The Biden administration released its fiscal year 2022 budget request Friday, confirming a roughly 12% increase for foreign assistance programs and detailing how it would spend some $58.5 billion to accelerate its priorities around global health, combating climate change, and Central America.
Global health security will get a major boost if this funding proposal is adopted by Congress. But it did not include increases for other global health priorities, including HIV/AIDS. It also recommends keeping funding flat for a number of other issues and agencies, including the Millennium Challenge Corp. and Peace Corps.
Congress has already begun considering the proposal, and in the coming months it will come up with its own budget bills with a goal to pass the legislation before the start of the fiscal year on Oct. 1. If recent history is any indication, it may be difficult to pass a funding bill by then.
While development advocates support the overall budget increases, some also see room for improvement and would have liked to see more funding, particularly for global health.
“If enacted, it would represent an important down payment consistent with expert recommendations for vital new investments to address pandemic preparedness, the myriad of global health and humanitarian crises, and ensure American competitiveness,” Liz Schrayer, CEO at the U.S. Global Leadership Coalition, said in a statement.
“We urge the Administration and Congress to move forward with this International Affairs funding level as the floor in all Fiscal Year 2022 negotiations.”
The budget request “reflects the importance the Administration places on U.S. global leadership and the fact that diplomacy and development are vital tools for advancing U.S. interests,” Secretary of State Antony Blinken said in a statement. Officials from the U.S. Agency for International Development and the State Department reiterated that message at a briefing Friday and said that the relationship between the two agencies is “critical” in achieving Biden’s foreign policy and development goals.
State Department Deputy Secretary of State for Management and Resources Brian P. McKeon said that leadership of the agencies already have a good working relationship and are effective partners. There have often been turf battles between the two agencies, so the language around partnership is notable, especially as the USAID administrator’s role is elevated to be a standing member of the National Security Council.
The budget request also includes a proposal for the largest staffing increase in a decade for the foreign and civil service at the State Department and USAID and funding to ensure the recruitment and retention of a diverse workforce, McKeon said.
This budget request includes about $10 billion to support global health, with one of the biggest increases in annual funding going to global health security. The proposal suggests nearly $1 billion for global health security programs, a roughly $800 million increase from the prior fiscal year. A majority of those funds, about $745 million, would be distributed by USAID, and the State Department congressional budget justification says that the agency will hire some 70 new staff to work on global health security.
About $300 million of the USAID global health funding will support contributions to multilateral efforts including the Access to COVID-19 Tools Accelerator, and $250 million of the funding through the State Department will go to support a new health security financing mechanism “which would be developed alongside U.S. partners and allies, to ensure global readiness to respond to the next outbreak.”
“This is not a budget to end AIDS — and it could have been.”— Matthew Rose, director of U.S. policy and advocacy at Health GAP
There was much debate last year about how the U.S. should manage global health security efforts, with former president Donald Trump’s administration proposing a State Department-led initiative and proposals in Congress. This budget indicates the Biden administration may be more inclined to have USAID lead on global health security.
Other proposed global health funding:
• $6.26B for HIV/AIDS.
• $2.37B toward preventing child and maternal deaths, including $550M for family planning and reproductive health.
• $995M for global health security.
• $770M toward fighting malaria.
• $319M toward fighting tuberculosis.
• $102.5M toward fighting neglected tropical diseases.
The budget proposes that the President’s Emergency Plan for AIDS Relief funding stay flat, which raised concerns for some global health advocates.
The budget “displays a lack of bold leadership motivated to end the HIV pandemic,” Matthew Rose, the director of U.S. Policy and Advocacy at Health GAP, said in a statement. “This is not a budget to end AIDS — and it could have been.”
Activists have called on Congress to increase the PEPFAR budget by $750 million for fiscal year 2022, especially as HIV testing and treatment has dropped as a result of the pandemic.
The proposal does include a modest increase in funding for global reproductive health and family planning programs. But while it in effect repeals the Hyde Amendment prohibiting the use of government funds for abortion domestically, the foreign affairs counterpart — the Helms Amendment — remains.
“We urge the U.S. government to permanently repeal the Helms Amendment, end the global gag rule, and all long-standing harmful policy restrictions that undermine people’s bodily autonomy and reproductive freedom domestically and globally,” Seema Jalan, executive director of the Universal Access Project, said in a statement.
One of the biggest funding increases proposed is to international organizations, primarily the United Nations and peacekeeping operations. The budget proposes $1.93 billion for peacekeeping funding, up from $750 million in fiscal year 2021, to support ongoing peacekeeping activities and pay arrears. The request also includes about $82.4 million to pay U.N. arrears.
U.S. Senator Jim Risch, a Republican from Idaho and the ranking member of the Senate Foreign Relations Committee, said that by paying so much for U.N. peacekeeping dues, “the president is disincentivizing reform and ensuring that China can continue to shape international organizations to suit its ends.”
While the budget proposal “appears to have some bright spots,” especially in global health security, the increases for U.N. dues and other parts of the bill could threaten those bipartisan priorities, he said in a statement.
Some U.N. agencies fared better than others. The administration is requesting funding for the U.N. Population Fund after the Trump administration refused to fund it. The World Health Organization also has a higher request, though the Food and Agriculture Organization had a slightly lower request than fiscal year 2021 levels.
The administration is requesting a total of $2.5 billion for international climate change programs, including about $1.7 billion for multilateral climate change and environment funds.
The administration requested $1.25 billion for the Green Climate Fund, with half of the funding coming from the State Department and half coming from the Treasury Department. It also requested $300 million for the Clean Technology Fund and $149.3 million for the Global Environment Facility.
About $600 million of the climate funds would be managed by USAID, “leveraging USAID’s comparative advantage on the ground to work with partners around the world,” according to a USAID statement.
The international climate finance request, especially for the Green Climate Fund, may be one of the most contentious parts of the request and may not survive congressional debates on the actual budget, Conor Savoy, a senior fellow at the Center for Strategic and International Studies, told Devex. The debate at a recent Senate hearing on climate finance reinforces the potential for disagreement.
The budget request includes about $7.6 billion for Africa, including $1.4 billion through the development assistance account at USAID. That funding includes $57.4 million for Power Africa, the energy access initiative, and $77 million for Prosper Africa, an initiative working to connect U.S. and African businesses and create economic opportunities. The funding will also support agriculture and food security, democracy programming, and access to education.
“Africa is of the utmost importance to USAID,” said Mark Feierstein, principal adviser at USAID. The USAID-State Department Africa strategy has four goals: increasing economic growth; promoting security; strengthening democracy and human rights; and promoting inclusive, country-led development, he said.
Addressing the root causes of irregular migration in Central America has been a key priority for the administration, and it is requesting $861 million in fiscal year 2022 to support efforts in the region. About $405 million of those funds will be directly managed by USAID.
The funding is a “down payment on the Administration’s four-year commitment to address economic insecurity, combat corruption, promote human rights, bolster security, and combat gender-based violence in the region,” according to a statement from USAID.
The request includes $67 million for bilateral debt relief and restructuring and support for International Monetary Fund accounts that have been used to provide support to the lowest-income countries in the wake of the pandemic.
About $52 million will support the G-20 Debt Service Suspension Initiative and the Common Framework for Debt Treatments beyond the DSSI. The remaining $15 million will enable what is often called debt-for-climate-swaps, allowing developing countries with certain concessional debt to the U.S. to redirect those payments to support conservation of their tropical forests or coral reefs.
The request also asks Congress to provide $100 million to IMF’s Poverty Reduction and Growth Trust and authorize the government to loan up to 15 billion Special Drawing Rights to the trust. IMF is expected to issue a new allocation of SDRs, which are a global reserve currency, in the coming months, and there has been significant discussion about how higher-income countries might transfer their SDRs to lower-income countries, including through the PRGT.
More funding details:
• $27.7B total to USAID, including $1.53B for operating expenses and including a $500M increase for the development assistance account.
• $6.3B for humanitarian assistance.
• $4.9B to support inclusive economic growth.
• $1.95B to multilateral development banks, including $1.43B for the International Development Association.
• $912M to the Millenium Challenge Corporation.
• $410.5M to the Peace Corps.
Governance, democracy, and human rights
The request doesn’t provide much detail about administration funding for governance, democracy, and human rights work — despite this being a stated priority for Biden. The request includes a total of about $2.8 billion across USAID and the State Department to “revitalize democratic values.”
Much of the funding is likely to come through USAID’s development assistance account and State’s Economic Support Fund. It will aim to prevent democratic backsliding and support countries working to build effective, transparent, and accountable governments.
While there is about $50 million for a new anti-corruption initiative at USAID that will allow it to respond quickly, funding requests for the Office of Transition Initiatives and the Democracy Fund at USAID are flat.
USAID Administrator Samantha Power has talked a lot about anti-corruption, but “you don’t really see that reflected” in this budget request — so how the administration may seek to fund these programs is something to watch, Savoy said.
U.S. International Development Finance Corporation
The budget reflects the Biden administration’s position on the youngest American development agency — the U.S. International Development Finance Corporation. The administration requested $148 million in administrative and project costs and $450 million in program funds for DFC. That reflects a roughly $29 million increase from fiscal year 2021.