Aid Reform, Budget Austerity, and Super Committees…Oh My

A sense of doom and gloom is hanging over the aid community.  Those of us who pretend to be optimists are succumbing to the growing recognition that hopes are dimming for reorienting and restructuring U.S. aid programs for better effectiveness and support of U.S. foreign policy goals.

Why the doom and gloom?

1. It was nearly two years into the administration before it issued two blueprints for a better approach to development (PPD) and how to square development and diplomacy (QDDR).  During that time, Congress was strongly dissuaded from tackling those issues even though there was considerable congressional leadership to do so.
2. In the year since the PPD and QDDR were issued, implementation of aid reform and effectiveness principles has not progressed as deeply and quickly as some have wanted.  In new analysis, I examined the FY2012 budget request for what it revealed about the administration’s commitment to reform.  The bottom line is that there are several serious lacunas even amid signs of progress.
3. Whatever progress has been made could come to a screeching halt as the budget takes center stage – and this fat lady just won’t stop singing.  The current budget debates have taken much of the air out of the reform debate.  Advocates for reform now find themselves fighting a budget battle to preserve aid funding even though many of them, myself included, believe that more aid does not, in and of itself, make for better development.
4. The FY2012 House appropriations bill would virtually gut USAID’s ability to manage even reduced aid dollars.  While appropriators were careful to reduce USAID’s Operating Expense (OE) budget in 2011 to a point just above the level that would have required RIFs, the House’s 2012 OE number is slashed another one-third.  This would likely necessitate large staff reductions and jeopardize the agency’s ability to support a civilian surge in Afghanistan and Iraq, or exercise due diligence in managing programs in Pakistan or Arab spring countries, or to continue rebuilding Haiti, and perhaps even to respond to famine in the Horn of Africa.
5. The super committee created by the Budget Control Act of 2011 (BCA) is tasked with finding up to $1.5 trillion in savings over ten years.  The legislation makes it clear that the committee can look for savings in entitlements, changes in revenue streams, and spending, but comments by some congressional leaders indicate that taxes may not be part of the equation.  If not enough savings can be found through reforms to entitlements or revenues, then the committee will have to rely on more spending cuts on top of those already taken in FY2011.
6. Under the BCA, the international affairs budget is put in the category of security spending, thus making it compete with DoD.  At least one super committee member has vowed to prevent any more DoD cuts.  That means the mandated reductions in the security category will come from the hides of State, USAID, Veterans Affairs, and Homeland Security.   The Senate’s higher allocation for State and Foreign Ops may not be a sign of hope since the DoD budget is maintained at last year’s level, without even a small reduction.
7. Congress is so consumed with budgets and electoral politics that foreign aid (and any foreign affairs legislation for that matter) is unable to move.  A new FAA is needed to produce a consensus on goals (at the very least); its main proponent released a discussion draft, but it is unclear that the administration or other members of Congress will avail themselves of a grand bargain.
8. The near hysteria over budget cuts overshadows what could be a reasoned debate on how reduced funding could drive reforms.  Making U.S. programs more selective around a set of priorities and objectives and more focused on what works is called for in the PPD, and this seems like an ideal opportunity.

It is this last point we at Rethink hope to tackle over the coming weeks and months.  A good start for the super committee would be to look at greater efficiencies in food aid.My question to you is this: where should U.S. aid programs be focused over the next five to ten years?  Where can we declare success and move on?  USAID’s new policy framework identifies food security, global health, climate change, economic growth, and democracy and governance as focal areas.  Can we jettison everything else?