At a glance
The United States (US) is the largest donor country, with net official development assistance (ODA) at US$34.7 billion in 2017 (in current prices). Relative to economic size, however, ODA is low at 0.18% of gross national income (GNI), ranking 22nd out of the 29 donor country members of the Organisation for Economic Co-operation and Development (OECD).
Congress passed the fiscal year (FY) 2019 budget bill in February 2019, which largely rejects the significant foreign assistance budget cuts proposed by President Donald Trump. The International Affairs Budget for FY2019 remains stable compared to FY2018 funding levels.
The president’s FY2020 budget once again proposes steep cuts to foreign assistance but given that Congressional support for development assistance remains strong, it is unlikely that big cuts will be enacted.
For further details on methodology, see our Donor Tracker Codebook. Total refers to gross ODA, which is the amount actually disbursed by a donor in a given year. Net ODA takes into account repayments of ODA loans, which are subtracted from gross ODA. ODA projections are calculated using the share of the State-Foreign Operations appropriations bill which qualified as ODA from the previous year.
- The Trump administration strongly links development assistance to US national security concerns and economic growth. Economic development is a top priority, while funding for global health and flagship programs is strong.
- United States Agency for International Development (USAID) Administrator Mark Green has presented additional priorities: supporting countries to transition from development assistance to self-reliance and humanitarian assistance.
- USAID is reorienting the way it works with partner countries under the ‘Journey to Self-Reliance’, a new strategy to “end the need for” foreign assistance in partner countries. It is also transforming its organizational structure to promote more effective development assistance by merging several key offices and functions, including budget and policy.
- In late 2018, Congress approved legislation to create a new development finance institution (DFI), the United States International Development Finance Corporation (DFC). The legislation doubles the size of the US’ current DFI and authorizes a wider set of development finance tools.
- How much ODA does the US provide?
The US is by far the largest donor, providing almost one-fourth of global ODA
The US is the largest donor country among members of the OECD Development Assistance Committee (DAC). Its net ODA was US$34.7 billion in 2017 (in current prices). This represents around one-fourth (24%) of the ODA provided by all DAC countries. Following a 10%-increase in ODA between 2015 and 2016, ODA levels were largely stable in 2017, dropping by 1% compared to 2016. However, relative to the size of its economy, US ODA is low: In 2017, the US spent 0.18% of its GNI on ODA, ranking 22nd among DAC donors, far below the ODA/GNI target of 0.7%.
US foreign assistance:
The US does not have a dedicated ODA budget. Rather, the federal budget is divided into budget ‘functions’ that include all spending on an issue, sourced from various appropriations bills. Most development–related spending is within Budget Function 150, commonly referred to as the International Affairs Budget, which includes ODA-accountable funding and non-ODA money, such as operating embassies, military assistance, and promotion of US exports.
Foreign assistance spending under the Trump administration (which includes funds for diplomacy and development) has remained largely unchanged due to Congressional support for such spending. The FY2019 approved funding levels largely reject the deep cuts to US foreign assistance included in the president’s FY2019 budget request, setting US funding for development and diplomacy (International Affairs Budget, see question four: ‘How is the US’ ODA budget structured?’) at US$56.1 billion, including base and Overseas Contingency Operations (OCO) funding. This represents a small increase of US$193 million compared to FY18 levels. Congress also approved the State and Foreign Operations appropriations bill, which funds the State Department (State), the United States Agency for International Development (USAID), and other US agencies responsible for US foreign assistance, at US$54.2 billion — US$11.9 billion more than the 30% cut requested by Trump for FY2019.
For further details on methodology, see our Donor Tracker Codebook. Total refers to gross ODA, which is the amount actually disbursed by a donor in a given year. Net ODA takes into account repayments of ODA loans, which are subtracted from gross ODA. ODA projections are calculated using the share of the State-Foreign Operations appropriations bill which qualified as ODA from the previous year.
The final spending levels for FY2018 and FY2019 are relatively stable. Some of the increases for FY2019 include more funds for USAID’s Capital Investment Fund (+14%), the National Endowment for Democracy (+6%), and the Democracy Fund (+5%). There are also modest increases in overall humanitarian and global health funding. Decreases in funding include a cut to the State Department’s Capital Investment Fund (-10%) and a decrease in Economic Support Funds (-6%).
The president’s FY2020 budget request, released in March 2019, once again proposed steep cuts to foreign assistance spending. The budget requests a 23% cut to the State, USAID, and other international programs compared to FY2019 enacted levels. It also eliminates Overseas Contingencies Operations (OCO) funding, discretionary spending that supports international affair activities, for State and USAID (see ‘Key Question 5: How is the US’ ODA budget structured?’). Given that Congressional support for international assistance remains strong, it is unlikely that big cuts to the budget will be enacted.
It is unlikely that Congress will enact cuts to the foreign assistance budget proposed by President Trump.
In June 2018, the US Senate narrowly rejected the Trump administration’s proposal to cut US$15 billion in unused funds from the prior year. That proposal included cuts of US$334 million from the International Affairs Budget, including US$252 million in funding for Ebola response, US$30 million from the Complex Crises Fund, and US$52 million from the Millennium Challenge Corporation. Later, in August 2018, the White House Office of Management and Budget was forced to abandon a separate plan to rescind US$3 billion in already-approved, unobligated foreign assistance funding due to broad pushback. The plan, despite not being enacted, forced agencies involved in US foreign assistance to rapidly commit unused funding to avoid losing it.
- What are the US' strategic priorities for development?
Trump administration links development assistance more strongly to US national security and economic interests; economic development is key focus areas
Overarching priorities for US development policy are set by the White House. Under former President Barack Obama, global development was elevated to a core component of US international engagement in the 2010 Presidential Policy Directive on Global Development (PPD-6), along with diplomacy and defense. Under President Donald Trump, priorities are shifting to be more strongly linked to national interests.
The US National Security Strategy, published in December 2017, and the president’s FY2019 budget request both reinforce the topline shift that was first presented in the president’s FY2018 budget request: advancing national security and economic competitiveness and promoting economic growth. Additionally, the US National Security Council, the principal forum used by the president for consideration of foreign policy matters, is currently conducting a foreign assistance review which could further alter priorities and means of implementation.
Further development priorities are outlined by the US Department of State (State Department), responsible for foreign policy, and the United States Agency for International Development (USAID), the development assistance agency, in the Joint Strategic Plan for FY2018-2022: 1) Protect America’s security at home and abroad, 2) renew America’s competitive advantage for sustained economic growth and job creation, 3) promote American leadership through balanced engagement, and 4) ensure effectiveness and accountability to the American taxpayer. Within these goals, other dimensions of US foreign assistance are emphasized: counter-terrorism, health, economic growth, US economic security, private-sector partnership, and humanitarian relief.
United States Department of State and USAID, Strategic Plan 2018-2022 – Strategic goals and objectives
1) Protect America’s Security at Home and Abroad: Counter instability, transitional crime, violence and terrorism that threaten US interests
2) Renew America’s Competitive Advantage for Sustained Economic Growth and Job Creation: Promote American prosperity through bilateral relationships, international institutions, and educated and productive populations in partner countries
3) Promote the transition to a low-emission, climate‑resilient world while expanding global access to sustainable energy: Transition nations from assistance recipients to partners, engage in international fora and partnerships with the private sector and civil society to further foreign policy goals
4) Protect core US interests by advancing democracy and human rights and strengthening civil society: Strengthen effectiveness of diplomacy and development investments
Source: Adapted from US Department of State and USAID Joint Strategic Plan 2018-2022
In February 2018, in a briefing about the President’s FY2019 budget request, Deputy-Secretary of State John Sullivan cited the following related priorities for his department: US prosperity; economic and development assistance, including for refugees and humanitarian crises; water; sanitation; health; and food security.
In FY2019 and FY2020, focus will be on the launch of the new development finance corporation (DFC), a development finance institution which combines the Overseas Private Investment Corporation (OPIC) and some development finance work at USAID, with a higher spending limit and new equity functions to allow the US to more effectively tap into private resources and further US development goals. Legislation to create the DFC, which enjoyed bipartisan support in Congress as well as support from the Trump administration and the development community, passed in September 2018. The law provided for the creation of a ‘Chief Development Officer’, underscoring the strong development function of the DFC. The new law also required the Administration to submit an implementation plan to Congress — a process which OPIC is leading — on March 8, 2019. The DFC is expected to open its doors on October 1, 2019.
Other priorities include USAID’s policy shift towards the ‘Journey to Self-Reliance’, a new strategy released in 2019 which aims to “end the need for” foreign assistance in partner countries. Going forward, USAID will be transforming its programs to focus on building self-reliance – or, “the ability to solve their own development challenges” – in partner countries. To facilitate this shift, USAID is re-orienting its cooperation according to how self-reliant each of its partner countries is. Partners are scored using ‘Country Roadmaps’, which rank countries on 17 publicly-available, third-party metrics. The metrics examine areas such as open and accountable governance, inclusive development, economic policy, and the relative capacities of the government, civil society, citizens, and the economy. The strategy also pledges to engage more deeply with the private sector to catalyze enterprise-driven development.
A final priority for USAID is its internal reorganization process, which has tentative bipartisan support. According to administrator Mark Green, the proposed changes will "position its structure, workforce, programs, and processes" for more effective development assistance by consolidating several offices, including merging budget, management, and policy functions. It will also realign USAID's humanitarian, crisis, and conflict work under one new associate administrator, and will merge development, democracy, and innovation into one bureau, with the aim of: streamlining technical expertise; elevating democracy, governance, and human rights; and ensuring that private-sector, gender, and faith-based and community approaches are integrated across programs. As of March 2019, only one of nine of these reorganizational elements (humanitarian assistance) had received approval from Congress for implementation to move forward.
In February 2019, the Administration launched the new 'Women's Global Development and Prosperity Initiative' (W-GDP) with a focus on women’s economic empowerment. The fund is an effort to assist 50 million women in the developing world by 2025. The President’s FY2020 budget provided US$100 million for the fund (on top of the US$50 million announced in February 2019), which is intended to mobilize private capital. The announcement was met with mixed reviews, including questions about the size of the initial investment and the fact that the Trump administration has tried to cut USAID's budget over the last two fiscal years.
- How does the US spend its ODA?
Bilateral programs receive the vast majority of US ODA; US among largest contributors to multilateral organizations
The US provides development assistance mainly in the form of bilateral support to partner countries. According to OECD data, the US channels US$30.7 billion of its ODA bilaterally, accounting for 87% of its total ODA in 2017. This is far above the OECD Development Assistance Committee (DAC) average of 60%, reflective of the US’ long-standing emphasis on bilateral cooperation.
Bilateral spending focuses on health and is channeled entirely as grants
According to OECD data, the largest share of US bilateral ODA went to global health (US$9.0 billion, or 29% of bilateral ODA in 2017). This aligns with the US’ long-standing prioritization of global health, given that the President’s Emergency Plan for AIDS Relief (PEPFAR), one of the US’ largest development programs, provides significant funds bilaterally. For FY2018, PEPFAR had a total HIV/AIDS budget of US$5.2 billion. Of this, US$4.3 billion was bilaterally programmed for HIV/AIDS, US$330 million for USAID HIV/AIDS programs, and $261 million for tuberculosis (TB) programs. According to the US Global Leadership Coalition’s budget analysis, FY2019 saw a US$500-million increase in PEPFAR’s bilateral funding over FY2018.
Other funding priorities included humanitarian assistance (US$7 billion, 23%), government and civil society (US$2.9 billion, 9%), and education (US$1.6 billion, 5%) (see figure). This is broadly in line with the US’ policy priorities. However, spending for agriculture—the fifth-largest sector for bilateral spending in 2016—dropped by 13% in 2017 to become the ninth-largest. Bilateral ODA levels have remained stable in the current fiscal year: In the final FY2019 budget passed by Congress in February 2019, funding for bilateral economic assistance remains stable compared to FY2018 at US$24.5 billion, in line with the stability of the International Affairs Budget overall.
US bilateral ODA is provided entirely (100%) in the form of grants. The US relies on the public sector (35% of total ODA, far below the DAC average 50%) and on NGOs and civil society (24%, above the DAC average of 17%) to channel bilateral ODA. Both the Obama and Trump administrations have pledged to work with more local development partners. PEPFAR in particular has set ambitious goals: 40% of funding will go to local implementers by the end of 2019, rising to 70% by the end of 2020. Local partners currently receive 34% of total PEPFAR funding.
Who are the US' ODA recipients?
ODA focuses on world’s poorest countries, particularly in sub-Saharan Africa
The US focuses its ODA on the world’s poorest countries: 36% of bilateral ODA went to low-income countries in 2017, significantly higher than the DAC average of 24%. Regionally, the US concentrates its bilateral ODA on sub-Saharan Africa (SSA). Between 2015 and 2017, the US provided an average of US$10.4 billion (35% of its bilateral ODA) to the region per year, followed by Asia (US$4.2 billion, 14%) and Middle East and North Africa (MENA; US$3.2 billion, 11%). Excluding funding unallocated to a specific region, the share of US funding for SSA accounted for 51% of total bilateral ODA on average between 2015 and 2017.
Between 2015 to 2017, Afghanistan was by far the largest recipient of US bilateral spending, receiving on average US$1.4 billion per year. However, funding to Afghanistan dropped markedly between 2016 and 2017 (-14%). Ethiopia was the second-largest recipient, receiving on average US$898 million per year, followed by Jordan (US$881 million) and Kenya (US$808 million).
In light of ongoing events related to irregular migration at the US’ southern border, in December 2018 the US committed US$4.8 billion in development assistance for southern Mexico (home to many of Mexico’s poorest communities) and US$5.8 billion to strengthen government and economic development in other parts of Central America. According to the US statement, these funds aim to promote a “safer and more prosperous Central America” by enhancing security, governance, and economic prosperity. This type of spending clearly aligns with current development priorities emphasizing the protection of US security and national interests.
For a deeper understanding of funding at the recipient level, please consult data from the International Aid Transparency Initiative (IATI). IATI is a reporting standard and platform on which organizations and governments voluntarily publish data on their development cooperation, including more recent activity than is available through OECD data.
Data can be searched by recipient country, the ‘publisher’ (including funders that do not report to the OECD), and other filters. Click herefor more information on IATI’s data. Click hereto go directly to IATI’s ‘d-portal’, a user-friendly interface for data searches.
Multilateral spending centers around health, with strong support for the Global Fund
As a result of its focus on promoting national interests and strengthening bilateral relationships, the US channels a lower share of its total ODA to multilaterals than other OECD DAC donors. Core funding to multilateral organizations stood at US$4.7 billion in 2017, down from US$6 billion in 2016 (although funding for key recipients, such as the World Bank’s International Development Association and UN agencies, remained stable). This accounts for 13% of total ODA, significantly lower than the OECD DAC average of 40%. However, in absolute terms, the US is the fourth-largest provider of core contributions to multilateral organizations. This is a two-spot drop from 2016, and the US now ranks behind the UK, Germany, and France. In addition to core contributions, the US provided US$6.4 billion in earmarked funding to multilaterals for specific projects or regions (this is reported as bilateral ODA), bringing the total amount of ODA in 2017 channeled to or through multilateral organizations to US$11.1 billion.
There have been bipartisan calls to increase US funding to the Global Fund in the run-up to its sixth replenishment conference in October 2018.
Key recipients in 2017 were the World Bank (US$1.2 billion, 26%), UN agencies (US$1 billion, 21%), and regional development banks (US$378 million, 8%). The US has traditionally been a strong supporter to the Global Fund, committing US$4.3 billion for 2017 to 2019. In FY2018 and FY2019, contributions totaled US$1.4 billion per year. There have been bipartisan calls to increase US funding to the Global Fund in the run-up to its sixth replenishment conference to be held in October 2018, although by law the US cannot contribute more than 33% of total Global Fund financing. Historically, its contributions have hovered near this ceiling: from 2001 to 2018, US funding accounted for 32% of all Global Fund contributions, far surpassing the second-largest donor, France (12%).
Since its inception, the US has also been a strong supporter of Gavi. The first large multi-year financial pledge was made in June 2011 for US$450 million and met through contributions in 2012 through 2014. A second pledge was made in January 2015 for US$1 billion over four years. Congress met this pledge with its Gavi appropriations between FY2015 and FY2018, with its FY2018 contribution being the US’ highest ever at US$290 million.
- Who are the main actors in the US's development cooperation?
White House sets high-level direction; Congress, the State Department, and USAID define priorities; USAID leads on administering assistance
The president, Donald Trump (Republican), sets overarching policy orientations for US foreign assistance, including for development. The president is assisted by several White House offices. The most important for development issues are the Office of Management and Budget (OMB) and the National Security Council (NSC). In consultation with executive agencies, OMB produces the president’s budget request, which outlines policy and funding priorities. The NSC is the principal forum for the president to consider matters of national security and foreign policy.
Approximately 25 government institutions contribute to funding or implementing US foreign assistance and development cooperation. Key institutions include:
The US Department of State (State Department), headed by the secretary of state (currently Mike Pompeo), is primarily responsible for foreign policy but is also an important party to development policy-setting. Under direction from the White House, it has sole- or joint-policy authority on issues including peacekeeping, democracy, global health, and food security. The State Department manages or co-manages a wide range of bilateral development programs as well as funding to international organizations. In countries where the US has strong foreign policy and national-security interests, the State Department and its embassies play an active role in informing overall development policy in that country. While different approaches and mechanisms are deployed depending on which governmental agency is implementing, the State Department has Integrated Country Strategies (ICS) that strive to encapsulate the government’s foreign-policy objectives into one high-level strategy.
Several offices oversee the State Department’s development-related activity:
- Deputy Secretary of State, currently John Sullivan, is the second-ranking officer at the Department of State.
- Office of US Foreign Assistance Resources is led by the director of US Foreign Assistance Resources. This office assists the secretary of state in providing strategic direction to foreign assistance resources and coordinates policy and planning of the State Department and USAID.
- The Office of the US Global AIDS Coordinator and Health Diplomacy (OGAC) administers the State Department’s HIV/AIDS funding and coordinates the President’s Emergency Plan for AIDS Relief (PEPFAR). PEPFAR programs are implemented by other US agencies, including USAID, the National Institutes of Health (NIH), and the Centers for Disease Control and Prevention (CDC). OGAC is currently headed by Ambassador Deborah Birx.
- Under-Secretary for Civilian Security, Democracy, and Human Rights (vacant) is responsible for US efforts to address threats to civilian security such as extremism, mass atrocities, and weak governance, as well as refugee, migration, and population issues.
- Under-Secretary for Economic Growth, Energy, and the Environment, Manisha Singh (Acting) leads efforts on policies related to economic growth, energy, environment, science, and technology.
- Bureau of Population, Refugees, and Migration (PRM) leads on the US’ work with refugees, migrants, and victims of conflict. It also engages with multilateral organizations. PRM is currently led by Principal Deputy Assistant Secretary Carol Thomson O’Connell.
Other key State Department stakeholders include the special representative for Global Food Security (vacant) and the US ambassador to the UN, Jonathan Cohen (acting). To date, many of the political positions remain unfilled at the State Department, limiting political leadership of the department’s work.
US Department of Defense (DOD), currently led by Patrick M. Shanahan (acting), manages aid-funded military assistance programs, some humanitarian assistance, and programs on disease surveillance and health research and development.
US Department of Health and Human Services (HHS), currently led by Secretary Alex Azar II, implements global health programs, including a portion of PEPFAR. HHS has four independent agencies that are especially active in global health: the National Institutes of Health (NIH), the Centers for Disease Control and Prevention (CDC, further details below), the Food and Drug Administration (FDA), and the Health Services and Resources Administration (HRSA).
US Department of the Treasury (Treasury), currently led by Secretary Steven Mnuchin, leads US efforts to promote economic growth and poverty reduction in developing countries through the Office of Development Policy and Debt. This office manages US contributions to and participation in the World Bank (along with the US executive director to the World Bank) and other multilateral and regional development institutions.
US Department of Agriculture (USDA), currently led by Secretary Sonny Perdue, provides food assistance and finances the ‘Food for Peace Program’, the US’ largest provider of food assistance (see ‘Sector: Agriculture’ and ‘Sector: Nutrition’).
US Agency for International Development (USAID) is headed by USAID Administrator Mark Green. The agency is technically independent but operates within the parameters of foreign policy guidance from the president, the secretary of state, and the NSC. The agency leads the implementation of US global development programs, though it often shares responsibility for strategy and implementation with the State Department. USAID is organized around programmatic as well as country programs, managed by offices in partner countries (called USAID missions), which are supported by headquarters in Washington, DC. Based on analysis of each partner countries, USAID’s overseas missions develop five-year Regional or Country Development Cooperation Strategies (CDCS) in cooperation with Washington headquarters and local stakeholders. At the country level, USAID mission directors exercise discretion on some aspects of strategy and implementation.
USAID is currently undergoing a reorganization (see ‘What are the US’ priorities for global development?’ for more information) to create a more field-oriented and functionally-aligned agency through eight new thematic bureaus and merged policy and budget functions. It is also working towards partner country self-reliance, helping countries to transition from development assistance.
USAID also includes the Development Credit Authority (DCA), which implements risk-sharing agreements between lenders and small businesses to mobilize local private capital for small businesses. This function will be transferred to the new US development finance institution, the DFC.
USAID leads the implementation of US global development programs, though it often shares responsibility for strategy and implementation with the State Department.
Centers for Disease Control and Prevention (CDC), part of HHS, is the largest government agency worldwide working in disease control and prevention. It operates both within the US and abroad. The Center for Global Health (CGH) was established in 2007 to drive CDC’s work globally. CGH has four divisions: 1) Division of Global HIV/AIDS, 2) Division of Parasitic Diseases and Malaria, 3) Division of Global Health Protection, and 4) Division for Global Immunization. CDC’s Office of Infectious Diseases (OID), comprising three national centers, also participates in US global health efforts.
National Institutes of Health (NIH) are a collection of 27 research institutes under HHS that comprise one of the world’s top global health research institutions. NIH conducts basic research on diseases and disorders for improved diagnosis, prevention, and treatment.
Millennium Challenge Corporation (MCC) is an initiative to provide development assistance for economic development to low-income countries and lower-middle-income countries that have committed to political, economic, and social reforms. The programs are administered through partner-country compacts, each of which establish a Millennium Challenge Account for implementation. It is legally authorized to enter into five-year commitments known as ‘compacts’ with partner countries.
Other institutions are involved in foreign assistance. They include:
- Other departments: Department of Energy, Department of Homeland Security, Department of the Interior, Department of Justice, Department of Labor, Department of Transportation, and Department of the Treasury.
- Other institutions: Inter-American Foundation, OPIC, Peace Corps, US African Development Foundation, Export Import Bank.
Congress is a key decision-maker on both funding and policy for foreign assistance. With the ‘power of the purse’, the two chambers – the House and the Senate – have a final say on federal spending, including foreign assistance. In particular, the House and Senate Appropriations committees and their 12 subcommittees decide on funding to specific spending areas and therefore exercise considerable decision-making and oversight authority over both foreign assistance spending and policy. In addition, two other congressional committees play a role (albeit less powerful) in authorizing and overseeing ODA-related programs.
- House Appropriations Committee: The Committee is currently chaired by Congresswoman Nita Lowey (Democrat). The key subcommittee is the State, Foreign Operations, and Related Programs (SFOPS), which oversees the budget for the State Department and foreign operations.
- Senate Appropriations Committee: The Committee is chaired by Senator Richard Shelby (Republican). Similarly, as in the House, the key subcommittee is called SFOPS.
- House Foreign Affairs Committee (HFAC): HFAC is currently chaired by Representative Eliot Engel (Democrat). An important subcommittee is: Africa, Global Health, Global Human Rights, and International Organizations.
- Senate Foreign Relations Committee (SFRC): Currently the SFRC is chaired by Senator Jim Risch (Republican). Important subcommittees are: Africa and Global Health Policy; Multilateral International Development, Multilateral Institutions; and International, Economic, Energy, and Environmental Policy.
- How is the US' ODA budget structured?
The US federal budget is divided into budget ‘functions’, which include all spending on a particular issue across departments or agencies and can include funding lines from multiple appropriations bills. The US does not have a dedicated ODA budget, but most development-related spending sits in Function 150 (referred to as the International Affairs Budget). Function 150 comprises both ODA-related and non-ODA funding, such as funding for operating embassies, military assistance, and promotion of US exports. In FY2019, the final budget for Function 150 was approved for US$56.1 billion.
The FY2020 budget proposed large cuts to foreign assistance, which are likely to be rejected by Congress.
The vast majority of funding (around 96%) included under Function 150 comes from the State-Foreign Operations (SFOPs) appropriations bill. The remainder comes primarily from the agricultural appropriations bill for food security and food-assistance funding. In FY2018, the SFOPs was enacted at around US$54 billion, while the FY2019 budget slightly increases SFOPs funding by 0.03%. The SFOPs bill is divided into ‘titles’, each covering a different budget envelope (see Table 2). The money in these envelopes is mainly, but not exclusively, managed by the State Department and the US Agency for International Development (USAID). Relevant titles related to global development include:
- Title I: State, Broadcasting & Related Agencies largely funds the management and running of the State Department. It also contributes to the US’ assessed contributions to 44 international organizations, including the UN’s regular budget and its specialized agencies.
- Title II: United States Agency for International Development (USAID) provides operational funds for USAID.
- Title III: Bilateral Economic Assistance covers much of the US’ foreign assistance and development activities, accounting for just under half of the entire SFOPs. By far the largest share goes to global health (36% in FY2018). This includes most of US support to combat HIV/AIDS and other infectious diseases, maternal and child health, and health systems strengthening, as well as the US’ contribution to the Global Fund to Fight AIDS, Tuberculosis and Malaria. Programs funded under this envelope are jointly managed by the State Department and USAID. Most funding is channeled through the ‘Development Assistance (DA)’ envelope, which goes broadly to foster economic progress and social stability in partner countries, and the ‘Economic Support Fund (ESF)’, which aims to provide assistance to allies and countries in transition to democracy, support the Middle East peace process, and finance economic stabilization programs.
- Title IV: Multilateral Assistance includes money for US voluntary contributions for various multilateral organizations, including to the World Bank and global environmental funds.
Beyond titles, US foreign assistance is divided into two types: enduring funds and Overseas Contingency Operations (OCO; see Table 2). Enduring funds are meant to cover all base functions within US development cooperation, while OCO funds were originally for emergency support to activities related to the ‘Global War on Terror’. They are managed by the Department of Defense (DOD) and the State Department. Recently, however, they have been used for base budget activities of the DOD and the State Department.
Around one-quarter of the International Affairs Budget was funded through OCO in FY2018, including operations related to the response and prevention of crises, including armed conflict, and man-made and natural disasters. OCO funds are not subject to the same procedural limits on discretionary funding in congressional budget resolutions as regular foreign assistance but are appropriated simultaneously with it. For some budget lines, OCO funds comprise the primary source of funding.
Table 2 features the breakdown between enduring and OCO funding for the SFOPs for FY2019 as enacted, the latest year for which a detailed breakdown is available (as of March 2019).
Table 2. State-Foreign Operations Appropriations overview
US$ millions FY2019 (Total enacted) FY2019 (Base) FY2019 (OCO) FY2019 (Total) Title I. State, Broadcasting & Related Agencies
International Organizations 2,850 1,826 1451 3267 Other 13,074 9,964 5,418 14,820 Title II. Admin of Foreign Assistance (USAID) 1,620 1,516 185 1,632 Title III. Bilateral Economic Assistance 24,402 21,270 10,773 26,912 Global Health Programs (GHP), State & USAID 8,690 8,837 - 8,837 Development Assistance 3,000 3,000 - 3,000 International Disaster Assistance (IDA) 4,285 3,801 584 4,385 Economic Support Fund 3,969 2,546 1,172 3,718 Democracy Fund 216 227 - 277 Assistance for Europe, Eurasia and Central Asia 750 750 - 760 Migration & Refugee Assistance 3,359 2,028 1,404 3,432 Emergency Refugee & Migration 1 1 - 1 Independent agencies 1,368 1,368 - 1,368 Department of Treasury 30 30 - 30 Other 132 70 62 132 Title IV. International Security Assistance 9,025 8,599 555 9,152 Title V. Multilateral Assistance 1,857 1,857 - 1,857 World Bank: GEF 140 140 - 140 Green Climate Fund - - - - World Bank IDA 1,097 1,197 - 1,197 World Bank IBRD - - - - IFAD 30 30 - 30 GAFSP - - - - International Organizations & Programs 339 339 - 339 Other 251 251 - 251 Title VI. Export Assistance -310 -336 - -336
Source: Congressional Research Service, State, Foreign Operations and Related Programs: FY2017 Budget and Appropriations (2016) and House of Representatives, 115th Congress, 1st Session, State, Foreign Operations, and Related Programs Appropriations Bill, 2018
In FY2019, Congressional approval of final appropriations levels was delayed to February 2019 from October 1, 2018. This delay came largely as a result of the 35-day partial US government shutdown and lack of agreement on certain appropriations bills, including the SFOP. The President’s FY2020 budget requests — normally delivered to Congress in the first week of February — was delayed by the government shutdown. The FY2020 budget, released on March 11, 2019, once again proposed large cuts to foreign assistance, which are likely to be rejected again by Congress in its approval of final appropriation levels (theoretically meant to take place by October 1, 2019).
- What are important milestones in the US’ annual budget process?
ODA levels and main funding lines can be influenced at various times during budget process
The US fiscal year runs from October 1 to September 30. The budget process begins 12 to 14 months (or more) prior to the start of the fiscal year. The majority of federal spending consists of ‘mandatory spending’ and ‘discretionary spending’ (see box); foreign assistance falls under discretionary spending. The budget process for discretionary spending can be categorized into three separate phases: 1) development of the president’s budget request, 2) congressional budgeting, and 3) congressional appropriations.
Types of spending in US federal budget
Mandatory spending – refers to programs such as Social Security and other social programs, for which legislation defines criteria for participation, and the government allocates funds for all who are eligible regardless of annual costs to the Treasury.
Discretionary spending - refers to the share of the budget that Congress decides annually in an appropriations process. This is further divided into defense and non-defense discretionary spending (including foreign and development assistance).
Phase 1: Development of the president’s budget request (May - February)
Government departments and agencies begin developing budgets in May and submit funding requests in September/October: From May to September, departments and agencies develop their budgets and set broad parameters for spending on specific programs. The US Agency for International Development (USAID) and the State Department, for example, negotiate major funding levels and policy decisions for each budget line and then share the proposal with the White House’s Office of Management and Budget (OMB). From September to November, OMB negotiates funding levels with the heads of government departments and agencies. Engagement with OMB from August to September is important. At this time, it can receive external input to inform its engagement and negotiation with departments and agencies.
Under normal circumstances negotiations can take between two and four weeks before the OMB officially passes back the budget request for agency review. In recent years, this stage has taken months rather than weeks, delaying the release of the budget request.
OMB works to finalize budget request in late fall and president submits it in February: In November/December, the OMB finalizes the budget request before the president signs off in late December/early January. Traditionally, the president submits his budget request to Congress the first Monday in February. This date is often delayed, particularly when a new administration takes office.
Phase 2: Congressional budgeting (February - April)
Congress sets spending limits for main budget areas: Once the president’s budget request is submitted to Congress, the Congressional Budget Office (CBO) evaluates the request. Then, the House and Senate each develop, debate, and (in theory) pass a joint congressional budget resolution before April 15. The resolution sets the overall level of discretionary funding for the next fiscal year. This ceiling (called a “budget cap”) is sent to the House and Senate Appropriations Committees. Unlike the president’s budget request, which is a detailed proposal – the budget resolution is a short, high‑level document. It is not a bill that is signed into law, but instead provides the binding budget cap that appropriators use in allocating discretionary spending. The president’s budget request is a key opportunity for advocates to engage in discussion on the foreign affairs budget with key stakeholders including with Congress, government agencies and departments, and the White House, through meetings, letters, and media outreach.
Phase 3: Congressional appropriations (April - September)
Congress considers appropriations bills that allocate funding to government functions, including foreign assistance, from April 15 to September: After the final budget resolution is agreed to, or after April 15 (whichever comes first), Congress must draft, debate, and pass 12 different appropriations bills, which correspond to different government functions. This includes the appropriations bill for State-Foreign Operations (SFOPs), which funds most development programs (see Question 4: ‘How is the US’ ODA budget structured?’). During the spring, each of the relevant committees and subcommittees holds several hearings on the president’s budget request to debate, amend, and rewrite (‘mark-up’) the appropriations bills. Prior to this phase, there are a number of advocacy opportunities, including meetings on Capitol Hill, letters to Appropriations Committee chairs, events, and participation in hearings.
House and Senate negotiate final budget; president signs: Once an appropriations bill has passed the House and Senate, a conference committee is formed with representatives from the Appropriations Committees to negotiate the differences between the House‐ and Senate-passed bills. If the House and Senate cannot find an agreement by the end of September, Congress needs to enact an emergency short-term measure – usually a ‘continuing resolution’ – to provide temporary funding to ensure the government continues to operate while the appropriations bills are finalized. Any spending bills are then sent to the president for approval or for veto; vetoes are rare and require an override from two-thirds of both chambers of Congress.
USAID and the State Department negotiate major funding levels and policy decisions for each budget line,
Examples of appropriations bills
Appropriations bill: Legislation that allocates funding to federal departments, agencies, and programs in the US government. Appropriations bills are passed by the House Committee on Appropriations and the Senate Committee on Appropriations. Bills must originate in the House of Representatives and be passed by both chambers of Congress before being signed by the president. The main types are:
Regular appropriations bills: 12 bills covering funding for the government for one fiscal year (October 1-September 30).
Omnibus bill: A single appropriations bill that combines any number of individual appropriations bills on diverse subjects into one large bill. Because of their size and scope, omnibus bills limit opportunities for debate and scrutiny. SFOPs is often part of such an omnibus funding measure.
Continuing resolution (CR): If Congress has not passed a regular appropriations bill in time, it can pass a CR, which generally continues pre-existing funding levels set during the previous year’s budget.
Supplemental appropriations: These add additional funding beyond what was originally appropriated at the beginning of the year; often used for things like disaster relief.