Funding for the Millennium Challenge Corp. is expected to increase in fiscal year 2010 after a funding drop of nearly 60 percent for fiscal year 2009, corporation officials said March 11.MCC funding was cut from $1.5 billion last year to $875 million as shown in the spending bill signed by President Barack Obama Wednesday. Lawmakers in Capitol Hill said that while the corporation still has support, slow implementation of plans led to the budget cut.MCC's initial reaction was to call the funding cut a "disappointment." However, after MCC's board met with Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner Wednesday in Washington, MCC CEO Rodney Bent said he was encouraged about the corporation's future."We're going to have to make some tough choices" because of the 2009 budget reduction, he said. He called the 2010 budget figure, expected to be released this spring, "significantly better news."Bent said the funding cut will not affect any existing compacts entered into with partner countries but will prohibit MCC from entering into new compacts.The 2010 funding for MCC relies on the president's assumption that the economy will recover next year, an assumption that has been disputed by some on Wall Street. However, Clinton and Geithner's assurance of improved 2010 appropriation represents one of the Obama administration's strongest endorsements of the corporation to date.Because MCC is a Bush administration construct, some have speculated about its future under Obama. Conjecture has ranged from the dissolution of the corporation to a merger with the U.S. Agency for International Development and U.S. President's Emergency Plan for AIDS Relief.Bent did not directly address MCC's future governance, but said that MCC will continue to work with other aid agencies.He also said that he left the board meeting with a sense that development aid is going to be a priority in the Obama White House. The newly-elected president said little about development commitments in his first month in office."I think Obama is going to make assistance a hallmark of what [his administration] is going to be about going forward," he said.The board also decided to continue to suspend portions of its $175 million Nicaragua compact. Late last year, following a controversial election in which Nicaragua's government is believed to have meddled, MCC suspended all new activities.As MCC struggles to secure funding, Geithner said Wednesday that the White House plans to ask Congress to extend the U.S. line of credit to the International Monetary Fund from $10 billion to $100 billion to help countries in economic crisis, according to reports.
