SEQUESTRATION OR NOT, USAID FACES TOUGH CUTS

USAID Deputy Administrator Don Steinberg. Photo by: USIP

Federal agencies are preparing for sequestration: across-the-board mandatory budget cuts that will go into effect Jan. 2 if Congress can’t come up with a way to avoid them. The development community is speculating about what the U.S. Agency for International Development will sacrifice if its own budget faces forced shrinkage.

USAID Deputy Administrator Don Steinberg told Devex last week what wouldn’t: the agency’s flagship Feed the Future initiative and especially child survival, democracy and governance programs, and initiatives meant to boost relations with the scientific, technological and university communities.

Areas where USAID cannot as easily show results or where programs are already small might be on the chopping block.

“In many cases we have programs that simply, in effect, buy us a seat at the table in a particular country, and we’re going to have to move away from those,” Steinberg said.

“This is a period where we’re going to have to focus and concentrate our efforts, and that’s part of what we’re doing right now, which is to eliminate some of our smaller programs where we cannot show development results,” Steinberg added, noting that the agency had already eliminated dozens of initiatives over the past couple of years.

“We think that in an odd way, something like a sequestration forces those decisions to be taken and it helps you rationalize,” he told Devex.

The threat of sequestration arose after the 2011 Budget Control Act raised the federal debt ceiling and mandated at least $1.2 trillion in deficit reduction. After a bipartisan panel of appointees couldn’t agree on what exactly to cut, automatic, across-the-board cuts may be triggered come January — unless Congress finds the savings by the end of the year, or changes the law.

Sequestration would force roughly $500 billion to be exorcised from the federal budget over the next 10 years: half from the defense and foreign affairs budgets, which includes USAID, and half from other accounts.

Even if lawmakers do reach a deal, that deal may involve cuts — and cuts to foreign assistance may become prime targets for conservative lawmakers.

Federal agencies will likely operate under a continuing resolution if a formal appropriations bill is not signed into law by the end of September. That’s too bad for USAID: The 2013 appropriations bills for foreign affairs, crafted separately by House and Senate lawmakers earlier this year and now stalled, actually included a higher budget for the Department of State and USAID than even the Obama administration requested, according to the Congressional Research Service. Then again, those congressional proposals would merely restore the foreign affairs budget to what it had been in recent years, roughly, since the White House actually has requested less for fiscal 2013 than Congress had alloted in previous years.

DEVEX