New Analysis on the FY2011 Budget – What It Might Mean for 2012

The international affairs budget bore a disproportionate share of all cuts made in the U.S. 2011 budget deal.  The hit to the 1% of the federal budget that funds U.S. global engagement in the final FY2011 compromise could be a signal of what’s to come in the 2012 budget.The Rethink team has analyzed the specifics of the recently enacted FY2011 Continuing Resolution – the budget agreement that this time actually continues funding government programs through the end of the fiscal year rather than just a few weeks.  I have pointed out that the budget deal is not as bad as first proposed by the House Appropriations Committee in H.R. 1.  Sarah Jane Staats has commented on funding for the MCC and international financial institutions.A new report dives into the numbers a little deeper and conjectures on what this all means for the 2012 budget process.  Here are some takeaways:

• The international affairs budget bore a large share of all cuts for 2011.  The budget agreement cut $78.5 billion government-wide from the 2011 request.  The international affairs budget’s portion is $8.4 billion, or 11%.

• Of the $8.4 billion cut from the international affairs budget, the foreign operations portion (in contrast to State Department operations) comprised 84%, or roughly $7 billion.  Because foreign operations is the larger share of the international affairs budget, it is not surprising that it would sustain a larger share of the cut.  However, 84% is still a significant decrease.  This brings funding for foreign operations below that appropriated for 2009.

• Nearly all foreign operations accounts were cut from the 2011 request, but some received increases over 2010 levels.  Those that received increases include Global Health and Child Survival, Development Assistance, International Disaster Assistance, and Migration and Refugee Assistance.

• Those that took hits include USAID’s operating expenses, the MCC, International Organizations and Programs, the Economic Support Fund, Foreign Military Financing, and Assistance to Europe, Eurasia, and Central Asia.

• The budget recently passed by the House (that’s the budget blueprint, not an appropriations bill) poses draconian cuts for 2012 and outyears.  It calls for an international affairs budget of just $37 billion in 2012 and envisions it decreasing to just $29 billion by 2016. Such levels would require a major reorientation (of the scaling back, withdrawal nature) of U.S. international engagement in both diplomacy and development.

• The degree to which the House and Senate Budget Committees are unable to reach agreement on this budget blueprint increases the likelihood that neither will the Appropriations Committees.  Likely outcome – expect the possibility of government shutdowns later this year.