With Final Budget Request, Obama Administration Gives Nod to Effective Foreign Assistance

February 10, 2016 (WASHINGTON) – This statement is delivered on behalf of the Modernizing Foreign Assistance Network by Co-Chairs George Ingram, Carolyn Miles, and Connie Veillette:

This week President Obama submitted his $4.1 trillion budget request to Congress for FY17, which includes $54.1 billion for the International Affairs Budget, including $39.3 billion in base funding and $14.9 billion in Overseas Contingency Operations (OCO). The request is approximately $400 million below FY16 enacted levels, marking a 1% cut. MFAN is encouraged by some elements of the President’s final budget request, as detailed below, but we are disappointed that it does not push the envelope on many of the important reforms that this Administration has heralded.

At a time when we are responding to ever more crises around the globe, it is imperative that the budget request reflects a focus on ensuring that our development and humanitarian assistance dollars are maximized by being spent transparently, efficiently, and sustainably. We applaud President Obama for including the following provisions that would help advance reform and ensure the overall effectiveness of U.S. foreign assistance:

  • Support for domestic resource mobilization: The Treasury Department’s Office of Technical Assistance (OTA) request included a $10 million increase from FY16 levels as a “down payment” on Secretary Lew’s commitment to double OTA assistance by 2020 to support DRM and public financial management made at the 2015 Financing for Development conference.
  • USAID Operating Expenses gets a boost: The Administration is requesting $1.4 for USAID Operating Expenses “to sustain ongoing operations and build on recent reforms, including through continued improvements in procurement, local-capacity building, innovation, and accountability.” USAID Operating Expenses are essential to providing adequate personnel and training to ensure the effectiveness, accountability and sustainability of all of USAID’s development and humanitarian programs.
  • Support for emergency food aid flexibility, local and regional purchase of food aid: The request seeks the authority to use up to 25% of Title II resources for cash-based food assistance in emergencies, which was also included in the FY16 request. This flexibility allows USAID to reach up to 2 million more beneficiaries each year. The request also includes $15 million for USDA’s Local and Regional Procurement Program, authorized by the 2014 Farm Bill, plus up to an additional $5 million for LRP from Mc-Govern Dole Funding to be used for LRP.
  • A focus on evaluation and learning at USAID: $195.5 million in central funding is requested for the Policy, Planning, and Learning (PPL) Bureau and the Global Development Lab. The request notes that “funding for PPL will strengthen USAID’s central evaluation capacity and policy development.”
  • Commitment to the 2030 Agenda for Sustainable Development: The request highlights its continued commitment to ending extreme poverty and notes that the request will help to “drive progress toward meeting the global development vision and priorities in the 2030 Agenda for sustainable Development.”
  • 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.
  • Support for MCC regionally-oriented investments: The MCC request seeks to allow for concurrent compact authority in order to “maximize the economic impact of its work through regional investments.”

While MFAN is pleased to see the above provisions included in the FY17 budget request, we are concerned that there is not a stronger commitment to key reforms that this Administration has pushed for in the past, such as increasing and improving data transparency, specifically the ForeignAssistance.gov website, and bolder progress on food aid reform. We are also disappointed to see that while the Treasury Department has requested resources to fulfill its commitment to supporting domestic resource mobilization, the Administration has not included a baseline or an agency-by-agency presentation of the resources put toward this important goal.

In addition, the request seeks to remove several General Provisions which help to ensure that U.S. assistance dollars are accountable and are supporting the long-term self-sufficiency of our partners. The request removes the provisions related to Local Competition (Sec. 7028) and Financial Management and Budget Transparency (Sec. 7031), with the exception of the subsection on ForeignAssistance.gov, which intend to improve accountability through mechanisms such as monitoring and evaluation. The request also seeks to remove Sec. 7081 related to establishing and implementing transition plans. These plans would help better channel assistance to programs and local institutions to build this long-term self-sufficiency.

It is concerning to see the overall request for the International Affairs Budget go down at a time when we are responding to an increased number of development and humanitarian challenges, and especially concerning to see a continued dependence on OCO, which represents 28% of the overall International Affairs Budget in this request. We will be watching closely for reform elements as the request moves through Congress.

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