On February 13, Congress approved H.J.Res. 2 , a continuingappropriations measure to which Foreign Operations and 10 other FY2003appropriations bills had been added. This omnibus spending measure was signed bythe President on February 20 ( P.L. 108-7 ). As enacted, Foreign Operations is fundedat $16.3 billion for FY2003, about $150 million less than requested and $125 millionand $250 million less than bills recommended earlier by the Senate and House,respectively ( H.J.Res. 2 , as passed by the Senate on January 23 and H.R. 5410 reported in the House in September 2002). The conferenceagreement further provides for an across-the-board rescission of 0.65% of alldiscretionary budget authority in the bill. This reduces total Foreign Operationsfunding to roughly $16.18 billion. As passed by Congress, the $16.3 billion Foreign Operations modifies several of the Administration's FY2003 funding requests. P.L. 108-7 increases ChildSurvival programs to $1.8 billion, about $242 million higher than the request. Thelegislation includes $880 million for international HIV/AIDS programs, $140 millionmore than proposed, but $172 million less than recommended by the Senate. The measure further provides $446.5 million for bilateral family planning activities, compared with $425 million recommended by the House in H.R. 5410 and $435 million passed by the Senate. The conferees agreedto allocate $34 million to UNFPA, the same as in FY2002, but made the fundssubject to several conditions, including a requirement that the President certifies thatthe organization is no longer involved in the management of a coercive familyplanning program. Last year, the Administration declared UNFPA ineligible for U.S.support because of its program in China where the Secretary of State determinedUNFPA was involved in a coercive program. The enacted Foreign Operations appropriation provides $700 million for the Andean Regional counternarcotics initiative. The Senate had approved $650 millionand the House ( H.R. 5410 ) had proposed $731 million, as requested. P.L. 108-7 includes $295 million for Afghanistan, compared with $296 million(House) and $220 million (Senate). The Administration estimated that it wouldallocate $98 million for Afghan aid out of its Foreign Operations request. Theconference agreement includes full funding for regular aid to Israel ($2.7 billion), butdoes not include House language that would have earmarked an additional $200million requested by the President in a September 2002 budget amendment for Israelianti-terrorism aid. The Omnibus Appropriation further cuts all funding for NorthKorean heavy fuel oil ($71.5 million) but retains $5 million for administrative costsof KEDO. (Note: This report does not discuss or include $7.48 billion in Foreign Operations funding approved in P.L. 108-11 , the Iraq War Supplemental. For complete detailson that legislation, see CRS Report RL31829 , Supplemental Appropriations FY2003:Iraq Conflict, Afghanistan, Global War on Terrorism, and Homeland Security .) The annual Foreign Operations appropriations bill is the primary legislativevehicle through which Congress reviews and votes on the U.S. foreign assistancebudget and influences major aspects of executive branch foreign policy makinggenerally. (1) It contains the largest share -- abouttwo-thirds -- of total internationalaffairs spending by the United States (see Figure 1 ). The legislation funds all U.S.bilateral development assistance programs, managed mostly by the U.S. Agency forInternational Development (USAID), together with several smaller independentforeign aid agencies, such as the Peace Corps and the Inter-American and AfricanDevelopment Foundations. Most humanitarian aid activities are funded withinForeign Operations, including USAID's disaster program and the State Department'srefugee relief support. Foreign Operations includes separate accounts for aidprograms in the former Soviet Union (also referred to as the Independent Statesaccount) and Central/Eastern Europe, activities that are jointly managed by USAIDand the State Department. Security assistance (economic and military aid) for Israeland Egypt is also part of the Foreign Operations spending measure, as are smallersecurity aid programs administered largely by the State Department, in conjunctionwith USAID and the Pentagon. U.S. contributions to the World Bank and otherregional multilateral development banks, managed by the Treasury Department, andvoluntary payments to international organizations, handled by the State Department,are also funded in the Foreign Operations bill. Finally, the legislation includesappropriations for three export promotion agencies: the Overseas Private InvestmentCorporation (OPIC), the Export-Import Bank, and the Trade and DevelopmentAgency. For nearly two decades, the Foreign Operations bill has been the principal legislative vehicle for congressional oversight of foreign affairs and for congressionalinvolvement in foreign policy making. Congress has not enacted a comprehensiveforeign aid authorization bill since 1985, leaving most foreign assistance programswithout regular authorizations originating from the legislative oversight committees. As a result, Foreign Operations spending measures developed by the appropriationscommittees increasingly have expanded their scope beyond spending issues andplayed a major role in shaping, authorizing, and guiding both executive andcongressional foreign aid and broader foreign policy initiatives. It has been largelythrough Foreign Operations appropriations that the United States has modified aidpolicy and resource allocation priorities since the end of the Cold War. Thelegislation has also been a key tool used by Congress to apply restrictions andconditions on Administration management of foreign assistance, actions that havefrequently resulted in executive-legislative clashes over presidential prerogatives inforeign policy making. Table 1. Status of Foreign OperationsAppropriations, FY2003: Action in the 107th Congress (H.R.5410 and S.2770) Table 2. Status of Foreign Operations Appropriations, FY2003: Action in the 108th Congress(H.J.Res.2) President Bush submitted his FY2003 federal budget request to Congress on February 4, including funding proposals for Foreign Operations Appropriationsprograms. Subsequently, on March 21, the White House requested FY2002emergency supplemental funds for homeland security and combating terrorismoverseas, a proposal that includes assistance to "front-line" states. House and SenateAppropriations Committees held a series of hearings on both the FY2003 andFY2002 supplemental requests, and approved the supplemental ( P.L. 107-206 ) onJuly 24, 2002. The Senate Appropriations Committee reported a bill for FY2003 onJuly 24 ( S. 2779 ). The House Foreign Operations Subcommitteeapproved its bill on September 5, a measure that was marked up by the fullCommittee on September 12 and reported on September 19 ( H.R. 5410 ). Both FY2003 bills expired at the end of the 107th Congress. Subsequently, the Senate passed H.J.Res. 2 on January 23, 2003. The legislation contained 11 FY2003 appropriation bills, including ForeignOperations. On February 13, Congress approved the conference report for theOmnibus Appropriation, and the President signed the measure on February 20 ( P.L.108-7 ). As shown in Figure 2 below, Foreign Operations funding levels, expressed inreal terms taking into account the effects of inflation, have fluctuated widely over thepast 25 years. (2) After peaking at over $33 billion in FY1985 (constant FY2003dollars), Foreign Operations appropriations began a period of decline to $13.8 billionin FY1997, with only a brief period of higher amounts in the early 1990s due tospecial supplementals for Panama and Nicaragua (1990), countries affected by theGulf War (1991), and the former Soviet states (1993). Table 3. Foreign Operations Appropriations, FY1995 to FY2003 (discretionary budget authority in billionsof current and constant dollars) Note. FY1999 excludes $17.861 billion for the IMF. FY2003 does not include the 0.65% across-the-board rescission. FY2003 also excludes the $7.48 billion forForeign Operations included in P.L. 108-11 , the Iraq War Supplemental. Supplemental funds added following the terrorist attacks of September 11, 2001, resulted in large increases for Foreign Operations programs. As part of a $40 billionemergency supplemental to fight terrorism enacted in September 2001 ( P.L. 107-38 ),President Bush and Congress allocated $1.4 billion for foreign aid activities. (3) Congress approved an additional $1.15 billion Foreign Operations supplemental ( P.L.107-206 ; H.R. 4775 ), bringing amounts for FY2002 to $16.54 billion. The amounts for each year since FY2000 -- ranging between $16.3 billion and$15.54 billion -- are the largest in nominal terms since FY1985 and in constantterms, are the highest in 10 years. Despite the recent trend of increased spending on foreign aid, however, by historical standards the amounts between FY2000 and FY2003, in real terms, are relatively low. Except for the lowest point in foreign aid appropriations that occurredin the mid-1990s, this most recent period is lower, in real terms, than for any yearprior to FY1994. As a share of the entire $2.15 trillion U.S. budget for FY2003, Foreign Operations represents a 0.76% share. As a portion of discretionary budget authority -- that part of the budget provided in annual appropriation acts (other thanappropriated entitlements) -- Foreign Operations consumes 2.13%. By comparison,at the high point of Foreign Operations spending in FY1985, foreign aid fundsrepresented 2% of the total U.S. budget and 4.6% of discretionary budget authority.