If you remember how a bill becomes a law from your Schoolhouse Rock days, you already know that the the White House proposal is just that, a proposal. The real work is getting agreement in the House and Senate to get a bill that lands on the desk of the President. If all goes well, President Obama signs that budget. The problem here is that the House and Senate are led by opposing parties with different ideas on how to deal with the financial troubles that face the United States.
The usual order of things goes that the President sends recommendations to the congressional bodies and then they hammer out the details. This time it is the other way around.
This proposal comes two months later than expected. It offers plenty to snack on, but below are five highlights – the good, the bad, the ugly and the rest.
1) Good News: Spending is Up from Last Year. Bad News: Senate and House have Different Ideas.
Remember that whole thing about everybody being on the same page? Well, that is not the case when it comes to the International Affairs Budget. Here are the base funding recommendations:
House of Representatives: $38.7 billion
Senate: $45.6 billion
White House: $48.2 billion
Sorry to toss some cold water from the start, but there is some serious work left to be done. The House plan represents a 5.6% cut from the current sequestered levels. To put it in further context, that is down 25% from the budget only four years ago. Even the White House recommendation for $48.2 billion is below the FY10 levels of $56.4 billion. Foreign aid spending is down and it is a matter if it will fall further.
How bad is it? NGOs are campaigning to maintain the status quo and preserve the budget. Note that they are not asking for more money, they just want to avoid cuts. The fiscal weather is tough right now, but it could get worse.
2) Promising Food Aid Reform. Good for Starving Children, Bad for Shippers.
All the buzz has surrounded big changes in food aid distribution and for good reason. USAID Administrator Shah unveiled a new plan that will use cash transfers and vouchers to respond to global food crises. He pointed to the effectivness of such programs and the money lost on shipping food from far away countries, like the United States.
“The truth is that for years our practice in food assistance has lagged behind our knowledge. In the last decade, more than 30 different studies—from Cornell University to Lancet medical journal to the Government Accountability Office—have revealed the inefficiencies of the current system,” said Shah.
The United States has long required that food aid come from American farmers and producers. It costs $1,180 per metric ton to ship American food aid and can take as long as 14 weeks to get to some places. When there is immediate need, the response must be swift and cost effective.
The reform is good news for the world’s poor and bad news for shippers if the proposal to allow 45% of food to be purchased in local markets goes through. However, it is not a certainty given that there is already early opposition to the plan.
U.S. Maritime Chairman James L. Henry issued a statement saying, “The Administration’s proposals to shift…purchases of food aid to allegedly cheaper foreign suppliers instead of donating wholesome commodities grown by American farmers will be harmful to our U.S. Merchant Marine, harmful to our national defense sealift capability, harmful to our farmers and millers, and bad for our economy.”
One needs to look no further than an earlier attempt to increase USAID expenditures to 30% in local countries by 2015. The contractors who would suffer from the loss of business responded swiftly with campaigns from the Professional Services Council and Coalition of International Development Companies to limit the change. As USAID tries to prioritize the communities it serves over the people who make money through the activities we can expect some resistance.
3) TB Funding Takes a Hit at Critical Time
The Global Fund announced that it needs $15 billion over the next three years to continue its progress against AIDS, TB and malaria. The White House proposal for $1.65 billion matches maintains the amount spent in FY13. However, spending on US-led TB programs would take a 19% cut from FY12 levels.
That means there will be less money dedicated to improving supply chains, country-level technical support and for late stage clinical research for TB medicines. A WHO report on TB said that improved TB care and control means an estimated 20 million people are alive today.
The report says that the progress is at risk with the rise of multidrug-resistant TB (MDR-TB) finding that the burden of MDR-TB increased in 27 countries. An additional $2 billion is needed to address resistance and the connections between HIV and TB, says the report.
The executive director for RESULTS, Joanne Carter, issued a diplomatic statement that commended the funding for the Global Fund.
“The Global Fund is dependent on the success of PEPFAR and bilateral investments in TB. I urge Congress to ensure PEPFAR is fully funded to reach the goal of an AIDS free generation, and proposed cuts to TB programs are reversed to fight the dangerous rise of drug-resistant TB,” said Carter.
4) Disaster Assistance Under Threat.
International disaster assistance technically gets a boost thanks to the new food aid transfer program, but the devil is in the details. The White House Budget allocates $629 million to disaster assistance and response. That is $500 million less than what was appropriated in the FY13 budget, says Mercy Corps Director of Policy and Advocacy Jeremy Konyndyk. It happens to be a pretty important budget in terms of responding to crises like the civil war in Syria and coup in Mali.
This cut would severely hinder the United States’ ability to respond to the needs of millions of people who fall victim every year to conflict or natural disasters. The proposed reductions would particularly constrain the U.S.’ ability to respond to the Syria crisis, which is enormous and continues to grow. These cuts would also put a significant squeeze on lower-profile emergencies such as those in Mali, Sudan, and the Democratic Republic of Congo, potentially forcing a zero-sum trade-off between those emergencies and the crisis in Syria.
The United States will be able to respond better when it comes to food, but other needs could be left in the dust due to the cuts.
4) Lessons Learned from Arab Spring put to Action.
The proposed Middle East and North Africa Incentive Fund is pretty much set up to respond to Arab Spring. The White House asked for $770 million to create the account in its FY13 budget request, but Congress passed. So, the White House is trying once more by asking for $580 million. The State Department has already spent $1.8 billion to meet emergency needs in Syria, Tunisia, Egypt and more countries over the past two years. This money will provide the ability to respond to the region and individual countries without needing to divert money from others.
This development, if passed, could be a way to fill in some of the gaps left by the decrease in disaster spending. The money here could be used to support refugees in Syria if more money is needed.