Uncertain Development Outcomes for Budget Priorities

Connie Veillette of the Center for Global Development published a white paper recently discussing the uncertain outcomes for US priorities in development. An excerpt is below and the full paper linked here:

The international affairs portion of the president’s FY2013 budget will likely generate concern among aid advocates over cuts to health and humanitarian assistance. With so many budget variables in play during an election year, it is difficult to predict an outcome, but international affairs spending will remain under pressure as policymakers search for ways to address budget deficits.

The president’s budget, released on February 13, sets total government-wide spending at $8.3 trillion. The international affairs budget, or 150 Account, constitutes 1.6 percent of total spending. At $56.2 billion, the request is $1.3 billion, or 2.4 percent, greater than last year’s appropriated level. The highlights of the budget include a proposal for a new Middle East and North Africa Incentive Fund, the elimination of the Assistance to Europe, Eurasia, and Central Asia account, and decreases in health and humanitarian accounts. Apart from these big changes, funding levels for other major accounts do not diverge greatly from FY2012 appropriations. The FY2013 base budget of $48 billion is an increase of $4.3 billion, or 9.8 percent.

Prospects for the Future:

Budget austerity will continue to dominate the political process this year, and the debates will only be sharpened by the approaching presidential and congressional elections. With the stakes so high for both political parties, it will be all the more difficult to find agreement on a consensus budget that would trim enough expenses to avoid sequestration in January 2013. On top of all this, it is unlikely that Congress will pass a budget resolution. Senate leaders have asserted that one is not necessary since the Budget Control Act established spending caps for 2013.

House leaders have promised to produce an alternative to the president’s plan. Appropriators will proceed with the intent of following regular order, but the State and Foreign Operations bill will likely be included in an end-of-year omnibus. If partisan impulses dominate, a short- or long-term continuing resolution could be an option. This would defer difficult decisions into a lame duck or a new Congress, and perhaps a new administration. However, this would present a very difficult situation if members of congress want to avoid sequestration, as many do because of its potential effects on the defense budget.

All considered, even though this is a responsible international affairs request, the political dynamics of an election year mean that this budget and the priorities it sets out may look far different by the time the budget process concludes.