America needs smart foreign aid budget for successful programs

Colder temperatures mean one thing in Washington. It is time for the White House Office of Management and Budget to formulate the annual federal budget request to Congress. As a retired federal executive who spent many years at the Office of Management and Budget, I have a healthy respect for the analytic rigor that the staff bring to this process.

They formulate the annual request in communication with each agency, pushing back on spending proposals that are not clearly fleshed out, questioning ongoing programs that may no longer be justified, and supporting new ideas to increase effectiveness. However, the White House budget request will sometimes include broad policy or political priorities that do not meet these tests. This is because on top of bringing strong analytics, a focus on performance, and a willingness to break agency crockery, the Office of Management and Budget is institutionally charged with advancing the major policy priorities of the president.

ADVERTISEMENT

The best outcome is achieved when these two institutional objectives work in harmony. Ideally, the Office of Management and Budget staff develop annual budget requests that propose and justify White House priorities in ways that can withstand objective analysis. The creation of an International Development Finance Corporation reflects such a balance. Unfortunately, the overall White House funding request for carrying out the international affairs agenda of the administration does not.

Every administration has proposed some increases or cuts to international affairs that the Congress considers “dead on arrival.” But I have never seen budget proposals as unlikely to succeed in Congress as the first two Trump administration budgets for international affairs. The 2018 and 2019 White House budgets proposed 32 percent and 30 percent reductions compared to total funding enacted the previous year. Congress largely ignored the 2018 request and is on track to do the same for 2019.

Was it inevitable that an administration that supports an “America first” foreign policy propose such drastic and ineffectual cuts? Not necessarily. From the Clinton administration to the Obama administration, the White House has proposed cuts to specific pieces of the international affairs budget that were accepted by Congress. The Obama administration made targeted reductions to certain countries as part of a strategy to focus foreign aid where it was most needed and could be used effectively.

One reason that this approach worked was that, while the overall policy decision was top down, the details were developed by career staff at the Office of Management and Budget, the Department of State, and the United States Agency for International Aid. I seriously doubt that staff proposed the drastic cut totals contained in the Trump administration budgets. One can see in the official document that agencies must submit to Congress explaining their budget requests that my talented and dedicated former colleagues did their best to focus remaining funding where it could do the most good. However, even they were not able to propose such large reductions that meet the tests of analytical rigor, strong program justification, and with the exception of the International Development Finance Corporation, vibrant institutional innovation.

These colleagues could have proposed more sensible approaches up front to targeted reductions or reallocation of funds to programs and countries where they could be used most effectively. This does not mean that the budgets would not have proposed any cuts. The Office of Management and Budget and other career executive branch staff always support the policy direction of the administration they work for. Rather, their analytical rigor could have guided the administration to develop plans that could have had more impact on the legislative budgets.

When political considerations outweigh objective analysis, program effectiveness can also suffer. For example, the Trump administration budgets correctly cited inefficiencies of the Food for Peace program. Indeed, the domestic purchase and transportation of food aid adds substantially to the cost of this international program, when market approaches proposed by both the Bush administration and the Obama administration are far more efficient at delivering lifesaving assistance.

However, rather than reforming the program, the Trump administration budgets proposed simply eliminating the program entirely. As a result, rather than spurring a much needed discussion of the objective benefits and political costs of shifting all United States food aid to a more efficient model, potentially achieving savings with zero impact on beneficiaries, the budgets were just ignored. The less efficient status quo remained.

If the Trump administration wants to make its next budget request a solid blueprint for Congress, rather than a blunt political statement, rigorous analysis needs to drive the planning process from the start. Embracing the International Development Finance Corporation in the 2019 budget was a first step in that direction, and the Office of Management and Budget and the administration should expand on that effort. This is the surest way to engage in a thoughtful negotiation with Congress and stakeholders to maximize taxpayer investments and the effectiveness of programs.

Michael Casella served as a former chief of the international economic affairs branch of the White House Office of Management and Budget.