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US Development Policy

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While you might not know it from the weather, there’s at least one sure sign it’s December in DC. No, we’re not referring to the oversized and ornamented evergreens on the Capitol and White House lawns, but to the recent mad dash by Congress to wrap up remaining legislative business before the end of session. This year, top priority was reaching a deal to fund the federal government through the rest of FY2016. And despite a year marked by bitter partisanship, Congress managed to arrive at an agreement.

As usual, we focused our attention on the appropriations for State and Foreign Operations. The bill’s topline comes in at $52.68 billion, which though short of the President’s budget, is considerably higher than what was included in this summer’s draft bills, which had us rooting for a continuing resolution.

(All tables include dollars in millions)

Here’s a quick rundown on the (merry and) bright spots and what has us channeling our inner scrooge:

International Financial Institutions (IFIs)

The big news here is that IMF quota reform passed at last! It’s embarrassing that we’re so excited (relieved) over something that should have happened back in 2010. But there you have it—the United States is no longer cutting off its nose to spite its (and the international community’s) face.

The overall IFI numbers are nowhere near as terrifying as the House and Senate draft SFOPs bills, though they’re still grim given how much development bang for our buck we get through the MDBs. The World Bank’s International Development Association (IDA) receives only $1.197 billion ($93 million less than the request) under the bill, among other cuts.

US Agency for International Development (USAID)

We were pleased to see $1.283 billion (base + OCO) for USAID’s Operating Expenses (OE), short of the president’s request, but at least higher than FY15. Less than ideal is that no funds are provided for new positions. As we raised in July, it seems shortsighted to limit new hiring if USAID continues to make good on its efforts to become more than a contracting pass through.

It was also a relief to see Development Assistance (DA) up 11 percent.

We like the language on country focus and selectivity, which includes an emphasis on identifying end goals and transitioning away from bilateral assistance (and removed the arbitrary-seeming pilot program from the Senate bill). We’d still be interested in seeing an evidence-based assessment of where USAID’s money is and is not working and of course, a subsequent reallocation. Perhaps passage of the Foreign Aid Transparency and Accountability Act will help spur such a move? Plus, some additional good news for smart development: the language from the earlier House and Senate reports, in affect where not contradictory to the explanatory statement, encourages USAID to continue domestic resource mobilization efforts.

Millennium Challenge Corporation (MCC)

President Obama went big this year for MCC, including $1.25 billion in his request for the growth-focused agency. We were never long on the odds of Congress delivering, and the agency essentially received the same level of funding as last year.

The bill directs GAO to examine MCC’s authority to use unobligated funds to work with countries not eligible for a compact. Language in the bill’s explanatory statement suggests appropriators may be particularly interested in this question for countries that are no longer candidates because their GNI per capita is too high. (Check out Nancy Birdsall’s recent testimony before the Senate Foreign Relations Committee to learn about how median consumption might offer a better measure of need to define MCC candidate countries.)

Overseas Private Investment Corporation (OPIC)

OPIC is reauthorized! Great news—if still a shame this has to be done through the appropriations process. No surprises on funding levels here. Both the House and Senate bills would have kept Administrative Expenses flat, though the requested bump included in the President’s budget would have allowed for more personnel, enabling OPIC to do far more. Under the final bill, OPIC’s carbon cap is again lifted.

Global Health Programs

Global health programs continue to enjoy strong bipartisan support in Congress. The bill provides slightly more funding than in FY15 and roughly 4 percent more than President Obama’s request. Maternal and child health programs enjoy the greatest increase due to a larger contribution to immunization efforts through GAVI. Nutrition programs also saw a boost, while family planning funding dipped slightly with a reduction in the amount provided for the UN Population Fund. (Kaiser has the full breakdown here.)

Food Aid

Like those that came before, President Obama’s FY16 budget included proposed reforms to the notoriously wasteful and inefficient system for delivering US food aid abroad. Unfortunately, also true to history, the proposal failed to gain sufficient traction in Congress. In addition to matching the $1.466 billion provided in FY15, appropriators included a one-time funding boost of $250 million for emergency and non-emergency food aid, recognizing growing needs due to the Syrian crisis and other conflicts.

Green Climate Fund

Despite pressure, the final bill is free of a provision prohibiting the United States from contributing to the multilateral Green Climate Fund (GCF), designed to assist developing countries grappling with climate change. President Obama has pledged $3 billion to the GCF over four years, but faces strong opposition from some in Congress. An explicit prohibition on GCF contributions would have been a serious blow on the heels of the historic deal reached in Paris, so the omission was heralded as a victory by many of the Fund’s supporters. While the measure does not appropriate the $500 million requested for a first installment, observers expect the Administration will exercise its transfer authority to make an initial payment to the GCF.

Power Africa

Power Africa gets $76.7 million—good to see it getting its own line item!

Disclaimer

CGD blog posts reflect the views of the authors drawing on prior research and experience in their areas of expertise. CGD does not take institutional positions.