US aid advocates brace for 'rescission' battle

The White House in Washington, D.C. Photo by: Diego Cambiaso / CC BY-SA

WASHINGTON — The U.S. development community is weighing its options for how to respond to a White House rescission package, expected to target more than $4 billion in previously appropriated funding, and rumored to be arriving as soon as Tuesday.

Despite being thousands of miles away from Washington, D.C. where the latest round of budget drama is unfolding, U.S. Agency for International Development Administrator Mark Green sent an agency notice, obtained by Devex, to all USAID employees early Sunday morning in which he rallied them to “embrace challenges and forge ahead.”

“As development practitioners, we are accustomed to uncertainty. We work in fluid, often unpredictable environments, and must always be ready to adapt to the circumstances around us,” Green wrote while traveling in the Democratic Republic of the Congo to meet with partners battling the country’s ongoing Ebola outbreak.

“I know that budgetary challenges can make our work difficult. I also believe our best way through the choppy waters of an uncertain process is to prove, over and over again, just how important our work is. We must deliver as a Federal Agency, as a team, and as an irreplaceable part of American leadership,” Green wrote before outlining the progress USAID has made over the past two years.

While Green implores his staff to continue demonstrating the value of their work, others in the U.S. aid community are mulling more direct options for confronting the White House’s attempt to reclaim billions of dollars in funding. U.S. aid advocates are broadly pursuing a three-pronged strategy, according to a Republican lobbyist who spoke to Devex anonymously about private discussions.

“The largest barrier may be whether there is a sufficient level of desire for taking on this fight.”

— partners of law firm Nichols Liu

The first line of defense involves translating the broad statements U.S. lawmakers have issued in objection to the rescission into specific legislative action the U.S. Congress might take to prevent the White House from carrying out its plans.

The U.S. House of Representatives included language in its 2020 budget bill aimed at making it impossible for the White House to use strategically timed rescissions to overrule Congress’s funding authority by making those funds available for an additional 90 days after the end of the fiscal year.

While this bill never became law, one option would be to insert similar language into a continuing resolution, which many expect lawmakers will pass after they return from recess in September.

The second strategy is media engagement, and advocates hope they can make information available about the potential harmful effects of a rescission. According to the Republican lobbyist, the State Department is currently preparing a report for the White House on the consequences they would expect if a rescission moves forward, which could prove useful in a public relations battle.

Finally, aid advocates have discussed the possibility of pursuing legal action against the Trump administration. A lawsuit could challenge both the rescission plan, if it moves forward as expected, as well as the daily spending cap the White House already imposed, which limits USAID and State Department spending to 2% of their unobligated funding per day.

Those spending caps are seen as an effort to prevent the agencies from quickly drawing down their accounts before the end of the fiscal year — and before the White House has a chance to bring the rescission package forward.

‘Likely to be found illegal’

Nichols Liu, a law firm that specializes in development contracting, has looked into the legal precedent for challenging the White House’s budget actions in response to requests from “several interested parties.”

In a pair of blog posts, the firm’s partners concluded that the Office of Management and Budget’s actions would likely be found to be illegal, and they outlined some of the precedent that might support a case against the Trump administration’s actions.

“The largest barrier may be whether there is a sufficient level of desire for taking on this fight,” they wrote.

The lawyers also concluded that such a suit would likely have to be brought by specific contractors or NGOs who feel they have been harmed by the Trump administration’s actions, as opposed to a trade association or member of Congress, for example.

It remains to be seen whether a specific private organization would be willing to attach its name to such a legal challenge, but according to the Republican lobbyist who spoke to Devex, there appears to be greater appetite for that kind of action now than there was when the administration first floated a foreign aid rescission last summer.

The rescission package is expected to target unspent funding from fiscal years 2018 and 2019 that are set to expire when the current fiscal year ends on Sept. 30. It is not uncommon for foreign aid agencies to maintain large balances of unspent funding close to the end of the fiscal year — though the White House has tried to portray this as evidence that the funding is unnecessary.

Last week, news reports emerged that the Trump administration would likely exclude certain funding pools from the rescission package, including global health accounts and funding that supports programs related to international religious freedom and global women’s empowerment, priorities favored by Vice President Mike Pence and Ivanka Trump.

According to one budget chart obtained by Devex — the accuracy of which could not be independently verified, but which reflects numbers currently circulating in the development community — the accounts still targeted for rescission could include nearly $1 billion in 2019 funding for international organizations, including international peacekeeping, and more than $2 billion in economic and development assistance appropriated in 2018.

After weeks of speculation about whether the administration might attempt another rescission this summer, OMB’s Associate Director for National Security Programs Michael Duffey sent a letter — seen by Devex — on Aug. 3 to USAID and the State Department freezing more than a dozen accounts and ordering the agencies to report back on the amount of unobligated funding they contain.

When the White House issues a rescission, the funds in question are frozen for 45 days, during which Congress can vote to reject or accept the proposal. Since this rescission proposal is likely to come forward within 45 days of the end of the fiscal year, it is widely viewed as an attempt to tie up funding until it has already reached its expiration date.

Aid advocates — including U.S. lawmakers from both parties — have repeatedly criticized the administration’s attempt to deploy a rarely used budgetary authority to override the Congressional appropriations process.

About the author

  • Michael Igoe

    Michael Igoe is a Senior Reporter with Devex, based in Washington, D.C. He covers U.S. foreign aid, global health, climate change, and development finance. Prior to joining Devex, Michael researched water management and climate change adaptation in post-Soviet Central Asia, where he also wrote for EurasiaNet. Michael earned his bachelor's degree from Bowdoin College, where he majored in Russian, and his master’s degree from the University of Montana, where he studied international conservation and development.