US budget deal: Effects on foreign aid unclear

A last-minute, tentative agreement on the U.S. budget was announced on Tuesday night. Will it be approved by Congress? What are the implications for foreign aid accounts and USAID? It’s still to early to tell, but the worst-case scenario of a government shutdown by January 15 seems to have been avoided.

The U.S. Capitol building in Washington, D.C. A newly announced budget agreement will include $6 billion in cuts to federal workers' retirement benefits, but whether or not these cuts will affect the U.S. Agency for International Development staff is still unknown. Photo by: James Palinsad / CC BY-SA

Bipartisan negotiators announced on Tuesday a deal on the U.S. federal budget that — despite modest spending cuts — hopes to end the three-year-long impasse which led to sequestration.

The $85 billion budget agreement is still subject to approval by the Senate and House of Representatives, but advocates hope it will be passed between Friday and the beginning of next week to avoid a government shutdown by January 15, and mitigate the effects of the sequester by allowing federal agencies and discretionary programs to spend up to $63 billion more over two fiscal years.

Sen. Patty Murray (D-WA) and Rep. Paul Ryan (R-WI) said the deal includes $6 billion in cuts to federal workers’ retirement benefits, but at this stage it’s unknown if these cuts will affect U.S. Agency for International Development staff.

At this stage and while details of the budget proposal are still being unveiled, it’s too early to tell whether the agreement will pit aid and development advocates against defense budget supporters in the face of tough cuts to U.S. government programs.

Supporters of the bill however seem confident to have eluded the devastating effects that a government shutdown would have meant for the already depleted foreign affairs budget, where foreign aid and USAID programs would have been an easy target for lawmakers trying to save costs.

Before the deal was announced on Tuesday night in Washington, D.C., former Congressman and development advocate Howard Berman told agency contractors to “remain vigilant” that lawmakers could be tempted to change the rules and shift the austerity burden over to U.S. aid accounts.

“Foreign aid is consistently the one area of the budget Americans are willing to cut [because they have an] inflated idea of how much we’ve spent on foreign aid,” Berman said at the 2013 CIDC conference last week.

Michael Igoe contributed reporting.

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