MFAN Statement: President Obama’s FY16 Budget Shows Continued Support for Foreign Assistance Reform

February 4, 2015 (WASHINGTON) – This statement is delivered on behalf of the Modernizing Foreign Assistance Network by Co-Chairs George Ingram, Carolyn Miles, and Connie Veillette:

MFAN welcomes the Obama Administration’s FY2016 budget request, which includes several important reform elements and increased resources for initiatives that will improve aid effectiveness.  The $54.8 billion request, which allocates $47.8 billion for base funding and $7 billion for Overseas Contingency Operations (OCO), is a 7.7% increase from current spending, not including supplemental spending for the Ebola crisis. The base funding request is $6.1 billion higher than current spending levels, a 14.7% increase, as funds are shifted from the OCO fund back to the base budget.

In addition to the strong base funding request, MFAN is pleased to see the inclusion of key provisions that would help advance reform and overall effectiveness of U.S. foreign aid in the request.

  • MCC Funding Gets a Boost: The MCC request comes in at $1.25 billion, a 39% increase over FY15. The MCC’s innovative approach to development prioritizes transparency and country ownership, which are key pieces of MFAN’s policy agenda, to reduce poverty and promote economic growth.
  • Increase in USAID Operating Expenses: Operating Expenses are essential for providing adequate personnel and training to implement and monitor programs and institutionalize USAID Forward reforms. In this request, OE receives a 17% boost, which is expected to help offset projected decreases in other sources of funding to maintain current operations.
  • Authorization for a USAID Working Capital Fund: The establishment of a USAID WCF would help increase procurement flexibility, in line with the USAID Forward agenda.
  • Additional flexibility for International Food Aid: While the overall Food for Peace Title II request is down from FY15, the request includes the authority to use up to 25% (or $350 million) of Title II resources for cash-based food assistance for emergencies. With this increased flexibility, USAID can reach approximately 2 million more emergency beneficiaries a year.
  • More Funding for Foreign Assistance Program Evaluation in State’s F Bureau: Within the Economic Support Fund (ESF), State has requested $2.4 million for Foreign Assistance Program Evaluation in the F Bureau, an increase of $900,000 from FY14 spending. This increase in funding can help ensure better training for staff and better quality evaluations to help inform program decision-making.
  • PEPFAR Impact Fund: The request includes $300 million to be set aside for a new PEPFAR Impact Fund, aimed to support more targeted efforts to combat HIV/AIDS. The fund would be allocated to countries with “the greatest need and ability to realign resources based on evidence to reach epidemic control, increase their own share of HIV budgets, and take greater ownership of data collection and expenditure analysis.”

While MFAN believes that the FY16 international affairs budget request demonstrates a continued commitment to aid effectiveness, we were concerned to see a decrease in the funding request for the Foreign Assistance Dashboard from FY14 levels. Given the U.S. commitment to the International Aid Transparency Initiative (IATI) and the amount of work left to meet that commitment by the end of this year, a decrease in funding for the Dashboard could hurt our efforts for greater aid transparency. We will be watching closely for these reform elements as the request moves through Congress.

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