Background Briefing on the President's FY17 Budget Request for the U.S. Department of State and USAID
MODERATOR: Hey everyone. Good afternoon. We’re pleased to have with us today three senior Administration officials who are going to discuss on background the President’s FY17 budget request for the U.S. Department of State, as well as for the U.S. Agency for International Development.
For your reference purposes only and not for reporting purposes, they are [Senior Administration Official One]; secondly we have [Senior Administration Official Two]; and then lastly we’ve got [Senior Administration Official Three].
So I think with that, they’ll have some brief remarks at the top, and then we’ll hand it over to all of you for questions. It’s a busy schedule today with the budget rollout, so let’s get started. Senior Administration Official One, if you want to kick us off.
SENIOR ADMINISTRATION OFFICIAL ONE: Very good. Thank you, [Moderator]. I’m pleased – it’s a pleasure to be on the phone with you today. I’m going to first give you a broad overview of the State/USAID topline budget request, the portion of the budget that then covers State’s diplomatic operation resources, and then pass the mike to [Senior Administration Official Two] and [Senior Administration Official Three] for a discussion of foreign assistance requests.
The topline State/USAID budget request for FY2017 is $50.1 billion, which under the budget agreement that was agreed to last year consists of two major components – $35.2 billion in our enduring core request and $14.9 billion of Overseas Contingency Operations resources. This budget request supports the resources to keep the American people safe, support the tools, programs, and people who counter violent extremism, defeat terrorist networks, stabilize conflicts, strengthen our alliances, and address emerging crises. Most notably, the FY17 request is critical to State and USAID’s role in a global coalition to degrade, destroy, and discredit ISIL. It also provides humanitarian assistance to those affected by that regional conflict.
Going back to how we were looking at the balanced – the bipartisan budget agreement last year, we have a significant OCO increase for both ’16 and ’17. So the most useful comparisons to our 2015 baseline would be against this combined budget. At this (inaudible) level, our request for FY17 is a 5 percent increase above 2015. Given that we are operating within the overall budget caps, it is also a 1 percent reduction below the 2016 level provided in the omnibus in December.
For FY16 and ’17, we will be using OCO to support countries and programs that require assistance to prevent, address, or recover from human-caused crises and natural disasters, as well as to secure State and USAID’s operations from hostile acts and potential terrorism. OCO will be providing about 50 to 100 percent of the funding for some countries and programs, including a range of ongoing assistance operations and treaty commitments.
I’ll now turn to the diplomatic engagement portion of the request, which is the part of the Department of State’s budget that supports our people – whether domestic or overseas, our diplomatic and embassy security programs, our treaty-based assessments to the UN and dozens of international organizations, and the global management platform that supports both diplomacy and development. Our total ‘17 requests for this part of the budget is $16.1 billion. It’s an increase of about 4 percent or $560 million over FY16.
The three main drivers for that increase are: one, one are ongoing costs for operations and security in Iraq and Afghanistan; second, we are making investments in our global workforce and operations to include additional staff for our Havana embassy; expanding the Bureau of Counterterrorism to better address countering violent extremism programs, as well as additional resources to improve our FOIA processing capacity; and also improve Department of State workforce diversity and recruitment.
Back to the UN and international organizations, our total request for there is 3.9 billion. That’s slightly below last year, but that’s purely based upon the most current assessment of the UN regular budget and peacekeeping budget, based upon negotiations in New York last December. So while the funding level is slightly down, it does not reflect a cut in terms of mission effectiveness or overall operations.
So those are the highlights on diplomatic engagement, and now I’ll pass to [Senior Administration Official Two] for foreign assistance.
SENIOR ADMINISTRATION OFFICIAL TWO: Thanks, [Senior Administration Official One]. For the Department of State and USAID foreign assistance, our request is $34 billion, which is 1.3 billion higher than FY15 and 1.1 billion less than FY16.
Some highlights and drivers in these resources: It will enable us to advance our efforts to destroy ISIL and mitigate the crisis in Syria and Iraq; strengthen our commitment to global health; counters Russian aggression in Ukraine and its neighboring countries; sustains a long-term approach to addressing the underlying causes of migration of unaccompanied children and families from Central America; addresses humanitarian needs, including helping internally displaced persons, refugees, and others affected by conflict; combats climate change and (inaudible) funding for the Global Climate Change Initiative and Green Climate Fund; bolster development by supporting sectors such as food security, trade, education for children and adolescent girls; clean water and conservation of natural resources; and sustains our commitment to Afghanistan and Pakistan to bolster economic growth, health, education, and stabilize areas vulnerable to extremism. Thank you.
MODERATOR: All right. I think with that we’re ready for any questions. I believe the first question we have is from Reuters from Arshad.
QUESTION: Two questions if I may. The first one is about migration and refugee assistance. This – it appears as if there is a significant drop in budget authority for this from the 2016 estimate of $3.066 billion to $923 million for 2017 estimate. Two questions. Is that primarily compensated for by the Overseas Contingency Operations budget authority of $1.876 billion? And second, even adding the 1.876 to the 923 million, you get a decrease in budget authority for those activities. Why would you be decreasing spending on migration and refugee assistance given the needs from Syria and other countries?
SENIOR ADMINISTRATION OFFICIAL ONE: Thank you for the question. So the 26 – so I think it’s important to look at this over a couple years. So the 2016 appropriation substantially increased funds for all our humanitarian accounts and it provides the ability to move money into that – into that migration and refugee assistance function that we have. And so in concert with what we received in 2016 plus the request in 2017, that will really allow us to meet the needs that we see coming down the pike.
MODERATOR: Next question, please.
OPERATOR: And that will come from Rachel Oswald with Congressional Quarterly. Please go ahead.
QUESTION: This question is about the overall change in total funding for the State Foreign Operations budget from 52.7 billion enacted in the current budget to the 50.1 billion. Can you talk a little bit about why the decision was made to decrease by 2.6 billion?
And also, when you were talking earlier about the trend toward relying more on OCO funding, you were breaking up a lot on the phone so I couldn’t hear some of those details. So could you revisit them?
SENIOR ADMINISTRATION OFFICIAL ONE: Sure, I’ll first revisit the details. In terms of the component for the FY17 budget, the base budget or the enduring core budget is 35.2 billion, and then the OCO portion is 14.9 billion, which is consistent with FY16. So essentially, the – since there was a reduction, it came against the enduring core budget. So I would say it’s partially a result of the fact that we did have some programs where, because of the amount of funding in ’16, which we greatly appreciate from Congress, under the sequester, after the lifting of the sequestration caps, we were able to reduce funding for some accounts in order to keep the same level of operations.
Obviously, on the diplomatic engagement side of the budget, for example, we did have some other sort of nonrecurring – some savings that we’re picking up. We were able to make some savings in our IT budget even while providing additional investments for FOIA. And as I noted on the International Organizations we had some slight reductions in the IO – from the IO assessments based upon the U.S. negotiations in New York.
[Senior Administration Official Two.]
SENIOR ADMINISTRATION OFFICIAL TWO: Yeah, I think just to echo what [Senior Administration Official One] said, the department’s request is 1 percent below the ’16 appropriation. And the decrease is really in the enduring part of our budget, which is, of course, subject to the balanced budget amendment cap. So this is – this reflects the Administration’s prioritization across all the non-defense agencies.
OPERATOR: And our next question will come from Nicole Gaouette with CNN. Please go ahead.
QUESTION: Hi, thanks for this call. I was just looking back at the fact sheet for the 2016 budget, and it put the OCO spending at 7 billion, and this year you’ve got it at 14.9.
SENIOR ADMINISTRATION OFFICIAL ONE: That’s a direct result of the bipartisan budget agreement in which, as part of lifting the sequestration caps at State, AID, and other domestic – other discretionary funds agencies were under, the Administration and congressional leaders agreed to increase the apportion of OCO that goes to State and AID to $14.9 billion. But that was not a windfall, and in fact, our base budget for at least this two-year period has been reduced in order essentially to shift, if you will, a greater proportion of our ongoing programs and activities into OCO under this two-year budget deal.
So that increase for OCO – while some of it is new things and we clearly are doing some new things in the budget, by and large what we’ve done is had to realign programs to cover them with OCO that were previously funded in the base. And this is something that the President’s budget does identify as something that will need to be addressed in ’18 by raising the – essentially the discretionary spending limit for our enduring core budget, potentially restore about 18 – $8 billion back to our topline.
[Senior Administration Official Two], do you want to add to that?
SENIOR ADMINISTRATION OFFICIAL TWO: No, that’s good.
MODERATOR: So I think our next question is from Luis from AP.
SENIOR ADMINISTRATION OFFICIAL ONE: [Moderator], we’re ready for the next question.
QUESTION: Yes. Hi. Good afternoon. Many thanks for doing this. I would like to ask you about Western Hemisphere – if you could please tell us whether it increase or decrease the total amount requested for Western Hemisphere. And specifically on the Central America front, I see that you guys are requesting 750 millions. So if we add this 750 millions that Congress approve last year, this – the total would be over 1 billion, would be almost 1,400. Am I correct, right? This 750 would be added to the 750 already approved by Congress in December? Thank you.
SENIOR ADMINISTRATION OFFICIAL TWO: Yeah. So this – so the 750 million in foreign assistance that’s being requested is new funding in addition to what Congress passed in 2016. It’s part of the government’s $1 billion request from all agencies for Central America, which includes some money from OPIC and DOD and a few other agencies.
SENIOR ADMINISTRATION OFFICIAL ONE: And on the --
MODERATOR: Great. Go ahead.
SENIOR ADMINISTRATION OFFICIAL ONE: And on the diplomatic engagement side, we have about a 7 percent increase in funding for the WHA regional bureau, and most of that is to support increased staffing for our embassy in Havana and – as well as for some additional staff in the Central American embassies to help support the increased programs and outreach to address the initiative that [Senior Administration Official Two] just spoke to.
MODERATOR: Thank you. Next question, please.
OPERATOR: And that will come from Nike Ching with Voice of America. Please go ahead.
QUESTION: Yes. Thank you for doing this. My first question is – follow-up with Nicholas’ question about OCO. It doubles this year. And then given it increased from 7 to 14 billion, could you explain and elaborate on what are those new things listed in OCO?
And separately, another question is I, too, noticed that one of the funding highlighting in FY 2017 budget request is a – to defend the rebalance to Asia and Pacific, and also build strong democratic institutions. I did not see the highlights from last year. Could you address that? Thank you.
SENIOR ADMINISTRATION OFFICIAL TWO: So – I’m sorry, can you repeat the second question? For Asia rebalance, you would like to see the increases from ’16?
QUESTION: My question is I did not see that item listed as a funding highlight in the 2016 budget request. So what does that mean? Does that mean that the – is that a reflection of a policy, or --
SENIOR ADMINISTRATION OFFICIAL TWO: No. So the Asia – so the amount we have for Asia rebalance (inaudible), foreign assistance, and diplomatic engagement is 1.5 billion in 2017, which is a slight increase from 2016. So it continues to be a priority of this Administration as we move forward.
SENIOR ADMINISTRATION OFFICIAL ONE: I can’t really speak to why it might not have been in some of the talking points last year. Clearly it was something that we were looking at as part of the ’16 budget. We did discuss it in many of our presentations to the Hill.
In terms of something that we are now funding with OCO in ’16 and ’17 that we have not in the past, I’ll give you two or three examples on my side. We are now funding well over 50 percent of our peacekeeping assessments – these are the assessments from the UN for peacekeeping missions in Africa, NEA, both ongoing and new missions. In FY ’15, none of that was funding with OCO. Now well over 50 percent is funded with OCO for these two years.
We’re also using more OCO funds to support our global diplomatic security operations. Previously, OCO was primarily in Iraq, Afghanistan, and Pakistan, and now again, DS – over 50 percent of the Diplomatic Security operational budget is in OCO for this fiscal year.
SENIOR ADMINISTRATION OFFICIAL TWO: For – on the assistance side, if you compare it to our ’16 request, which is where we were at the lower OCO number, some examples include Lebanon and Somalia, South Sudan, Tunisia, and Yemen. We looked at countries that were either in crisis or trying to prevent to go into crisis, and we funded the assistance in those countries – almost all the assistance in those countries – through OCO.
MODERATOR: Great. Thank you. At – go ahead, I’m sorry. Is there additional comment? No? Okay. Great. We’re ready for our next question, then.
OPERATOR: Okay. And that’ll come from Dmitry Kirsanov with TASS. Please go ahead.
QUESTION: Hi. Thanks for doing the call, guys. I was hoping to ask you address this quote/unquote “countering Russian aggression” thing. What specifically does that entail? What kind of specific measures, specific steps, and in which countries? And in which amounts?
SENIOR ADMINISTRATION OFFICIAL ONE: So the countering Russian aggression total is $952 million. And this addresses – and this expands resources in the core Ukraine, Georgia, and Moldova, but also for other countries in Central Asia. And some of the examples of the programs that we’re supporting with these funds are enhancing access to independent, unbiased information; eliminating corruption and supporting rule of law; strengthening civil society; enhancing the energy security; supporting financial reforms, trade, and economic diversification; and increasing some defense capabilities.
QUESTION: All right. Thanks.
MODERATOR: Thank you so much. Do we have any additional questions?
OPERATOR: Currently no questions in queue.
MODERATOR: Okay. Very good then. Well, thank you all for joining us and thanks so much to our three speakers for answering some of your questions about the budget. Everyone have a great afternoon.