International Affairs Budget Update, 5-12-11

EDITOR’S NOTE: The House Appropriations Committee’s proposed international affairs budget allocations for fiscal 2012 indicates a reduction of $1 billion, or 2 percent, from the overall fiscal 2011 levels, notes Stuart B. Baimel, government relations associate at the U.S. Global Leadership Coalition. The $47.2 billion allocation, he says, is significantly better than what is proposed under the FY 2012 budget resolution passed by the House in April.  

1. Further Analysis of House Appropriations Allocations for FY12 Appropriations

As reported in our Budget Update last evening, the House Appropriations Committee yesterday afternoon released the all-important appropriations allocations–“302(b)s”–for FY12.  Due to the way the Committee describes these allocations, there has been some confusion about the exact funding levels for the International Affairs Budget.

The confusion over the funding level for State-Foreign Operations account stems from the way the Committee accounts for war-related expenditures, known as the OCO account (Overseas Contingency Operations).

The Committee’s FY12 tables appear to represent a cut of $8.6 billion (-18%) from FY11 spending.  However, the Committee makes clear in a footnote that the figures in the table do not include the $7.6 billion for OCO (or what the Committee calls “Global War on Terror” funding).   The Committee tables do the same thing for the Defense account.  This confusion has resulted in a few inaccurate press reports.

A true “apples to apples” comparison results in a 2% reduction from overall FY11 levels as we reported last night.  This calculation compares the FY11 level of $48.2 billion with the FY12 core accounts plus the OCO account resulting in an overall cut of approximately $1 billion.

Understanding Impact of Allocations

The good news is that the $47.2 billion House allocation marks a major improvement from the deep and disproportionate 18% cut contained in the FY12 budget resolution passed last month by the House.   Earlier indications were that the House allocation would include an additional $6 billion of cuts, the amount equal to the House approved budget that provided only $41 billion for both core and OCO accounts.

Here is the concern: The core programs (non-war related funding) are certainly being reduced with serious long-term funding implications.  When comparing the funding levels for core accounts over the last two years, the House appropriations allocation represents nearly a 20% reduction.  While an exact calculation is not possible at this time to determine the one year impact on core programs, it is likely to translate to a 12%-16% cut.  (An exact calculation is not possible at this time because a core vs. OCO breakdown does not exist, pending final FY11 program allocations by the State Department and USAID). One final point of comparison is that the FY12 House allocation, including OCO funding, does represent a dramatic cut of 19% from the President’s FY12 request level.

The bottom line: The overall allocation is significantly better than compared with the House budget resolution.  However, the allocation continues a two-year trend of significant cuts to non-war related programs and operations. 

2. Comparison with Other Accounts

The House Appropriations Committee worked from an overall cap for discretionary spending, known as 302(a), of $1.019 trillion.  In total, the allocations for FY12 result in a net cut of $30 billion relative to FY11 levels and $121 billion below the President’s FY12 request.

In the FY11 spending agreement, the International Affairs Budget shouldered a disproportionate 17% of the overall cuts. In the FY12 allocation, the International Affairs Budget constitutes about 3% of the net cuts, a number much closer to the proportionality of the size of the International Affairs Budget.  As a comparison, the Labor-HHS account received about 38% of the cuts and Transportation received about 16% of the cuts.

The total State-Foreign Operations allocation is more in line with how other security accounts fared: Homeland Security received a 2.6% cut, Military Construction-Veterans received a 0.8% cut, and DOD received a 3.3% increase.  However, when looking at non-war related expenditures, the disproportionate nature of cuts to the FY12 International Affairs Budget is very clear.  The estimated 12-16% cut for core programs in FY12 is, in fact, one of the most significantly impacted accounts and completely out of step with the rest of the security spending accounts (as noted above).  In fact, without the OCO funds, the International Affairs Budget is among the most severely cut, along with Labor-HHS, Transportation and Agriculture-FDA, all of which are cut between 11-14%.

3. Senate Action on FY12 Budget Still Delayed; Committee Markup Possible Next Week

Senate Budget Committee Chairman Kent Conrad (D-ND) is aiming to hold a markup on his FY12 budget proposal next Wednesday, May 18.  Senator Conrad has been holding off on a markup, in part to allow more time for the bipartisan “Gang of Six” to reach an agreement on a comprehensive budget proposal.  With the likelihood of an agreement waning, Conrad has also faced obstacles in ensuring sufficient support from Democrats on the Budget Committee if he proceeds with his own budget resolution.  Most notably, Senator Bernie Sanders (I-VT) has threatened to block its approval in Committee unless the resolution contains a more even balance between spending cuts and revenue increases.  Adjustments to the resolution to address Sanders’ objections have been made, which would allow next week’s markup to proceed.

While the details of Senator Conrad’s budget resolution have not been released, Senate aides have said the Chairman’s proposal would achieve $4 trillion in deficit reduction over the next decade by raising $2 trillion in revenue and $2 trillion in spending cuts.  In contrast to the House budget resolution passed last month, the International Affairs Budget is expected to be included as part of national security spending in Chairman Conrad’s budget; however, details of the funding level for the International Affairs Budget are unknown at this time.

Re-published with permission by the U.S. Global Leadership Coalition. Visit the original article.

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