Robbing Peter to Pay Paul?
The President’s International Affairs Budget

In Washington, the federal government’s ballooning deficit casts a long shadow over Capitol Hill. The Republican controlled Congress is under heavy pressure to cut spending but is equally fearful of being blamed for the discontinuation of popular initiatives. President Bush, for his part, is trying to fulfill his promise to cut the budget deficit in half between 2004 and 2009. In this political climate, Congress leaves no stone unturned in its search for spending cuts. The International Affairs (IA) budget, which includes the State Department and key non-military international programs, is often among the hardest hit.

In the post-Cold War deficit-cutting years of the Clinton administration, IA was cut nearly every year. Yet, President Bush’s spending plan for Fiscal Year 2007 includes an 11 percent increase for IA. This substantial increase reflects the president’s conviction that robust diplomacy and a commitment to solving global problems is the right thing to do and can advance U.S. interests in the world. But buried beneath the numbers is another message: By transferring funds from reliable, multilateral programs with long records of success to untested, unilateral initiatives, President Bush seems to be saying: “We’ll solve problems, but it’ll be our way or the highway.”

For example, the president’s 2007 budget largely abandons cooperative approaches to fighting pandemic diseases. He proposes a total of $4.27 billion for global AIDS, TB, and Malaria, an increase of more than $1.2 billion. But most of this augment — nearly $1 billion — is for the President’s Emergency Plan for AIDS Relief (PEPFAR).

Since it was announced in 2003, PEPFAR has become one of the most controversial U.S. international programs. Through PEPFAR, the U.S. provides AIDS treatment and education in 14 African countries and Vietnam. President Bush has won praise for his pledge to eventually commit around $5 billion a year to PEPFAR, more than any president has spent on international HIV/AIDS in history. But the program is not without its share of critics. It has drawn fire for emphasizing abstinence and fidelity at the expense of proven “risk-reduction” techniques. It also excludes countries like India, which has the second-largest number of HIV/AIDS cases in the world, and Russia and China, which have the most new infections each year. Finally, PEPFAR’s growth has come at the expense of the Global Fund for AIDS, TB and Malaria, a United Nations effort whose approach is comprehensive and whose record is credible. To finance PEPFAR this year, President Bush has proposed a $245 million cut in the U.S. contribution to the Global Fund this year. His $300 million request for the Global Fund is $900 million less than the U.S. is expected to contribute. Without full U.S. funding, the Global Fund’s capacity is severely diminished.

Another example of shifting priorities is an increase in the president’s request for the Millennium Challenge Account (MCA). The MCA’s request is $1.25 billion above 2006 funding, a 71 percent increase. This represents the largest single IA program boost in the 2007 budget. While an increase in MCA funding is extremely welcome, it unfortunately comes at the expense of other U.S. development programs.

The MCA was meant to ensure that U.S. dollars are used effectively by stressing poverty alleviation, but only for countries that pass a series of “measurable indicators.” This rigorous selection process will likely lead to a higher success rate. Overemphasis of the MCA and discontinuing other successful development programs will leave many of the world’s poorest people without means to overcome poverty.

This year, in order to pay for the MCA’s substantial increase, traditional on-going development accounts have been dramatically cut. The Child Survival and Health Programs Fund, which expands basic health services and education to women, children and other vulnerable populations, is cut by $211 million, or 13 percent. Development Assistance, a program targeted at less developed and selected middle income nations, is down $227 million. And International Disaster and Famine Assistance (IDFA) has fallen nearly $70 million, a 16 percent reduction. IDFA, a humanitarian relief account, provides medical supplies, food and potable water to disaster areas. It has also been used to address complex emergencies arising from ethnic and national tensions.

Both PEPFAR and the MCA have noble goals, but they should complement, not replace traditional development. The increase in the International Affairs budget is extremely daring to propose in such a difficult political climate. President Bush should be commended for submitting such an ambitious proposal. But to successfully meet global challenges like poverty, disease and civil strife, the U.S. will also need to work with allies and maintain traditional programs with track records of success.

Contributing Writers: Scott Paul and Simon Weber


Updated April 10, 2006