Sequestration and International Affairs: What's the Deal?

We've all heard about sequestration, a mandatory cutting of federal expenditures on apocalyptic levels if a budget deal is not struck in Congress before the New Year.  However, does anyone really know what it will mean for international affairs budgeting if sequestration takes effect?

The short answer is: it doesn't look good.

To begin, let's run through what would happen on the macro level if sequestration kicks in.  If sequestration is not avoided, the Office of Management and Budget will cancel $110 billion in spending for fiscal year 2013, with a grand total of $1.2 trillion in savings through fiscal year 2021.  The amount of money saved by sequestration will be split 50/50 between Defense programs and non-Defense programs, with Social Security, Medicaid, and the majority of Medicare escaping unscathed.

Using fiscal year 2013 as a model and assuming percentage cuts between seven and ten percent, that would mean that Defense spending would drop by $55 billion and non-Defense discretionary spending would be cut, again, by $55 billion, which includes the International Affairs Budget.

What does this mean for the International Affairs Budget?  If everything goes according to projections, the post-sequestration International Affairs budget in fiscal year 2013 would be approximately $47.7 billion.  This total is $7.2 billion less than the fiscal year 2012 enacted amount ($54.9 bn) and $8.7 billion less than the fiscal year 2013 request ($56.2 bn).  What does this kind of cut mean in terms of what will be impacted?  The U.S. Global Leadership Coalition, a network of experts, businesses, and NGOs, has put together a fantastic little chart on what some of the cuts would be:

  • Global Health programs would be cut $670 million from FY12 levels;
  • State Department operating expenses (DCP) would lose $1.084 billion;
  • USAID's development programs would fall $207 million;
  • Refugee relief would be cut $154 million; and
  • Foreign Military Financing would fall by $518 million.

Clearly, sequestration would have a hugely damaging impact on soft power influence around the world; the damage would take many years and billions of dollars to repair.  In this era of fiscal limitations and highly complex and varied international issues, we cannot afford to let one of our best modes of interaction with the international community fall by the wayside.  Congress must reach an agreement, if not for the myriad of other potentially devastating results of sequestration, for the huge setbacks in international affairs funding that would come as a result of this type of spending cut.

If you are interested in following this issue, USGLC has put together a calendar of important events to keep in mind:

December 31

     Expiration of Bush tax cuts

January 2

     Sequestration Applied

January 3

     113th Congress Swearing-In

January TBD

     Freshman Orientation, House Retreats

January 21

     Presidential Inauguration

February 5

     FY14 Budget Submission to Congress

March 27

     FY13 CR expires

Also, if you are interested in learning more, USGLC has a number of great resources on the issue of sequestration:

http://www.usglc.org/2012/11/01/21720/

http://www.usglc.org/2012/07/30/budget-watch-july-30-2012/

http://www.usglc.org/2012/10/03/international-affairs-budget-update-10-2-12/

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