IA Analysis: What's Next for Foreign Assistance

Now that the across-the-board spending cuts known as sequestration have come down, the smoke is starting to clear to reveal just what the damage will be to foreign assistance accounts that support lifesaving programs around the world.

The bottom line, and perhaps the silver lining, is that these accounts will be cut by 5 percent – slightly less than the anticipated 5.3 percent. The White House Office of Management and Budget (OMB), in a March 1 report to Congress, lists hundreds of programs that will be affected, along with the amount they will lose to sequestration. Some examples of cuts to the accounts that InterAction and its members – more than 180 U.S.-based NGOs – care about:

• Global Health Programs: $411 million
• Development Assistance Program: $127 million
• Migration and Refugee Assistance: $94 million
• Contributions to Peacekeeping Activities: $92 million
• Contributions to International Organizations: $78 million
• Contribution to the International Development Association: $75 million
• Operating Expenses of the Agency for International Development: $68 million
• International Disaster Assistance: $49 million
• Millennium Challenge Corporation: $45 million
• International Organizations and Programs: $18 million
• Clean Technology Fund: $9 million
• Global Food Security Fund: $7 million
• Democracy Fund: $6 million
• Strategic Climate Fund: $3 million
• Contributions to the International Fund for Agricultural Development: $2 million
• United States Emergency Refugee and Migration Assistance Fund: $1 million

What Happens Next?

In the next several weeks, the OMB will continue to determine precisely what departments and agencies are allowed to spend for the rest of the fiscal year (ending September 30), assuming nothing changes. They will try to figure out just how much flexibility they have to move money around, between and within accounts, since the sequestration blueprint doesn’t provide a huge amount of detail about what needs to be cut, beyond targeting each “program, project and activity” (PPA). While those are generally defined in each Congressional spending bill, there are specific questions that each agency still must answer about what exactly PPA means in their particular case, which can open up some avenues for flexibility, along with a great deal of confusion.

OMB and the agencies will also try to determine whether it makes sense to delay implementation of the cuts, in hopes that Congress and the Administration might strike a deal to end sequestration and restore the funding. However, delaying the cuts temporarily runs the risk of creating an even more painful result later in the year if a deal is not reached.

Can This Still Be Fixed?

Some Congress-watchers had been hoping that a deal might be reached before the current stopgap “continuing resolution” (CR) spending bill expires on March 27. Some had thought that, with the expiration of the CR, there might be an opportunity to negotiate a deal that would either 1.) avert the cuts entirely, or 2.) at least create a more rational structure for the cuts to replace the universally-acknowledged “dumb” cuts that the sequestration was purposely structured to be.  

Averting the cuts appears to be fading rapidly. Barring a sequestration-caused disaster between now and March 27 (for example, a bridge collapsing that should have been fixed in March), it appears to be increasingly likely that most Americans will not see a huge difference in their daily lives as a result of sequestration. The cuts will have the greatest impact on the poorest and the most vulnerable – both at home and abroad. Most Americans, meanwhile, may see 5 percent longer lines at airport security, or feel that the federal highways system is 5 percent worse than at this time last year, but is that enough to cause real anger or serious pressure on Congress? Likely not.

This leaves the second option – creating a more rational structure for the cuts. One way to do this would be for Congress to pass updated spending bills for FY13 that reflect current realities (as opposed to just continuing spending on auto-pilot under another CR, based on last year’s priorities). An updated foreign aid spending bill would likely take into account the current crises in Mali and Syria and updated needs in global health and development that have not yet been included in prior spending bills. That might be too ambitious, given current political realities.

A more realistic approach would be for Congress to continue spending under the CR but include “anomalies” that would change the spending levels enough to reflect some of these ongoing crises. This could free up money for the crises mentioned above, but of course, either of these approaches (writing new spending bills or adjusting the CR) would still leave sequestration very much in place.

All of this means our advocacy is more important than ever. While Congress debates U.S. government spending for the remainder of FY13 and into FY14, it is essential that InterAction, its members, and all those who care about foreign aid keep the pressure up, and keep sending the message to Congress that these cuts cost lives. Using the numbers we have calculated about the impacts of sequestration, and the argument that foreign aid represents such a miniscule fraction of the federal government, we hope that we can push Congress and the administration to give these critical accounts the support they need in these extraordinarily difficult budget times.

By Jeremy Kadden, the Senior Legislative Manager at InterAction.