Foreign aid 'red warning lights' to watch in the US Congress in 2024

The year ahead is likely to be unpredictable, contentious, and challenging in the U.S. Congress. Many foreign aid priorities from 2023 remain unfinished business, with roadblocks thrown up as the stakes are incredibly high, policy experts and development advocates told Devex. “There’s literally red warning lights that are flashing for 2024 and whether it’s terrorism, authoritarianism, global hunger, if we ignore it we do so at our peril,” Liz Schrayer, president and CEO of the U.S. Global Leadership Coalition, told Devex. “The stakes could not be higher for America’s interest in how we engage, how seriously we engage in the world.” Challenges range from contentious politics within the Republican Party to clashes between Democrats and Republicans, a tight calendar with the presidential election looming, and a constrained fiscal environment. Many of those issues made it hard to pass legislation in 2023, including anything related to foreign aid. There is a legislative “dam” that keeps getting fuller, with more pressure mounting, Bill O’Keefe, executive vice president for mission, mobilization, and advocacy at Catholic Relief Services, told Devex. Key foreign aid issues, including the 2024 budget, an emergency supplemental funding bill, the reauthorization of the key U.S. global HIV/AIDS initiative, and the farm bill, which governs important food security programs, have all been pushed into the new year. On top of that, Congress must contend with the budget for 2025 and several decisive reauthorizations for the U.S. International Development Finance Corporation, or DFC, and a major U.S.-Africa trade program. “It’s going to be a busy year and it’s too bad that these things are all going to be litigated during an election year where attention is lower, emotions are higher and potential for compromise is more limited,” O’Keefe said. Here’s what to watch in Congress this year. Dynamics Beyond individual bills or legislative priorities, the environment on Capitol Hill this year will play a leading role in determining what can be accomplished. “The bipartisan consensus on foreign aid is being tested. It may still hold, it hasn’t collapsed but it feels like it’s eroded,” said Justin Fugle, Plan USA’s head of policy. There were 102 votes in the House to cut the U.S. Agency for International Development funding by 50% during debates on the foreign affairs funding bill, setting off warning bells that perhaps coalitions cobbled together in the past aren’t coming together, he said. While advocacy groups are pushing to find other avenues to achieve consensus, “there’s definitely that feeling that the ground has shifted and we’re not 100% sure where people are standing,” Fugle said. Part of the challenge is the departure of lawmakers who championed these issues and made it a top focus area. That may be compounded by increased polarization and lawmakers focusing more domestically during an election year, Liz Leibowitz, senior director of government relations at The ONE Campaign, told Devex. Educating lawmakers is a top priority for several organizations, including ONE, an advocacy organization focused on ending extreme poverty, which will ramp up efforts to build broad support and expertise for foreign aid, and not just around specific bills. It’s the only way to push anything forward, she said. “If we can’t even make foreign assistance a priority then how do we narrow in on any one policy?” Liebowitz said. Other issues creating uncertainty include a new House Speaker in Rep. Mike Johnson, who doesn’t have much of a track record on foreign aid, new leadership on the Senate Foreign Relations Committee, and an overall tough environment caused by numerous divisions at play in Congress. Cultural issues and domestic politics, particularly because it is an election year, could also bleed into foreign aid discussions. The money Congress must pick up the pace in the new year to clinch agreement on the 2024 budget and an emergency supplemental funding bill. And as soon as they are concluded it will pivot quickly to the 2025 budget. In 2023 the U.S. Congress twice passed stop-gap measures to extend negotiations to reach a deal on the budget, and the deadline looming now for foreign affairs funding is Feb. 2. The House and Senate versions of the state and foreign operations bills are very different with the House wanting steep cuts. Lawmakers have yet to agree on top-line compromise numbers. “There is a big gap that has to be bridged, and I think they’ll find a way to bridge it, but it’s going to be the usual last-minute fire drill,” O’Keefe said. If the House and Senate cannot pass the budget bills, a provision in the June debt limit deal would kick in, resulting in across-the-board funding cuts and as much as 10% cuts for foreign affairs, several policy experts said. Early in the year, Congress must renew discussions over an emergency funding bill for Ukraine and Israel that failed to pass before year-end. The bill includes about $10 billion in global humanitarian aid and money for multilateral development banks. It’s unclear if the bill will get stripped down or if the humanitarian aid will survive. USAID’s humanitarian funding is already tight and without additional money will become a problem, leading to difficult decisions and cuts to food rations, education, and health programs, O’Keefe said. Congress also needs to take up the 2025 budget, but it’s unlikely to pass before the start of the fiscal year on Oct. 1, according to policy experts and advocates who spoke to Devex. A stopgap is likely at least until after the election on Nov. 5, but possibly through January so the winner can weigh in. Unfinished business Two key pieces of legislation: the farm bill and the reauthorization of the President’s Emergency Plan for AIDS Relief, or PEPFAR, must pass through Congress, after lawmakers failed to find a compromise in 2023. Both bills fell victim to what some advocates described as “culture war issues,” which have made it difficult to pass legislation in recent years. PEPFAR, a program that for two decades has enjoyed bipartisan support, was accused of being a source of funding for abortion in a campaign by conservative and anti-abortion activists. PEPFAR officials have been clear that it does not fund abortion and complies with the U.S. law prohibiting federal funding from supporting abortion. Catholic Relief Services carefully considered the allegations and found that they are simply not true, O’Keefe said. “We’re a pro-life organization, CRS is, and the PEPFAR program is the most pro-life program the United States has ever done,” he said. Despite PEPFAR’s struggles, there has been considerable support from faith leaders, Republicans who helped create the agency, and, obviously, global health advocates, Liebowitz said. Several advocates said they are hopeful PEPFAR will be reauthorized and they continue to push for a five-year extension, arguing that long-term planning is critical for an issue such as HIV. The chairman of the House Foreign Affairs Committee, Rep. Michael McCaul, a Republican, recently said, “We’re very committed to a reauthorization of PEPFAR. It’s a tricky process up here but, I’ve been up here long enough to know how to get things done, and it’s my intention to get this one done too.” DFC reauthorization DFC has a couple more years before it has to be approved again by lawmakers but discussions are expected to start this year. Lawmakers have expressed interest in potentially reauthorizing DFC early, in part to make tweaks to the agency. Among issues to be addressed are expanding the number of countries where DFC can work, making a technical fix that would enable it to boost equity investments, and increasing the maximum size of its portfolio. In December, DFC revealed its total portfolio has reached $41 billion, not far off its $60 billion cap, which it could hit in a few years if it continues at its current pace. With DFC “you can avoid some of the more challenging political contexts we’ve seen,” Erin Collinson, the director of policy outreach at the Center for Global Development, told Devex. The bill creating the agency was passed by a bipartisan group that in part looked to provide a counterweight to Chinese overseas financing, which still resonates as an issue today, she said. One statistic that never fails to grab lawmakers' attention, regardless of political party, is just how much the Chinese Communist Party has increased its development finance investments in the last 15 years, Schreyer said. AGOA The African Growth and Opportunity Act, which provides preferential trade deals to sub-Saharan African countries so they can increase exports to the U.S., expires in 2025 so expect conversations to ramp up. Sen. Chris Coons, the chairman of the State and Foreign Operations Appropriations Subcommittee, in November released a draft of the AGOA Renewal Act of 2023 that would “extend and enhance” AGOA. The proposed bill would extend the trade agreement with sub-Saharan African countries through 2041. “This long-term extension would provide businesses with the predictability needed to invest in sub-Saharan Africa at a time when many firms are looking to diversify their supply chains and reduce dependence on China,” according to a press release from Coons. Among the proposed changes are streamlining the program, strengthening its impact on economic growth and development, and integrating it with the new African Continental Free Trade Area, a newly established continent-wide free trade area designed to draw more investment to Africa and ease trade between countries. There is also support in the House, where Foreign Affairs Committee chairman Rep. McCaul and ranking member Rep. Gregory Meeks also released a statement in November announcing their full support for reauthorizing AGOA before September 2025. “The timely reauthorization of AGOA is important to provide business certainty and show the United States continued support towards Africa’s economic growth. We are committed to working with our colleagues and our African partners to improve AGOA, but we believe the principal consideration must be ensuring a successful and timely reauthorization,” McCaul and Meeks wrote in a joint statement. President Joe Biden expressed his support for AGOA and said in a statement that he would work with Congress and African partners to pass a renewal in a timely manner. The rest There are a number of other bills and legislative efforts tied to global development that will also be discussed next year. The Millenium Challenge Corporation, MCC, turns 20 this year and hopes Congress will expand the shrinking group of nations that qualify for its funding. The Millennium Challenge Corporation Candidate Country Reform Act, which would allow it to work in middle-income countries, was approved by the Senate Foreign Relations Committee in 2023. Expect a continued push for approval. There may also be progress on the Fostering Innovation in Global Development Act, FIGDA, which is close to a committee discussion in the House. Discussions about Gavi, the Vaccine Alliance’s replenishment, details of which are being determined this year, will also get underway, as will talks about the next round of funding for the World Bank’s International Development Association. In December World Bank President Ajay Banga called for the largest IDA replenishment ever. “All these things that have to do with money and the commitment of money, I think are going to be harder fights,” O’Keefe said.