International Affairs Budget Update July 2015

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1 International Affairs Budget Update July 2015 FY16 State-Foreign Operations Appropriations Bill House and Senate Comparison On Tuesday, July 7, the appropriations process picked back up as Members returned to Washington after the July 4th recess when the Senate State-Foreign Operations Appropriations Subcommittee approved its FY16 State-Foreign Operations spending bill. On Thursday, July 9, the full Committee approved the bill by a vote of 27-3 with Senators Patty Murray (D-WA), Jack Reed (D-RI), and Jon Tester (D-MT) voting no. As previously reported, the Senate s total allocation maintains International Affairs funding at nearly current levels. The allocation of $49.0 billion includes $39.0 billion in base funding, $9.3 billion for Overseas Contingency Operations (OCO), and $759 million in emergency spending. Taken together, the allocation is $1.2 billion (2%) above the House allocation and 1% below enacted spending. While the Senate bill is higher overall than the House bill, it is more dependent on OCO and emergency funding. State-Foreign Operations Appropriations Snapshot FY15 Enacted* FY16 Request** FY16 House FY16 Senate Base $40 billion $46.9 billion $40.5 billion $39.0 billion OCO $9.3 billion $7.0 billion $7.3 billion $9.3 billion Total $49.3 billion $53.9 billion $47.8 billion $49.0 billion* * The table excludes $2.5 billion in emergency funding, which was provided specifically to combat the Ebola crisis in West Africa, but includes the Senate s FY16 302(b) allocation of $759 million in emergency spending. ** Reflects CBO re-estimate of Administration s request. During the Committee mark-up there was bipartisan agreement that sequestration and the current discretionary spending caps are negatively impacting Congress s ability to adequately fund these important programs. Both Senators Lindsey Graham (R-SC) and Patrick Leahy (D-VT), Chairman and Ranking Member of the Subcommittee respectively, noted the harm sequestration has caused on the International Affairs Budget in their opening statements.

2 Comparison of Senate and House Bills As in the past, the Senate and House bills reflect similar priorities in some areas, but differ in other areas compared to both the Administration s request and each other. In terms of similarities, both bills prioritize funding for global health, humanitarian assistance, and diplomatic security, and make deep cuts to contributions to international financial institutions. The major differences center on funding for international organizations, UN Peacekeeping, development assistance, family planning, and International Monetary Fund (IMF) reform. Detailed Analysis of Key Accounts: The table below compares how key accounts fared in the Senate and House bills. Comparison of Senate and House FY16 State-Foreign Operations Bills Similarities Embassy/Diplomatic Security: Both bills provide requested level. Peacekeeping Response Mechanism: Both bills deny the $150 million request. National Endowment for Democracy: both bills provide $67 million more than requested. Global Health: both bills fund at essentially current levels, nearly $300 million above the request. Economic Support Fund: the House and Senate cut the request by $2.2 billion and $2.1 billion, respectively. Millennium Challenge Corporation: both bills maintain funding at roughly current levels, about $350 million below the request. Disaster Aid: the House provides $154 million and the Senate $615 million more than requested. International Financial Institutions: both the House and Senate cut funding deeply, particularly for climate-related funds. Differences International Organizations contributions: the Senate funds slightly above the request, while the House zeros out funding. UN Peacekeeping: the Senate provides $473 million above the House, though still $445 million below request. Development Aid: the Senate includes $131 million more than the House, though $144 million less than requested. USAID Operating Expenses: the Senate provides $160 million above the House, though still below the request. Aid to Europe and Central Asia: the Senate provides $854 million in this account, partially offsetting its reduction to ESF; the House does not. IMF Reforms: the Senate provides authority and funding to accept IMF reforms; the House does not. Family Planning: the Senate provides the requested level of $613 million, while the House provides $461 million. Refugee Aid: the House provides $605 million and the Senate $27 million more than requested. 2 USGLC: International Affairs Budget Update, July 2015

3 OCO Composition The Senate proposes to maintain current funding levels for OCO $9.3 billion, which is $2.3 billion higher than the request. Within the account, the Senate bill significantly increases funding for UN peacekeeping operations, International Disaster Assistance, Migration and Refugee Assistance, Foreign Military Financing, and several other accounts shown on the table below. By contrast, the House funds the OCO account much closer to the Administration s request, with several significant exceptions. House appropriators increase funding for International Disaster Assistance, Migration and Refugee Assistance, International Narcotics Control and Law Enforcement, non-un peacekeeping, and Foreign Military Financing, partially offsetting these increases with reductions in Nonproliferation and Anti-terror aid and several other programs. OCO FY15 Enacted FY16 Request FY16 House FY16 Senate Diplomatic/Consular $1.35 billion $1.5 billion $1.5 billion $1.89 billion Embassy Security $261 million $135 million $135 million $135 million Conflict Stabilization Ops $15 million $0 $0 $10 million State Dept. IG $57 million $57 million $57 million $67 million Contributions to Int'l Orgs $74 million $0 $74 million $52 million UN Peacekeeping $0 $0 $0 $505 million PKO Response Mech. $0 $150 million $0 $0 Int'l Broadcasting $11 million $0 $9 million $6 million USAID Ops Expenses $125 million $65 million $65 million $139 million Int'l Disaster Aid $1.34 billion $810 million $810 million $1.04 billion Transition Initiatives $20 million $0 $20 million $20 million Complex Crisis Fund $30 million $0 $0 $0 Economic Support Fund $2.11 billion $2.18 billion $2.11 billion $2.02 billion Migration & Refugees $2.13 billion $819 million $966 million $1.25 billion Int'l Narcotics/Law $443 million $266 million $367 million $284 million Nonprolif/Anti-Terror Aid $99 million $390 million $170 million $266 million PKO Operations $329 million $65 million $307 million $210 million Foreign Military Finance $866 million $640 million $740 million $1.19 billion Recissions $0 $0 $0 -$222 million TOTAL $9.3 billion $7.0 billion $7.3 billion $9.3 billion USGLC: International Affairs Budget Update, July

4 State Operations and Diplomatic and Embassy Security The House bill includes $8 billion for Diplomatic and Consular Affairs Programs (D&CP) a $224 million increase from current levels but $567 million below the Administration s request which covers the cost of State Department operations around the world. The Senate bill includes $8.2 billion in D&CP funding a $416 million increase from FY15 but $375 million below the request. The House and Senate both fully fund the Administration s request for State Department securityrelated operations and embassy costs. International Security Assistance The House provides a total of $8.6 billion for international security assistance, $165 million more than FY15 and the same as the Administration s request. Compared to the request, the bill provides less for Nonproliferation, Anti-Terrorism, Demining, and Related (NADR) Programs and more for International Narcotics Control and Law Enforcement (INCLE) and Foreign Military Financing (FMF), including an additional $50 million to equip European and Eurasian partners facing Russian aggression. The Senate includes $8.0 billion for these programs, $470 million less than in FY15 and $636 million below the request. Compared to FY15, the biggest reduction is a $276 million cut to INCLE. However, some of this reduction is offset by additional funding included in the Senate bill for the Assistance for Europe, Eurasia and Central Asia (AEECA) account (discussed further, below). Global Health The House maintains funding for Global Health at current levels, $273 million above the request. Compared to the request, the House cuts funding for family planning by $152 million, provides up to $1.35 billion for the Global Fund ($244 million above the request) and $882 million for Maternal and Child Health (MCH). The MCH increase ($112 million above the request) would, however, most likely be offset by the bill s requirement that the Global Health account also fund any U.S. contribution to UNICEF. Gavi, the Vaccine Alliance, received $235 million within the MCH account, the same as the Administration s request. The Senate provides slightly more ($14 million) than the House for Global Health. While it closely resembles the House in most areas, there are some differences. Most notably, the bill, as amended by an amendment during full committee consideration, restores Family Planning funding to the requested level of $613 million. Global Health* FY15 Enacted FY16 Request FY16 House FY16 Senate Bilateral PEPFAR $4.32 billion $4.32 billion $4.32 billion $4.32 billion Global Fund $1.35 billion $1.1 billion $1.35 billion $1.35 billion HIV/AIDS $330 million $330 million $330 million $330 million Malaria $670 million $674 million $674 million $670 million Tuberculosis $236 million $191 million $236 million $236 million *State Department and USAID Global Health accounts only, except for family planning. 4 USGLC: International Affairs Budget Update, July 2015

5 Global Health* FY15 Enacted FY16 Request FY16 House *State Department and USAID Global Health accounts only, except for family planning. FY16 Senate Maternal/Child Health $715 million $770 million $882 million $715 million Vulnerable Children $22 million $15 million $22 million $22 million Nutrition $115 million $101 million $115 million $115 million Family Planning $610 million $613 million $461 million $613 million NTDs $100 million $87 million NA $100 million Global Health Security $73 million $50 million NA $73 million Total $8.45 billion $8.18 billion $8.45 billion $8.47 billion Humanitarian Assistance Reflecting the continuing, and in many cases expanding, humanitarian crises in Syria, Sudan, South Sudan, Iraq, Afghanistan, Burma and elsewhere, the House holds funding for humanitarian assistance flat at its FY15 level. Over the past four years, as a result of these growing crises, funding for these accounts has nearly doubled. Unfortunately, even though these are long-term crises, much of this funding has been provided through OCO including approximately $1.8 billion (35%) of the humanitarian assistance. The Senate includes $117 less for humanitarian assistance in FY16 than the House, but still significantly more than the request. The Senate provides $3.0 billion (62%) of its humanitarian assistance funding through either OCO ($2.3 billion) or emergency appropriations ($759 million). Humanitarian Assist. FY15 Enacted FY16 Request FY16 House FY16 Senate* Disaster Aid (IDA) $1.9 billion $1.74 billion $1.9 billion $2.36 billion Refugees (MRA) $3.06 billion $2.45 billion $3.06 billion $2.48 billion Emergency Refugees $50 million $50 million $50 million $50 million Total $5.0 billion $4.25 billion $5.0 billion $4.89 billion *Includes $298 million in IDA and $461 million emergency funding. Peacekeeping The House provides a slight ($64 million) increase from FY15 for non-un peacekeeping operations. However, it maintains funding for UN peacekeeping operations at the FY15 level, which falls $818 million short of the Administration s request which was driven by the need to address surging requirements in South Sudan, the Central African Republic and elsewhere. It also rejects the $150 million requested for a new Peacekeeping Response Mechanism (PRM). USGLC: International Affairs Budget Update, July

6 The Senate provides $473 million more for peacekeeping that the House. Although this is still $445 million below the request, it is $537 million more than provided in FY15. Like the House, the Senate rejects the request for the new PRM. Peacekeeping FY15 Enacted FY16 Request FY16 House FY16 Senate UN Operations $2.12 billion $2.93 billion $2.12 billion $2.75 billion Non-UN Ops $474 million $495 million $538 million $377 million PRM $0 $150 million $0 $0 Total $2.59 billion $3.58 billion $2.66 billion $3.13 billion Multilateral Assistance The House bill cuts funding for multilateral assistance by $1.3 billion (47%) from current levels. While the cuts are focused especially on various climate-related funds, contributions to a broad range of International Financial Institutions (IFIs) are also reduced or eliminated. The bill provides no funding for IMF reform and zeros out funding for voluntary contributions within the International Organizations and Programs (IO&P) account (through which UNICEF and many other International Organizations are normally funded). The Senate includes $841 million (31%) less for multilateral assistance than was provided in FY15. Unlike the House bill, it includes the authority to restructure the U.S. financial position at the IMF, as well as necessary funding both of which the Administration has sought from Congress for the past four budget cycles. The Senate also includes a slight increase above the request for the IO&P account. And unlike the House, it includes some funding for existing climate-related funds although well below the requested level. In addition, the bill, as amended, allows contributions to the new Green Climate Fund. In part, because the cost of IMF reform is substantially higher in the Senate bill than in the request (due to technical differences between OMB and CBO on scoring the cost of the proposal), the Senate bill cuts overall funding for the IFIs by even more than the House. Development and Economic Assistance The House holds funding for most of the major development accounts and agencies flat at FY15 levels, well below the levels requested by the Administration. The House bill includes a major reduction ($823 million from current levels and $2.2 billion from the request) in Economic Support Funds (ESF), through which the U.S. provides economic assistance to key allies in the Middle East and elsewhere, but does not indicate which countries would feel the impact of these reductions. The House bill also cuts USAID s Operating Expenses account, which covers USAID salaries and benefits and other Washington and overseas operating costs, by $93 million (8%) from FY15 levels and $302 million (21%) from the request. The House bill cites concerns about the efficiency of USAID s procurement process, but provides no indication of where the reductions should be taken. The Senate provides modest increases above FY15 levels to the main development accounts. On the other hand, like the House bill it includes a cut to ESF. However, the reduction is somewhat smaller than in the House bill. More importantly, the Senate provides $854 million in the Assistance to Europe, 6 USGLC: International Affairs Budget Update, July 2015

7 Eurasia and Central Asia (AEECA) account. As the Senate report notes, this is funding for activities that the Administration included in its requests for the ESF and INCLE accounts. The Senate also includes more funding for USAID Operating Expenses than the House. Development and Economic Assist. FY15 Enacted FY16 Request FY16 House FY16 Senate DA $2.51 billion $3.0 billion $2.51 billion $2.64 billion MCC $900 million $1.25 billion $900 million $901 million Peace Corps $380 million $410 million $380 million $380 million USAID OE $1.22 billion $1.43 billion $1.12 billion $1.28 billion ESF $4.75 billion $6.14 billion $3.92 billion $4.0 billion AEECA $0 $0 $0 $854 million Policy Provisions The Senate and House differ on a number of key policy provisions. The House includes a prohibition on the use of funds for an embassy or other diplomatic facility in Cuba. It also includes the Mexico City Policy, which requires all non-governmental organizations that receive federal funding to refrain from performing or promoting abortion services as a method of family planning, even with non-u.s. government funds in other countries. By contrast, the Senate bill does not include a prohibition on opening an embassy in Cuba and, as amended, contains a repeal to the Mexico City Policy. USGLC: International Affairs Budget Update, July