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Overshadowed by other headlines, President Trump’s first budget request to Congress arrived on Capitol Hill yesterday to relatively little fanfare. With the president overseas, OMB Director Mick Mulvaney was left behind to make the case for the deep cuts the administration is proposing in FY2018. It won’t be easy. For months, members of Congress on both sides of the aisle have dismissed—and even roundly rejected—the spending figures advanced by the new administration, including in the area of foreign aid spending. And they’ve had ample opportunity to do so, starting with the release of the ultra-thin skinny budget in March, followed by leaked documents that added detail to planned reductions. The full budget features a 32 percent cut to topline funding for the Department of State and Foreign Operations, leaving few programs that would completely escape the axe.

 

FY16 Enacted

FY17 Request

FY17 Enacted

FY18 Request

Base

$39,654

$39,252

$38,332

$28,040

OCO/GWOT

$14,895

$14,895

$16,485

$12,017

Supplemental

-

-

$4,300

-

Total

$54,550

$54,147

$59,117

$40,058

 

While Director Mulvaney has suggested this is a “Taxpayer First Budget,” it’s hard to read this as a good deal for anyone. Value for money is an edict CGD experts have often championed when it comes to foreign aid spending. But deep cuts don’t inherently translate to efficiency. And improving effectiveness will require more than merging budget line items. Meanwhile, some of the moves proposed by the administration would undermine the accountability of foreign aid, threaten hard won gains in global health, put millions of lives at risk, cede US international leadership, and start the process of eliminating an agency that returns money to the Treasury each year while promoting US interests abroad.

Reducing accountability in foreign aid

 

FY16 Enacted

FY17 Request

FY17 Enacted

FY18 Request

Development Assistance

$2,781

$2,960

$2,995

$0

Economic Support Fund

$4,319

$6,081

$3,651

 -

Economic Support, Democracy, and Development Assistance

 -

 -

 -

$4,938

 

My colleague Jeremy Konyndyk sounded the alarm last month when plans to merge USAID’s development assistance account into the State-managed Economic Support Fund (ESF) surfaced in a leaked document obtained by Foreign Policy. He outlined specific concerns that the move would result in future assistance being driven primarily by diplomatic and political goals with less accountability—including with respect to congressional oversight. And the documents that comprise the full budget seem to confirm the administration’s intent to target aid in just such a manner through the newly titled Economic Support, Democracy and Development Fund. But despite several nods to efficiency in language describing the move, using aid to pursue near-term foreign policy objectives is rarely efficient. Further, the administration provides only a fraction of the funding, reducing the newly-merged account by 25 percent compared to FY2017 funding levels.

Ignoring the evidence in global health

 

FY16 Enacted

FY17 Request

FY17 Omnibus

FY18 Request

Global Health Programs - USAID

$2,833

$2,907

$3,055

$1,505

Global Health Programs - State

$5,670

$5,670

$5,670

$4,975

 

$8,503

$8,577

$8,725

$6,480

 

Even in the face of—oft-remarked—bipartisan support in Congress, US global health funding took a hit in the administration’s budget request. Funding to fight HIV/AIDS globally through the President’s Emergency Plan for AIDS Relief (PEPFAR) would bear an 11 percent cut, raising questions about how the administration plans to ensure continued treatment for patients who currently receive antiretroviral drugs through the program.

Under the administration’s budget, USAID’s global health programs would be subject to a far more dramatic cut—just half of what Congress provided in the FY2017 omnibus. Though the budget proposes to redirect some Ebola emergency funds to fight Malaria ($250 million) and support global health security ($72.5 million).

And, worryingly, in making these deep reductions, the administration seems to be ignoring the evidence of what works in global health. For instance, despite interest from key White House staff in advancing women’s economic empowerment—the budget request would eliminate funding for family planning—access to which is so often a necessary precursor to women’s economic empowerment. Budget documents also remark on reductions in funding to combat polio. Polio is an awful disease, but thanks to coordinated efforts from public and private actors alike, the world has come incredibly close to eradicating it entirely. On an annual basis, the US investment in the fight is relatively small, but pulling back makes little sense. Not only would letting up give the disease the chance to regain ground, but if we’re able to reach global eradication we won’t ever need to appropriate money for the disease again. In the CGD book Millions Saved, my colleagues chronicle the incredible cost effectiveness of US efforts to eradicate smallpox, noting that the United States recoups its investments in savings every 26 days because it no longer needs to spend to vaccinate or treat the disease.

Hampering our humanitarian response

 

FY16 Enacted

FY17 Request

FY17 Enacted

FY18 Request

Food for Peace II

$1,466

$1,350

$1,466

$0

One-time increase

$250

 -

$134

$0

 

$1,716

$1,350

$1,600

$0


International Disaster Assistance

FY16 Enacted

FY17 Request

FY17 Enacted

FY18 Request

Base

$875

$125

$498

$690

OCO/GWOT

$1,919

$1,832

$3,313

$1,818

Supplemental

 -

$953

$616

 -

 

$2,794

$2,910

$4,428

$2,508


The world is staring down four famines while struggling to address the continuing flow of refugees from Syria. Congress recognized the heightened need for life-saving assistance in the FY2017 Omnibus, providing an extra $990 million to tackle famine. In stark contrast, the Trump administration’s budget would zero out US food assistance—under the United States’ largest international food aid program, known as Food for Peace Title II (or P.L. 480). The budget request suggests future food assistance will be provided, more efficiently, through the International Disaster Assistance account (IDA)—but rather than shoring up the account to shoulder the additional cost, it cuts IDA too. The US system for providing food assistance overseas is in serious need of reform. But that should open a window for the Trump administration to achieve meaningful efficiency gains—building on the work of reform champions Senators Bob Corker (R-TN) and Chris Coons (D-DE). Turning our back on those in desperate situations would have dire consequences and offer little budgetary savings.

Eliminating a money-making agency


OPIC

FY16 Enacted

FY17 Request

FY17 Enacted

FY18 Request

Admin Expenses

$63

$88

$70

$61

Program Account

$20

$20

$20

$0

Total

$83

$108

$90

$61


The administration signaled plans to eliminate the Overseas Private Investment Corporation (OPIC), the United States’ chief development finance institution, in its skinny budget. In a global landscape where private investment is increasingly desired by developing countries, OPIC is crucial to helping US businesses gain footing in emerging markets. The administration cites concerns that OPIC displaces the private sector as justification for killing the agency (though not right away). But, in fact, OPIC helps private sector actors invest in frontier economies where they struggle to do so on their own. And OPIC is statutorily required to maximize private co-investment. Meanwhile, the agency returns money to the US Treasury each year. For more, see this new post from CGD’s Todd Moss and Joseph O’Keefe.

Failing our commitments to the International Financial Institutions

 

FY16 Enacted

FY17 Request

FY17 Enacted

FY18 Request

IFIs

$2,280

$2,285

$1,771

$1,480


The Treasury Department’s share of the 150 account would see a 16 percent cut under the Trump administration’s request when compared to the level approved by Congress in the FY2017 omnibus. In nominal terms it is the smallest request since FY2007 and in real terms the smallest since 1964. Given President Trump’s vocal opposition to UN climate change programs, it’s unsurprising that the budget request does not include any funding for a US contribution to the Green Climate Fund. (President Obama pledged $3 billion to the multilateral fund designed to support developing countries mitigate and adapt to climate change, but he struggled to marshal support in Congress to pony up and managed only to transfer $1 billion before leaving office.) The administration’s request for the Global Environment Facility falls $34.2 million short of the US annual commitment to the fund’s last replenishment. Under the request, US contributions to the World Bank’s International Development Association (IDA) and the African Development Fund also come up short based on pledges made during replenishment sessions last December. It’s likely the United States will ultimately submit a lower pledge for each institution, causing other donors to grumble, at the very least. But the broader trend—where the United States fails to deliver on its commitments and cedes its leadership in these institutions—is even more worrying. 

Congress chose to forge its own path in crafting an FY2017 spending bill. The odds seem good that members continue the trend. Rather than embrace severe cuts that will cost lives and undermine US global leadership, Congress should continue to work to ensure our investments in foreign aid are effective and deliver value for money. We outline some ideas here—expect more to come.

The first table in this post was updated on June 7, 2017 at 10am to reflect funding for the full international affairs budget. It previously showcased recent funding for the Department of State and US Agency for International Development.