Where Does US Foreign Aid Budget Stand in Debt Panel Plans?

Washington insiders are expecting significant aid cuts as a special bipartisan panel created by recent legislation to reduce the U.S. deficit kicks off its tasks of finding more than $1 trillion savings in the U.S. federal budget.

Reductions to the U.S. foreign aid budgets appear to be among the most noncontroversial cuts the debt panel could propose to lawmakers, considering the powerful lobbies of other budget accounts such as health and defense. The panel, which includes six senators and six congressmen from both sides of the aisle, is working against a Nov. 23 deadline to find and present before Congress ways to save $1.2 trillion from the U.S. federal budget over 10 years.

Little to no details have emerged from plans being considered by the debt panel but Washington insiders are expecting significant aid cuts, including between 10 percent and 50 percent off of the operating expense budget of the U.S. Agency for International Development.

USAID officials themselves have noted that such significant cuts to the agency’s operating expense budget, whether proposed by the debt panel or congressional appropriators, would adversely affect ongoing staffing and procurement reforms.

Members of the U.S. development community have also now spoken up against possible cuts the debt panel may be considering, saying further reductions to the U.S. aid budget would put important programs such as Feed the Future and Global Health Initiative in jeopardy.

The U.S. foreign aid budget has already suffered significant cuts in fiscal 2011, which is funded by a budget deal reached by Congress and White House earlier this year. It is expected to be reduced further in fiscal 2012 to accommodate a $684 billion spending cap imposed by the legislation to slash the U.S. budget deficit.

U.S. aid and development groups are now rallying behind the Senate version of the 2012 foreign and state operations appropriations bills, which slashes $6 billion from U.S. President Barack Obama’s budget request. The $44.64 billion provided by Senate appropriators is not ideal, aid groups said, but it is better than the $39.6 billion in discretionary funding provided by the House for USAID and the U.S. State Department.

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About the author

  • Ivy Mungcal

    As former senior staff writer, Ivy Mungcal contributed to several Devex publications. Her focus is on breaking news, and in particular on global aid reform and trends in the United States, Europe, the Caribbean, and the Americas. Before joining Devex in 2009, Ivy produced specialized content for U.S. and U.K.-based business websites.