What the massive US funding deal means for international COVID-19 response

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The U.S. Capitol Building, as seen on a rainy Monday morning amid the COVID-19 pandemic in Washington, D.C. Photo by: Graeme Sloan / Sipa USA

WASHINGTON — The U.S. Congress is poised to approve a third funding package — worth more than $2 trillion — aimed at shoring up America’s economy and boosting the health response to COVID-19. Included in the massive funding bill are some modest increases for international health and development programs, though experts warn these will not be nearly enough to address the global dimensions of the pandemic.

“The U.S. government, in the worst crisis, can still spend where everybody else in the world has to pull back.”

— Bill O’Keefe, executive vice president for mission, mobilization, and advocacy, Catholic Relief Services

The U.S. House of Representatives is expected to vote Friday on its version of a bill that the Senate has already approved. While the vast majority of the funding focuses on domestic concerns, both congressional chambers have included some additional funds for international programs.

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The final version of the funding package is expected to include additional money for U.S. diplomatic programs, U.S. Agency for International Development operating expenses, USAID’s International Disaster Assistance account, the State Department’s Migration and Refugee Assistance account, and the Centers for Disease Control and Prevention’s global health security programs. The package is also likely to include some additional funding for the Peace Corps, which some experts said will be used for the global evacuation of the agency’s more than 7,000 volunteers.

Additional funding will also flow to multilateral organizations, including the World Bank and African Development Bank.

Global health and development advocates had lobbied for more international funding to be included in the package but told Devex that while the relative lack of funding is disappointing so far, it is not surprising U.S. lawmakers are currently focused on domestic response and recovery.

“I think it’s really hard for people to see beyond what’s in front of them … and what they see is the impact it’s having on the U.S.,” said Loyce Pace, president and CEO of the Global Health Council.

A key challenge in getting more funding for the global response in this bill is that previous funding allocated in the first COVID-19 supplemental bill has not yet been spent, said Lisa Peña, director of policy, budget, and appropriations at InterAction.

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It’s unclear when that funding will become available, but USAID and the State Department submitted their spending plans for the funding in the first supplemental to Congress this week, as required.

Pace and other advocates said they hope — and expect — that future supplemental packages might have a larger international dimension, particularly as the COVID-19 outbreak expands in low- and middle-income countries that have so far seen relatively fewer cases than countries more closely tied to the global economy.

Flexible funding

Several experts said that Congress has made the funding allocations with an eye on flexibility in an effort to limit restrictions on how money is spent and get it out the door quickly.

Congress put money in the International Disaster Assistance account partly because it is flexible funding that can be spent on global health and humanitarian aid or that can go to international organizations, Peña said.

After the West Africa Ebola crisis, Congress created and has funded the Emergency Reserve Fund and the Infectious Disease Rapid Response Reserve Fund, which are both tools that make sure money is available to quickly respond to needs, said Brandon Ball, senior lead of congressional relations at PATH.

“The money [allocated] could be used for preparedness, for detection, for response across the board, unlike the Ebola supplemental where there were some restrictions on how the funding was used,” he said.

A multilateral response

While this supplemental appropriations bill doesn’t provide much in terms of U.S. bilateral aid to the COVID-19 response, it does include significant funding for multilateral institutions — in some cases speeding up promised U.S. contributions.

If approved, the bill would authorize some $3 billion for the World Bank’s International Development Association, nearly $17 million for the International Finance Corporation, and nearly $514 million for the African Development Bank’s African Development Fund and would allow the U.S. Treasury to make up to $28.2 billion in loans to the International Monetary Fund.

“If you look at the whole body of international response in this package, it's frankly pretty modest, very small, plus ups in the U.S. agencies. And a lot of it is devoted to these measures for the MDBs [multilateral development banks] and the IMF. That’s pretty striking. And frankly, I’m impressed by that — that Congress, both Senate and House, are prioritizing these institutions,” Scott Morris, director of the US Development Policy Initiative at the Center for Global Development, told Devex.

By including the funding in the bill, lawmakers are speeding up the timeline to approve the administration’s funding requests for these institutions, which would have otherwise had to wait until the next budget was approved.

“The money [allocated] could be used for preparedness, for detection, for response across the board, unlike the Ebola supplemental where there were some restrictions.”

— Brandon Ball, senior lead of congressional relations, PATH

The early approval is “not only an important symbolic sign” but will have a “practical effect” in allowing these institutions to move forward at a time when there is pressure on them to scale up funding in response to the crisis, Morris said.

Economic fallout

As the economic reverberations of the coronavirus crisis deepen, nonprofit aid organizations are also hoping that increased funding from the U.S. government might help to balance out an expected decrease in private donations.

“The U.S. government, in the worst crisis, can still spend where everybody else in the world has to pull back,” said Bill O’Keefe, executive vice president for mission, mobilization and advocacy at Catholic Relief Services.

O’Keefe noted that the funding package is also likely to include some broader provisions aimed at supporting the U.S. nonprofit sector, which, he pointed out, employs 10% of America’s workforce. That could include about $60 billion and changes to the tax code.

“We’re just going to have to manage our way through this. We’ve never been in this situation before and neither has anybody else,” O’Keefe said.

There were a few provisions that NGO advocates were not able to get into the supplemental bill currently being considered, Peña said.

They were hoping to tweak how the government limits eligibility for relief; advocates wanted the cutoff for small businesses to be 500 employees per location rather than a total of 500 employees so that NGOs with fewer than 500 staff members in the U.S. but big teams abroad could be eligible. There was also an effort to increase a specific tax deduction for charitable giving, which could have helped spur additional donations, she said.

About the authors

  • Adva Saldinger

    Adva Saldinger is a Senior Reporter at Devex, where she covers the intersection of business and international development, as well as U.S. foreign aid policy. From partnerships to trade and social entrepreneurship to impact investing, Adva explores the role the private sector and private capital play in development. A journalist with more than 10 years of experience, she has worked at several newspapers in the U.S. and lived in both Ghana and South Africa.
  • 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.