February 18, 2011

Foreign Aid Spared. So Far Anyway.

I spend so much time analyzing budget processes, allocations and expenditures here, that I sometimes forget what an interesting, if not extremely tumultuous and anxiety ridden, political era we are facing in the US in terms of political infighting over budget allocations, etc.

Good news for those of us in the foreign assistance and international development world came through this week in the form of Obama's budget proposal for 2012 foreign aid spending. In the face of limited fiscal resources, there were some "hard choices" made and the result is "a lean budget for lean times." Although what Congress makes of this remains to be seen... Read on, if you are interested.
Obama’s 2012 Budget Proposal Spares Foreign Aid from Deep Spending Cuts

U.S. President Barack Obama is requesting USD47 billion for the Department of State and the U.S. Agency for International Development as part of the fiscal 2012 budget proposal his administration released Feb. 14. The request covers USD32.9 billion for core foreign assistance and food aid and USD14.2 billion for core State Department operations.

The proposed state and foreign operations budget represents a 1 percent increase from 2010 and a smaller annual increase than in past years. Obama is also requesting a separate USD8.7 billion for overseas contingency operations in Iraq, Pakistan, Afghanistan and other countries where counterinsurgency efforts and initiatives are increasingly managed by the State Department instead of the Department of Defense.

In a letter included in budget summary documents, U.S. Secretary of State Hillary Clinton said the request is “a lean budget for lean times.” The budget was scrubbed for every dollar of savings and the resources outlined in it are “smart investments” that would save money and lives abroad and in the United States, she explained.

The administration said it made several “hard choices” in drafting the 2012 request, including slowing down the hiring of new staff at USAID and the State Department – a move that could set back the Obama administration’s efforts to reduce its reliance on external contractors.

As part of the 2012 proposal, Obama is asking for funding to support 349 new foreign service and civil service staff members at USAID and the State Department. The total is notably lower than the 410 new officers Obama proposed to hire under his 2011 budget request.

The Obama administration also plans to reduce international spending in 2012 by eliminating bilateral security assistance for several countries, reducing aid and bilateral programs for Europe, Eurasia and Central Asia and cutting funding for the Inter-American Foundation and African Development Foundation.

Despite these reductions, the 2012 budget proposal will likely face significant opposition in the in the Republican-led House of Representatives.

The U.S. Congress has yet to tackle the 2012 budget request. Current debates surrounding appropriations for the 2011 fiscal year gives a glimpse of the tough battle Obama, Clinton and USAID Administrator Rajiv Shah would be facing in defending the state and foreign operations budget.

The House Appropriations committee has recently introduced a continuing budget resolution that cuts Obama’s fiscal 2011 request by more than USD100 billion. The White House has warned that Obama would veto the spending bill for the remainder of fiscal 2011 if it undermines U.S. national security interests.

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