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International Affairs Budget Update
October 28, 2015
Budget Deal Reached: Impact on International Affairs Budget,
Initial Analysis on FY16

Leaders in Congress and the White House surprised Washington earlier
this week when they announced a two-year budget deal that would lift
discretionary spending caps and increase the debt ceiling. The
deal, which had been worked on secretly for several weeks, will allow
for an additional $66 billion in discretionary funding for FY16,
including an additional:

* $25 billion for Defense spending
* $25 billion for Non-Defense Discretionary (NDD) spending
* $16 billion for Overseas Contingency Operations (OCO), split
equally between Defense and Non-Defense

What Could This Mean for International Affairs?

For NDD, total (base plus OCO) funding would be 6.3% higher than in
FY15. While the deal does not specify funding levels for individual
spending accounts, if the International Affairs Budget were to receive
a proportional share of the increase (6.3%) overall funding for FY16
would be approximately $54.1 billion. This is $3.2 billion more than
provided in FY15. However, Appropriators will determine the overall
spending allocations in the coming days and could decide to allocate
the accounts differently. We will be watching this closely and are
urging proportional allocations for base funding.

The Big Unknown

There are two big questions around OCO funding:

* First, how much of International Affairs programs will be funded
by OCO versus base appropriations? Over the years, we have
strongly urged for strong base funding while ensuring adequate
OCO resources to address emergency needs. In the past,
Appropriators have used the OCO account to free up funding for
other NDD programs. If Appropriators similarly employed OCO in
this manner it could lead to a cut in base International Affairs
funding. This is concerning because - given the temporary
nature of the account - an over-reliance on OCO
significantly threatens funding for programs that address
long-term, enduring challenges.

* Second, how much flexibility will the Administration have to use
OCO funding to address emerging global crises? Initially, OCO
funds were to be used solely for operations and programs in
Iraq, Pakistan and Afghanistan. Congress has allowed funds
to be used for other emergencies or extraordinary circumstances
over the years, and given the growing humanitarian crisis in
Syria and other global challenges greater flexibility in OCO
funds will be necessary and welcome.

Next Steps

Congress is expected to approve the budget deal in the coming days.
Once approved, Appropriators will revise the spending
allocations for each individual spending bill (known as 302(b)
allocations) and each subcommittee will determine program funding
levels.

We will be closely watching the following questions:

* Will the International Affairs Budget receive a proportional
increase in its 302(b) allocation compared to the other NDD
accounts?
* What type of programs and activities will be funded in the
expanded OCO account?
* Will Appropriators protect the critical needs in International
Affairs base funding even with a strong OCO funding level?

As more details become available, we will be providing additional
Budget Updates and analysis.


U.S. Global Leadership Coalition

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