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U.S. Global Leadership Coalition
International Affairs Budget Update

International Affairs Budget Update
March 12, 2013

1. House Budget Committee Releases FY14 Budget Resolution: Deep Cuts Made to International Affairs
2. Senate and House Act on Full-Year FY13 Continuing Resolutions

1. House Budget Committee Releases FY14 Budget Resolution: Deep Cuts Made to International Affairs

Action on the FY14 budget began today with House Budget Committee Chairman Paul Ryan's (R-WI) release of the FY14 House Budget Resolution. The plan, which will be marked up in the Committee tomorrow, reduces federal spending by $4.6 trillion through FY2023 and provides $38.7 billion in base funding for the International Affairs Budget. This represents a 7% cut (-$3 billion) from current FY13 sequestered levels.

The House funding level, if enacted, would mean that one of every four dollars of base funding for the International Affairs Budget will have been cut in just four years: the House budget proposal is 25% (-$12.8 billion) lower than FY2010. The impact of these cuts is devastating to America's ability to respond to today's global security, economic and humanitarian challenges.

More details, including policy recommendations contained in the House budget resolution for International Affairs programs, have yet to be released. We will provide a more detailed analysis of the House budget resolution tomorrow, as well as any late-breaking details related to tomorrow's Committee markup.

The Senate begins its action on the FY14 budget tomorrow, when Senate Budget Committee Chairwoman Patty Murray (D-WA) will release the Democrats' FY14 budget proposal ahead of Thursday's committee markup. The Senate budget resolution will differ significantly from the House resolution - containing higher discretionary spending levels for federal programs, including the International Affairs Budget. We will provide details of the Senate budget resolution tomorrow.

As reported previously, Senate floor action on the FY14 budget resolution next week is likely to feature several cutting amendments to the International Affairs Budget. We will continue to keep you updated through our Action Alerts as we mobilize to defeat harmful cuts to these programs.

2. Senate and House Act on Full-Year FY13 Continuing Resolutions

Last week, the House passed a full-year FY13 Continuing Resolution (CR) by a vote of 267-151 and yesterday, the Senate Appropriations Committee released details of its alternative CR measure. Both spending bills work off of FY12 appropriations levels, minus the 5% sequestration that took effect on March 1. Each measure also makes a 0.1% across-the-board reduction to security accounts, including International Affairs programs.

The House and Senate bills provide roughly the same amount for International Affairs: $41.5 billion in base funding and $10.6 billion in war-related (Overseas Contingency Operations) funds, for a total International Affairs level of $52.1 billion. This represents a roughly 5% cut compared to last year's (FY12) levels. While each measure includes some changes to FY12 amounts - known in CR terms as "anomalies" - the Senate bill provides more significant adjustments to current spending levels and offers the Administration greater flexibility in matching resources to FY13 priorities.

More details on the Senate CR will be available in the coming days when the Chair of the Senate Appropriations Committee inserts into the Congressional Record an explanatory statement regarding the measure.

Major Anomalies Included in House and Senate CRs

Embassy Security resources bolstered in both House and Senate bills. Following the attack on the U.S. Consulate in Benghazi and the death of Ambassador Stevens last year, Congress and the Administration have made diplomatic and embassy security a top priority. The House and Senate measures increase funding for Embassy Security, Maintenance, and Construction to $2.75 billion, about 75% higher than in FY12. The add-on for diplomatic security is basically budget-neutral because both House and Senate bills rescind unused FY12 funding for other State Department
operations, mostly coming from reduced diplomatic requirements in Iraq.

Global Health funding increased by Senate. The Senate CR provides $2.61 billion for USAID health programs and $5.43 billion for PEPFAR. While both are below FY12 levels (due to sequestration), they are higher than the President requested for FY13. The Senate further provides $1.65 billion to the Global Fund to Fight AIDS, TB, and Malaria, as requested, compared with $1.05 billion appropriated last year. (The State Department later raised this level to $1.3 billion.) By increasing resources for the Global
Fund, however, the Senate bill reduces amounts available for PEPFAR.

Multilateral Development Bank contributions raised in the Senate. Through a series of anomalies, the Senate measure sets multilateral assistance at $2.82 billion, nearly $200 million above the House. Most of the increases go to the Global Development Facility, the World Bank's International Development Association, and the Inter-American Development Bank.

Humanitarian programs significantly increased by Senate. As humanitarian emergencies in Syria, Mali, and elsewhere have grown substantially in past months, many relief organizations have expressed deep concern that flat funding under a CR, combined with the reductions due to sequestration, would have a devastating impact on the U.S. ability to respond to these crises. The Senate proposes to dramatically increase funding within OCO for USAID's International Disaster Assistance and State's Migration and
Refugee Assistance accounts. Collectively, within base and OCO resources, the Senate measure provides $4.2 billion for the two accounts, 43% higher than FY12 (even after sequestration has been applied). The increases for humanitarian programs are largely off-set by reductions in State Department operations in Iraq and by eliminating funding for the Pakistan Counterinsurgency Capability Fund.

Other anomalies added by the House and Senate include:

* Contributions to International Peacekeeping Activities increased to $1.9 billion (Senate)
* Israel military assistance raised by $25 million to the requested level (House and Senate)
* Europe, Eurasia, and Central Asia funds moved from a separate account and merged with Development Assistance (Senate)
* Contingency response assistance, such as non-lethal aid to the Syrian opposition, increased from $50 million to $100 million
(Senate)
* Jordan loan guarantees and OCO funding authorized (Senate)
* State Department/OCO operations appropriations authorized for transfer among multiple accounts providing greater flexibility (Senate)

[Note: All the figures above for FY13 reflect the 5% cuts due sequestration. The House and Senate CRs do not provide the actual post-sequestration funding levels, which can lead to some confusion.]


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