InterAction Analysis: President Obama's 2014 Budget

In the $3.77 trillion budget that President Obama unveiled this month, he includes $52 billion for the International Affairs Budget (150 account) for fiscal year (FY) 2014. Of that, $48.2 billion is for the account's "base" budget, while $3.8 billion is in Overseas Contingency Operations (OCO). How does that compare to past funding for these critical accounts? How does it break down for specific programs? Here's InterAction's analysis.

President’s Request Moves OCO Funding into the Base International Affairs Budget

For supporters of the 150 account, the president’s base budget of $48.2 billion for the 150 account compares favorably to both the House and Senate budget committee blueprints, which have allocated only $38.7 billion and $45.6 billion respectively to the 150 base account (they have not released recommendations on funding levels for OCO). As OCO funding declines, it is critical that base funding for critical development and humanitarian programs is increased to avoid deep and disproportionate cuts in future years.

Modest Request Reflects Current Tight Fiscal Constraints

Compared to recent years, the president’s FY2014 request for the 150 account is 7% lower than the FY2013 request ($56.2 billion) and 11% lower than FY2010 enacted ($58.6 billion). While the FY2014 request is lower, it is still better than the final FY2013 CR postsequestration (FY2013 hereafter) International Affairs base budget, which was down 19% from FY2010 levels.

Development Accounts Generally Fare Well Compared to FY2013 CR Postsequestration

The president’s recommendations for health and a number of development accounts are higher than previous enacted levels, as well as the postsequestration levels for FY2013.  Under the president’s plan, for example, Global Health ($8.3 billion overall) would receive a 3.4% bump over FY2013, and the president requested $1.65 billion for the Global Fund to Fight AIDS, Tuberculosis and Malaria. Preliminary numbers appear to be low, however, for other TB funding and for PEPFAR; we will provide more details as they become available.  Several other accounts would receive increases over the sequester levels, including the Millennium Challenge Corporation, the International Development Association, the Global Agriculture and Food Security Program, the International Fund for Agricultural Development and the McGovern-Dole International Food for Education and Child Nutrition program, though they would receive flat funding compared with presequestration levels. 

The overall Development Assistance (DA) number, while higher than last year’s at first blush, is actually somewhat inflated by the president’s proposed food aid reform (discussed below). So while the overall DA proposed funding level of $2.84 billion is 5% higher than the FY2013 post sequestration level of approximately $2.8 billion, without the additional funding for food aid, it would be just $2.59 billion, or 4% less than the FY2013 funding level. 

Proposed Levels for Humanitarian Accounts are a Cause for Concern

Compared to final FY2013 funding, humanitarian accounts appear to be receiving steep cuts under the president’s proposal. Overall, the four humanitarian-focused accounts of International Disaster Assistance, Migration and Refugee Assistance, Emergency Refugee and Migration Assistance and Food for Peace Title II would be cut by at least $1.175 billion, and maybe more, in FY2014 compared with FY2013 – even after sequestration and proposed changes in Food for Peace Title II. As a result, there are concerns that the president’s funding levels may not be adequate to meet global needs, especially as the world faces ongoing crises in places like Syria and Mali. 

• The Migration and Refugee Assistance (MRA) account would receive the largest cut, coming in $900 million lower than even the postsequestration funding level in FY2013 ($2.66 billion in FY2013 compared with $1.76 billion in FY2014). 
• And while the overall number for the International Disaster Assistance (IDA) account has been increased to $2.045 billion, it is in reality a smaller allocation than last year because it now includes $1.416 billion for food aid (further analyzed below) and just $629 million for the primary function of the account, the Office of Foreign Disaster Assistance (OFDA). The OFDA allocation for FY2013 was approximately $1.17 billion, so the FY2014 funding level for OFDA would represent a $541 million cut in the core OFDA budget.
• While the request proposes a significant increase from $100 million to $250 million to the Emergency Refugee and Migration Assistance account, it is a relatively small account compared to IDA and MRA.

Food Assistance Reform Proposal: An Encouraging Start

The last of the four humanitarian accounts, Food for Peace Title II, has probably received the most attention in the run-up to the budget’s release, as the president outlined a reform proposal for these programs in his budget. Leading NGOs have agreed on a set of principles to help guide efforts to reform food assistance programs, and initial analysis indicates the proposed reforms would be largely consistent with this set of principles if Congress transfers all of the money as proposed and creates the legislative authority to protect the core purposes of both the emergency and developmental programs under Food for Peace Title II in the new accounts.  These principles include making sure any reforms protect the core focus and effective elements of existing food assistance programs, increase the number of people helped, improve the flexibility of programs, and are made in an open, transparent and inclusive process.

As outlined, the administration’s proposed reforms to U.S. food assistance programs would reportedly allow lifesaving assistance to reach an additional 2-4 million people as well as make gains in flexibility, timeliness and efficiency of these programs. The reforms would zero out the P.L. 480 Title II Food for Peace account and transfer funding from the jurisdiction of the Agriculture Appropriations Subcommittee to three USAID accounts under the jurisdiction of the State and Foreign Operations (SFOPS) Appropriations Subcommittee.  A total of $1.416 billion was transferred to three USAID accounts, including $1.116 billion to the International Disaster Assistance account, $250 million to the Development Assistance account (DA), and $75 million to create a new account, the Emergency Food Assistance Contingency Fund.  (The $1.116 billion transfer to IDA combined with $300 million that is currently implemented under IDA for cash-based emergency food assistance would result in the aforementioned $1.416 billion for food assistance under IDA). 

For FY2014, no less than 55% of this funding will be used for the purchase, transport, and related costs of U.S. commodities.  The $250 million transfer to DA, combined with an additional $80 million in DA from Bureau for Food Security resources, would result in a total of $330 available for the Community Development and Resilience Fund (CDRF). CDRF would be managed by USAID’s Office of Food for Peace to address chronic food insecurity in areas of recurrent crisis. An additional $25 million would also be transferred from the P.L. 480 Title II Food for Peace account to the Department of Transportation’s Maritime Administration.

All of these reforms and changes will, of course, require congressional action, both in allocating the funding to the SFOPS subcommittee, rather than Agriculture – through the so-called 302(b) allocation – and in writing the actual reforms into law. InterAction will continue to monitor this closely and keep our members, Congress and other interested parties informed as the budget process and food aid reform progress.

By Jeremy Kadden, InterAction's senior legislative manager, and Mark Lotwis, InterAction's senior director of public policy.