Responsible Appropriation? Another Look at the Senate's MCA Slashing

Last week's blog gave a quick reaction to the shocking $254 million appropriation Senators gave the Millennium Challenge Account. As I said then, I respect tremendously the difficult job appropriators face in meeting the many and often competing needs both within and across U.S. budget accounts. So through the weekend I reflected on the Committee report's reference to "responsible appropriation." According to the report, appropriators:

"do not measure programmatic success by rates of expenditure, but could not responsibly appropriate billions of dollars in additional funding for new compacts without more evidence that existing compacts are meeting their goals."

So that got me thinking. Is there any way the $254 million appropriation was, in fact, responsible? Let's take a look at some of the report's arguments:1. MCC not spending what is has. I believe the rate of disbursement should, at this point in time, be higher than it is. It is a measure, albeit not the most important measure, of program effectiveness both in terms of MCC and partner country implementation capacity. And that argues for a substantial shift of focus and resources to implementation of existing programs over design of new ones. It does not, however, justify a complete halt. Zero compact funding in FY09 will impact Moldova for sure and quite possibly Senegal, thereby sending a message to those countries that the U.S. does not follow through on its promises. There needs to be a better balance between Congress being more flexible on letting a multi-year funding program run its course and the MCC truly demonstrating stepped-up implementation.2. MCC has delivered few tangible results. On this one, it depends what one means by "tangible results." On the one hand, it's simply too early to measure the end-of-compact results of income growth and beneficiary impact. But there are certainly sufficient outcome results to demonstrate the effect that the MCC model is having on changing the way U.S. development assistance is viewed by partner countries and on reforming local policies that pave the way for sustained development. Repairing a gas pipeline in Georgia to prevent environmental and safety hazards and prevent the disruption of gas delivery, enhancing transparency of government operations and budgeting in Cape Verde, increasing access to credit by women in Madagascar, raising crop productivity and farmer incomes in Honduras are but a few of the very real results from MCC investments. These kinds of outcomes are the building blocks of long term, country-owned development that can build a better safer world and utlimately transition countries away from foreign assistance.3. The U.S. must address more immediate and pressing needs. Well, simply put: if we don't begin to prioritize making long-term investments in building capable, prosperous democracies that can address the needs of their people, our short-term "more pressing" costs -- both in terms of military and humanitarian -- will only rise. We need to find a way to recalibrate and reorganize our foreign assistance apparatus to strategically and coherently fund short-term and long-term need that together serve our national interest. Senate appropriators took the rest of the $2 billion MCC request and scattered it largely over short-term security and humanitarian programs, but also provided a huge top-up for global health and HIV/AIDS programs. While recognizing the development impact of child survival and HIV/AIDS programs, simultaneously cutting the complementary long-term MCC funding that builds economies to provide jobs and security for those individuals saved and could build health systems more broadly is ultimately short-sighted.So, was the Senate appropriation responsible? The reality is that your answer will always depend on where you sit. But for someone who believes that U.S. interests are served by investing in global poverty reduction and economic growth and applying the lessons we have learned about investing in well-governed countries that can own and drive their own development, it makes little sense to kill -- or "pause" -- the one experiment we have.Despite language in the report that suggests good intent and support of the MCC model, pausing the program for a year will send a signal to countries that have worked hard to meet the eligibilty criteria and design credible programs that the U.S. doesn't follow through on its commitments. A $1 billion appropriation would at least have saved face. And language that suggests the MCC should reprogram assistance to "countries important to U.S. interests" takes the poverty focus of the MCC political, thereby casting doubt on the degree of real support for the model.And, finally, the larger question: what are the chances of reaching a grand bargain between Congress and the Executive Branch on 21st Century foreign aid reform that would embody what we know enhances development effectiveness -- multi-year strategic budgeting, long-term commitment to economic growth and poverty reduction, country-ownership, attention to impact results not disbursements -- when the one model we have is being sacrificed?