In US, uncertainty starts March 1

U.S. President Barack Obama. Photo by: Pete Souza / White House

Today, drastic across-the-board cuts to U.S. government programs take effect. The impact won’t be immediate, but further inaction by Congress will mean disaster within and beyond America’s borders.

By now, everyone appears to have accepted that no last-minute deal will be reached to avert sequestration, or $85 billion in cuts from the $3.6 trillion budget originally approved by Congress.

Cuts will be deep to the relatively small foreign aid budget: $150 million to humanitarian assistance, $400 million to global health, $70 million to food aid, and $70 million to U.S. Agency for International Development’s operation, according to administration officials.

As hope for a deal to avoid those across-the-board cuts is waning, all eyes are on the next deadline: March 27, when a continuing resolution that’s kept government running over the past few months expires. The White House and Congress have to work out again a plan to keep the government functioning until the fiscal year ends in September.

And if that wasn’t enough, the next budget battle is right around the corner: the fiscal 2014 appropriations. The White House delayed the release of its budget proposal earlier this year, but publication is imminent if lawmakers are to finalize it by Sept. 30, the end of this fiscal year.

Another month full of uncertainty

At this point, even Washington insiders are unsure how all these budget negotiations will end up.

“I wish I had a crystal ball,” Tom Hart, U.S. executive director of the ONE Campaign, an anti-poverty advocacy group, told Devex when asked about the post-March 1 scenario.

Early this week, about 150 activists affiliated with ONE went to the Hill and had 170 meetings with lawmakers and their staff. While lawmakers sympathize with the cause, they just don’t understand how to deal it with, Hart noted.

“No negotiations, no ideas have been put on the table,” Hart said.

And that’s worrying, he added.

“It’s a worry because the programs that we fight for are vulnerable,” Hart said. “And it’s a worry because the institutions here in the U.S. are struggling to get their work done.”

Jeremy Kadden, senior legislative manager of InterAction, the largest alliance of U.S.-based development nongovernmental organizations, shares that sentiment.

“Frankly, people on Capitol Hill understand a lot of these things,” Kadden said. “They’re just not in the position to be able to avert sequestration right now.”

So far, everything remains inconclusive.

Senate Democrats have proposed a 50-50 solution for the sequestration that, when passed, raises revenue from the wealthy by $55 billion and cuts spending by $55 billion. A Republican senator suggested that to save $85 billion, the United States should cut foreign assistance by around half or $20 billion annually.

As of press time, no continuing resolutions for fiscal 2013 have been filed with the Senate Appropriations Committee, a check by Devex shows. The House Appropriations Committee, meanwhile, is now drafting a continuing resolution, Jennifer Hing, the comittee’s communications director, told Devex.

“Our hope is that it will be filed for House floor consideration on Monday (March 4),” Hing said.

President Barack Obama earlier committed to release his 2014 budget proposal in mid-March. Ideally, the White House should have submitted its plan to Congress last month.

Whatever the plans maybe, aid groups say cutting the foreign aid budget to save is not the way to do it.

“We’re not going to find a lot of money there. It’s absurd,” Kadden told Devex. “If people want to balance the budget, we need to have a conversation about what we do to make that happen. Foreign aid is not the way to do that because it’s such a tiny percentage of the budget anyway.”

In the coming weeks, expect a wave of intense lobbying and advocacy campaigns on Capitol Hill.

“By March 27, we’re hoping that that message will be gotten through, so there will be some sort of sensible cuts from the ones we’ve been seeing so far,” Kadden said.

On the chopping block

While uncertainty looms, what is certain, according to aid groups, is the impact of the federal cuts overseas:

  • 3 million children can’t go to school.

  • 2.1 million people can starve without food aid.

  • 1 million children won’t get vaccines.

  • 175,000 people won’t receive antiretroviral vaccines.

Who’s going to be that starving kid is another issue altogether. And it depends on how USAID chooses which programs to cut and which country suffers from the cut.

“The challenge, of course, is for USAID having to prepare for an ever-changing-but-never-resolved budget. And that can’t be easy for any agency,” said Sarah Jane Staats, director of policy outreach at the Center for Global Development. “Some of the federal agencies whose entire mission is based on personnel is going to be much more difficult. I think USAID will have a little flexibility in the program side but not much.”

USAID should choose wisely among the myriad of projects and programs it’s implementing around the world.

“I think the first place to look would be looking for cases where USAID has programs where the presence is going to be costly in terms of having USAID staff in a country and the program fund is relatively small and maybe not garnering the biggest impact,” Staats said.

Her suggestion echoes what USAID has in mind.

Last year, USAID Deputy Administrator Don Steinberg told Devex: “This is a period where we’re going to have to focus and concentrate our efforts, and that’s part of what we’re doing right now, which is to eliminate some of our smaller programs where we cannot show development results.”

The ongoing budget crisis, Staats said, forces USAID to think.

“It could help them make some of the tough decisions that they wanted to make in the past but haven’t been able to,” she said.

Still, the game is not entirely played by USAID alone.

“A lot of it depends on the rules of the game that are coming from beyond USAID in terms of where the cuts will come from and how much flexibility the USAID will have in applying those,” Staats said.

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About the author

  • John Alliage Morales

    As a former Devex staff writer, John Alliage Morales covered the Americas, focusing on the world's top donor hub, Washington, and its aid community. Prior to joining Devex, John worked for a variety of news outlets including GMA, the Philippine TV network, where he conducted interviews, analyzed data, and produced in-depth stories on development and other topics.