DevExplains: Why the outdated law that created USAID is so hard to fix

In 1961, Soviet astronaut Yuri Gagarin became the first human in space, the film West Side Story was released, Roger Maris broke the single-season home run record in baseball, and then-United States President John F. Kennedy signed the Foreign Assistance Act, creating the U.S. Agency for International Development.

A lot has changed in the 60 years since. Billionaires are launching into orbit on their own rockets, Maris’ record has been broken and re-broken, and there’s even a remake of West Side Story. But the Foreign Assistance Act of 1961 still holds sway as the law that authorizes U.S. government foreign aid programs.

It’s not unusual that a foundational law passed decades ago to establish a U.S. government agency would still be in effect. But what is noteworthy is that the process for updating the Foreign Assistance Act — or FAA — has mostly broken down.

That raises questions about how oversight of U.S. foreign aid programs happens — and whether U.S. aid policy is able to keep pace with a changing world.

What is the Foreign Assistance Act?

The FAA is an authorization bill that provides the legal basis for USAID — which administers roughly $30 billion a year in foreign assistance — to exist.

In a functional legislative process, the Senate Foreign Relations Committee and the House Foreign Affairs Committee would regularly reauthorize the Foreign Assistance Act by passing new legislation or amendments and by recommending funding levels to pursue U.S. foreign aid priorities. Then the appropriations committees of both congressional chambers would take over on the funding side and determine the final budget amounts.

That was the system that existed — and worked well — into the mid-1980s, Diana Ohlbaum, a foreign aid expert and legislative director of the Friends Committee on National Legislation, told Devex.

“It was a very collaborative process where every two years there would be an authorization bill that would set out specific numbers for every foreign assistance account — each budget line item — as well as policy changes. Some of them would be one-year or two-year policies, and some of them would actually go back and amend the Foreign Assistance Act of 1961 to become permanent law,” Ohlbaum said.

But Congress hasn’t passed a comprehensive reauthorization of the Foreign Assistance Act since 1985.

Ohlbaum said that is a result of “the breakdown of the authorization system” in the face of — you probably guessed it — political polarization.

What’s the problem?

While many agree that U.S. foreign aid policies are badly in need of reform, that is hard to do when the authorizing legislation for these programs hasn’t been significantly updated since the end of the Cold War.

At the moment, U.S. foreign aid is not a particularly controversial political issue in the United States, but lawmakers struggle to talk about it without running into other hot-button topics that tend to derail their deliberations before they even really begin.

Any in-depth discussion of foreign aid reform would necessarily include global health policy, and in today’s political climate, that would likely end up in a stalemate over family planning and abortion. The same pattern holds for issues related to LGBTQ rights, climate change, and other areas where Republicans and Democrats have divided into two unbridgeable camps.

“Honestly, both sides feel that it's more important to gain advantage for their position on those social issues than it is to get a foreign aid reform bill,” Ohlbaum said.

“Not enough people care about having a new foreign aid authorization bill or foreign aid reform. There's an awful lot of people who care about abortion, one way or another, or about climate change, one way or another,” she said.

During the Obama administration, when Ohlbaum worked as a congressional staffer on the House Foreign Affairs Committee, she helped lead an effort under former congressman Howard Berman to overhaul the Foreign Assistance Act. The bill that Berman and his staff put together tried to reflect some updated thinking about U.S. foreign aid programs — for example, that they should be more focused on good outcomes, and allow the executive branch more flexibility in exchange for greater transparency, Ohlbaum said.

Berman’s proposed legislation, which weighed in at nearly 1,000 pages and took five years to write, never made it through the political gauntlet — largely due to opposition from the Obama administration.

“They were much more comfortable working within a very broken system that they knew how to operate within than taking their chances on something that they felt could be much worse,” Ohlbaum said.

What happens instead?

The collapse of the foreign aid authorization process means that the center of gravity for congressional oversight has shifted to the appropriations committees and the process they lead to fund the U.S. government.

There is a saying in Washington that there are really three political parties: Democrats, Republicans, and appropriators. The point being that compared to the intractable political logjams that characterize much of the debate between America’s two main political parties, those tasked with getting funding bills approved before the government runs out of money tend to set those differences aside to get their job done.

That has implications for what the appropriations process usually tackles — and what it allows to fall by the wayside.

“On the appropriations side, they just know they have to keep their noses to the grindstone and hammer out some kind of agreement, which usually means not making very large changes, and they just go with the status quo,” Ohlbaum said.

Pushing U.S. foreign aid policy decisions onto the appropriators also comes with an oversight cost, Ohlbaum said.

The Senate Foreign Relations Committee and the House Foreign Affairs Committee have dozens of staffers, including specialists in every region and topic area.

“There's all these people who should be having some input on what we spend and where,” Ohlbaum said.

Instead, the oversight burden has fallen to a much smaller number of staffers on the appropriations committees, who have to keep tabs not just on financial accounting details such as funding pipelines and spend rates, but also the country-by-country priorities and policy details for U.S. foreign aid.

“It's limited oversight when a handful of people are responsible for doing all the oversight instead of these large committees whose responsibility it is,” Ohlbaum said.