President Obama’s FY2012 budget request comes out on Valentine’s Day. Will the development community react to the president’s budget missive with love or loathing?  My fear is that it will create a development-lover’s quarrel: a shrinking pot of money means development advocates will squabble over their own priorities and sectors at the expense of a widely shared new vision for U.S. global development and better aid.

The foreign affairs budget is all but guaranteed to shrink in FY2012. No surprise given the federal fiscal cuts across the board. House Appropriations Committee Chairman Hal Rogers (R-KY) proposed capping FY2011 foreign affairs spending at $46.95 billion, roughly $10 billion less than FY2011 president’s request. We can expect similar proposals for FY2012, if not worse (see here, here and here).

I can hear the howls already. But as long as the foreign aid budget isn’t disproportionately slashed, it’s reasonable to slow spending and scrutinize how to get the biggest bang for the American taxpayer’s buck.

More aid isn’t always better aid; having less of it should force the United States to be smarter about where it invests and to wind down programs that haven’t delivered. (This also requires better evaluation to know what works and what doesn’t, something the Millennium Challenge Corporation and USAID are aiming to improve.)

Of course, it’s easier to innovate when times are flush. Under President George W. Bush, budgets were growing and there was room for fresh approaches like the Millennium Challenge Account and the President’s Emergency Plan for AIDS Relief. But in times of shrinking budgets, when innovation must come at the expense of the status quo, the appetite for risk shrinks.

My colleague Connie Veillette recently reminded me of the HELP Commission’s finding in 2007:

For nearly 22 months, this bipartisan commission interviewed, at home and abroad, many of the world’s foremost experts on U.S. foreign assistance…not one person appeared before this commission to defend the status quo.

But the constituency for development in the United States is not disinterested when those status-quo budget line items are on the chopping block. Many of the same experts who deride the status quo are also lobbying the Hill to keep funding levels for education, water, global health and other sectors at or above last year’s amount. It’s not just that many of these organizations depend directly on U.S. government funding to support varying portions of their programs, but that even private funding is often tied to perceived lobbying success at increasing the right line items in the budget.

I recently sat in a meeting where a Washington-based development policy advocate explained the many reasons the Millennium Challenge Corporation (MCC) is moving U.S. foreign assistance in the right direction. He made clear, however, that if funding for the MCC came at the expense of child and maternal health line items, his organization’s support for the MCC would suffer. (Never mind whether the economic growth, poverty reduction and policy reform goals of the MCC might also improve child and maternal health.) Worse yet is when you start hearing advocates fight over maternal or child health. It gets ugly.

The same sentiment will affect the Obama administration’s new vision for global development—as pronounced in the Presidential Policy Directive (PPD) and Quadrennial Diplomacy and Development Review (QDDR)—which adopt MCC-like principles.

Many in the development community have been clamoring for a clear overarching strategy, country ownership, and a focus on economic growth, transparency, and results—all articulated in the new vision for U.S. global development. The new vision also pushes the United States to be more selective about assistance because the United States can’t do everything, everywhere (a point former Republican Members of Congress Mark Green and Jim Kolbe along with former OPIC President and CEO Rob Mosbacher strongly support in a recent op-ed .

But how can U.S. foreign assistance become more selective and more effective if the shrinking budget shifts attention to maintaining the status quo as much as possible in each and every line item?

Instead of knee-jerk reactions to a shrinking budget, I hope the focus can shift to:

  1. Doing aid better. This means not just maintaining individual budget line amounts, but focusing on where reasonable cuts can be made (Connie has a few suggestions) and how the U.S. can better channel the resources available so that they support many of the good development principles articulated in the PPD, QDDR and by the advocacy organizations themselves.
  2. Non-aid development channels. Now more than ever, non-aid development policy tools—trade, migration, environment, technology, security and investment—can have a big impact. Many of these policy tools don’t require a budget line item. The require a stroke of the pen to codify smart policy that can improve development prospects abroad and security and prosperity at home.

I’d like to be proven wrong about the development-lover’s quarrel ahead. But if it does happen, my Valentine’s wish is that focusing on better, smarter aid and non-aid development channels will help the community of well-intentioned advocates swallow some pride, put the broader interests before their own and maybe at the end of the day, kiss and make up.