What Republicans are thinking on foreign aid

Last week, Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, unveiled the House Republican budget proposal for fiscal 2015. Touted as a fiscally conservative alternative to the Obama administration’s budget request, the austere budget proposal would slash more than $5 trillion in federal spending over the next decade. While the House Republican budget proposal, or Ryan budget, almost certainly won’t make it into law for as long as U.S. President Barack Obama is in office, the spending plan is seen in Washington as a repository for Republican ideas — including on the future of U.S. foreign aid. Ryan, the 2012 Republican nominee for vice president, is known to be considering a bid for the White House in 2016, stoking speculation that the Ryan budget may very well be a blueprint for a future Republican administration. Concerned by the Ryan budget’s impact on U.S. foreign aid spending, some leading voices in the U.S. development community have already expressed disappointment at the proposal. Below, Devex breaks down and analyzes the key takeaways from the Ryan budget proposal for U.S. international affairs spending, the funding envelope for U.S. foreign assistance. International affairs spending slashed – up to a point In stark contrast to the Obama administration’s budget proposal, which would largely protect international affairs spending, the Ryan budget calls for sharp cuts to U.S. foreign aid in fiscal 2015. For fiscal 2015, the Ryan budget sets aside $39 billion in base funding for international affairs, 13 percent below the administration’s $44.1 billion proposal. The Republican budget blueprint makes the case that growth in U.S. aid spending, which began under the administration of President George W. Bush, “is not reflected in a comparable growth in results.”(If funding for overseas contingency operations in the front-line states of Iraq, Afghanistan and Pakistan is included, then the Ryan budget’s topline figure for international affairs would rise to $45 billion, compared with the administration’s $50 billion proposal.) As the chart below shows, however, the Ryan budget’s 10-year spending plan would grow base funding for international affairs spending beginning in fiscal 2017. On the other hand, under the White House’s 10-year spending plan, which uses base and OCO funding as a baseline, the first increase in international affairs spending would not kick in until three years later — in fiscal 2020. The White House’s restrained international affairs spending plans is likely explained by the downsizing of the U.S. military and civilian presence in the front-line states. Nonetheless, the Ryan budget’s planned increase in international affairs spending over the long-run would be far too modest — averaging 1.8 percent each year from fiscal 2017 to fiscal 2024 — to close the gap. Ten years from now, base international affairs spending under the Ryan budget would hit only $43.6 billion, which would be 1 percent below the administration’s fiscal 2015 base request. MCC elevated as the lead U.S. development agency For the third year counting, the Ryan budget would transform the Millennium Challenge Corp., the performance-based aid agency established by the Bush administration a decade ago, to the lead U.S. development agency. The Republican budget blueprint argues that MCC’s pioneering aid model has been more effective in achieving development results than the U.S. Agency for International Development’s traditional aid programming — a view that is shared by many aid analysts and advocates in Washington. Given USAID’s size and standing, however, the Ryan proposal to make MCC the lead U.S. aid agency is unlikely to gain much traction anytime soon — even under a Republican administration. The 2012 Romney-Ryan platform did not go further than calling for the U.S. aid regime to be based on the MCC’s performance-based aid model. Administration officials contend that their drive to rebuild USAID’s standing as the premier U.S. agency has, in fact, prompted USAID to draw lessons and innovations from the MCC model. Case in point: taking a page from MCC, which conducts rigorous impact evaluations for much of its portfolio, USAID is expected to ramp up its use of impact evaluations as part of USAID Forward. America’s experience with having two development-assistance programs has shown that MCC’s model has been more effective in achieving results. --— FY2015 Ryan budget proposal Despite Republican enthusiasm for the MCC model, it remains to be seen whether lawmakers will fully back the administration’s robust $1 billion fiscal 2015 request for MCC. Congress has recently been reluctant to appropriate more than $900 million for MCC — well below the $5 billion annual budget initially intended for the agency. At the same time, lawmakers on both sides of the aisle have been lukewarm to the administration’s just-shelved MCC-style Middle East and North Africa Incentive Fund proposal, which suggests that they may be unwilling to put money where their mouth is when it comes to performance-based aid. Multilateral organizations bear brunt of cuts While the Ryan budget’s significant slashes to U.S. foreign aid would likely be felt across the board, the Republican budget blueprint targets contributions to multilateral organizations for cuts. Under the Ryan budget, U.S. contributions to the World Bank-administered Climate Investment Funds — which account for the bulk of U.S. multilateral climate financing — would be eliminated. For fiscal 2015, the administration has requested $264 million in contributions to the CIFs, which are designed to support developing country transitions toward low-carbon and climate-resilient development. Perhaps unsurprising given the climate skepticism within the Republican contingent in Congress, the Ryan budget argues that financing for energy-efficient technologies “is not a core U.S. foreign policy function.” Even as it seems to protect assessed contributions to international organizations, the Ryan budget would also reduce voluntary donations to United Nations agencies including UNICEF, U.N. Development Program, U.N. Population Fund and U.N. Women — which again isn’t all too surprising in light of Republican reticence toward U.S. engagement with the U.N. system. The Obama administration has requested $221.6 million in voluntary contributions to UNICEF, UNDP, UNFPA and U.N. Women for fiscal 2015. U.S. contributions to UNFPA have long drawn the ire of rank-and-file Republicans, who claim that the U.N. agency has been complicit in coercive family planning practices in China — charges that UNFPA denies. Republicans have suspended U.S. contributions to UNFPA when in power, most recently under President George W. Bush. In addition to U.S. contributions to the CIFs and U.N. agencies, funding for U.S. education exchange programs, quasi-private agencies such as the Asia Foundation, as well as the flexible funding mechanism for conflict-affected countries called the Complex Crises Fund are also on the Ryan budget’s chopping block. Common ground on country ownership – in principle at least On promoting country ownership — a key element of the Obama development agenda — the Ryan budget suggests the administration and House Republicans may actually share some common ground. Citing MCC as a model, the Ryan budget makes the case that countries should plan and lead their own aid projects — which isn’t all that different from the rhetoric coming out of the administration’s localization agenda under USAID Forward. Further, the Ryan budget acknowledges that USAID Forward may be making some headway in promoting country ownership of U.S. foreign assistance, even as it asserts that MCC’s performance-based aid model is still far more effective at doing so. The Ryan budget also no longer calls for the elimination of Feed the Future — the administration’s food security initiative which promotes country-led agricultural development — as was the case in its fiscal 2013 version. There is understandable skepticism in the U.S. aid community, however, over whether the apparent bipartisan agreement on the principle of country ownership will be translated into practice. USAID Forward’s goal of channeling 30 percent of the agency’s assistance through country systems by 2015 has already come under fire from some high-profile Republican lawmakers, who contend that USAID lacks the oversight capabilities to shield U.S. aid dollars from waste, fraud and abuse. Statements from USAID officials, which concede that inefficiencies may have to be tolerated over the course of localization, aren’t likely to help the administration’s case for country ownership before Republicans in Congress. Join the Devex community and gain access to more in-depth analysis, breaking news and business advice — and a host of other services — on U.S. aid reform, international development, humanitarian aid and global health.