Over the past two weeks, the House Foreign Affairs Committee and the Senate Foreign Relations Committee released separate Foreign Relations Authorization bills designed to guide the direction of and spending on U.S. foreign engagement in FY2012. The House bill, which was passed through committee, generally maintains FY2011 funding levels but places serious restrictions on funding and operations for the Millennium Challenge Corporation (MCC) and USAID. The Senate bill generally adheres to the President’s FY2012 request and seeks to expand capabilities within MCC and USAID. Below is a head-to-head look at how the MCC and USAID fare in both Authorization bills.The MCC in the House and Senate Authorization Bills
| House Authorization | Senate Authorization | |
| Total Allocation | $900 million (This is 20% below the FY2012 request.) | Not specified. |
| What happens if a candidate country changes income groups? | A country should retain its candidacy at the former income category only for the year of such a transition. | A country shall retain its candidacy for the year of its transition and the three fiscal years thereafter. |
| Application of the MCC’s control of corruption indicator | No U.S. economic or development assistance may be provided to the government of a country that does not meet the MCC’s corruption indicator. (The President may waive this restriction on a case-by-case basis for national security reasons or if a country has taken documented steps to meet the corruption benchmark.) | The Senate bill does not tie non-MCC U.S. assistance to any MCC indicator. |
| Longer, Concurrent, and Subsequent Compact Authority | The House bill does not grant these authorities. | Upon MCC board approval, a compact may be extended up to seven years. The bill also grants concurrent and subsequent compact authority to the MCC. |
| Re-defining the MCC’s Income Categories | The House bill maintains the status quo income categories. | The low income category would become the poorest 75 countries according to GNI per capita. |
During the House authorization bill markup, three MCC-specific amendments were offered. Reps. David Cicilline (D-RI) and Bill Keating (D-MA) offered an amendment in support of awarding Cape Verde a second MCC compact. This amendment was approved by voice vote. Rep. Allyson Schwartz (D-PA) offered two amendments. The first specifies adding language to the findings section on reducing tariffs for MCC compact-eligible countries to better align trade and development policies. It was temporarily withdrawn so that committee staff could work on inclusion and determine whether it would require referral to the Ways and Means Committee. Rep. Schwartz’s second amendment moved to strike the section on prohibition of non-MCC U.S. assistance to governments that fail to meet the MCC’s control of corruption indicator; it failed on a party-line vote of 13-23. As the MCA Monitor noted in a recent analysis, the MCC’s control of corruption indicator is extremely problematic as a hard hurdle. The corruption indicator has a range of uncertainly (especially around the median) and can have time lags of up to two years. Using the control of corruption indicator as a hard hurdle for all U.S. economic and development assistance without addressing the inherent problems in the indicator could prove highly challenging.USAID in the House and Senate Authorization Bills
| House | Senate | |
| Total Allocation for USAID Operating Expenses | $1.52 billion (This is a decrease of 13% below the FY2012 request.) | The Senate bill does not specify a USAID OE amount but does authorize it to establish a Working Capital Fund. |
| USAID’s Budget Authority | Budget authority is stripped from USAID and moved back to the State Department. | The Senate bill maintains the status quo in which USAID has authority over its own budget. |
| Spotlighted USAID Program | The House bill highlights the Global Development Alliance program and its mandate to promote public-private partnerships. In contrast to the Senate bill, the House defunded the Development Innovation Ventures program. | The Senate bill highlights the Development Innovation Ventures program which enables USAID to work with partners to identify and scale evidence-based development solutions. |
The House authorization bill markup saw two USAID-focused amendments; both were approved by voice vote. The first was an amendment from Reps. Ted Poe (R-TX) and Jeff Duncan (R-SC) that codified the Obama administration’s Foreign Assistance Dashboard. Dashboard offers USAID and State Department program and funding data from FY2006 to the present. The second amendment, from Rep. Don Manzullo (R-IL), was to defund USAID’s Development Innovation Ventures (DIV) program. On DIV, the two bills stand in stark contrast with the House bill seeking to defund it and the Senate bill highlighting it as an example of improving U.S. development efforts.The chances of these two bills becoming law are close to nil so perhaps the biggest takeaway is the immense distance between the Senate and House on foreign assistance. In response to the question of how U.S. development should work in a resource-scarce environment, the House offers an overly prescriptive bill (see section 409: a make-more-work provision for data on aid by other international donors – data that is already publicly available) that restricts aid while the Senate attempts to inject USAID and the MCC with the authority to make aid more effective and far-reaching. The Authorization bills offer the opening salvo in the international affairs budget debate; the real contest will come when the House and Senate appropriators go head-to-head on FY2012 funds.
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