White House abandons plan to rescind billions in US foreign aid

The White House. Photo by: 4thfullmoon / CC BY-NC-ND

WASHINGTON — Facing broad pushback, both from within the administration and from lawmakers on Capitol Hill, the White House abandoned its plan to rescind unobligated foreign assistance funding on Tuesday, according to sources with knowledge of the decision.

The White House Office of Management and Budget informed leaders of the House and Senate appropriations committees that they no longer intend to issue a rescission package, according to multiple people briefed by members of those committees. The decision represents a victory for development and diplomacy leaders in the administration — such as Secretary of State Mike Pompeo — and for aid advocates who lobbied members of Congress to convince the White House not to follow through with the plan.

Devex spoke to multiple sources involved in the effort to overturn the plan, many of whom shared information from private conversations and off-the-record meetings on the condition of anonymity.

In response to rumors of the planned rescission package, the U.S. development community mobilized. The advocacy group ONE Campaign directed 13,000 letters from its members to congressional offices in a span of 72 hours. Others worked behind the scenes to send a message to lawmakers that OMB’s plan could threaten Congress’ budget authority, according to strategy notes seen by Devex.

The message resonated and lawmakers were upset by what they saw as a potential violation of America’s separation of powers and an attempt to achieve budget cuts that they have consistently rejected.

“This is a process that requires trust, a trust that would have been damaged by such a proposal,” wrote Senator Patrick Leahy, a Democrat from Vermont and vice chair of the Senate Committee on Appropriations, in a statement. “Rescinding funds that had been agreed to by Congress and signed into law by the president, in the waning days of the fiscal year, would have set a terrible precedent and harmed programs that further United States interests around the world.”

The exact amount of funding at stake was a moving target as the U.S. Agency for International Development worked quickly to obligate the money — perhaps because of the impending rescission, but also because USAID spending often accelerates at the end of the fiscal year. The amount of vulnerable funding dropped precipitously, from about $3.6 billion two weeks ago, to about $1 billion on Friday, sources told Devex.

One Republican lobbyist told Devex that the rapidly shrinking pool of money was leading to questions about whether the administration would follow through with the rescission plan at all, or whether they might restructure it to include more funding.

OMB did not respond to a request for comment. For now, the threat of a White House effort to slash foreign aid funds outside of the normal budget process appears to be over.

Some members of the development community were quick to portray the aborted plan as a victory for Pompeo, who in taking over the top job at the State Department promised to bring back its “swagger” after a year of disillusionment and staff departures under former Secretary Rex Tillerson.

“No question that the swagger is back with the quick death of the latest proposal to slash foreign assistance. On Capitol Hill, Republican and Democratic Senate leaders rallied together to stop another doctrine of retreat — and Secretary Pompeo clearly is on top of his department’s budget,” said Liz Schrayer, president and chief executive officer of the U.S. Global Leadership Coalition, in a statement.

Others were not as quick to credit Pompeo with a foreign aid budget turnaround. While agreeing that the secretary deserves credit for the final outcome of this budget dispute, one Republican lobbyist cautioned that he will remain in a difficult position within the administration, predicting that the White House budget request for 2020 will once again seek deep cuts to development programs.

While rescissions have happened before, this particular effort was unprecedented because of its timing. When the White House issues a rescission package, the funding in question is frozen for 45 days. If Congress does not vote in support of the rescission, at the end of those 45 days, the funding authority is restored and agencies can return to spending the money.

In this case though, the end of the current fiscal year is fewer than 45 days away. Even if Congress did not support the administration’s rescission proposal, by the time the freeze ended, the funding would already have expired.

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.