U.S. Global Health Priorities: USAID's Global Health FY2003 Budget
Released: 2003-03-18T00:00:00

Most Recent Developments

On February 12, 2003, Congress passed the Consolidated Appropriations Resolutions, 2003, P.L.108-7 . The bill includes funding for USAID global health activities at the following levels:

Table 1. Child Survival and Health (CSH) Programs Fund

HIV/AIDS Activities. The omnibus bill appropriates a total of $800 million for USAID HIV/AIDS activities. However, the $591.5 millionlisted above is allocated for the Child Survival and Health (CSH) Programs Fund. Another $38.5million is provided through other USAID-managed or co-managed accounts, and $170 million isreserved for the Global ATM Fund and UN agencies. P.L. 108-7 reserves an additional $100 millionfor the Global Fund through the Labor, HHS, and Education Appropriation, bringing the total UnitedStates contribution to the Global Fund to date to $725 million.

Other Infectious Diseases. Congress reserves a total of $120 million for tuberculosis assistance in the FY2003 omnibus appropriations bill. Of thisamount, $65 million is funded through the CSH account, $15 from other bilateral accounts and $40million through the Global Fund contribution. A total of $115 million is appropriated for malariaassistance, with $65 million directed to the CSH account, $7.5 million designated to other bilateralaccounts and $42.5 million through the Global Fund contribution.

Family Planning/Reproductive Health. A total of $446.5 million is made available for family planning/reproductive health from all accounts, with$368.5 million reserved for the CSH account.

Background

The Administration gave priority to HIV/AIDS in its budget request for USAID programs. Inits FY2003 global health budget proposal it dedicated more than 40% of its funding to HIV/AIDSactivities, while decreasing spending in most of the other health programs. Some Members ofCongress expressed concern that reserving a significant portion of the global health budget forHIV/AIDS activities without increasing overall global health funding would have left other healthprograms without enough funds. Meanwhile, USAID maintained that in practice the increase in theoverall global health budget was more important than the program in which the funding changesoccurred. (1) Additionally, it asserted that itsintegrative approach would minimize the impact of thelower budget allocations on the other health programs. This report examines U.S. global healthfunding trends since 1999, reviews issues surrounding USAID's decision to funnel much of itsmoney into HIV/AIDS activities, and analyzes current global health spending priorities.

Global health activities have become a major component of U.S. foreign aid, partially due to growing concern among some policy makers that health could significantly impact economic growth,national security, and political stability in many parts of the world. According to a 2000 CIA report, The Global Infectious Disease Threat and Its Implications for the United States , the persistentinfectious disease burden is likely to increase the risk of economic decay, social fragmentation, andpolitical destabilization in the hardest hit countries in the developing and former communist worlds. (2) The report further indicates that the economic costs of infectious diseases, especially HIV/AIDS andmalaria, are already significant and will take a heavy toll on productivity, profitability, and foreigninvestment, possibly reducing GDP by as much as 20% or more by 2010 in some sub-SaharanAfrican countries. (3)

Infectious diseases could significantly affect not only those abroad, but also Americans at home. According to the CIA report, over the last 30 years, twenty well known diseases, including TB,malaria and cholera, have reemerged or spread geographically, often in more virulent anddrug-resistant forms. Furthermore, at least 30 previously unknown incurable diseases have emergedsince the 1970s. Although infectious diseases do not pose as great of a threat to American securityas they do for other countries they could still have a significant impact. Many infectious diseases,most recently, the West Nile virus, originate outside U.S. borders and are introduced by internationaltravelers, immigrants, returning U.S. military personnel, or imported animals and foodstuffs. TheCIA report predicts that the most dangerous known infectious diseases likely to threaten the UnitedStates over the next two decades will be HIV/AIDS, hepatitis C, TB, and new, more lethal variantsof influenza. (4)

U.S. health programs, for many years, have included programs that aim to thwart the spread of infectious diseases, address the disastrous effects of HIV/AIDS, and bolster the crumbling healthinfrastructures of many developing countries. Members of Congress have become increasinglyaware of the potential dangers of the spread of infectious diseases. Consequently, the priority placedon global health funding within the broad scope of foreign aid has increased significantly since themid 1990s. Congress has been especially supportive, and in many cases the initiator, of increasedhealth spending.

USAID is the U.S. agency primarily responsible for implementing international health programs. The global health pillar, one of USAID's four program pillars, covers a range of healthprograms and resources whose funding came from preexisting accounts that funded child survivaland disease activities. Those accounts are:

Child Survival and Health Programs Fund (CSH)

Economic Support Fund (ESF)

Assistance for Eastern Europe and the Baltic States(AEEB)

Assistance for the Independent States of the Former Soviet Union(FSU)

P.L. 480 Title II Food Aid (PL 480)

Table 2 shows the funding levels of USAID global health programs since 1999. As the table illustrates, while the global health program is funded through a number of sources most programactivities are financed through the Child Survival and Health Programs Fund (CSH). Nearly 90%of the global health budget comes from the CSH account. CSH is the most significant part of theglobal health budget, and consistently receives bicameral and bipartisan support in Congress.

Table 2. USAID Global Health Programs (in millions of dollars)

Source: USAID Budget Office, April 15, 2002.

a Includes $50 million supplemental.

b FY2003 includes $100 million for the International Mother and Child HIV PreventionInitiative.

c Global Fund contributions only reflect funds allocated to USAID. The full Global Fundcontribution is attributed to HIV/AIDS totals in fiscal years 2001 and 2002. However, in FY2003,only $170 million of the Global Fund contribution directed to HIV/AIDS activities is included in theHIV/AIDS total.

d The $100 million was funded through the 2001 Supplemental Appropriations.

e According to the FY 2003 omnibus appropriations bill, contributions to the Global Fundare to bedivided between HIV/AIDS($170 million), malaria ($42.5 million) and tuberculosis ($40million). Additional contributions have been made to the Global Fund totaling $650 millionto date. For more information on Global Fund contributions see CRS Report RL31712 .

f Includes $170 million Global Fund contribution for HIV/AIDS.

The Child Survival and Health Programs Fund, created in FY1996, is an account that funds acompilation of global health programs that enhance the likelihood of child survival, address maternalhealth concerns and curb the spread of infectious diseases. The CSH was created when there wassignificant pressure to cut foreign aid spending as part of the overall effort to eliminate the federalbudget deficit. (5) In an effort to protect the mostvulnerable populations in the poorest parts of theworld the House Subcommittee on Foreign Operations, Chaired by Representative Sonny Callahan,added language that would introduce the Child Survival and Disease Fund into the ForeignOperations appropriation legislation. The objective was to ensure that there would be no reductionsin programs that directly affect younger children, and to accelerate efforts to eradicate diseases thatthreaten younger children. (6) Funding for CSH wasderived from preexisting child survival and adultdisease accounts. Those accounts were:

The Development Assistance Fund (DA);

The Development Fund for Africa (DFA);

The Economic Support Fund (ESF);

Assistance for Eastern Europe and the Baltic States (AEEB);

Assistance for the New Independent States of the Former Soviet Union(FSU);

and the UNICEF portion of International Organizations and Programs. (7)

Initially, the Child Survival and Health Programs Fund (originally called the Child Survival and Disease Programs Fund) account did not include reproductive health and population activities, andincluded basic education for children's initiatives. Education programs are no longer part of theCSH account, while reproductive health and population programs have been added. Currently, CSHis used for activities related to:

immunizations;

oral rehydration;

health and nutrition;

water and sanitation;

a grant to UNICEF;

displaced and orphaned children;

reproductive health and population activities;

the treatment, prevention and research for tuberculosis, HIV/AIDS, polio,malaria and other diseases; (8)

and the Global Fund to Fight HIV/AIDS, Tuberculosis andMalaria.

Figure 1 illustrates the trend in CSH and global health funding since 1999. Although CSH is only one part of the global health budget it has become a significant part, receiving bicameral andbipartisan support in Congress. It accounts for more than 90% of the FY2002 global health budget. Since it was created in FY1996, allocations for CSH have increased from $592.6 million to $1.836billion in FY2003. When combined with funds from all accounts, including CSH, funding for theglobal health budget reached $1.972 billion in FY2003.

For FY2003, the Administration did not request CSH funds. Instead, it requested that $1.594 billion of the global health budget (ordinarily funded through CSH) be funded through developmentassistance. It requested that the remaining $177 million come from the other accounts, bringing thetotal global health budget request to $1.771 billion. USAID argued that funding the global healthprograms through the development assistance account would give it greater flexibility in projectimplementation. As in past years, the Administration requested the FY2003 UNICEF contributionthrough the international organization contributions rather than global health funds. Congress haschallenged both of these decisions. Protecting the Child Survival and Health Programs Fund andmaintaining UNICEF contributions have remained a high priority for many in Congress.Consequently, funding for global health programs and UNICEF were placed under the ChildSurvival and Health Programs account for FY2003 in the Senate and House Foreign Operations bills.

USAID Global Health Priorities

The Administration request for FY2003 includes a significant increase in HIV/AIDS spendingand a decrease in nearly all of the other health programs. Figure 2 illustrates the rate at whichHIV/AIDS spending has increased relative to the other health programs. In FY1999, USAID spent12.7% ($139 million) of its global health budget on HIV/AIDS. In FY2002, USAID spent 29.7%($485 million) of its global health budget on HIV/AIDS activities. Finally, in FY2003, 40.6% ($800million) of the USAID global health budget was reserved for HIV/AIDS activities, including $100million for the President's new initiative, the International Mother and Child HIV PreventionInitiative. The FY2003 appropriation increased HIV/AIDS spending nearly 40% within one fiscalyear. If Congress had approved the Administration's request, the budget share of other programswould have fallen 28% from FY1999 spending levels and 11% from FY2002 spending levels. Allfigures include Global Fund contributions. (9)

(10)

Instead of focusing on the cuts in some programs USAID argued that the most important thing to concentrate on is the integrative nature of the programs, and that overall spending on global healthwould increase. On March 13, 2002, USAID Administrator Andrew Natsios testified before theHouse Foreign Operations Subcommittee. During that hearing Mr. Natsios stated,

There are a number of things we do in HIV/AIDS which is also something we do in maternal health and in child survival. For example, a mother that has asexually transmitted disease that is pregnant has a very high risk of the kid dying when the child isborn. The survival rate dramatically drops if the woman has an STD when she's pregnant. So partof our child survival strategy is STD strategy. That's also part of our HIV strategy. So a lot of theseprograms in the field are actually integrated together and they have to be or they don't work... Theimportant factor I would point out here in all of these health accounts is the bottom line is up $60million. (11) And so there's $60 million more beingspent on health programs than there were before. And I think that's a good message. (12)

Issues and Options for Congress

In its deliberations over the FY2003 appropriations for global health in the foreign operationsbill, Congress considered a number of issues, including: the adequacy of the global health budget,global health funding versus other development assistance, HIV/AIDS spending versus other globalhealth programs, and the number of directives in global health programs.

Adequacy of Global Health Budget

Given the trade-offs that proposed funding levels for global health seemed to face, were proposed funding levels adequate to meet U.S. health objectives? As HIV/AIDS continues to ravagedeveloping countries and emerging states, the Administration deemed it vital to place a substantialamount of resources into activities that counter the spread of HIV/AIDS. Some at USAID arguedthat overall funding for global health activities is not sufficient to meet all the needs in the field.They said that it is often difficult to balance competing priorities within the global health budget. Consequently, they say that the size of the global health budget necessitates that as funding increasesin one program area it decreases in others.

On February 12, 2003, Congress passed P.L. 108-7 , an FY2003 omnibus appropriations bill, which included $1.84 billion for CSH and $1.97 billion for USAID global health activities. Mostglobal health programs (except family planning and reproductive health initiatives) were fundedabove requested levels. The increase was most significant for HIV/AIDS. Directed funds include$800 million for the fight against HIV/AIDS. This figure is $140 million above the Administration'srequest of $740 million, and includes the President's $100 million request for the InternationalMother and Child HIV Transmission (MTCT) initiative on September 3, 2002. (13) The HIV/AIDSfunds also include $170 million of the $250 million Global Fund contribution. $384 million isdirected for maternal and child health activities, the Administration requested $344 million. ThePresident only requested $122 million to fight other infectious diseases, while Congress set aside$178 million. Congress directed $383.5 million to fund family planning and reproductive healthactivities, $41.5 million below the $425 million request from the Administration. Finally, the SenateAppropriations Committee voted to give $120 million to the United Nations Children's Fund(UNICEF) through the CSH account although the Administration did not request funding forUNICEF under the account. The omnibus bill also reserves an additional $100 million for theGlobal Fund through the Labor, HHS, and Education Appropriation, allocating $350 million in totalfor the Global Fund.

Global Health Versus Other Development Assistance

Do current global health funding levels affect the implementation of other development assistance programs? Some are concerned with what they perceive as an overemphasis on globalhealth vis-Ã -vis other development programs. In FY2002, health programs accounted for about 60%of all development assistance. (14) Critics believethat other areas also need support, namely education,democracy, trade and investment, and agriculture. These areas also significantly impactdevelopment and health, critics argue. Some claim if the programs that build human capacity,promote stable governments, encourage private investment and foster environmentally-friendlygrowth are not simultaneously supported, then the health programs will not be sustainable.

This issue has been raised during some of the Foreign Operations hearings. USAID Administrator Andrew Natsios noted that while agriculture is vital in countering poverty andsupporting health programs, the trend has been to reduce funding to agricultural programs as otherissues, such as HIV/AIDS and famines demand immediate responses. "[T]he only way you're goingto reduce poverty in the world and reduce hunger is not by constant humanitarian programs, but byteaching people how to grow more food. And we're not doing that because all of the money hasbeen shifted to accounts where there is more and legitimate interest." (15) "If you have child survivalprojects and you keep kids alive until they're 5 years old - you know what happens after 5? Theybecome malnourished, because the parents are still so poor they can't provide for them. We shouldlook at the countries where we have child survival programs for older kids to see what themalnutrition rates are. They have been disturbingly high." (16) U.S. Representative Jerry Lewisconceded that agriculture does impact poverty reduction, good governance, and a host of otherdevelopment issues. "[I]ndeed, I've felt for many, many years it's very difficult to talk to developingcountries about democracy and freedom and peace, and indeed terrorism, if their children go to bedwith their stomachs hurting every night." (17)

Although some may like to see some of the foreign assistance money spent on other development assistance activities, Chairman Kolbe described the difficulty that many in Congressfaced while considering the President's request. "If Congress fully funds the HIV/AIDS request thatthe president has made, it's going to have to be something reduced somewhere else: economicgrowth, agriculture, trade. That happens, the advocates of trade promotion, basic education,microcredit, all of which are represented before this committee, are going to face some toughchoices. [T]he question is, if we go complete funding of what there's a huge amount of publicpressure now to do...the other kinds of things in agriculture, trade promotion are going to likelysuffer." (18) The FY2003 Omnibus Appropriationsbill, P.L. 108-7 , funded most global healthprograms above requested levels. Although it is unclear whether family planning programs werefunded below requested levels to fund increases in other global health programs, some requests forcuts have been made in other areas. (19)

HIV/AIDS Versus Other Global Health Programs

How does funneling a significant portion of the global health budget to HIV/AIDS programs affect the other health programs? Historically, Congress has placed heavy emphasis on halting thespread of infectious diseases, particularly those that are becoming increasingly antimicrobialresistant. It has maintained its support for infectious diseases, and has funded the programs aboverequested levels. In FY1998, the Senate and House Subcommittees on Foreign Operations expressedconcern that USAID had not placed enough emphasis on combating the spread of infectiousdiseases. (20) Recognizing the correlation betweenHIV/AIDS and TB, in FY2001, the House andSenate Subcommittees on Foreign Operations urged USAID to increase its activities related toHIV/AIDS and TB prevention, as well as those that seek to treat and prevent sexually transmitteddiseases. They also recognized the promising results of microbicide research and urged USAID toincrease its work in that area. (21) Still later theHouse Subcommittee on Foreign Operations expressedconcern in FY2002 that USAID had not placed enough emphasis on halting emerging epidemics. (22) Finally, in FY2002, the Senate Subcommittee on Foreign Operations added that USAID should seekto provide resources to build the capacity of governments to effectively use additional funds for theprevention and treatment of HIV/AIDS programs so that they can reach people in need. (23)

Not only are some in Congress particularly concerned about the spread of infectious diseases, but they are also concerned about the other programs in global health. At the hearing on the USAIDbudget proposal for FY2003, some Members expressed concern about the impact of increasingspending on HIV/AIDS activities at the expense of other global health programs. RepresentativeJesse Jackson stated, "I am concerned with what the Administration has proposed to thissubcommittee regarding international health. The Administration's budget cuts funding for TB,malaria, and child survival programs, all programs I believe Congress strongly supports, and wrapsup the stand-alone child survival and health account, created by my good friend from Alabama,Sonny Callahan, into development assistance accounts. I think some of the increases we are makingin our bilateral contributions for HIV/AIDS is a good first step. But, it seems to me that we aresimply robbing Peter to pay Paul. Could you explain to us why we're not growing all the globalhealth accounts equally?" (24)

Although many in Congress also deem countering the spread of HIV/AIDS a priority, they differ from the Administration in that they do not want to boost HIV/AIDS funding at the expenseof other health programs. Congressional support for HIV/AIDS programs is illustrated by theinclusion of additional funding for HIV/AIDS through the FY2002 supplemental, H.R. 4775 . (25) After passing the House on May 24, 2002,and later the Senate on June 6, 2002, the FY2002Supplemental Appropriation became Public Law 107-206 on August 2, 2002. The $28.9 billion billincluded $200 million to fight HIV/AIDS with at least $100 million reserved for the Global Fundto Fight HIV/AIDS, Tuberculosis and Malaria.

The additional $200 million for HIV/AIDS was part of a $5.1 billion contingency emergency package that was attached to the supplemental bill. As provided by P.L. 107-206 , the President haduntil September 1, 2002, to decide whether to obligate all of the funds or spend none of it. (26) At aneconomic forum held in Waco, Texas on August, 13, 2002, the President announced that he wouldnot obligate the contingency funding because he felt that the government needed to practice fiscaldiscipline. Some Democrats reportedly said that they perceived the action as "a White House effortto portray the withholding of the funds as a struggle between the President and Democrats, eventhough the appropriations had broad Republican support." (27) Critics also accused the President ofblocking funding to his own programs. The President acknowledged that he supported some of theinitiatives in the contingency package, however he said that he would request support for hispriorities, including HIV/AIDS from the FY2003 appropriations.

On September 3, 2002, the President proposed changes to the FY2003 Department of Health and Human Services (HHS) Appropriations and the Foreign Operations Appropriations to request$200 million for his new initiative, the International Mother and Child HIV Prevention Initiative. The President requested that the money be shared equally between HHS and the USAID. Congressfunded this initiative in FY2003. P.L. 108-7 includes $140 million for the new initiative. $100million comes from USAID funds and the remaining $40 million is drawn from HHS funds.

Number of Directives in Global Health Programs

How do congressional directives affect the United States' ability to adjust health assistance programs to match the conditions in the field quickly? In an attempt to demonstrate the impact ofthe directives, representatives from USAID stated that only $207 million, the portion of the FY2002global health budget designated to reduce the main causes of child mortality and morbidity, does notcontain specific directives as to the allocation of funds. They reported that it is not the largedirectives that significantly impact the global health programs, rather it is the small ones that becomesubstantial when totaled. (28)

Legislative directives have become more specific as Congress has become increasingly concerned about global health issues. When global health programs first began Congress offeredfew directives. As criticisms about the effectiveness of foreign aid mounted, Congress began toclearly earmark areas of high priority, ultimately leading to the creation of the Child Survival andHealth Programs Fund. (29)

Although the Administration has expressed dissatisfaction with the level of congressional directives, Congress attached directives to the FY2003 global health budget, as it has in the past,to ensure that its spending priorities are protected. Chairman Kolbe's comments during SecretaryPowell's hearing in February 2002 illustrate divergent spending priorities in the global health budgetbetween Congress and USAID. "This budget would increase funding for AIDS so rapidly that itcalls for sharp cutbacks in maternal health, child survival, and the equally critical struggle againstresurgent tuberculosis and malaria." (30) Directiveshave remained in the FY2003 global health budgetthis fiscal year, and may continue in the future to the extent that Congress' spending priorities differfrom those of USAID.