Senate Takes Earlier MCC Haircut to Full Out Decapitation

Remember the FY08 haircut given to the MCC by Senate appropriators just last month? You know, the one that started with Senators Gregg and Leahy wanting to give the MCC a $525 million buzz cut but after push-back from development groups and the Administration ended up being a $58 million trim? Well, those same Senators have decided that the MCC needs more than a haircut in FY09. Trading in its shears for a guillotine, the Senate Appropriations Committee essentially decapitated the MCC, providing $254 million (a cut of $1.97 billion from the Administration's request), covering one year of basic life support services for the corporation during which time it must prove its worth. Meanwhile, the Committee recommends redirecting the freed-up MCC money to top up other development accounts, USAID operating expenditures, and then a host of short-term humanitarian, peacekeeping and non-proliferation accounts.At least on the other side of Capital Hill, the House State-Foreign Operations subcommittee approved $1.54 billion for the MCC, flatlining its FY08 appropriation.MCC CEO Danilovich called the Senate decision "absurdly low" and a "mixed signal about America's commitment to poverty reduction."I agree that the amount is absurdly low. While I share some of the sentiment contained in the report -- a need to really focus on implementing the compacts already signed, to show more concrete results from investments made to date, and to be sure that the impact estimates are realistic -- the inability to sign even one compact in FY09 jeopardizes the "challenge element" of the MCC model that countries have used to undertake important reforms. In addition, flatlining the administrative costs of managing, measuring, and assisting countries to implement the existing compacts doesn't make programmatic sense. Enhanced oversight required to streamline decisionmaking processes, enhance monitoring and evaluation, reevaluate impact analyses and help countries accountably spend the money they have requires more resources. It essentially asks the MCC to do more with less. The Senate could have sent the same messages of "a temporary pause to evaluate the effectiveness of MCC programs" while maintaining the challenge element of the model by scaling back the FY09 request to $1 billion, which just 4 days ago I was looking at as worst-case scenario (given the country pipeline). Now I feel absurd.I don't agree with Danilovich on this being a "mixed signal." I see it as quite a clear signal. I fully recognize the extreme pressures on appropriators to fund pressing and competing needs. Yet the continued practice of prioritizing short-term crisis spending and sectoral specific programs without concommitant investments in the long-term economic growth programs (like the MCC) that help countries promote stability and prosperity that can both prevent crisis and diminish the need for foreign aid is simply not in America's long term interests. And "pausing" the one U.S. aid program we have that tests all the lessons on aid effectiveness learned by the world over the past 50 years sends a daunting signal to the growing constituency of individuals and organizations across America that are pushing for modernization of U.S. foreign assistance.