Missing link: Can USAID unite budget and policy?

The U.S. Agency for International Development has undertaken nearly all of the reforms included in the reorganization plan begun by former Administrator Mark Green, with one big exception: A proposal to create a new bureau meant to bring together USAID’s budget, policy, and program performance is still stuck in limbo. As USAID’s other reorganization plans moved forward during former President Donald Trump’s administration, the proposed Bureau for Policy, Resources, and Performance was hung up on a technical issue. Members of the U.S. Congress, who must sign off on major changes such as the creation of a new bureau, believed the head of PRP ought to be a Senate-confirmed assistant administrator, while USAID had already used up its allotted number of Senate-confirmed positions. That should be a relatively easy fix if President Joe Biden’s team — including Samantha Power, the nominee for USAID administrator — chooses to move forward with the previous administration’s proposed structure. What is less certain is whether the creation of a new bureau at USAID would get to the heart of long-standing challenges related to the agency’s budget authority, strategic planning, and independence from the Department of State. The proposed PRP Bureau is meant to consolidate foreign aid management responsibilities that are currently scattered among at least five different bureaus and offices. Advocates for the change see it as an important step toward building greater coherence among USAID’s strategies and policies, the resources it allocates to countries and programs, and the way it measures what those resources achieve. “I think [Secretary of State Antony] Blinken may actually fix this because he's not obsessed with absorbing AID — at least not yet.” --— Andrew Natsios, former administrator, USAID “It makes eminent sense,” said Susan Reichle, president and CEO at the International Youth Foundation and former assistant administrator at USAID’s Bureau for Policy, Planning and Learning. “By having these separate entities, with their own responsibilities and authorities, things just get slowed down,” Reichle said. A PRP Bureau, advocates say, would allow USAID to better align its country strategies and sectoral policies with the funding that lawmakers appropriate for the agency so that discussions about strategy are happening at the same time and place as discussions about resources. Bringing those pieces together could also strengthen USAID’s policy, budget, and performance capabilities, putting the agency on stronger footing with the U.S. Congress and other executive agencies in conversations about programs and funding. “PRP is really an effort to try, within the existing framework, to bring a certain level of budget autonomy back to AID, but also explicitly linking that with policy … and with performance,” said Conor Savoy, executive director at the Modernizing Foreign Assistance Network. Some warn that while the new bureau might look good on paper — and might be an improvement over the current arrangement — it does not address some big underlying issues that have hindered USAID’s ability to think strategically, align resources with its plans, and then measure the performance of those resources in achieving them. ‘A micromanaging role’ The problem of foreign aid budget and policy fragmentation is not new, and attempted solutions to it have swung back and forth like a pendulum — mostly between the State Department and USAID — for years. In 2006, then-Secretary of State Condoleezza Rice, frustrated that she was unable to get a clear answer about how much money USAID was spending on democracy and governance programs, created a new position at the State Department tasked with coordinating U.S. foreign assistance. Under Rice’s plan, the new director of foreign assistance and the USAID administrator would be the same person, with broad authority to coordinate the U.S. foreign aid budget. During former President Barack Obama’s administration, those roles split, but the State Department office director retained much of the power over budgeting. Many USAID advocates say the result is that USAID must now submit to layers of bureaucracy and rounds of questioning from the State Department’s Office of Foreign Assistance — known as the F Bureau — before it can make most budgetary or policy decisions, including for specific countries and programs. “What you saw is that over time — and I think in particular during the Obama years — it really took on much more of a micromanaging role in terms of AID’s budget,” Savoy said. “There’s been an overall sense that this has added further layers of complication onto executing the budget efficiently and ensuring that there is some level of alignment between strategy and budget,” he added. Some want to see a return to the earlier arrangement, with one official “dual-hatted” as the head of USAID and director at the F Bureau. “The President appoints and nominates an Administrator, with the advice and consent of the Senate, yet in reality a non-confirmed [appointee] can undermine that mission,” Eddy Acevedo, senior director of communications and policy at the McCain Institute for International Leadership and former senior official at USAID, wrote to Devex. “USAID typically does not have programmatic budget authority and must defer to F on approving the use of program funds, which only undermines our development objectives worldwide,” he added. ‘The system is not broken’ For USAID, the current process can drive a wedge between Washington’s decision-making power and the need to respond to changing conditions and priorities in the places where it operates. “We need a national security apparatus that can be more flexible, move resources, move people, respond to the challenges. … We absolutely have to do it differently than we’ve traditionally done it in order to be successful,” Reichle said. That requires a deeper reevaluation of the relationship between USAID and the State Department, and specifically the F Bureau’s power over day-to-day management decisions related to foreign aid, some advocates argue. “The system is not broken. The problem is the organizations have conflicting objectives that cannot be simply managed away,” said former USAID Administrator Andrew Natsios. In the past, that negotiation has involved the Secretary of State and the USAID administrator, and some are hopeful that Biden’s team might lean in the direction of greater autonomy for USAID. “I think [Secretary of State Antony] Blinken may actually fix this because he's not obsessed with absorbing AID — at least not yet,” Natsios said. Power, whose confirmation hearing has not yet been scheduled, is also a higher-profile figure with greater political influence than many who have previously occupied the administrator role. Biden already announced he is elevating her position to a seat on the National Security Council, raising hopes among USAID advocates that the agency’s stature will rise with her. If she is confirmed, Power will inherit a daunting list of challenges, including the ongoing COVID-19 pandemic, deteriorating crises in Ethiopia and Myanmar, and a USAID workforce still recovering from the morale-killing final months of the Trump administration. While intricacies of budget and policy planning might not carry the same prominence, they are related to the agency’s overall health. “The morale suffers when people feel like: ‘I’m just being micromanaged. I can’t get anything done,’” Reichle said. “There is a relationship.”