Following US President Trump's decision to freeze assistance to the Northern Triangle of Central America in the spring of 2019, the US Department of State (State) has sent a letter to Capitol Hill setting forth what must be done in order for El Salvador, Guatemala, and Honduras to once again be eligible for US foreign assistance. Although public statements by State had previously said that funding would be resumed after a full review, the letter gives no timetable for when -- or even if -- US assistance might restart.  

The letter from Secretary of State Mike Pompeo was in response to a request by the Chairs of the full House Foreign Affairs Committee and the Subcommittee on Western Hemisphere, Civilian Security, and Trade. The Chairs had requested information as to when full funding would return and if that would be related to the implementation of the agreements signed by the US and the three countries which allow the US to return asylum seekers back to Central America when seeking such status.  State's letter said that the "governments of El Salvador, Guatemala, and Honduras must improve their border security; combat migrant smuggling and human trafficking, especially related to children; receive and reintegrate returned citizens; and implement public messaging campaigns to dissuade illegal immigration from these countries."  The State Department's implementation plan for resumption of funding, however, was not released on the grounds that it is deliberative.  The House leaders have renewed their request for information, deeming the letter nonresponsive. 

News article - Devex

As part of its overall funding package for the 2020 fiscal year, the US Congress has increased poverty-focused international assistance by US$1 million or 4 percent. This package was approved despite President Trump's continued support for cuts to US foreign assistance.

Included in the legislation is US$5 million for global nutrition, bringing the annual total to US$150 million. The final bill also included provisions to protect poverty-focused development assistance to Central America and food-security funding worldwide, allowing Congress more oversight to ensure food-security funds are disbursed and not subject to deep cuts at the end of the fiscal year.

News blog - Bread for the World

After a three month delay over budget disagreement, the United States Development Finance Corporation (DFC) has finally opened. The DFC combines the functions of the Overseas Private Investment Corporation (OPIC) and the US Agency for International Development's Development Credit Authority.

The newly confirmed CEO, Adam Boehler, outlined the priorities and objectives of the new agency, saying "DFC has three objectives: first, to invest in highly impactful projects in developing countries; second, to advance U.S. foreign policy; and third, to continue our consistent track record of generating returns for the American taxpayer."

Additionally, the DFC now has more resources, including an increased investment cap of US$60 billion (more than doubling OPIC’s previous US$29 billion limit) and new tools, including equity investments, technical assistance, and feasibility studies. The DFC will prioritize investments in low-income and lower-middle-income countries and will seek investments that are important to U.S. foreign policy, national security, and women’s economic empowerment, including OPIC’s '2X Women’s Initiative'. It will also continue to invest in 'Connect Africa' as well as in priority regions such as the Indo-Pacific and Latin America.

Press release - DFC

Included in the larger US spending bill for Fiscal Year 2020 is the Global Fragility Act, a law to change the US government's approach to the prevention of violence and conflict that can become breeding grounds for terrorism. The US will now promote a whole-of-government approach to treat the causes of violence, including the creation of a ten-year strategy to “contribute to the stabilization of conflict-affected areas, address global fragility, and strengthen the capacity of the United States to be an effective leader of international efforts to prevent extremism and violent conflict.”

The bill also includes, over the next five years, US$200 million for a Prevention and Stabilization Fund as well as US$30 million for a Complex Crisis Fund. Overall, the bill had strong bipartisan support in both the US House and Senate, a recognition that the traditional approach wasn't effective. Senator Chris Coons, one of the primary sponsors, stated that the US "has spent nearly US$5.9 trillion in the 18 years since 9/11 to combat extremism and terrorism around the world, and it’s clear we need a new strategy to do that more effectively.”

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The US' omnibus spending bill, which finally passed Congress and was signed into law for Fiscal Year 2020, saw small increases for US foreign assistance but -- unusually -- at rates below what both the US House and Senate had originally passed. Overall, the spending totaled US$54.7 billion, which is US$467 million above the levels of Fiscal Year 2019, or a 1% increase. Domestic programs as a whole, however, increased by about 5%.

Global health saw increases for the Global Fund to Fight Aids, Tuberculosis and Malaria's latest replenishment, although family planning resources remained flat and no language was ultimately included to remove the Mexico City policy restrictions. Women and children's initiatives also received funding and support.

Originally scheduled to open on October 1, 2019, the bill now allows the new US Development Finance Corporation to open its doors with a US$299 appropriation, although two thorny issues remain unfixed: methods for scoring equity investments and the use of fees to offset operating expenses. The bill also contains US$300 million for the Countering Chinese Influence Fund, and there is specific language included to better ensure that funding for Central America is actually spent. There is also some additional oversight language to ensure spending is in line with what Congress has appropriated, although the provisions are not as strong as what the House originally passed. Finally, there is also a new requirement for congressional notification for any action taken as a result of the Administration's yet-to-be-finalized foreign assistance review.  

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The United States Agency for International Development (USAID) announced that it will provide additional support to Haiti to help address the ongoing humanitarian crisis. USAID will provide US$1 million to the World Food Programme (WFP) to move emergency assistance to Haitians in vulnerable situations, as well as to finance food storage and information management. USAID will also continue to help WFP distribute approximately 2,200 metric tons of food.  This is in addition to ongoing US humanitarian efforts.

Press release - USAID

The US Supreme Court agreed to hear a case concerning the reach of first amendment speech protections to foreign affiliates of US health groups that receive federal dollars for work on HIV and AIDS abroad.

The US rule requires that, as a condition of receiving funding, those entities must adopt explicit policies opposing prostitution and sex trafficking. The lower court, the US Court of Appeals for the Second Circuit, rejected the government's latest position, writing that requiring “an entity’s affiliate to speak the government’s message unconstitutionally impairs that entity’s own ability to speak.” The Supreme Court is expected to hear the case in early 2020.

News article - Bloomberg Law

US secretary of state Mike Pompeo intervened personally on December 12, 2019, to lift a hold on US$115 million in Economic Support Funds (ESF) to Lebanon. The previously unreported hold had been put in place by the deputy administrator of the United States Agency for International Development (USAID) after consultations with a national security staffer and some members of congress. Pompeo reportedly called the deputy administrator personally and ordered the ESF funds released. According to a congressional notification, the funding supports “good governance, civil society, water supply and sanitation, basic education, higher education, and private sector productivity programming.”

The scuffle over the funding release is set against the backdrop of the ongoing impeachment trial of Donald Trump over the withholding of US$391 million in military support funds to Ukraine in exchange for the investigation of a political rival. The newly released ESF funds were separate from another package of US military support slated for Lebanon which, too, was initially frozen without explanation. Both assistance bundles have now been released, but debate over the spending remains rancorous, due to internal disagreements about the funding's potential to benefit the Iran-backed political party and military group Hezbollah, which enjoys significant influence in the Lebanese government.

News article - Bloomberg

An amendment to the State Foreign Operations (SFOPS) appropriations bill, which largely funds US foreign assistance, has caused a snag in the fiscal year 2020 final spending approvals. Senator Jeanne Shaheen secured an agreement that the Senate version of SFOPS includes language that would prohibit USAID from discriminating in services provided to individuals on the basis of factors such as race, gender, sexual orientation, religion, marital status, and political affiliation. At the urging of anti-abortion and faith-based groups, the White House is now raising concerns about the language.

Senator Shaheen says that the language simply requires USAID to comply with existing law on nondiscrimination. The language also contains certain reporting requirements that would require USAID to notify the appropriations committee of instances of non-compliance. Opponents of the language say it could prevent the awarding of USAID contracts to faith-based organizations, effectively 'blacklisting' 'pro-life' and 'pro-family' groups. The language in the House bill is stronger than that in the Senate's and contains a provision that repeals the Mexico City policy. Also known as the 'global gag' rule, the controversial policy prevents the allocation of US dollars to any organization that provides access to, information about, referrals for, or advocacy relating to abortion, even if the US funding is used wholly on other non-abortion-related projects. If that provision had made it into the final bill, it likely would have drawn a veto by President Trump.

The House and Senate are trying to finish negotiations and votes on all appropriations bills before December 20, 2019, when the current continuing resolution, which is funding the US government, will expire. 

News article - Roll Call

The US State Department's Office of US Foreign Assistance Resources ("F Bureau") has committed to budget reforms that will assist in streamlining decisions on US assistance and attempt to avert budget rescission efforts that have plagued the US budget process over the last few years. The Trump administration failed this year to appropriate all US assistance funding that Congress had approved for expenditure. This was due, at least in part, to deliberate efforts not to allocate funding, in order to prevent its spending.  The administration also tried twice in 2019 to rescind already-allocated assistance funding. Both times these attempts were stymied by Congress.

F Bureau Director Jim Richardson commented on the reforms, saying, "The fact is, the system is just designed to make last-minute decisions, and the reality is we can no longer operate that way."

USAID has also announced plans to reform certain processes and to hire more procurement staff, in response to criticism of understaffing and inefficiency.

News article - Devex