Central America big winner in White House budget proposal

USAID relief commodities at the Port-au-Prince airport are readied for distribution, January 17, 2010. Photo credit: Candice Villarreal / U.S. Navy

The international affairs budget in the White House request for fiscal year 2016 received an unexpected boost yesterday. The Obama administration requested $54.8 billion to fund diplomatic, humanitarian and development work for next year. It is a 7.7 percent increase that may reverse a five-year trend of spending cuts. But the devil is in the details. While the proposed budget is higher than this year’s, it is still 15 percent less than what was spent in 2010. The budget is “a step in the right direction but may not be able to keep pace with today’s challenges,” said a representative of the U.S. Global Leadership Coalition, a coalition of nonprofits and businesses.

“I applaud the administration for beginning to restore cuts to these vital programs, but I’m concerned that the total level falls short of what will be needed to contend with a host of threats worldwide,” said Liz Schrayer, USGLC president and chief executive officer. “With crises across the globe, we must bolster investments in development and diplomacy programs that are critical to advancing our security and economic interests.”

Budget winners

As with anything that involves money, there are winners and losers in the proposal. The biggest winners are Central America and the Millennium Challenge Corporation. Both would see dedicated money increase significantly. Central America and Mexico will have $1.14 billion funding, roughly twice as much as was spent on the region in fiscal year 2014. The increase is the direct result of the Obama administration’s promise to address the surge of child migrants that rose to national prominence in the middle of 2014. Specifically, the money will go toward the “U.S. Strategy for Engagement in Central America,” according to the budget. Half of the money will focus on El Salvador, Guatemala and Honduras. A significant number of migrants come from the three countries and few resources have been dedicated to them in the past.

Budget

“These funds will address the underlying social, governance and economic factors in Central America that drove last year’s crisis in unaccompanied migration – child migration, while helping Mexico secure its southern border,” said Heather Higginbottom, deputy secretary of state for management and resources, to the media. “Our goal is to partner with our neighbors in Central America to mitigate these underlying factors before their youth risk the dangerous journey north and arrive at our border.”

The money for Central America came as little surprise, after Vice President Joe Biden shared the administration’s plan in an OpEd for The New York Times late last week. He made the case for doing more to support Central American countries. In the piece, he identified three key areas where work is needed: security, governance and international investment. The idea builds on the success of Plan Colombia, a support plan for the South American country that saw $9 billion spent on improving the country from its economy to security. Biden said it succeeded in helping improve Colombia. To him, the lessons are clear.

“The cost of investing now in a secure and prosperous Central America is modest compared with the costs of letting violence and poverty fester,” Biden wrote.

The other winner is the Millennium Challenge Corporation. The proposed budget for grant-making foreign aid agency grows to $1.25 billion, up 39 percent from 2015. More money will allow MCC to form compacts with new countries, such as Nepal, the Philippines and Mongolia. Heralded as one of best U.S. government development programs, MCC works to support government-led initiatives to improve their respective countries. Partners must adhere to high standards of transparency and evaluations to participate and maintain MCC funding. The money is a big boost for MCC, but still is not near the $1.7 billion allocated for it in fiscal year 2007.

Budget losers

While the emergence of a migration crisis in Central America led to new financial resources, other global problems did not garner the same level of support. Most notable is the cut to the overall budget for refugees and migration. The White House asked for $2.5 billion in the account, less than the $3 billion for 2015. A portion of the refugee budget is made up by money left over from prior years.

“With the carryover funds we estimate to have going into ’16, we believe we have the resources to address our highest priority needs,” said a senior State Department official in a media conference call.

humanitarian funding

With the phase-down of the Overseas Contingency Operations portion of the budget – money set aside for flexible spending when emergencies arise – overall humanitarian spending is coming under pressure. Roughly half of U.S. humanitarian spending in fiscal year 2015 came from the OCO budget. Future budgets will need to make up for the loss of money over the next four years so that the United States is prepared to deal with global problems as they emerge.

“I am concerned about humanitarian assistance,” said Larry Nowels, a budget analyst working with the USGLC, in a media conference call. “At this time last year, [the Islamic State]was not on our radar at all and Ebola had not risen to the tragedy it did. Not only are we dealing with current emergencies, we will have things we are not even thinking about.”

Other budget losers include the Global Fund to Fight AIDS, TB and Malaria. The United States committed to $1 for every $2 provided by other countries to the fund at the December pledging conference. The total pledges came up short, leading the United States to commit less over the next three years than before. It is not the only global health area to see cuts. TB, vulnerable children, nutrition, neglected tropical diseases and global health security all take small to significant funding cuts in the proposal. Overall, global health funding drops by 3.2 percent to $8.18 billion.

Global Health Funding

United States Agency for International Development Administrator Raj Shah described the success of the agency’s accomplishments in health, during his statement to the media yesterday. He noted the fact that programs were drawn down in 23 countries – a supposed sign of success for health work – all go toward the effort to enable sustainable health and development gains.

“Over the last years we have refocused our investments to make sure that we’re doing our work in a way where, over time, our aid and assistance is no longer necessary, where self-sufficiency can replace the need for outside assistance,” Shah said.

This shall not pass

With the Republicans in control of Congress, it is safe to say that the proposed budget will not be accepted as is. Foreign assistance, in the past, has been a place where some on the political right try make a dent into the federal budget deficit. The White House budget request adds up to $4 trillion. It relies on new forms of budget savings and ways to increase revenue to offset the cuts mandated by sequestration. The $33.7 billion dedicated to foreign assistance is a small fraction of the total – less than 1 percent of the budget – and still it faces certain scrutiny. However new initiatives that will draw attention, regardless of which party supports it.

“Whenever there is any new funding line, regardless of who is president, it is always an uphill battle to get Congress to fund it,” said Nowles. “Having it be climate change adds another challenges to it.”

Nestled into the budget is $500 million for the Green Climate fund. The administration pledged $3 billion to the fund in November. The total $10 billion pledged to the fund will provide a start for the financial resources needed to support developing countries adapt to climate change and enact policies that mitigate activities that contribute to climate change. Newness set aside, devoting money to climate change is not something Congress will happily spend.

As with previous years, the budget is a contentious issue. Reactions are starting to come out about the White House plan and all signs point to an arduous negotiation process. What will happen to the foreign affairs portion remains to be seen.

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About Author

Tom Murphy

Tom Murphy is a New Hampshire-based reporter for Humanosphere. Before joining Humanosphere, Tom founded and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]humanosphere.org.