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Dear Board of Directors,

Congress finally completed its spending bills for Fiscal Year 2018 – and when it comes to the final tally for the International Affairs programs, it’s extremely impressive given where the year started:

* From a White House proposal to decrease the budget by 32%;
* To a final bill that increases the budget by 4% (not including supplementals)!

My statement is here<http://www.usglc.org/newsroom/usglc-ceo-fy18-omnibus-rejects-doctrine-retreat/>.

This would not have happened without your steadfast support, our outstanding Congressional champions and our extraordinary coalition of leaders across the country. And of course, the USGLC professional team are each rock stars – too many to name, but all extraordinary. I am profoundly grateful – for every visit to Capitol Hill, letter and phone call made, and strategy meeting attended – without which, this would not have been a success story.

That said, the final story of FY18 is of course complicated. The funding levels are just not keeping pace with the actual global crises. This is what keeps me up at night and is what I want to explain:

* In an apples-to-apples comparison (not including the FY17 additional supplemental funds) the omnibus includes a 3.8% increase for the International Affairs Budget. This is a wildly impressive rejection by both parties in Congress of the Administration’s original 32% proposed cut to these same programs.

* At the same time, in real dollars (including the FY17 additional famine and ISIS supplemental funds), the final FY18 budget is a 5.5% decrease from current spending for International Affairs. Once again, while significantly better than the original proposals, it falls short of what America needs to respond to the challenges and opportunities we face in the world.

* The bill just passed the House and should pass the Senate in the next few days – with or without a super-short Continuing Resolution (CR) – before it heads to President Trump’s desk for his signature.

Here’s a little more backstory on the numbers:

* The final funding level at $55.9 billion is right where we expected it to land – about $2 billion below the FY17 baseline – but short of our stated goal. You may remember that at the beginning of last year, we made a strategic decision to call for $60 billion in FY18 – the same level as FY17.

* We knew all along that this would be a challenge to achieve because Appropriators never count supplementals towards the baseline, but we believed that given the state of the world, our target should include all funds – including the ISIS and famine emergency supplementals from FY17.

* Expect appropriations chiefs Lindsey Graham, Pat Leahy, Hal Rogers, and Nita Lowey to take a victory lap for getting “more money” compared to last year – and they should, and we should thank them for this increase.

* To put it simply, there are two stories – first, this is a significant win for our champions on Capitol Hill and a significant accomplishment for our community who came together and faced down a massive challenge just 13 months ago. And second, we can’t lose sight that America is not keeping pace with the growing crises in the world.

Future Challenges – Looking ahead, a few items to note:

* Globalists vs. Nationalists. With Cohn and Tillerson out, McMaster likely next, and John Bolton potentially waiting in the wings, the Administration appears to be taking an even deeper dive towards concerning international instincts. New challenges will emerge and our ongoing efforts to build relationships throughout the Administration will remain a top priority.

* Long-term Damage to State. I’m certain it will take years for the State Department to restore its full capacity following the past year at Foggy Bottom. The sheer volume of senior career leadership that has left, the number of vacancies that remain, and the dramatic cuts for new talent coming in the door have done immense damage to the institution. On the Pompeo front, we’re deploying a complex behind-the-scenes strategy to shape the confirmation process around our issues. Stay tuned.

* Spending and Pipeline Concerns. From countering Russian interference and propaganda to country-level USAID programs, it’s no secret that critical funds have been slow to get out the door under this Administration. This is a key issue that has been underreported and with Congress’s help, we’ve got to continue to use our influence to keep the pressure on to implement what Congress allocates.

Looking back, it’s been just over a year since the Administration’s plans first leaked to slash State and USAID by a third. While we will never be satisfied with a 5.5% decrease from current levels in real dollars – let’s not lose sight of conversations at that time when the idea of 10% or even 20% cuts looked promising.

The reality is that in a most challenging political environment – and now in an election year – a broad-based community and a bipartisan firewall of Congressional supporters stood up against a “doctrine of retreat” to powerfully support development and diplomacy.

It’s not perfect, and there is so much more to do, but we are in a very different place than we were one year ago. It’s a remarkable achievement – and for that, I thank you.

Best,

Liz
Liz Schrayer, USGL