State, Foreign Operations, and Related Programs: FY2015 Budget and Appropriations
Released: 2015-01-16T00:00:00

FY2015 Chronology

December 16, 2014. The President signed into law the Consolidated and Further Continuing Appropriations Act, 2015 ( H.R. 83 / P.L. 113-235 ). The House had passed the legislation on December 11, 2014; the Senate passed it December 13, 2014.

November Amendments to the Request . On November 5 and 10, 2014, the Administration submitted amendments to its FY2015 budget request to address the Ebola crisis and the threat posed by the Islamic State (IS), respectively. The Administration requested an additional $2.89 billion in emergency funding through international affairs accounts for activities related to Ebola, including a $792 million contingency fund. An additional $520 million was requested for the international affairs OCO budget to support efforts to defeat IS and address humanitarian needs related to IS attacks. Together with the June 2014 OCO amendment, these amendments increased the total FY2015 State, Foreign Operations and Related Programs request to $53.50 billion.

Continuing Resolution s (CR). The House and Senate were unable to pass regular appropriations bills before the end of the fiscal year and, therefore, passed H.J.Res. 124 , Continuing Appropriations Resolution, 2015, on September 17 and 18, respectively. The President signed the CR into law ( P.L. 113-164 ) on September 19, 2014. The CR funded government agencies and programs at an across-the-board reduction of .0554% below the Consolidated Appropriations Act, 2014 ( P.L. 113-76 ), funding rate through December 11, 2014. OCO funds were not subject to the reduction. The CR included some anomalies, with one for foreign affairs: Section 145 provided the Department of State with the ability to exceed the rate for operations that would otherwise apply to funds in a number of accounts—International Broadcasting Operations, Economic Support Fund (ESF), Nonproliferation, Anti-terrorism, Demining, and Related Programs (NADR), International Narcotics Control and Law Enforcement (INCLE), and Foreign Military Financing (FMF)—to sustain assistance for Ukraine and other independent states in that region. Two additional CRs— P.L. 113-202 and H.J.Res. 131 —kept the government funded until the full-year appropriations bill was signed into law.

June OCO Amendment . On June 27, the Administration amended its OCO request, asking for an additional $1.35 billion in State-Foreign Operations OCO funds (out of a total $65.8 billion OCO request, mostly for Department of Defense programs) for peacekeeping and counterterrorism activities.

Committee Action. On June 19, 2014, the Senate Appropriations Committee introduced and passed S. 2499 , an SFOPS appropriation for FY2015 that totaled $47.18 billion. The House Appropriations Committee introduced and passed an FY2015 SFOPS appropriation, H.R. 5013 , on June 27, which recommended total funding of $48.45 billion. (See Appendix A for account-by-account Request, House and Senate comparisons.)

302(b) Allocations. On April 8, 2014, the House agreed to a $48.45 billion allocation for State-Foreign Operations accounts for FY2015; the Senate approved an SFOPS allocation of $48.48 billion (see Table 1 ) on May 22.

Hearings. In March and April 2014, Secretary of State John Kerry and U.S. Agency for International Development (USAID) Administrator Rajiv Shah testified on the request before the House and Senate Appropriations Committees, as well as the House Foreign Affairs and the Senate Foreign Relations Committees. On July 17, 2014, Deputy Secretary of State for Management and Resources Heather Higginbottom testified before the House Budget Committee regarding the amended OCO request. On November 11, 2014, Deputy Secretary Higginbottom testified before the Senate Appropriations Committee on the State Department response to the Ebola crisis.

Budget Submission. The Obama Administration submitted its original FY2015 budget request, including for International Affairs (function 150), to Congress on March 4, 2014. Of the total FY2015 foreign a ffairs request, $17.09 billion wa s for State Department Operations and related agencies, a 7.8% increase from the FY2014 funding estimate of $15.86 billion. For Foreign Op erations, the Administration requested $32.99 billion, a 2.2% decrease from the FY2014 estimate of $33.72 billion.

Current Request and Past Trends

The State, Foreign Operations, and Related Programs appropriations fund a variety of U.S. foreign affairs programs and activities. These include State Department and U.S. Agency for International Development (USAID) operations, bilateral economic and security assistance, contributions to international organizations and multilateral financial institutions, public diplomacy, such as educational and cultural exchanges and international broadcasting, and certain international commissions.

The FY2015 State Department, Foreign Operations, and Related Programs (SFOPS) Appropriations Request

The amended FY2015 foreign affairs request (about 1% of the total FY2015 budget request) would have increased overall SFOPS funding by 8.8% from the FY2014 funding estimate. It would have increased State Department and related activities (about one-third of the foreign affairs request) by 8.3% and foreign aid activities (about two-thirds of the request) by 7.7%. The amended Overseas Contingency Operations (OCO) portion of the FY2015 request was 14.6%, compared to 13.3% in FY2014, and 5% of the amended request was designated as emergency Ebola funding. In addition to its budget request, the Administration proposed a new Opportunity, Growth, and Security Initiative that, it said, was to provide funds in a budget-neutral way for furthering its other priorities. Figure 1 provides a breakout of the total FY2015 SFOPS appropriations budget request.

Overseas Contingency Operations (OCO)

For the FY2015 foreign affairs budget, the Administration requested $7.785 billion (as amended) for OCO—more than double the $3.8 billion requested in FY2014, and 19% more than Congress appropriated for that year (after rescissions). The Administration sought to expand OCO use in FY2015 beyond Iraq, Afghanistan, and Pakistan to include support for the Syrian opposition and Syrian refugees. The Administration also requested OCO funds for a new Peacekeeping Response Mechanism (PKRM) intended to provide more flexibility to address peacekeeping missions in Africa and other regions experiencing conflict.

The House committee bill, H.R. 5013 , included $5.9 billion in OCO funds, stating that OCO funds should be phased out over time. The House Appropriations Committee included OCO funds beyond Iraq, Afghanistan, and Pakistan to include Middle East and North Africa, counterterrorism, counterinsurgency, and humanitarian crises resulting from conflict.

The Senate committee proposal, S. 2499 , included $8.6 billion in OCO funds and specifically stated that OCO funds would be available beyond Iraq, Afghanistan, and Pakistan to also include Syria, Jordan, Central America, and for extraordinary costs of U.S. response for humanitarian crises in the Middle East, Africa, and South Asia, among other purposes.

The final FY2015 appropriation included $9.26 billion for OCO, more than either House or Senate proposals, largely because of additional OCO funding to counter the Islamic State (IS).

History of OCO in International Affairs. Congress passed emergency supplemental appropriations for international affairs each year between FY2006 and FY2010, primarily for civilian activities related to U.S. military operations in Iraq and Afghanistan. No supplementals were part of the FY2011 foreign affairs budget. In FY2012, the Administration requested foreign affairs OCO funds for the first time. That year the Administration requested $8.7 billion for OCO for the frontline states of Iraq, Afghanistan, and Pakistan. Congress appropriated $11.2 billion, however, for frontline states, as well as for other uses, such as Peacekeeping Operations in Somalia, Economic Support Funds (ESF) for Somalia and Yemen, and Nonproliferation, Anti-terrorism, Demining and Related Programs (NADR) for Kenya. The FY2015 request for OCO was about 95% of what Congress enacted in FY2012. (See Table 2 .)

Since FY2012, the Administration's foreign affairs budget has distinguished between what it has interchangeably called "enduring", "base," or "ongoing" funding, and funding to support "overseas contingency operations" (OCO), described in budget documents as "extraordinary, but temporary, costs of the Department of State and USAID in Iraq, Afghanistan, and Pakistan." Congress has adopted this approach, but has defined OCO more broadly. In each of the last three years, Congress appropriated more OCO funding for foreign affairs than was requested, and for a broader range of countries and activities. Within the foreign affairs budget in FY2012, the Obama Administration requested $8.7 billion for OCO, and Congress enacted $11.2 billion. In FY2013, the Administration requested $8.2 billion for OCO, but Congress enacted $10.8 billion (net rescissions). The FY2014 request continued this pattern; the Administration requested $3.8 billion of OCO funds for foreign affairs, while Congress appropriated $6.5 billion (net rescissions). The OCO designation has significant budget implications, as OCO funds are subject to sequestration, but do not count against the spending caps established by law (see text box below).

The Opportunity, Growth, and Security Initiative

The Obama Administration added to its FY2015 budget a new government-wide proposal referred to as the Opportunity, Growth, and Security Initiative. This proposed $56 billion fund was divided equally between defense and nondefense expenditures. The cost of the initiative was to be offset largely with targeted spending cuts and closed tax loopholes, Administration officials stated. According to the Administration, this initiative, if it had passed, would have provided additional funding (over $750 million) beyond the regular international affairs request to address specific foreign affairs priorities that have been restricted by sequestration. Proposed funding for the initiative covered the following:

$350 million to the Millennium Challenge Corporation (MCC), above the requested $1 billion, to develop overseas economic environments and help U.S. businesses be more competitive; $300 million within the Global Health Programs (GHP) account to encourage more funding from other donors to the Global Fund for fighting AIDS, TB, and Malaria; funds for Maternal and Child Health activities within GHP to provide extra momentum toward ending preventable maternal and child deaths; $80 million in multilateral aid for the Global Agriculture and Food Security Program; $29.9 million for the Board for International Broadcasting's satellite transmission program, estimated to provide a 31% cost savings; an unspecified amount of funding within the Development Assistance (DA) account to support bilateral and multilateral food security in the Feed the Future Initiative; and support within DA for USAID's Global Development Lab to encourage science, technology, innovation, and partnerships that would promote development.

Neither bills in the House, the Senate, nor the enacted legislation included funding for this proposal. (Funding proposed through the Opportunity, Growth, and Security Initiative is not part of the FY2015 funding levels discussed elsewhere in this report.)

Funding Trends

The SFOPS 10-year funding trend indicates that total foreign affairs funding increased 48% from the low in FY2006 to the high in FY2012. The peak year for enduring funding , however, was FY2009 when it was 60% higher than in FY2006. While total foreign affairs funding declined from FY2012-FY2014, the enduring funds decreased because of the FY2013 sequestration, but increased slightly in FY2014. The decline in total foreign affairs funds after FY2012 suggests that even as the enduring funds increase there is a trade-off between enduring and OCO money in order to reduce the overall total. (Some argue, however, that enduring funding trends are a more accurate measure than totals that include temporary OCO funds.) Regardless, it is likely that the recent-year decline in foreign affairs funding can be attributed somewhat to the BCA and a scaled-down presence in Iraq and Afghanistan. The FY2015-enacted level shows a slight decrease in enduring funds and the peak funding level for OCO/emergency funds, including funds to address IS and the Ebola crisis. (See Table 2 and Figure 2 below.)

State Operations and Related Agencies

The Administration's FY2015 request, as amended, sought to increase funding for the State Department and Related Accounts category by 8.3% over FY2014 estimated levels, to $17.18 billion. Both "base" (or "enduring") funding and Overseas Contingency Operations (OCO) funding would have grown under the proposal, by 5.3% and 27.3%, respectively. In addition, the FY2015 request, as amended, included $41 million in emergency funding. The overall composition of this portion of the request is shown in Figure 3 .

Figure 3 shows funding levels for selected State operations accounts for FY2013, FY2014, the FY2015 amended request, House and Senate proposals, and the adopted Consolidated Appropriations Act for 2015, H.R. 83 .

Under the Administration's request, Diplomatic and Consular Programs (D&CP), the department's main operating account, would have grown by 4.5%, to $8.34 billion. The State Department's second-largest administrative account is Embassy Security, Construction and Maintenance (ESCM); the FY2015 proposal called for $2.28 billion, a 14.8% decrease from the FY2014 estimated level of $2.67 billion. In addition, the "Related Programs" category would have been cut by 21% under the FY2015 request, which included significant proposed cuts to funding appropriated for the East-West Center, the Asia Foundation, and National Endowment for Democracy (cuts of 35%, 29%, and 23% respectively).

The pending House and Senate bills would have fully funded the Administration's ESCM request. The House's measure would have provided a 3% increase in D&CP funds from FY2014 levels (rather than the 4.5% growth requested by the Administration), while the Senate measure would have reduced D&CP by 2%. Both H.R. 5013 and S. 2499 would have funded the "Related Programs" category at a higher level than the Administration's request, rejecting proposed reductions of funding to the National Endowment for Democracy and the Asia Foundation. While Senate appropriators would have increased funding for the East-West Center, as was enacted, the House measure had proposed to zero out the Center's funding altogether.

The Consolidated and Further Continuing Appropriations Act, 2015 ( P.L. 113-235 / H.R. 83 ), reduced funding for D&CP by slightly less than 2%. The ESCM account was reduced by more than 13% from 2014 levels, although more funding was provided than was requested by the Administration. While accounts covering international peacekeeping operations and contributions to international organizations grew by 15.7% over 2014 levels under the act, the funding enacted for this category was $906 million less than the Administration requested.

State Operations: FY2015 Key Issues

The following sections outline a number of elements within the State Operations account request, which the department referred to as "Diplomatic Engagement" in its FY2015 presentation to Congress.

Frontline States

In its FY2015 budget proposal, the department sought to continue shifting operational funding for the frontline states from OCO to enduring funding accounts, contending that the likely long-term presence and activities of the department in these countries makes predictable, non-emergency funding streams essential for planning and operational purposes.

In Iraq, the Department of State became the lead agency for all U.S. programs after the departure of U.S. military forces in late 2011, and an initially ambitious diplomatic presence has been dramatically curtailed in the last two years. Under the FY2015 proposal, new funding requested for State operations in Iraq would have increased by 12% from FY2014 levels, to $1.2 billion. The FY2015 funding request was nearly twice the FY2013 actual level and more than double the FY2013 enduring funding. Officials explained that more appropriated funds were being requested because less carryover funding was available in FY2015 than in previous years. The request included $250 million in OCO funding for a new permanent consulate in Basrah, Iraq, a key oil industry hub.

The extent of the U.S. military presence in Afghanistan remained undetermined at the time the Department of State prepared its budget request. The request assumed a continued civilian presence in various parts of the country, including the Embassy in Kabul, consulates in Herat and Mazar-e-Sharif, and some presence in Jalalabad and Kandahar. The overall FY2015 request for State Operations in the country was for $961 million, a 15% increase over FY2014 estimated levels but a 40% drop from FY2013 actual funding. The requested funding would have allowed additional security measures to be put in place should all U.S. military forces have pulled out by the end of 2014, according to State officials.

Pakistan, the third frontline state, would have seen its funding levels for State Operations decrease by 5% under the FY2015 proposal, from an estimated $140.4 million in FY2014 to $120 million. While requested enduring funds would grow by 56% as State shifts to a long-term diplomatic platform, OCO funding would be reduced by 44%. Operational funding totals for Pakistan are declining because prior year efforts to put into place permanent facilities and security to support the U.S. diplomatic presence are now completed, according to State officials.

The likelihood of rapid change in staffing and programmatic requirements in the frontline states led House appropriators to avoid designating specific funding recommendations by country for the frontline states in H.R. 5013 . The House committee report directed the Administration "to refine its plans for programs, facilities, and staff in consultation with the Committees on Appropriations." Regarding Afghanistan, Section 7044 of the bill prohibited the use of funding for positions not notified to the committees or for additional contractors, unless "necessary to protect such facilities or the security, health, and welfare of United States personnel." It also required a report detailing Department of State/USAID transition and security plans.

Among the Senate's provisions regarding the frontline states, S. 2499 specified that any funds spent on property for new diplomatic facilities in the frontline states are subject to prior consultation and regular notification of the Committees on Appropriations. The bill did not provide funds for a New Consulate Compound (NCC) in Basrah, Iraq, as requested by the Administration. Senate appropriators noted that "no agreement has been reached on an appropriate site," and specified that the funding requested for Basrah—$250 million—could instead be used for general security purposes or operations in Iraq.

Several provisions in the Consolidated and Further Continuing Appropriations Act, 2015 ( P.L. 113-235 ), indicated continued congressional interest in the frontline states in several provisions, even if the act did not prescribe specific funding levels. The act directed the Secretary of State and USAID Administrator to "consult with the Committees on Appropriations on a regular and ongoing basis on operations and assistance for Afghanistan, Pakistan, and Iraq." The explanatory statement to the act indicates that the funding directives in the House and Senate reports for Afghanistan, Pakistan, and Iraq should be replaced by consultation with the Committees on Appropriations, and reporting on proposed funding levels for these countries. Other more specific measures include a ban on funding for the construction of a permanent U.S. consulate in Iraq on property for which no land-use agreement has been entered into (Section 7041), and a funding limitation regarding any additional federal personnel, contractors, or aviation facilities or assets in Afghanistan (Section 7044).

International Organizations/Peacekeeping

The International Organizations accounts, including Contributions to International Organizations (CIO), Contributions for International Peacekeeping Activities (CIPA), and a new Peacekeeping Response Mechanism (PKRM) proposed by the Administration, would have seen a 54% jump in funding under the FY2015 request, to $4.50 billion. This includes $35 million requested on November 5 to support the U.N. Mission for Emergency Ebola Response (UNMEER). The U.S. share of assessed contributions to the U.N. regular budget is 22%; other U.N. members are to contribute the remaining 78% of the mission's costs, estimated at about $160 million through the end of 2015. The increase of $1.39 billion for the accounts over FY2014 estimated levels was largely intended for peacekeeping purposes, including operations in Mali, Darfur, Somalia, and Central African Republic, according to the Administration.

The CIO account funds the U.S. share of the assessed budgets of 45 international intergovernmental organizations, including the United Nations. The FY2015 request sought $1.5 billion under this category, a 13.2% increase from FY2014 estimated levels that would have boosted funding to the World Health Organization, the Food and Agriculture Organization, NATO, and the International Labor Organization. The CIO request did not include funds for the United Nations Educational, Scientific and Cultural Organization (UNESCO) due to UNESCO member states' decision to admit "Palestine" as a member. Administration officials suggested they would continue to seek a waiver from Congress to fund the organization.

The House measure would have provided 11.7% less than originally requested for Contributions to International Organizations, or $1.34 billion, while the Senate measure recommended all but roughly $2.45 million of the original request—it would have reduced funding for the U.S. contribution to the Organization of American States because of concern about what it deemed the OAS's opaque personnel practices and insufficient cost-cutting.

The Administration's CIPA request of $2.52 billion would have increased that account by 43% from FY2014 estimated levels; the request would have funded U.S. assessed contributions to the special accounts for 11 U.N. peacekeeping operations and three international war crimes tribunals. In addition, the Administration's FY2015 request, as amended, included a $428 million Peacekeeping Response Mechanism (PKRM), a new proposal intended to support urgent peacekeeping needs, including $278 million for a recently authorized U.N. peacekeeping mission in the Central African Republic. The OCO funds requested for the PKRM would have allowed State to support contingency operations without taking funds from other peacekeeping efforts in progress or returning to Congress for off-cycle budgetary requests, officials suggested. Together, these peacekeeping requests represented a nearly 77% increase over FY2014 estimated funding.

House appropriators recommended funding the CIPA account at the FY2014 estimated level of $1.77 billion. The Senate measure, on the other hand, would have fully funded the Administration's request for $2.52 billion for assessed contributions to peacekeeping operations, although it recommended moving funding previously found under the State Operations CIPA account to a Foreign Operations account under the International Security Assistance title (title IV) and Overseas Contingency Operations (title VIII). The Senate committee report explains the move by stating "U.N. peacekeeping missions are a critical component of furthering U.S. security interests globally."

Neither H.R. 5013 nor S. 2499 would have funded the PKRM requested by the Administration. Instead, the Senate committee measure recommended additional funding for the Complex Crisis Fund (CCF) as well as transfer authority to meet unanticipated peacekeeping requirements.

The 2015 Consolidated and Further Continuing Appropriations Act, 2015, provided $1.47 billion for Contributions to International Organizations, of which $74 million was designated OCO funding; the appropriation explicitly does not include UNESCO funding. While the total represents a 10% increase from FY2014 levels, it falls $79 million short of the Administration's request. The CIPA account, while falling short of the Administration's request by about $400 million, also jumps in the FY2015 appropriations, by 20% over FY2014 levels.

Diplomatic Security

In the wake of the September 11, 2012, attack on U.S. personnel in Benghazi, Libya, congressional and executive branch efforts to better prepare U.S. diplomats and facilities abroad for security threats continue. In its FY2015 budget request, the Administration sought funding to continue to implement the initiatives launched under the Increased Security Proposal and meet the post-Benghazi Accountability Review Board's (ARB's) recommendations. The request included approximately $3.1 billion in Worldwide Security Protection (WSP) funds, to provide security personnel with technical tools and training; and approximately $1.5 billion in Worldwide Security Upgrades (WSU) funds to upgrade and maintain safe, secure diplomatic facilities.

Within the Embassy Security, Construction, and Maintenance (ESCM) request was $986.5 million to provide for the Department of State's share of the Capital Security Cost Sharing (CSCS) program, an interagency shared funding mechanism designed to ensure each U.S. government agency represented abroad is paying its fair share of construction costs for new and more secure facilities. The amount requested was down from the $1.4 billion appropriated for this purpose for FY2014, a result of higher assessed contributions from other agencies into the common account. Department officials underlined that the CSCS request met the full $2.2 billion level called for by the post-Benghazi Accountability Review Board. The requested CSCS program funding would support the development of new diplomatic facilities in Sri Lanka, Paraguay, Saudi Arabia, Mexico, and Papua New Guinea, according to the Administration.

The request also featured $44 million to fund recurring costs for the 151 additional Diplomatic Security (DS) personnel the Department of State has sought to hire after the Benghazi attacks. According to the department, it hired 113 employees under this category in FY2013, including 75 new DS agents; the 38 remaining employees were to be hired in FY2014.

Table 4 summarizes recent funding for the three accounts containing the bulk of funding for diplomatic security measures: Worldwide Security Protection funding (for security programs including a worldwide guard force), Worldwide Security Upgrades funding (for bricks and mortar security needs, including construction of secure new embassy compounds), and Diplomatic Security Bureau D&CP funding. The FY2015 request transfers a significant portion of what had been DS Bureau D&CP funding in previous years to the WSP account, which offers greater flexibility.

Figure 4 illustrates that under the FY2015 request, approximately 42% of the Department of State's operational funding would have gone to security-related accounts, a percentage that has seen significant growth in recent years (from roughly 22% as recently as FY2008).

The House appropriators' measure would have fully provided for the Administration's WSP request and exceeded its request for WSU by nearly $50 million. The Senate Appropriations Committee, for its part, would also have fully funded the WSP request. However, S. 2499 would not have designated $250 million of WSU OCO funds for a New Consulate Compound (NCC) in Basrah, Iraq, as requested by the Administration, because "no agreement has been reached on an appropriate site." Instead, Senate appropriators would have included that amount as undesignated Embassy Security, Construction, and Maintenance funding, and specify that the resources requested for Basrah could instead be used for general security purposes or operations in Iraq. Neither bill specified an amount for the Bureau of Diplomatic Security within the Diplomatic & Consular Programs account.

H.R. 83 / P.L. 113-235 , the Consolidated and Further Continuing Appropriations Act, 2015, met the Administration's $3.1 billion request for Worldwide Security Protection funds—growing the account by 12.7% over FY2014-enacted levels. While the act exceeds the $1.47 billion request for Worldwide Security Upgrades by $23 million, this represents a reduction of 7.7% from FY2014 levels.

Management and Human Resources of the Department of State

Many observers suggest that the Department of State has historically faced chronic personnel shortfalls, a situation worsened in recent years by a growing number of overseas positions to fill, especially in the frontline states. The ranks of mid-level Foreign Service officers are particularly thin, forcing junior personnel to serve in assignments meant for personnel of higher rank. In the past few years, to address these gaps as well as the need to better train its employees, the State Department, with the support of Congress, increased hiring, growing the Foreign Service by almost 20% since the end of FY2008 and the Civil Service by 7%; however, hiring slowed significantly since FY2011-FY2012 due to budget constraints.

The Administration's FY2015 request for human resources initiatives (under Diplomatic & Consular Programs) was the same as it requested in FY2014, a total of $2.60 billion—a reduction of 5% from FY2014 estimated funding levels. While the Administration's FY2015 request indicates that it planned 206 new positions at the Department of State altogether, 153 of these would have been funded by consular fees and devoted to work such as meeting increasing visa demand. The request for the remaining 53 new positions for which State sought appropriated funding was described by department officials as a much more modest personnel request than in recent years. As a point of comparison, the State Department requested appropriated funding for 35 new positions in its FY2014 request, for 121 new positions in its FY2013 request, and for 133 in its FY2012 request.

The new positions requested were to be focused on the following priorities, as indicated in Figure 5 : 23 positions for Economic Statecraft activities (including increased staffing in the Secretary's Chief Economist Office) at a cost of $9.1 million; 11 positions for the Bureau of Energy Resources; 4 positions for the Intelligence and Research Bureau; and 3 positions for the Secretary's Coordinator for Cyber Issues office.

In support of the Administration's policy of rebalancing to the Asia-Pacific region, the Human Resources request also included three Public Diplomacy positions in the Foreign Service in China, Indonesia, and Mongolia at a cost of $1.3 million. By comparison, the department requested 29 new positions focused on the Asia-Pacific in its FY2014 budget proposal.

Among other personnel-related issues, the department's request notably did not include additional funding for Overseas Comparability Pay (OCP), as it has in previous years. OCP adjustment is intended to bring the base pay of Foreign Service personnel posted overseas to levels comparable to their Foreign Service colleagues serving in Washington, DC, who receive locality pay. OCP has long been a priority of the Foreign Service rank-and-file, who argue that the discrepancy affects morale, retention of FSOs, and acts as a financial disincentive to serve overseas, including by its cumulative impact on retirement pay. The department sought $81.4 million in FY2014 funding to provide the third portion of a three-phase adjustment, the first two tranches of which were supported by Congress in previous years. The third OCP phase was not supported by Congress in FY2013 or FY2014 appropriations.

Neither the House nor the Senate committee measures would have fully met the Administration's request for Human Resources funding. H.R. 5013 would have provided nearly $3 million less than requested, while S. 2499 came in at $64 million below the request. Senate appropriators also explicitly ruled out funding for the new positions requested by the Administration, and instead indicated that they would consider reprogramming proposals, looking particularly favorably on funding mechanisms based on savings or reduced redundancy and inefficiency.

The 2015 Consolidated Appropriations Act allocated a total of $2.27 billion for Human Resources activities, and did not specifically designate funds for the new non-security positions requested. Appropriators instead directed the Secretary to assign lower-priority positions to higher priority staffing requirements, while signaling their continued willingness to consider requests to fund new positions on a case-by-case basis. Section 7034(l) continues the authority provided to the Department to provide foreign service OCP, but prohibits implementation of the third phase of the authority.

Foreign Operations

With the exception of food aid, the Foreign Operations budget funds most traditional foreign aid programs, including bilateral economic aid, multilateral aid, security assistance, and export promotion programs. Funding for U.S. Agency for International Development (USAID) administration is also part of the foreign operations budget. The FY2015-enacted appropriation for Foreign Operations accounts was $36.10 billion, or 0.6% less than the amended request of $36.32 billion and a 7.1% increase from the FY2014 estimated appropriation. Table 5 shows foreign operations and total foreign aid funding by type for FY2013, FY2014, and the FY2015 amended request and pending House and Senate bills:

Aid by Type. Although the request appeared to include a significant boost over current year funding for USAID Operating Expenses, the Administration explained that the increase was intended to offset anticipated decreases in other funding sources, including recoveries, reimbursement, and trust funds, and would have allowed for continued operations at the current level rather than growth. While the Administration originally proposed reductions in bilateral economic aid, largely driven by a 27.8% cut in International Disaster Assistance (IDA) and a 33.1% cut in Migration and Refugee Assistance (for which the Administration explained that actual available resources would not be reduced because of anticipated carry-over funding from previous years), supplemental requests have since brought the FY2015 bilateral economic aid request to 7% above FY2014. Much of the increase was in the IDA and USAID Global Health accounts for funds to address the Ebola crisis. Security Assistance also would have been reduced under the original request, but would have increased 8% with the additional FMF and Counterterrorism Partnership Fund spending proposed in the July 2014 amended OCO request and the November 2014 OCO amendment requesting additional FMF to counter IS. Multilateral aid would have increased as a result of an International Monetary Fund quota increase (+$315 million), partly offset by a proposed cut to the International Development Association (-4.8%) and no request for the Global Agriculture and Food Security Program ($133 million in FY2014).

House appropriators stayed close to current year spending levels for most types of aid, with the exception of multilateral assistance, which they would have cut significantly (-17.6%). Senate appropriators would have increased USAID administrative funding (+16.8%), similar to the Administration's proposal, provided slightly less than current year funding for bilateral economic aid (-2.8%), and more than the current funding levels for multilateral aid (+8.1%). The Senate committee-approved bill also included significantly more security assistance (+17.0%) under Foreign Operations than the current budget, but this in large part reflected the bill's shift of assessed contributions to peacekeeping activities from the State Operations to Foreign Operations section of the bill. Peacekeeping funds (including both assessed and voluntary contributions) recommended by Senate appropriators totaled $2.86 billion, compared to $2.25 billion proposed by House appropriators, the Administration's amended request of $3.35 billion, and FY2014 funding of $2.20 billion. Both the House and Senate legislation were approved by committee before the Administration made multiple amendments to its request in response to world events, so comparisons between the congressional proposals and the Administration's request are of questionable value.

The enacted appropriation, P.L. 113-235 , included an 8.6% increase from FY2014 levels for Administration of Foreign Assistance, but 10.5% less than requested. Bilateral economic programs increased 12.2% from FY2014, driven largely by emergency funding to address the Ebola crisis. Security assistance declined by 0.7%, and multilateral assistance declined by 7.3% from FY2014 funding.

Aid by Country and Region. Under the original FY2015 request, bilateral aid allocated by region (excluding humanitarian aid and the Millennium Challenge Corporation) would have varied in some instances from current year funding. Aid to South and Central Asia would have increased by 13.2% compared to FY2014, while East Asia Pacific and the Near East would have seen modest increases of about 1.9% and 1.6%, respectively. Funding for Africa would have been reduced by about 1.6%. Europe and Eurasia would have seen a decrease of 6.3% under the original request, but the amended request for European security assistance would have provided an increase of 7.6%. Only the Western Hemisphere would have seen significant reductions (-10.1%) from current year regional spending under the request. The proportional allocation of aid among regions would not have changed significantly ( Figure 6 ). Nevertheless, these portions would change with the inclusion in the amended request of a $1 billion Counterterrorism Partnership Fund, nearly $3 billion to fight the Ebola virus, and additional funds to fight IS. Regional and country allocations for these proposed funds have not been specified.

The House and Senate appropriators did not provide comprehensive information on country and regional allocation in their pending bills. However, the House committee report notably rejected the Administration's proposed cuts to Western Hemisphere countries and increased aid to the region by no less than $120 million above the Administration request to address needs related to the surge of undocumented migrants at the U.S.-Mexico border. House appropriators also included funding above the original request to support democracy in the Ukraine and former countries of the Soviet Union. Senate appropriators included an additional $100 million to address the migrant surge.

P.L. 113-235 and the accompanying report did not provide comprehensive data on regional or country allocations, but did provide some details. Notably, Israel was allocated $3.1 billion in Foreign Military Financing (FMF); Egypt was allocated $1.3 million from FMF; the report noted that $120 million above the request was provided to implement a migration prevention and response strategy for Central America; and $139.28 million was provided for bilateral assistance to Ukraine.

The top aid recipient countries under the original FY2015 request ( Table 6 ) were fairly consistent with FY2014 allocation estimates. As in FY2014 and recent years, the top recipient list for FY2015 includes long-standing strategic partners such as Israel, Egypt, and Jordan; frontline states in the war against terrorism, such as Pakistan; and global health focus countries. One notable change under the original request was the ranking of Iraq, which had been a top recipient since the 2003 U.S. invasion, but fell just under the top 15 in FY2015 with the requested allocation of $309 million. However, the request was made before the security situation in Iraq deteriorated in the midst of an IS insurgency, and a large portion of the additional funds requested and enacted for activities to fight IS would likely support activities in Iraq. Similarly, the increased funds requested and (at a lower level) enacted to fight Ebola may move some of the countries hardest hit by the virus to the top recipients list.

Foreign Operations: FY2015 Key Issues

U.S. Support for Democratic Transitions in the Middle East and North Africa

Ongoing political unrest in the Middle East and North Africa has significant implications for U.S. national security goals, challenging the Administration and lawmakers to respond in a manner that best promotes U.S. strategic interests and democratic values. For the last two budget cycles, the Administration had requested funding ($770 million for FY2013 and $580 million for FY2014) and authorities to create a Middle East North Africa Incentive Fund (MENA-IF) that would provide flexible resources to meet diverse and rapidly evolving needs. Congress neither authorized nor appropriated funds for a MENA-IF account in FY2013, and needs in the region have been addressed through existing accounts. The FY2014 appropriations bill also did not include funding for a MENA-IF account, but the explanatory statement accompanying the bill noted that OCO funds may be used for stabilization and response efforts in the Middle East and North Africa. In the absence of a designated account, the Administration estimated that it had spent $3.62 billion on MENA response between January 2011 and February 2014 using funds in existing accounts.

For FY2015, the Administration did not request a separate MENA IF account, but instead requested funds for MENA response through a variety of established accounts. The request included a total of $1.53 billion for MENA through the Migration and Refugee Assistance (MRA), International Disaster Assistance (IDA), Economic Support Fund (ESF), International Narcotics Control and Law Enforcement (INCLE), Nonproliferation, Antiterrorism, Demining and Related Programs (NADR), Transition Initiatives (TI), and Complex Crises Fund (CCF) accounts. Of this amount, $1.255 billion (almost all designated as OCO) was expected to be used for Syria regional response, $225 million for reform activities, and $50 million for contingencies. The Administration's June 2014 amendment to the OCO request included the addition of $1 billion in foreign operations funds for a Counterterrorism Partnership Fund, which was largely intended to address instability in the MENA region related to the crisis in Syria, but may be used to support counterterrorism capacity building in other regions. The November 2014 request for an additional $520 million to counter IS focused on the MENA region as well.

While not recommending a total funding level for the region, the FY2015 House and Senate committee reports noted that their funding recommendations for several Foreign Operations accounts reflected evolving needs in the Middle East and North Africa, including the crisis in Syria, refugee assistance to Jordan and other neighboring countries, and the deteriorating security situations in Iraq and Libya. Senate appropriators also recommended $5 million for a multi-donor MENA Transition Fund.

The explanatory report accompanying P.L. 113-235 noted that the legislation did not create a new account for Middle East activities, but that funding for "Middle East Response" was provided through several existing accounts, including $400 million in ESF, $15 million under NADR, $5 million under INCLE, and $110 million under FMF. In addition, the report noted that the legislation provided significantly more funding than requested for IDA and MRA, and that a significant portion of these funds (both base and OCO) are to be used to address humanitarian needs in the Middle East. The report also noted that the act provided flexibility within OCO accounts to transfer funds between accounts if necessary to address unanticipated contingencies.

Overseas Contingency Operations Assistance to Frontline States

As discussed earlier in this report, the Administration appears to have embraced the congressional approach to OCO in the FY2015 request, asking for the OCO designation for funding beyond the frontline states of Iraq, Afghanistan, and Pakistan. The foreign operations OCO funding request for FY2015, as amended, totaled $5.47 billion and included funds for Syria/MENA response, peacekeeping in Somalia and Central African Republic, and security assistance to bolster European self-defense capabilities, among other things. This would have been a 6.6% increase from FY2014 Foreign Operations OCO funding estimates, with the increase largely attributed to ramped-up activities to counter IS in Iraq and Syria.

In their pending FY2015 proposals, House and Senate appropriators took notably different approaches to OCO designation, with the House committee coming in only slightly above the Administration's original request of $3.89 billion and the Senate committee designating a much larger portion of foreign operations funds, $6.87 billion, as OCO. (Both bills were reported before the Administration revised its Foreign Operations OCO request upward to $5.47 billion). Much of the discrepancy reflected the Senate committee's application of the OCO designation to a much larger portion of humanitarian assistance (IDA and MRA) than the House committee, as well as the Senate committee moving assessed contribution to peacekeeping operations from the State Operations to the Foreign Operations titles of the bill.

A significant portion of the Administration's OCO request was made by amendment after committee approval of the House and Senate legislation, making it difficult to accurately compare the Administration's request to congressional action.

The enacted FY2015 appropriation, P.L. 113-235 , included $7.49 billion in foreign operations funds designated as OCO, a 46% increase over FY2014 and higher than the Administration's request and both the House and Senate bills. The legislation took a broad approach to the OCO designation, described as "the extraordinary costs of contingency operations in Afghanistan, Pakistan and Iraq; stabilization, security and response efforts, including in the Middle East and North Africa; and other programs that address counterterrorism, counterinsurgency, and humanitarian crisis." OCO funding for the MRA account increased 66% from FY2014, to address humanitarian needs in Africa, the Near East, and South Asia. Significant increases, for unspecified purposes, were provided in the ESF and IDA OCO accounts as well. The legislation also provided authority for funds within other OCO accounts to be transferred to the MRA and IDA OCO accounts.

Syria/Humanitarian Assistance

Humanitarian assistance has increased as a portion of the foreign operations budget since FY2013, driven largely by the crisis in Syria, which has resulted in an estimated 2.4 million refugees and 9.3 million internally displaced persons. As of March 2014, the United States had provided over $1.70 billion in Syria-related humanitarian assistance, including aid to neighboring countries that have taken in refugees, and the need is not expected to diminish in the near future. In addition to Syria, the Administration anticipated at the time of the request an ongoing need for humanitarian assistance in South Sudan, the Central African Republic, and for unforeseen conflicts and emergencies.

For FY2015, the Administration originally requested humanitarian assistance totaling $4.80 billion, including $2.05 billion for Migration and Refugee Assistance (MRA), $50 million for Emergency Refugee and Migration Assistance (ERMA), $1.30 billion for International Disaster & Famine Assistance (IDA) and $1.40 billion for Food for Peace (food aid funded through the Agriculture appropriation). The original requested amount would have been a 24.8% decrease from the total FY2014 estimated appropriation for these accounts, but the Administration asserted that anticipated carryover funds from FY2014, the result of large MRA and IDA increases in FY2013 and FY2014, would enable the United States to meet anticipated humanitarian needs. However, with the growing humanitarian needs created by the Ebola epidemic in Africa and the deteriorating environment in Iraq and Syria, the Administration requested an additional $1.49 billion in IDA funds in November 2014. The amended humanitarian assistance request totaled $6.29 billion, or 23% more than the FY2014 funding estimate.

Both the House and Senate committees recommended significantly more than the Administration's original request for humanitarian accounts in their FY2015 proposals, and slightly more than the amended request. The House recommendation totaled $6.376 billion and the Senate $6.362 billion, both consistent with FY2014 funding.

P.L. 113-235 provided $7.91 billion for humanitarian accounts, or about 24% above the enacted FY2014 level and the House and Senate committee-approved legislation. MRA, ERMA, and Food for Peace were funded at approximately the FY2014 level, while total IDA funding was increased by nearly 85% to $3.33 billion, bolstered by more than $1.44 billion in new emergency funding to address the Ebola crisis and $1.34 billion designated as OCO (up from $924 million in FY2014).

Food Aid Reform

The International Affairs budget has supported international food assistance for decades, primarily through the Food for Peace (P.L. 480, Title II) program utilizing donated U.S. agricultural commodities. Unlike most foreign assistance, this program is authorized in farm bills and funded through the Agriculture appropriations bill.

In the FY2014 budget proposal, the Administration proposed several food aid reforms, including a requirement that only 55% of aid be used to procure and ship U.S. produced commodities, allowing more aid to be procured regionally or provided as cash. The Administration also proposed that Food for Peace be funded through Foreign Operations appropriations. The FY2014 appropriation did not adopt these reforms, but new authorizing legislation in the 2014 Farm Bill (Agricultural Act of 2014, P.L. 113-79 ) did create more flexibility in the Food for Peace program and create a new local and regional purchase program authorized at $80 million annually for FY2014 through FY2018.

For FY2015, the Administration requested $1.4 billion for Food for Peace, within the Agriculture appropriation, of which $1.1 billion would be for emergency food needs and $270 million for development programs. In total, this would have been a 4% reduction from the FY2014 food aid estimate, but the Administration noted that it requested an additional $80 million in the Development Assistance account for development food aid. In addition, the Administration requested new authority to use up to 25% of the Food for Peace request ($350 million) for cash-based food assistance to address emergencies, asserting that this authority would allow food aid to reach 2 million more beneficiaries without increasing funding.

The FY2015 House and Senate Agriculture appropriations bills, as reported by committee, both included $1.466 billion for Food for Peace, matching the FY2014 enacted funding. P.L. 113-235 , the enacted appropriation, matched that funding level. For more information on food aid, see CRS Report R41072, International Food Aid Programs: Background and Issues , by [author name scrubbed].

New and Ongoing Administration Assistance Initiatives

The Obama Administration introduced three new Africa initiatives in 2013, joining the three major ongoing foreign assistance initiatives introduced by the Administration in 2009 and 2010—the Global Health Initiative, the Food Security Initiative (Feed the Future), and the Global Climate Change Initiative. The initiatives were priorities in the FY2015 budget request.

Africa Initiatives. The request included $114.3 million for Africa initiatives, including $77 million for Power Africa, $27.3 million for Trade Africa, and $10 million for the Young African Leaders Initiative (YALI). Power Africa, led by USAID, aims to increase access to reliable, affordable, and sustainable power. It is designed to leverage the resources of 12 U.S. trade and development agencies to facilitate project transactions and private sector investment in the power sector. Total U.S. government resources for Power Africa are expected to total up to $7.8 billion over five years. Trade Africa focuses on improving trade and investment activities in East Africa, while YALI seeks to develop the professional and leadership skills of emergent young African leaders.

The House committee report did not mention any of these initiatives, while the Senate committee report recommended $15 million for YALI and included language supporting Power Africa and requiring the Administration to report to Congress on the initiative's objectives and the metrics used to measure progress. P.L. 113-235 mentioned none of the initiatives, although the explanatory statement indicated $15 million was allocated for YALI.

Global Health Initiative . The original request included $8.05 billion for global health programs, a 4.6% decrease from the estimated FY2014 funding and level with FY2013 funding. Of this, $1.35 billion was for the Global Fund, an 18.2% reduction from FY2014 funding. The Administration asserted that the requested funds were focused on creating an AIDS-free generation, ending preventable maternal and child death, and preventing the spread of infectious diseases. Compared to FY2014 allocations, Family Planning (+2.7%) and Malaria (+1.4%) programs would have seen modest increases, while HIV/AIDS (-5.0%), Nutrition (-12.2%), and Neglected Tropical Diseases (-13.5%) activities would have been reduced. Maternal and Child Health (-0.1%) funding would have remained almost level, though a larger proportion would have gone toward a proposed 14.3% increase for the Global Alliance for Vaccines and Immunizations (GAVI). The proposal included significant reductions for Vulnerable Children (-34.1%), Tuberculosis (-19.1%), and Pandemic Influenza (-31.0%) activities. In November 2014, the Administration amended its Global Health Programs request to add $340 million for Ebola response, bringing the total GHP request to $8.39 billion. It is not clear how the additional funding would have been allocated by sector.

Both House and Senate appropriators included more funding than was requested for global health in FY2015, recommending $8.31 billion and $8.14 billion, respectively, but still less than FY2014 funding. As in past years, the most notable divergence in sub-allocations between the proposals was for reproductive health and family planning funding, for which the Senate committee recommended $539 million, consistent with the Administration's request, while the House committee recommended $461 million, or 14% less. In contrast, the House committee report recommended $300 million (5%) more than the Senate report for global HIV/AIDS programs.

P.L. 112-235 provided $8.77 billion for the global health programs account, including $312 million for emergency Ebola response. This was a 3.9% increase from the FY2014 estimate and 4.5% more than the amended request, though base funding of $845 billion (excluding emergency funds) was about level with the FY2014 estimate. Subsector allocations of non-emergency funds, as detailed in the explanatory statement, were very similar to the FY2014 estimates, with the exception of an 18% decrease in the contribution to the Global Fund, as requested.

Food Security Initiative . Feed the Future (FtF) is the Administration's food security initiative, designed to support long-term country-led agricultural growth and nutrition plans. For FY2015, the Administration requested $1.00 billion for Feed the Future, a 4.5% increase over the FY2013 funding (FY2014 data are not yet available). The Administration's request was consistent with U.S. commitments made at G-8 summits in 2012 and 2013. For FY2015, requested funding would be used for programs in 19 focus countries and 9 aligned countries to reduce poverty and malnutrition.

The FY2015 House committee report did not specify a funding level for Feed the Future programs or for food security and agricultural development generally. The Senate committee report recommended $1 billion for this purpose. P.L. 113-235 adopted the Senate provision, calling for no less than $1.006 billion for food security and agricultural development programs.

Global Climate Change Initiative (GCCI) . The GCCI is designed to promote environmentally sustainable, climate resilient development. The initiative would have received nearly level funding in FY2015 under the Administration proposal, with a requested $839 million, but the program allocations would have differed considerably from FY2013 (the most recent data available). Bilateral clean energy funding would have increased by 34.7% and adaptation programs by 3.8%, while sustainable landscapes funding would have been reduced by 7.5%. Total U.S. contributions to World Bank climate accounts would have decreased by 12.5%, counting $84 million in bilateral aid transferred for this purpose in FY2013. According to the Administration, GCCI funding in FY2015 would be essential for implementing the President's Climate Action Plan and increasing U.S. leverage in negotiating an international climate agreement in 2015.

The House committee report identified no specific allocations for bilateral climate change activities for FY2015, and included no funding for multilateral climate change programs. The Senate committee report recommended $193.3 million for adaptation and mitigation, $123.5 million for sustainable landscapes, and $189.45 million for clean energy, in addition to funding multilateral climate change programs. P.L. 113-235 did not specify a funding level for bilateral climate change activities, so the allocations in the Senate report presumably apply. The legislation included $184.6 million for the International Clean Technology Fund and $49.9 million for the Strategic Climate Fund—both less than the Senate bill but more than the House bill, which provided no funding for either account.

Appendix A. State-Foreign Operations Appropriations, by Account

Appendix B. International Affairs (150) Function Account, FY2014 Estimate, FY2015 Enacted, House and Senate Recommendations