Bloomberg News

State Department Budget Bolsters Middle East Aid, Trims Europe

February 21, 2012

(For more information about the budget, see BUDG <GO>.)

Feb. 13 (Bloomberg) -- President Barack Obama’s budget seeks $8.2 billion in “extraordinary and temporary” funding for State Department responsibilities in Iraq, Afghanistan and Pakistan.

The request comes on top of the $43.4 billion proposed for the “core” budget for the State Department and the U.S. Agency for International Development, which manages foreign aid. As the military has pulled out of Iraq and drawn down in Afghanistan, the administration has turned to the State Department to oversee spending on political, security and economic projects, such as the $1.8 billion for Iraq police training and military assistance.

The administration is proposing to trim assistance to Europe, Eurasia and Central Asia in order to bolster spending in areas given higher priority by Secretary of State Hillary Clinton. The Middle East would gain, with the creation of a special $770 million fund to support political and economic reform in the aftermath of the Arab Spring.

“This budget follows a year of transformational change in the world,” Thomas Nides, the department’s deputy secretary for management and resources, said today.

The $51.6 billion budget proposal for fiscal 2013 would increase spending on global programs by 1.6 percent over the amount approved by Congress last year, when the Obama administration asked for $8.7 billion for Iraq and Afghanistan

“Even as our needs and responsibilities grow, our budget increase is less than the rate of inflation,” Nides said at a briefing on the budget.

Money for Egypt

The budget includes funding for Egypt, despite the current dispute over U.S. staff of nonprofit groups being threatened with felony and misdemeanor charges for not registering or for engaging in political activity.

The budget calls for $1.3 billion in assistance to the military, $1.8 million in military education and another $250 million in economic assistance. U.S. lawmakers have threatened to cut off funding until Egypt lifts the charges and lets the Americans return home.

“There’s bipartisan support, once we get these issues resolved, to support Egypt,” Nides said.

The State Department budget calls for $4.8 billion in spending in Iraq -- including $2.7 billion to support the embassy there and three consulates plus public outreach programs -- and for $4.6 billion for Afghanistan, including $2.1 billion to support “the expansion of diplomacy” and the “extraordinary costs of security in a conflict zone.”

Trade Support

There is also a $78.9 million request to fund the United Nations Educational, Scientific and Cultural Organization. Congress barred the administration from funding UNESCO after the body accepted Palestine as a member. Nides said that the president had requested a waiver because “UNESCO does a lot of enormously good work.”

Five international trade-related organizations are designated to receive $432 million, an increase of $19 million over the previous year’s request, for trade promotion and assistance to small businesses seeking broader export opportunities. The funding, for five different federal organizations, is to support the administration’s National Export Initiative, which aims to double exports over five years.

The proposal lays out plans to make the State Department’s overseas administrative operations more cost-efficient by reducing travel, printing supplies and other costs to less than 2010 levels by increasing the use of phones and web-based and digital video conferencing. Spending on contract services for management support will be cut to 15 percent less than 2010 levels, according to the proposal.

‘Stretch’ Tax Dollars

Those changes would save more than $100 million, according to the budget documents.

Nides said the department was aware that this is a time of “economic hardship.” The department’s budget proposal “seeks to stretch every tax dollar as far as possible without compromising our core national security interests,” he said.

So-called core spending -- the main State Department and USAID operations excluding certain war-related funding -- isn’t comparable year-to-year because of program shifts between the main budget and the “overseas contingency operations.”

The proposed State Department budget is part of the $3.8 trillion budget Obama sent to Congress today.

--Editors: Terry Atlas, Larry Liebert

To contact the reporter on this story: Nicole Gaouette in Washington at ngaouette@bloomberg.net.

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net


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