Department of State, Foreign Operations, and Related Programs: FY2021 Budget and Appropriations
Released: 2020-05-19T00:00:00

Overview

On February 10, 2020, the Trump Administration proposed its FY2021 budget for the Department of State, Foreign Operations, and Related Programs (SFOPS) accounts, totaling $44.12 billion (including $158.90 million in mandatory retirement funds). SFOPS funding typically represents about 1% of the annual federal budget and supports a wide range of U.S. activities around the world, including the operations of U.S. embassies, diplomatic activities, educational and cultural exchanges, development, security, and humanitarian assistance, and U.S. participation in multilateral organizations. Figure 1 shows funding for different SFOPS components based on FY2020 budget authority estimates, relative to each other and to the broader federal budget.

The Administration's request is about 3% higher than the FY2020 request for SFOPS accounts but nearly 23% below the FY2020 SFOPS funding level enacted by Congress, including supplemental funds to help combat the COVID-19 epidemic globally. The Trump Administration has consistently requested far less SFOPS funding than Congress has appropriated. This is a reversal from the Obama Administration, when Congress typically provided less total SFOPS funding than was requested, though the gap narrowed over time during Obama's terms ( Table 1 ).

If enacted, the requested SFOPS funding level would be the lowest in over a decade ( Figure 2 ).

The Budget Control Act and Overseas Contingency Operations

Since FY2012, the appropriations process has been shaped by the discretionary spending caps put in place by the Budget Control Act of 2011 (BCA; P.L. 112-25 ). Congress has since sought ways to manage the constraints imposed by the BCA and has repeatedly amended the BCA to raise the caps, most recently by the Bipartisan Budget Act of 2019 (BBA 2019; P.L. 116-37 ). The BBA 2019 raised discretionary spending limits set by the BCA for FY2020 and FY2021, the final two years the BCA caps are in effect.

In addition to raising the caps, Congress has worked around the BCA limits by using Overseas Contingency Operations (OCO) funding, which is excluded from BCA discretionary budget limits. Congress began appropriating OCO in the SFOPS budget in FY2012, having previously provided OCO funds for the Department of Defense (DOD). Originally used to support shorter-term, contingency-related programming in Afghanistan, Iraq, and Pakistan that was not considered part of the "base" or "core" budget, OCO's use expanded considerably in level and scope between FY2012 and FY2017. Global SFOPS OCO funding peaked at $20.80 billion in FY2017 (nearly 35% of SFOPS funds that year), at which point it was used to support 18 different SFOPS accounts, ranging from USAID operating expenses and the Office of Inspector General to International Disaster Assistance and Foreign Military Financing. This broad use has led many observers to question whether the OCO designation makes a meaningful distinction between core and contingency activities, with some describing OCO (in both SFOPS and Defense appropriations) as a slush fund.

The Administration has not requested OCO funds for SFOPS since FY2018, though it has continued to request OCO funds in the DOD budget. Nevertheless, Congress designated $8.00 billion of enacted SFOPS funding in both FY2019 and FY2020 as OCO, continuing a downward trend in the use of OCO since the FY2017 peak.

FY2020 SFOPS funding also included $2.37 billion in supplemental emergency funding to help combat the COVID-19 pandemic abroad. Like OCO-designated funding, emergency-designated funding does not count toward the BCA discretionary spending caps and may therefore be used as an alternative to the OCO designation. Before the use of OCO in SFOPS, funding for contingency activities was often provided through supplemental emergency appropriations.

Congressional Action on FY2021 SFOPS Legislation

Congressional action on SFOPS and other FY2021 appropriations has been delayed to an uncertain degree by disruption of congressional activity related to the Coronavirus Disease 2019 (COVID-19) pandemic. Congress held some hearings on the FY2021 budget request before all hearings were postponed in March 2020. Subcommittee allocations have not been formally established, nor has SFOPS legislation been introduced for FY2021.

State Department Operations and Related AgencyÂ Highlights

The FY2021 request would cut funding for the Department of State and Related Agency appropriations accounts to $14.03 billion, down 18.9% from an enacted FY2020 level of $17.31 billion (including $588 million in COVID-19 supplemental funds). The Administration's request does not include funds to support the State Department's response to the COVID-19 pandemic. To date, Congress has provided all State Department operations funding for COVID-19-related matters through two FY2020 supplemental appropriations acts ( P.L. 116-123 and P.L. 116-136 ).

The Administration's stated priorities for funding provided via Department of State and Related Agency accounts in FY2021 include

supporting the Indo-Pacific Strategy; countering Chinese, Russian, and Iranian malign influence; protecting U.S. government personnel, facilities, and data assets; and maintaining American leadership in international organizations while asking other nations to increase their support.

Table 2 provides a comparative breakout of the Administration's State Department and Related Agency request, by account.

Selected Programs and Priorities

Consistent with its previous requests, the majority (87.1%) of the funding the Administration is requesting for the Department of State and Related Agency appropriations accounts is for diplomatic programs, diplomatic security and embassy construction, and contributions to international organizations and international peacekeeping activities. For FY2020, such programs composed approximately 88.1% of the Administration's request and 84.8% of the enacted appropriations Congress provided for these accounts. Some of the Administration's priorities within these areas, as identified by the Department of State in its Congressional Budget Justification, are detailed below.

Diplomatic Programs

The Diplomatic Programs account is the State Department's principal operating appropriation and serves as the source of funding for several key functions. These include

most domestic and overseas State Department personnel salaries; foreign policy programs administered by State Department regional bureaus, the Bureau of Conflict and Stabilization Operations, and others; public diplomacy programs; and the operations of the department's strategic and managerial units, including the Bureaus of Administration, Budget and Planning, and Legislative Affairs as well as the Office of the Chief of Protocol.

The Administration's FY2021 request for Diplomatic Programs totals $8.49 billion, around 12.6% less than the $9.71 billion Congress provided for this account in FY2020 (this amount includes $588 million Congress provided for Diplomatic Programs in FY2020 supplemental COVID-19 funds; see text box for more detail). The Administration's request seeks $138 million for the Global Engagement Center (GEC), which is responsible for leading interagency efforts to recognize, understand, expose, and counter foreign state and non-state propaganda and disinformation efforts aimed at undermining U.S. interests, including those carried out from Russia, China, and Iran. The Administration maintains that this request, which would constitute a $76 million increase in annual funding for the GEC provided through SFOPS, would alleviate the need for DOD to transfer funds for GEC operations. Some Members of Congress and other observers have expressed concern regarding past DOD transfers, arguing that DOD has not transferred funding to the State Department in an expeditious manner or at funding levels that reflect congressional intent.

The Administration's request also includes a realignment of personnel and funding from the Bureau of Global Talent Management (formerly the Bureau of Human Resources); the Bureau of Arms Control, Verification, and Compliance; and the Office of the Coordinator for Cyber Issues to establish a new Bureau for Cyber Security and Emerging Technologies (CSET). The State Department first notified Congress of its intent to create this new bureau in June 2019. It will be responsible for supporting "foreign policies and initiatives to promote U.S. cyber and emerging technology policies and deter adversaries from malicious and destabilizing behavior in their use and application of such technologies." Some observers have expressed criticism over elements of the State Department's plan for CSET, arguing that additional cyber-related matters such as global internet governance should be included in the bureau's remit. However, it appears that this issue and related matters will instead remain under the purview of the Bureau of Economic and Business Affairs.

Diplomatic Security

For FY2021, the Administration requests around $5.38 billion for the State Department's key diplomatic security accounts: $3.70 billion for the Worldwide Security Protection (WSP) allocation within the Diplomatic Programs account and $1.68 billion for the Embassy Security, Construction, and Maintenance (ESCM) account. The Administration's request represents a decrease of 11.4% from the FY2020 enacted funding level (see Table 3 ).

The Administration is proposing that Congress decouple WSP from Diplomatic Programs and establish a standalone WSP account (see text box). WSP funds the Bureau of Diplomatic Security (DS), which is responsible for implementing the department's security programs to protect U.S. embassies and other overseas posts, diplomatic residences, and domestic State Department offices. In addition, WSP supports many of the State Department's security and emergency response programs, including those pertaining to operational medicine and security and crisis management training. The ESCM account funds the Bureau of Overseas Building Operations (OBO), which is responsible for providing U.S. diplomatic and consular missions overseas with secure, functional, and resilient facilities and managing nonmilitary U.S. government property abroad.

The Administration's WSP-funded priorities for FY2021 include the hiring of an additional 110 special agents at DS, which the Administration maintains is necessary to address critical overseas vacancies. In addition, the Administration intends to deploy High Definition Secure Video Systems (HDSVS) at overseas posts worldwide. The Administration has stated these systems will provide enhanced monitoring capabilities at overseas posts, including greater video resolution and enhanced nighttime visibility. At the same time, the Administration has proposed a cut of $109 million for DS operations in Afghanistan, which it says is consistent with the consolidation of DS-managed locations in the country and a corresponding reduction in costs for guard services and logistical support.

The Administration's ESCM request includes $866.67 million for the State Department's share of the Capital Security Cost Sharing and Maintenance Cost Sharing Programs, which are the sources of funding for the planning, design, construction, and maintenance of the United States' overseas diplomatic posts. The Administration maintains that this request, when combined with funds contributed by other agencies with personnel at overseas posts and visa fee revenues, will fund these programs at the $2.20 billion level recommended by the Benghazi Accountability Review Board. Construction projects the Administration is seeking to fund through this request include a new embassy compound in Riyadh, Saudi Arabia, and new consulate compounds in Adana, Turkey, and Rio de Janeiro, Brazil.

Assessed Contributions to International Organizations and PeacekeepingÂ Missions

The Contributions to International Organizations (CIO) account is the funding vehicle for the United States' payments of its assessed contributions (membership dues) to over 40 organizations. These include the United Nations (U.N.) and its specialized agencies (among them, the World Health Organization, or WHO), inter-American organizations such as the Organization of American States, and the North Atlantic Treaty Organization (NATO), among others. U.S. funding to international organizations is also provided through the various SFOPS multilateral assistance accounts, as described in the " Foreign Operations Highlights " section of this report. Separately, the United States pays its assessed contributions to most U.N. peacekeeping missions through the Contributions for International Peacekeeping Operations (CIPA) account.

For FY2021, the Administration is requesting a combined $2.05 billion for these accounts. If enacted, this funding level would mark a 31.8% cut from that provided by Congress for FY2020. Table 4 shows recent funding levels for each account.

Similar to previous budget requests, the Administration's CIO request prioritizes paying assessments to international organizations "whose missions substantially advance U.S. foreign policy interests" while proposing funding cuts to those organizations whose work it says either does not directly affect U.S. national security interests or renders unclear results. With these intentions in mind, the Administration proposed to eliminate funding to the Organization of Economic Cooperation and Development (OECD), while decreasing U.N. regular budget and specialized agency funding by more than one-third. The request intends to maintain near-recent-year levels of U.S. funding for other organizations, including the International Atomic Energy Agency (IAEA).

For CIPA, the Administration's FY2021 request reflects its ongoing commitment to reduce costs for U.N. peacekeeping missions by reevaluating their respective mandates, design, and implementation. The Administration has stated that its request, when combined with the application of U.N. peacekeeping credits (excess funds from previous U.N. peacekeeping missions), would allow the United States to provide 25% of all assessed global funding for U.N. peacekeeping missions, which is equal to the statutory cap established by Congress. However, the current U.S. assessment for U.N. peacekeeping (last negotiated in 2018) is 27.9%, meaning that around $345 million of anticipated U.S. assessed funding would be carried over into arrears. This practice has resulted in the accumulation of over $900 million in U.S. peacekeeping arrearages since FY2017.

Foreign Operations Highlights

The foreign operations accounts in the SFOPS appropriation compose the majority of U.S. foreign assistance included in the international affairs budget; the remainder is enacted in the agriculture appropriation, which provides funding for the Food for Peace Act, Title II and McGovern-Dole International Food for Education and Child Nutrition programs. The Administration's FY2021 foreign operations request totals $30.09 billion, representing a 3.7% increase from the Administration's FY2020 request and a 25.7% decrease from FY2020-enacted levels. Total foreign assistance requested for FY2021, including the food assistance funds provided in the agriculture appropriation, would represent a 29.1% reduction from FY2020-enacted levels.

The Administration's budget request articulates five primary goals for U.S. foreign assistance that are meant to align with both the National Security Strategy and the State-USAID Joint Strategic Plan:

prioritize global strategic challenges, including countering Chinese, Russian, and Iranian influence; support strategic partners and allies, including Israel, Egypt, Jordan, Colombia, and Venezuela; enhance commitment to long-term development; strengthen key areas of U.S. leadership, to include global health and humanitarian assistance; and advance U.S. national security and economic interests.

These goals are also meant to guide the Administration's regional thematic priorities (see " Country and Regional Assistance "), as well as how funds are allocated across assistance types. The Administration's FY2021 budget request proposes cuts in nearly all assistance types ( Table 5 ). The only exception is export promotion assistance, which would see a significant increase. This increase is largely due to proposed funding for the new U.S. Development Finance Corporation (DFC), which the Administration states represents an "expansion of the role of development finance in advancing U.S. interests around the world," and an estimated increase in offsetting collections from the Export-Import Bank.

Key Sectors

Consistent with prior year funding and the FY2020 enacted levels, proposed funding for global health programs, humanitarian assistance, and security assistance comprises approximately two-thirds of the $30.09 billion FY2021 foreign operations budget request ( Figure 3 ).

Global Health Programs

The total FY2021 request for the Global Health Programs (GHP) account is nearly $6.00 billion, representing a 5.4% reduction from the FY2020 budget request and a 37.5% reduction from the FY2020-enacted level, including supplemental appropriations. When compared with FY2020-enacted levels before enactment of supplemental funding for COVID-19, all but one GHP subaccount would be reduced under the budget proposal ( Table 6 ).

Budget documents indicate that the increase to pandemic influenza funding (when compared with FY2020-enacted appropriations prior to the COVID-19 supplemental funding) would include a $25.00 million deposit of nonexpiring funds to replenish the Emergency Reserve Fund for rapid response to infectious disease outbreaks. Observers have expressed concern about the potential cessation of USAID's PREDICT-II pandemic preparedness program in March 2020. The Administration does not indicate in the budget request, nor has it specified in any public fora, whether PREDICT-II will be continued. However, the University of California, Davisâone of PREDICT-II's implementing organizationsâhas reportedly received additional funding from USAID to extend PREDICT-II and continue related work through the "One Health WorkforceâNext Generation" project.

Requested cuts to GHP subaccounts range from 8.0% for malaria programs to 100% for USAID's HIV/AIDS and vulnerable children subaccounts. The Administration asserts that despite its proposed reduction to HIV/AIDS funding, the requested level would be sufficient to maintain treatment for all current recipients. The proposal also reflects the Administration's effort to limit U.S. contributions to the Global Fundâan international financing mechanism for efforts to combat AIDS, tuberculosis, and malariaâto 25% of all donations, rather than the 33% limit that the United States has provided since the George W. Bush Administration.

As noted above, the Administration's FY2021 request does not include funds for COVID-19, because the request was prepared prior to the outbreak. Congress enacted, and the President signed into law, three supplemental appropriations acts for COVID-19 preparedness and response in March ( P.L. 116-123 , P.L. 116-127 , and P.L. 116-136 ). As of this report's publishing, the Administration has not submitted a request for additional FY2021 funds to combat the virus.

Humanitarian Assistance

The FY2021 budget request for humanitarian assistance is nearly $6.27 billion, roughly equivalent to the FY2020 request but down 40.1% from the FY2020-enacted level of $10.46 billion. In successive years, the Administration has requested levels of humanitarian assistance far lower than those enacted the prior year, at times reflecting the fact that humanitarian assistance funds may be carried over from year to year and unobligated balances from prior years may still be available. On a bipartisan basis, for many years, Congress has consistently supported global humanitarian efforts through appropriation levels well above the budget request ( Figure 4 ).

In addition to the proposed $6.27 billion in new funding for humanitarian assistance, the Administration's request assumes $2.80 billion in carryover funding from past-year humanitarian assistance. The Administration asserts that the FY2021 request, combined with the estimated carryover, totals close to $9.00 billion, which would allow the United States "to program well above the second highest level ever, and is sufficient to address the needs for Syria, Yemen, and other crisis areas."

Proposed Humanitarian Account Consolidation

For FY2021, as in FY2020, the Trump Administration proposes to fund all humanitarian assistance through a single International Humanitarian Assistance (IHA) account managed through USAID's new Bureau for Humanitarian Assistance (BHA). The Administration has justified the restructuring as necessary "to optimize humanitarian assistance, prioritize funding, and use funding as effectively and efficiently as possible." The proposal would effectively move the administration of overseas refugee and migration assistance fundingâcurrently funded through the Migration and Refugee Assistance (MRA) and Emergency Refugee and Migration Assistance (ERMA) accountsâfrom the State Department to USAID. In FY2020, enacted funding for these accounts totaled $3.78 billion. The budget request would eliminate the ERMA account and significantly reduce funding to MRA, with none for overseas needs. Within USAID, the BHA is in the process of combining the functions of the Offices of U.S. Foreign Disaster Assistance and Food for Peace. The budget request would eliminate the International Disaster Assistance (IDA) account (FY2020-enacted funding totaled $4.95 billion), as well as Food for Peace Act, Title II emergency food assistance funding, the latter of which is currently appropriated through the agriculture appropriation but administered by USAID (FY2020-enacted funding totaled $1.73 billion). Funds previously requested in these accounts would be consolidated into the IHA account.

Security Assistance

The Administration is requesting $7.73 billion in international security assistance for FY2021, an increase of 4.3% from the FY2020 request and 14.3% below the FY2020-enacted level. The greatest cuts to security assistance accounts would be to Peacekeeping Operations (PKO, -36.6%) and International Military Education and Training (IMET, -27.4%) ( Figure 5 ).

Consistent with prior year requests and appropriations, the majority of security assistance ($5.19 billion) would be for Foreign Military Financing (FMF) to the Middle East, including $3.30 billion in grants to Israel. As in the Trump Administration's past three budget proposals, the FY2021 request seeks flexibility to provide FMF assistance through a combination of grants and loans, including loan guarantees, rather than the current use of FMF on an almost exclusive grant basis. The Administration asserts that this authority would both "expand the tools available to the United States to help NATO and Major-Non NATO allies purchase more American-made defense equipment and related services" and "increase burden sharing by asking these partners to contribute more national funds to foreign military sales cases."

Development Assistance and Export Promotion

The remaining third of the FY2021 foreign operations request proposes to allocate funds to development sectors other than those related to global health, independent agencies, multilateral assistance, and export promotion agencies.

Development Assistance

The FY2021 budget request would reduce funding from FY2020-enacted levels in a number of development sectors ( Table 7 ). Environment-focused aid, for example, would be cut by 86.3%, while funding for education and water and sanitation would fall by 61.2%. As with the FY2020 request, the FY2021 request includes a significant increase from prior year-enacted levels to programming that seeks to promote women in developing economies, largely due to a proposed $200.00 million for the Women's Global Development and Prosperity Initiative (W-GDP).

Proposed Economic Support and Development Fund

Under the FY2021 request, most development accountsâDevelopment Assistance (DA); Economic Support Fund (ESF); Assistance to Europe, Eurasia and Central Asia (AEECA); and the Democracy Fund (DF)âwould be combined into a single new Economic Support and Development Fund (ESDF). The Administration asserts that this consolidated account would streamline the deployment of resources, increasing efficiency in foreign assistance. Because the consolidated account would incorporate what are now both core and shared USAID accounts, it remains unclear what portion of the new account USAID would manage or implement. The Administration made a similar request in the FY2018, FY2019, and FY2020 budget requests, but Congress did not enact the proposals.

The FY2021 budget request nestles the Relief and Recovery Fund (RRF) and a proposed new Diplomatic Progress Fund (DPF)âboth previously requested as separate budget itemsâunder the proposed ESDF account. According to the justification, the DPF would "allow the State Department and USAID to respond to new opportunities arising from progress in diplomatic and peace efforts around the world." While Congress provided funds for the RRF in previous fiscal years, Congress has not accepted the Administration's proposal for the DPF.

Independent Agencies

The Administration's FY2021 request would reduce funding to the Peace Corps (-19.5%) and the Millennium Challenge Corporation (-11.6%). The request also proposes eliminating the Inter-American Foundation (IAF) and the U.S African Development Foundation (USADF), and incorporating staff and small grant activities of the two foundations into USAID's new Bureau for Development, Democracy, and Innovation. The Administration maintains that this consolidation would allow USAID to "capitalize on the existing expertise, capacity, relationships, and tools that USADF and IAF provide, including their regional and market segment emphases, in order to reinforce U.S. government bilateral development efforts." To implement the shuttering of the IAF and USADF, the Administration requests $3.85 million and $4.66 million, respectively.

Multilateral Assistance

SFOPS multilateral assistance accounts provide for U.S. payments to multilateral development banks and international organizations that pool funding from multiple donors to finance development activities. The Administration's FY2021 request would reduce these accounts by 28.9% from FY2020-enacted levels. As in the Trump Administration's three previous requests, the proposal would eliminate funding for the International Organizations and Programs (IO&P) account, which funds U.S. voluntary contributions to international organizations, primarily United Nations entities such as UNICEF. Congress appropriated $390.50 million for IO&P in FY2020. The Administration also proposes eliminating funds for the Global Environment Facility (GEF) and the International Fund for Agricultural Development (IFAD). For the GEF, the Administration asserts that carryover funds from FY2019 and FY2020 appropriations are sufficient to meet the U.S. pledge to the GEF's seventh replenishment.

Export Promotion

The FY2021 request includes an increased investment in the U.S. Development Finance Corporation (DFC), established in 2019 to implement the BUILD Act. However, the Administration would eliminate funding for the U.S. Trade and Development Agencyâthe request includes $12.11 million for the agency's "orderly closeout"âand an 8.3% reduction from FY2020-enacted levels for the Export-Import Bank of the United States' Operations account. As in previous years, the Administration assumes that all export promotion expenditures would be offset by collections. In the FY2021 request, the Administration assumes $711.20 million and $496.00 million in offsetting collections from the Export-Import Bank and the DFC, respectively.

Country and Regional Assistance

The Administration organizes much of its country and regional assistance into six thematic priorities ( Figure 6 ). These priorities are also meant to reflect the broader foreign operations goals outlined in " Foreign Operations Highlights ."

Top country recipients under the FY2021 request remain consistent with prior year funding allocations. Israel, Egypt, and Jordan would remain the top three recipients of foreign assistanceâthough Egypt would move ahead of Jordan when compared with FY2019 actual fundingâlargely due to the proposed levels of military aid for those three countries. Other countries that the Administration maintains are strategically significant, including Afghanistan and Ukraine, also remain top country recipients in the FY2021 request, as do several African countries that would receive high levels of global health and development aid ( Table 8 ).

Regionally, the Middle East and Africa would receive the largest shares of aid in the FY2021 requestâtogether comprising about 71.5% of total aid allocated by country or regionâconsistent with FY2019 year actuals ( Figure 7 ). Proposed funding for Europe and Eurasia and, separately, the Indo-Pacific, come to 3.9% and 9.2%, respectively. Notably, the distribution of assistance within regions vary significantly. For example, Africa receives a majority of GHP funding (58.1% in FY2019 and a proposed 66.7% for FY2021), but accounts for a small proportion of INCLE funding (5.2% in FY2019 and a proposed 4.1% for FY2021). In comparison, the Western Hemisphere region accounts for a small percentage of GHP (2.5% in FY2019 and a proposed 2.2% for FY2021) and a large proportion of INCLE funds (37.7% in FY2019 and a proposed 44.8% for FY2021).

Appendix A. SFOPS Funding, by Account

Appendix B. International Affairs Budget

The International Affairs budget, or Function 150, includes funding that is not in the Department of State, Foreign Operations, and Related Programs (SFOPS) appropriation; in particular, international food assistance programs (Food for Peace Act (FFPA), Title II and McGovern-Dole International Food for Education and Child Nutrition programs) are in the Agriculture Appropriations, and the Foreign Claim Settlement Commission and the International Trade Commission are in the Commerce, Justice, Science appropriations. In addition, the Department of State, Foreign Operations, and Related Programs appropriation measure includes funding for certain international commissions that are not part of the International Affairs Function 150 account.

Appendix C. SFOPS Organization Chart