The US foreign affairs budget and what comes next

Last week, the U.S. Congress passed a budget bill with an unexpectedly small increase to the foreign affairs budget and without any supplemental funding for the global response to COVID-19. The final bill, which awaits President Joe Biden’s signature, shocked many development advocates who are now wondering what went wrong — and how to make foreign aid a priority for lawmakers at a time of proliferating global crises.

The total fiscal year 2022 foreign affairs budget is $56.1 billion, an increase of about 1% from fiscal year 2021.

The budget outcome is the result of a number of congressional process issues as well as the politics of foreign aid and spending in Washington, D.C., in a year that was set up to be complicated for the appropriations process without the framework of the expired Budget Control Act. The act had forced both parties to reach agreements on budget deals, a person with knowledge of the Senate appropriations committee who requested anonymity to speak freely, told Devex.

Development advocates had expected a much larger increase in foreign affairs funding. Biden’s budget request asked for a roughly 12% increase, and both the funding bill the House passed last year and the legislation the Senate introduced included a larger increase.

“We had a real opportunity with this bill,” said Keifer Buckingham, the advocacy director at Open Society Foundations, adding that it did not “reflect the bipartisan, bicameral support” for foreign aid and shows that priorities are elsewhere.

Advocates thought the bill could include billions more in base appropriations for the foreign affairs accounts and an additional nearly $5 billion for global COVID-19 response in emergency funding. But budget negotiations and domestic politics resulted in a nearly flatlined budget despite mounting needs. The overall budget bill does include nearly $14 billion in emergency funding for Ukraine, some of which will go to supporting the humanitarian response and refugees.

Still, this result, especially the lack of COVID-19 supplemental funding, is a bit of a “come to Jesus moment about where priorities lie,” Buckingham said, adding that the global development community “should probably be taking stock of what’s happened.”

How the budget decisions unfolded

In order to get a budget bill passed, top lawmakers and the White House had to make a deal, which included agreeing on topline numbers for total government spending.

One of the sticking points for Republicans was that defense and nondefense spending stayed relatively evenly matched, advocates told Devex. About half of U.S. discretionary spending is defense-related. The result: nondefense spending had to be cut, and the state and foreign operations budget as it typically does “got the short end of the stick,” the person with knowledge of the appropriations committee said.

Another blow came after initial allocations, when a $2 billion rescission of U.S. border wall funding in the homeland security budget was blocked by Republicans, causing Democrats to look for $2 billion in additional budget cuts. They decided it would come from the foreign affairs budget.

Senator Chris Coons, a Democrat from Delaware and the chairman of the Senate appropriations subcommittee on state and foreign operations, which is responsible for the foreign affairs budget, “didn’t roll over” and spoke to Senate and House appropriations leaders as well and Democratic Senate leadership but “lost that fight,” the person with knowledge of the appropriations committee said.

In a rare move, Coons later criticized the funding levels for foreign affairs in the final budget package passed last week. In a statement last week, he said he was “deeply concerned” by the funding level for foreign affairs, saying it fails to make critical investments needed to address current crises around the world.

“The SFOPS account is not a piggy bank that can be raided by appropriation accounts,” he said, adding that the “shortcomings” of this bill shouldn’t be repeated in the future.

But this result wasn’t some tactical or messaging error on the part of development advocates, said Liz Schrayer, president and CEO at the U.S. Global Leadership Coalition. Lawmakers were under a lot of pressure to deliver a budget and faced a lot of “pulls and tugs,” she said, adding that the final bill did not reflect the way the majority of members of Congress think about foreign aid.

“Members of Congress are misreading how constituents feel on these issues and didn’t prioritize the global response” particularly when it comes to global COVID-19 funding, Schrayer said.

The COVID-19 supplemental or emergency funding bill was pulled from the appropriations legislation at the last minute due to objections from some House Democrats about where some of the funding would come from: unspent state COVID-19 resources, according to several sources and news reports.

But that was a domestic issue and not related to any controversy around the global COVID-19l funding, which has had bipartisan support, Schrayer said. Congress should have perhaps considered splitting global and domestic COVID-19 appropriations, Schrayer said.

“I don’t think this is a question about recognizing need,” said David Cronin, a government affairs specialist at Catholic Relief Services. “No one is discounting the global needs that we have. The question becomes how are we translating recognition to political will to take action.”

What’s in the budget

While the topline is a disappointment, advocates pointed to some positive signs within the budget’s funding allocations, including more funding to support LGBTQ rights and individuals and funding to hire more staff at the U.S. Agency for International Development and the State Department.

Subcommittee leadership and staff were committed and made “important steps forward” within the allocation they were given, said Justin Fugle, head of policy at Plan International USA.

The budget included an increase for USAID’s development assistance account up to $4.14 billion and about $1.64 billion for USAID’s operating expenses. It also includes language that Congress recognizes that USAID has lacked “sufficient personnel” and supports the agency’s goal to increase staffers. The bill also includes about $9.5 million to improve recruitment and retention of employees from diverse backgrounds.

The bill also includes funding for another administration priority — the Centroamérica Local initiative at USAID focused on supporting more locally led development in Central America.

While global health funding didn’t see big increases, and that budget will be stretched by COVID-19, the final text included one element some advocates had pushed for: A requirement that USAID develops a new multiyear strategy on global health research and development.

But there were also some disappointments for advocates, they said, including a missed opportunity to increase family planning and reproductive health funding. The bill’s limited increases in climate adaptation and mitigation funding fall short of the need, they added.

While funding for Afghanistan and Ukraine are welcome, reductions to the baseline International Disaster Assistance and Migration and Refugee Assistance funding “are tough to swallow,” Cronin said.

What’s next

Most immediately there will be an effort to get the House and then the Senate to pass a standalone COVID-19 supplemental funding bill, though there are mixed views about whether it will succeed.

Senate Republicans have made clear that they will not vote for a COVID-19 funding bill without offsets to pay for it. So unless a new funding stream is identified — or lawmakers are convinced to change their minds — it may be a challenge, development advocates explained.

Beyond that, there may just be a lack of appetite for any more funding bills at this point and little incentive for Republicans to vote for one — even though they agreed to it as part of the budget package, one lobbyist who asked for anonymity to speak freely told Devex.

“It’s going to be really hard to pull that back at this point,” the lobbyist said, adding “I don’t see how you recover from it in the near term.”

The person with knowledge of the appropriations committee echoed that sentiment, saying it would be “extremely difficult” to pass a COVID-19 supplemental in the Senate and that there is a lack of willingness from Republicans, even those who are helpful and engaged on foreign affairs issues to push leadership to act on such issues.

But there remains bipartisan support for more funding for the global response, said Schrayer, and advocates will be pushing hard for that COVID-19 supplemental funding.

Beyond the emergency, COVID-19 funding will be the fiscal year 2023 funding process, which is right around the corner. Advocates will be meeting to do a post mortem on the just-passed budget as they look to push for bigger increases in the year ahead, they said. Biden is expected to release his budget request in the coming weeks, with fiscal year 2023 beginning Oct. 1.

The fiscal year 2023 appropriations process is likely to be even harder in light of the midterm elections, the person with knowledge of the appropriations committee said, adding that they have “lost a lot of faith in the process.” The “erosion of regular order” in the appropriations process has resulted in budget decisions landing in the hands of eight lawmakers, bypassing committee votes and processes, that person said.

That budget request will be telling, including on questions of COVID-19 funding and how the U.S. will support the Global Fund to Fight AIDS, Tuberculosis and Malaria at its next replenishment, especially after Biden proposed maintaining the global health budget at previous levels, except for an increase in global health security funding, Buckingham said.

“To be honest with you I don’t have a lot of hope that it will happen on the global side,” she said, adding that the White House has not put its energy behind the global fight against COVID-19 the way that it needed to, despite at USAID and elsewhere who are pushing the work forward.

The lobbyist expects that the fiscal year 2023 budget request from the president will look similar to his first, though it will likely include more funding for the Global Fund.

The most interesting issues to watch will be how the administration allocates funding for global health and global health security, and how it divides it between bilateral and multilateral initiatives, the lobbyist said.

The development community needs to “recognize the damage” the Trump administration has done on how Americans and Republicans view foreign assistance issues and “need to pivot and think strategically about how to change minds about this,” the person with knowledge of the appropriations committee said.

The advocacy community “needs to get out of its echo chambers and talk to people who don’t agree with them 100%” and they also need to do more grassroots engagement and engage Americans in red states and try to change their minds about the value of investments in foreign aid and how they can benefit the middle class, that person said.

“We’re going to make clear we expect much more than the nearly flat line ‘22 budget. We’re advocating loud and clear to the administration,” Schrayer said, adding that advocates will also be making it clear to Capitol Hill lawmakers that this funding is in America’s interest.