Budget constraints limit foreign affairs funding in Biden proposal

President Joe Biden’s 2025 budget proposal, introduced on Monday even as Congress still struggles to approve 2024 funding, includes a marginal 1% increase from last year’s spending. In its $7.3 trillion budget proposal, the Biden administration has requested $64.4 billion for foreign affairs programs, well below the $70.5 billion sought last year. Of that, $58.8 billion will go to the U.S. Department of State and USAID. While global development advocates recognize the administration didn’t have a lot of flexibility in foreign assistance spending given the budget caps agreed with Republicans last year, many said they were nonetheless concerned that the proposed funding levels wouldn’t meet the need of the moment. “This request should be considered the floor,” said Suzanne Granville, North America executive director at The ONE Campaign in a statement. “The world is facing more threats than it has in modern history. Stable funding might keep us from sliding further backward but it will not generate the resources needed to alleviate suffering and secure meaningful progress.” The administration was constrained in writing its budget by a deal struck with Republicans last year that capped spending. The 2024 budget process has been hampered by congressional inaction and marked by proposals of harsh cuts to foreign aid from some Republicans. And while the Senate passed an emergency supplemental funding bill for the Ukraine and Israel conflicts that included about $10 billion in humanitarian aid, it has stalled in the U.S. House of Representatives amid Republican pushback. Further complicating the process is the presidential election, so Congress is likely to pass a stopgap measure to delay any final budget decisions until after voting in November. In any year Congress can choose to use the budget request as a guide for its own deliberations, or not. Sometimes it ignores the document entirely, and ultimately Congress has the power of the purse. The situation is like “a house of mirrors,” David Cronin, a senior government affairs specialist at Catholic Relief Services, told Devex, adding that it is hard to stay focused with so many funding bills in the picture addressing the same challenges but moving simultaneously. As a result, it is “really hard to assess this [2025] budget request,” he said. “The most important thing right now is not necessarily what numbers say on the paper, because we know Congress will make the decisions, but how can we make an argument that foreign aid is important … how can we strengthen bipartisan support when we’re seeing it kind of fractured in front of us,” he added. The foreign affairs budget is largely focused on global competition — with China in particular — but also on humanitarian aid, climate change, and issues such as global health security and democracy. There are no real surprises in Biden’s fourth budget request, Cronin said. The numbers The biggest loser in the proposed budget is global health funding. While there is a total of nearly $10 billion for global health programs in the request, it is down some $733 million on 2023 levels, with the bulk of that from State Department funding. That’s in part because of a smaller U.S. contribution to The Global Fund to Fight AIDS, Tuberculosis and Malaria — $1.2 billion rather than $2 billion — keeping in line with the law that the U.S. cannot contribute more than a third of the total funding from all donors. The U.S. had initially said it would commit $6 billion over three years, but the fund failed to raise enough money from other donors for the U.S. to meet the full commitment. Funding for USAID global health programs is down about $175 million, though the budget proposes about $900 million for global health security including $250 million for the Pandemic Fund. It appears that the Global Fund calculation was made based on assumptions about how much would be allocated in 2024. If that money doesn’t come through as requested, some advocates worry that could mean the benchmark in the 2025 budget request could fall short of what’s required to meet the U.S. commitment. Losing the funding, whether from bilateral or multilateral programs, means less money going to global health. Instead of the major cuts, the administration had an “opportunity to redirect some of that money towards bilateral programs,” said Katie Coester, associate director of public policy and advocacy at the Elizabeth Glaser Pediatric AIDS Foundation, adding that “the need is there clearly.” The administration was clear that the budget has been drafted within the confines of the caps “so it was not a surprise to see a small increase overall to the international affairs budget, but we would have preferred to see global health programs be a priority,” she said. The budget requests some $10.3 billion for humanitarian and refugee assistance, though it appears none of it would go through the United Nations Relief and Works Agency for Palestine Refugees, which isn’t mentioned. About $1.2 billion is proposed to address global food insecurity, including $100 million for the Vision for Adapted Crops and Soils. The request includes more than $3 billion for global democracy, human rights, and governance programs, and a similar amount to advance gender equity and equality worldwide. Some of the asks look remarkably similar to last year, including funding for the President’s Energy Plan for Adaptation and Resilience, or PREPARE, which aims to be a $3 billion initiative supporting more than half a billion people in developing countries to adapt to and manage the impacts of climate change by 2030. The budget also includes a $500 million contribution to the United Nations’ Green Climate Fund, though given that Congress has not approved a contribution to the GCF in previous years, it seems particularly unlikely this year. The Indo-Pacific gets more than $4 billion for bilateral and regional assistance and Central America gets about $1 billion for programs to address the root causes of migration. About $322.5 million is allocated to help the government follow through on commitments made at the 2022 U.S. Africa Leaders Summit. A few new things While there aren’t a lot of surprises when it comes to policy priorities in the budget, there is new funding this year, particularly for multilateral organizations. The request includes about $1 billion to the World Bank’s International Bank for Reconstruction and Development, including $750 million in guarantees meant to unlock $36 billion in new World Bank lending by removing risk from its balance sheets. The remainder will go to World Bank trust funds and financial intermediary funds. “This funding would provide an alternative to the [People’s Republic of China’s] coercive financing and address global challenges,” the budget says. IDB Invest, the Inter-American Development Bank’s private sector arm, would get $75 million to support a recently approved replenishment, with the African and Asian Development Banks receiving more funding along with the European Bank for Reconstruction and Development, if it were to be approved. While the budget request for the Millenium Challenge Corporation is about on par with recent years, the administration also asks for $200 million to be transferred to the agency from a new International Infrastructure Fund, as part of U.S. efforts to “out-compete China globally.” “MCCs ability to leverage grants to finance high-quality, sustainable infrastructure projects stands out in stark contrast to others that often create increased debt burdens on low- and lower-middle income countries,” the budget said. This aligns with an event last week on Capitol Hill where MCC CEO Alice Albright and some of the politicians speaking repeatedly tied MCC, and its desired expansion, to U.S. efforts to counter China.