41 billion for the International Affairs Budget, a 27% cut from FY10 levels and 34% lower than President Obama’s FY12 request.

Although the budget resolution fully funds the President’s $8.7 billion Overseas Contingency Operations (OCO) request for International Affairs, the cut to Core operations is dramatic.  The nearly 30% cut is particularly disproportionate compared to other national security accounts (Defense, Homeland Security and Veterans), which collectively are essentially flat-lined in the budget resolution.

Key Statements

• USGLC released a strong statement last week expressing grave concerns with impact these deep cuts would have on U.S. global engagement and competitiveness.  Similarly, supporters on Capitol Hill reacted strongly in opposition.
• Senator Patrick Leahy, Chairman of the Senate’s State-Foreign Operations Appropriations Subcommittee: “As the international affairs budget faces deep cuts in fiscal year 2011 and in the future, it is important to be reminded of the invaluable assistance provided by the State Department and USAID to American citizens abroad.”
• Representative Howard Berman, House Foreign Affairs Committee Ranking Member: “The Republican proposal to slash the international affairs budget by nearly 40% sets a new standard for recklessness and irresponsibility.”
• Representative Nita Lowey, House State-Foreign Operations Appropriations Subcommittee Ranking Member: “Presidents and leaders of both political parties have recognized that our national security is a three-legged stool of defense, diplomacy, and development.  The Republican budget blueprint would effectively chop two of these legs at the knees.”

Next Steps

The FY12 budget resolution will move to the House floor on Thursday, with a final vote expected Friday. During House consideration, both a Democratic alternative and a Republican alternative resolution will be offered. Rep. Chris Van Hollen (D-MD), the Ranking Member on the Budget Committee, plans to unveil his alternative proposal early tomorrow. His proposal is expected to avoid large cuts to the International Affairs Budget. By contrast, the Republican Study Committee (RSC) alternative would reduce spending beyond the levels in the committee-passed budget resolution. The RSC proposal has no mention of the International Affairs Budget, but it aims to reduce overall non-defense discretionary spending in real terms by 50% over the next decade.

USGLC members received an Action Alert last week urging mobilization of their networks to fight these deep cuts.  If you have not already done so, please contact House members to urge opposition to these dangerous cuts to International Affairs programs.

3.        Related Hearings on the International Affairs Budget This Week

Several related hearings will be occurring this week on the International Affairs Budget:

• Today, USAID Administrator Rajiv Shah testified before the Senate Appropriations Subcommittee on State-Foreign Operations.
• On Wednesday, a Senate Foreign Relations Subcommittee is holding a hearing on USAID and MCC with USAID Administrator Rajiv Shah and MCC CEO Daniel Yohannes, with Senator Ben Cardin presiding.
• On Wednesday and Thursday, the House State-Foreign Operations Appropriations Subcommittee will be hearing testimony from non-subcommittee Representatives and outside witnesses. USGLC will be represented by its Senior Director, Ambassador Mark Green, and Secretary Daniel Glickman, Chairman of the Board.
• On Thursday, the Senate Foreign Relations Committee’s Subcommittee on African Affairs will be hearing testimony relating to the FY12 budget request and Africa, with witnesses including Assistant Secretary of State for African Affairs Johnnie Carson.

On Thursday, the House Foreign Affairs Committee will hold a hearing on the FY12 budget request and Europe and Eurasia.

4.        Snapshot: International Affairs Budget

($ in billions)