Yesterday the House Appropriations Committee released a draft bill that sets spending for international affairs (that’s both diplomacy and development) at levels 14 percent below the request and 5 percent below last year’s appropriations bill. Today, the State and Foreign Operations Subcommittee approved those spending levels. Advocates are worried, but they might want to save the hand-wringing for what could be a disastrous end-of-year scramble.The potential end-of-year train wreck will be caused by the very large differences among White House, Senate, and House budgets. The House adopted a budget resolution that is $19 billion less than the Senate’s. In terms of the international affairs budget, this means that the House is operating with a $40.1 billion base allocation while the Senate comes in at $49.8 billion. That’s a nearly 20 percent difference. (Ouch.)At these levels, it will be very difficult for the State Department and USAID to effectively run their foreign affairs portfolios, not just because of the stark spending cuts but also because of the numerous restrictions, directives, and earmarks that reduce agency flexibility. I say this as a believer that the budget can be reoriented to accommodate cuts and improve effectiveness, but also as an advocate of greater flexibility and less micro-managing.But what about OCO, you ask? The Overseas Contingency Operations request was designed to accommodate temporary and extraordinary expenses related to operations in Afghanistan, Pakistan, and Iraq. Last year’s potential budget disaster was ameliorated because appropriators shifted some base funding to OCO, which by the way, doesn’t count against spending caps.So what did the House Committee do with OCO for 2013? It fully funded the Administration’s request of $8.2 billion. Of course, House appropriators rearranged what gets funded in OCO, cutting in half the amount for State Department operations and ESF funding, while increasing amounts for USAID operating expenses, international organizations, disaster assistance, transition initiatives, migration aid, and security assistance. The problem? As I’ve discussed before, a dangerous precedent is set if some of this money isn’t truly temporary and extraordinary. When the time comes to put this money back in the base, there could be justified resistance.But there’s another problem with how 2013 will play out. While the House agreed to $8.2 billion for OCO, the Senate’s allocation is just $3.2 billion. This is one of the reasons that the House's base budget is so much lower than the Senate's. (Combining the base and OCO, the House number is still about 9 percent less than the Senate.)The difficulty will come as the two chambers try to reconcile these differences. We’ll know a little more next week when the Senate panel marks-up. Don’t expect this to sort itself out prior to the elections. This will be end-of-year calculus with way too many variables, including who wins the White House, and which party controls the House and Senate. And then there’s the threat of sequestration.So what does all this mean for development? When the budget doesn’t get completed by the beginning of the fiscal year, the release of those funds is delayed and the period in which they must be spent is compressed. As agencies struggle to ship the money out the door, I can’t help but think that some due diligence in oversight might be sidestepped. The future of programs and projects in the field are left dangling and the United States is not seen as a reliable partner.And don’t get me started on the hilarity of the U.S. focus on governance…
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