Budget Instability and Development Effectiveness

The Modernizing Foreign Assistance Network advocates for more effective and accountable U.S. foreign assistance that will deliver greater results for people in need and U.S. taxpayers. A chaotic budget environment beleaguered with cuts, delays, and rescissions does not enable effective aid nor efficient use of American taxpayer dollars. To shed light on the issues with this process, MFAN is publishing a series of articles that trace the harmful effects of budget instability from the halls of Congress to community programs on the ground to illustrate the damage that an erratic budget process has on global development.

Foreign affairs budget instability is not new. Pipeline delays, threats of government shutdown, and other erratic budget practices predate the current administration, but they have grown in both magnitude and frequency. The Trump administration has attempted reckless rescissions and repeatedly proposed drastic 30 percent cuts to the foreign aid budget that would threaten U.S. national security, weaken our global standing, and harm vital development and diplomacy programs.  This year, Congress again missed the deadline to appropriate funds for development and diplomacy by the start of the next fiscal year. As a result, agencies and programs face ongoing funding uncertainty.

The White House’s Office of Management and Budget

The budget process starts with an appropriations request from the President, via the Office of Management and Budget. This request reflects the  policy priorities of the President, and ideally, would merge those policy priorities with evidence-based planning and analysis to deliver a well-reasoned budget request to Congress. As Mike Casella, former Chief of the International Economic Affairs Branch at the Office of Management and Budget, argues, the process breaks down when the President neglects to engage in a thoughtful analysis and make meaningful distinctions, trade-offs, and decisions in spending allocations that should seek to maximize taxpayer investments.

America needs smart foreign aid budget for successful programs by Michael Casella for The Hill

Budget Planning at Aid Agencies 

Cuts, rescissions, and delays affect agencies that work directly in partner countries to deliver U.S. assistance. According to Susan Reichle, CEO of the International Youth Foundation and former Assistant to the Administrator at USAID, agencies need greater flexibility and responsibility for the funds they use, including the unification of policy and budget functions at USAID, a more streamlined internal approval process for projects, and fewer congressional earmarks dictating how to use funds in rapidly-changing environments.

The toll of budget dysfunction on US development leadership by Susan Reichle for Devex.

Congressional Appropriations Process, forthcoming.

Effects of Budget Uncertainty on the Ground, forthcoming.



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