Friend –

I hope you saw my update from earlier this morning on the “warning shot” that former Chairman of the Joint Chiefs, Admiral Michael Mullen, sent to Congress ahead of the Administration’s fourth “Budget Day”. With coverage from USA Today to POLITICO to Defense One, he made it clear with his own handwritten inscription:

• "The more we cut the International Affairs Budget, the higher the risk for longer and deadlier military operations." (retweet his note here)

Well here’s the official readout: This year the Administration proposes a disproportionate 22% cut – similar to past years, nearly a quarter of America’s footprint around the world. This is simply and woefully out of touch with protecting America’s interests – especially at a time of growing global threats from a surge in coronavirus to mounting hotspots of conflict to the rise of China.

But now Congress takes the reins on spending decisions and I’m confident that lawmakers will follow their bipartisan playbook from the past three years – and reject these dangerous cuts. They know that now is not the time to take our diplomats and development tools off the playing field.

Read below for My Top 5 Trendlines on what the budget proposal means for protecting America’s interests, or click for the USGLC team’s full analysis of the Administration’s budget.

More to share soon…

Best,

Liz
Liz Schrayer, USGLC

5 Trendlines on the Administration’s Global Budget Priorities
February 10, 2020

>> Click here to get the full USGLC analysis report

#1 Development and Diplomacy Bear Brunt of Budget Cuts (Again)

• While the 22% cut is a step in the right direction compared to past proposals to cut as much as 37% three years ago, it is still tragically out of touch with America’s security and economic interests in the face of unprecedented global challenges and opportunities. 


• The overall federal budget request not only ignores last summer’s bipartisan budget deal between the White House and Congress – cutting what is known as “non-defense” spending by 7% – but also disproportionately targets development and diplomacy programs, now for the fourth straight year.

#2 Global Competition Guides Resource Decisions

• The Administration’s budget narrative drives a particular focus on countering Chinese, Russian, and Iranian influence – with Iran added as a new priority in the global competition frame. Yet their proposals are still well below what Congress enacted last year.


• The Administration has proposed fully funded security partnerships with Israel, Jordan, and Egypt, and increased their request compared to last year for their Indo-Pacific Strategy and Prosper Africa initiative – but still a relatively small investment compared to China’s efforts.


• What to watch: The “great power competition” is certainly a bipartisan priority on Capitol Hill, but Congress will surely ask tough questions both in public hearings and behind closed doors about whether these investments are sufficient given the deep cut to the topline.

#3 Signature Initiatives See Funding Surge

• As expected, the Administration proposes significant boosts for two of its top development priorities:


• The W-GDP initiative to promote women’s economic empowerment would see its annual funding double to $200 million.


• The newly launched U.S. International Development Finance Corporation (DFC) would see its program funding jump nearly four-fold to $700 million.
  
  
• Key question: While both initiatives have strong bipartisan support, budget watchers will ask if these funding increases come at the expense of other critical development programs.
  
  

#4 Deep Cuts to Global Health Despite New Pandemic Threat

• As the Wuhan Coronavirus continues its rapid spread across the globe, the Administration’s budget slashes funding for Global Health Programs by a staggering 34% compared to what Congress provided last year. Flashback: That’s even greater than the Administration’s 28% proposed cut last year.


• The request does add $15 million more than Congress provided last year to USAID’s Global Health Security account to improve health systems and address disease threats, but Congress will ask how overall cuts to global health impact America’s ability to prevent and respond to future pandemics.


• Some good news: Gavi, the Vaccine Alliance, receives a $1.2 billion pledge over four years to improve access to vaccines for children in the world’s poorest countries.

#5 Troubling Signs for Combating Global Fragility

• At the end of last year, with bipartisan support from both ends of Pennsylvania Avenue, the Global Fragility Act became law, setting a course for a laser focus on the root causes driving extremism, instability, and conflict. 


• The Administration’s budget notes the importance of strengthening fragile states, and includes $135 million for the Relief and Recovery Fund that could be used “to implement the Global Fragility Act”, but specific funding to programs and countries is a mixed bag:


• The Venezuela crisis is an outlier which sees a 811% surge compared to last year.


• Central America funding is reduced by 18% compared to last year.


• Funding for Syria is zeroed out for the second year in a row.


• The Democratic Republic of Congo (DRC), Somalia, South Sudan, and Yemen all see deep cuts compared to current funding levels.


• Overall migration and refugee assistance is cut by 91% from last year – at a time when the world is facing the largest number of people displaced in human history.


• Plus, economic and development assistance is down by 19% compared to last year.

What to Watch Next

Administration leaders are sure to face tough questions in the coming days and weeks in Congress. Russ Vought, the Acting Director for the Office of Management and Budget, is slated to appear before the House Budget Committee on Wednesday morning. While not yet announced, initial expectations are that Secretary Pompeo could testify before the end of the month and agency heads in early March.

  >> Click here to get the full USGLC analysis report