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International Affairs Budget Update
October 6, 2017
1. Budget Week in Congress: Action on House and Senate FY18 Budget
Resolutions
2. More Details Emerge on State Department Redesign Process
3. Bipartisan Foreign Assistance Legislation Moves Forward

1. Budget Week in Congress: Action on House and Senate FY18 Budget
Resolutions

This week saw a flurry of action on the budget in Congress with the
House passing its FY18 Budget Resolution and the Senate Budget
Committee marking up its own version. While each budget resolution
lays out broad spending priorities, the FY18 budget resolutions are
considered primarily to be vehicles for tax reform. Their
sub-allocations, including for the International Affairs Budget, are
less salient now that House and Senate Appropriators have completed
their FY18 spending bills.

International Affairs Budget Snapshot


FY17 Enacted
FY18 Request**
FY18 House Budget
FY18 Senate Budget
FY18 House Approps
FY18 Senate Approps

Base
$38.4 billion
$28.5 billion
$36.3 billion
$39.5 billion
$36.9 billion
$32.2 billion

OCO
$20.8 billion*
$12.0 billion
$12.0 billion
N/A
$12.0 billion
$20.8 billion

Total
$59.1 billion
$40.5 billion
$48.3 billion
N/A
$48.9 billion
$53.0 billion

*Includes $4.3 billion provided in the FY17 Security Assistance
Appropriations Act
**Based on CBO's re-estimate of the Administration's
request

Senate

The Senate Budget Committee's FY18 Budget Resolution sets out
$516 billion for non-defense discretionary spending, equal to the FY18
Budget Control Act (BCA) cap. The resolution includes $39.5 billion in
base funding for the International Affairs Budget, but does not
specify the Overseas Contingency Operations (OCO) funding breakdown
between defense and international affairs. Rather it provides an
overall total of $77 billion for OCO - $27 billion below current
levels and equal to the Administration's FY18 request. With
about one-third of the total International Affairs Budget currently
funded through OCO, this steep cut to the total OCO funding level
could result in a much lower total allocation for the International
Affairs Budget.

Of note, the Senate budget resolution permits a Senator to strike
OCO-designated funds in an appropriations bill during floor
consideration. Budget hawks - including Foreign Relations
Committee Chairman Bob Corker (R-TN) - have criticized the use
of OCO to circumvent statutory budget caps as irresponsible. Given the
dependence of many international affairs programs on OCO funding, this
provision could severely limit funding for development and diplomacy
programs. State-Foreign Operations Appropriations Subcommittee
Chairman Lindsey Graham (R-SC) has voiced his strong opposition to the
provision, which he views as unwise given the critical role OCO
funding plays in supplementing the base International Affairs and
Defense budgets at a time of growing global threats.

The back-and-forth during the lengthy mark-up previewed some of what
we can expect as Congress and the Administration work towards a
broader budget deal for FY18. Senator Tim Kaine (D-VA) offered an
amendment that would have permitted adjustments to the
resolution's defense and non-defense discretionary spending
levels in the event of a budget deal. As currently written, the
resolution only allows for an adjustment to the defense spending cap.
Budget Committee Chairman Mike Enzi (R-WY) opposed Senator
Kaine's amendment on the grounds that allowing adjustments to
defense and non-defense spending would prematurely determine the
outcome of negotiations between the Congress and Administration on
parity in a budget deal. It should be noted that even without Senator
Kaine's amendment, the non-defense discretionary spending cap
could - and likely will - increase under a budget deal.
The amendment failed on a party-line vote of 11-12.

House

This week, the House passed its FY18 Budget Resolution on a party-line
vote of 219-206, rejecting several alternative budgets during debate
on the floor. As USGLC previously reported, the resolution sets out
$511 billion for non-defense discretionary spending - $5 billion
below the Senate Budget Committee and the FY18 BCA cap. It provides
$48.3 billion for the International Affairs Budget, including $36.3
billion in base and $12 billion in OCO funding.
http://action.usglc.org/site/R?i=C1q2HLBF1tmMCAm5GNNBdQ

http://action.usglc.org/site/R?i=rS9_LccrjMwaCJ4ec5xfBQ

Next Steps

The Senate budget resolution is expected on the floor later in
October. Once the Senate approves its version of the resolution,
lawmakers will work to reconcile the budget resolutions -
eventually making way for Congress to pass tax reform under budget
reconciliation rules, which only requires a 51-vote majority in the
Senate.

Meanwhile, momentum continues to grow for a budget deal that would
lift the caps on defense and non-defense discretionary spending, with
Members of Congress on both sides of the aisle acknowledging that a
deal must be reached in the next several months to fully fund the
government in FY18. As reported previously, the current FY18
Continuing Resolution funds the government through December 8. It will
be critical for any budget deal to increase the cap on non-defense
discretionary spending in order to properly fund America's
development and diplomacy programs.

http://action.usglc.org/site/R?i=_YHrAWsNaYjmjrLvruFpzA

2. More Details Emerge on State Department Redesign Process

Bipartisan Members of Congress are continuing to press the
Administration for details on the State Department's
"redesign" process following the Department's
submission of recommendations to the Office of Management and Budget
(OMB) in mid-September. In a substantive hearing before the House
Foreign Affairs Committee, Deputy Secretary of State John Sullivan was
grilled by Members of Congress on the details of the redesign process
- shedding more light on the Administration's plan to
create a more efficient, effective, and accountable federal
government.

http://action.usglc.org/site/R?i=kkzcBvMECGswbwhCp65VWQ

During the hearing, Members expressed support for reforms that improve
efficiency and effectiveness at the State Department, but reiterated
that the redesign must protect development and diplomacy as distinct
disciplines. Deputy Secretary Sullivan addressed Members'
concerns about transparency throughout the process, stating that
Congress would be consulted on all aspects of reform before any
actions are taken by the Department. He confirmed that the proposals
under consideration do not include merging USAID into State or moving
the Consular Affairs or Population, Refugees, and Migration Bureaus
into the Department of Homeland Security. He also acknowledged that
some of the Department's reform recommendations -
particularly the proposal to modernize the Department's IT
platforms - will require significant resources in the future.
Finally, Deputy Secretary Sullivan conceded that morale at the State
Department is low due to "uncertainty," but stated that
he, Secretary Tillerson, and the U.S. government remain wholly
committed to diplomacy and development.

After combing through more than 60 reports from think tanks and
experts, USGLC found seven important areas of consensus for reforming
the State Department and USAID as laid out in our Report on Reports
released last month:

http://action.usglc.org/site/R?i=5BU0IdVFKAwVzc60lMv4-w

1. Ensure a distinct and independent U.S. Development Agency,
2. Reduce duplication and inefficiencies at the State Department
and USAID,
3. Enhance efforts to promote economic growth,
4. Strengthen civilian tools in the fight against terrorism,
5. Bolster humanitarian assistance,
6. Increase focus on results in foreign assistance, and
7. Work with Congress to ensure robust resources and sustainable
reform.

3. Bipartisan Foreign Assistance Legislation Moves Forward

In a show of bipartisan consensus around foreign assistance
authorizing legislation, Congress has taken action on a number of
bills in the past several weeks:

* READ Act Signed into Law (H.R. 601). On September 8, the
President signed into law the Reinforcing Education
Accountability in Development (READ) Act. The bill, authored by
http://action.usglc.org/site/R?i=mBHuaEk0LGyzOdKEy0ZS_A

Reps. Nita Lowey (D-NY) and Dave Reichert (R-WA) in the House
and Senators Marco Rubio (R-FL) and Dick Durbin (D-IL) in the
Senate, authorizes USAID as the lead coordinating agency to
develop a strategy to promote and strengthen basic education
programs in developing countries.

* Women, Peace, and Security Act Passes Congress (S. 1411). The
Women, Peace, and Security Act passed the House on September 25
and now awaits the President's signature. The bill,
authored by
http://action.usglc.org/site/R?i=HN97t_jWhBUrf7pJN1huzg

Senators Jeanne Shaheen (D-NH) and Shelley Moore Capito (R-WV) in
the Senate and Reps. Kristi Noem (R-SD) and Jan Schakowsky
(D-IL) in the House, requires a government-wide strategy to
promote women's participation in conflict prevention and
resolution efforts around the world.

* Protecting Girls' Access to Education Act Passes House
(H.R. 2408). On Tuesday, the Protecting Girls' Access to
Education Act, introduced by
http://action.usglc.org/site/R?i=pxV4DYWRkHrNMqx5dXThkQ

Reps. Steve Chabot (R-OH) and Robin Kelly (D-IL), passed the
House. The bill would prioritize programs that support access to
education for displaced children, especially girls.

* Multilateral Aid Review Act Introduced (S. 1928).
http://action.usglc.org/site/R?i=g6Ard-dX8L00g9rUN0RaFg

Senators Bob Corker (R-TN) and Chris Coons (D-DE) introduced
their Multilateral Aid Review Act on Thursday. The bill would
authorize a methodologically-based assessment to evaluate U.S.
contributions to multilateral institutions.


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