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Taking inventory of the tools of statecraft: putting the FY2011 request in context April 12, 2010

Posted by Matthew Leatherman in Analysis.
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by Matt Leatherman and Rebecca Williams

Congress returns to session today with consideration of the FY2011 budget resolution atop its to-do list.  Anticipating this debate, Budget Insight has hosted a five-part series offering a unique perspective on the intersection of foreign affairs and defense spending.

Taken together, these five budget categories are the substance behind the conventional wisdom that the American government engages the world primarily through the lens of security and in response to perceived threats.

This series includes contributions from Dr. Gordon Adams on defense, Joe Whitehill on international affairs, Larry Nowels on international development, Kenneth Luongo on securing weapons of mass destruction, and Bill Johnstone on homeland security.

The Top Line

President Obama responded to ballooning federal debt by announcing a three-year spending freeze in this year’s State of the Union address.  National security-related costs are the only exception to this policy.  Each of the spending categories featured below fall under that exemption, and each is requested to grow.

The administration requested increasing the defense budget $48 billion over current levels (FY10 enacted), a figure eight times that of the international affairs budget increase, $6 billion.  If these requests are fully appropriated, they correspond to proportional increases of 15% for international affairs and 7% for the Pentagon.

Viewed alone, these proportions might suggest a coming shift toward international affairs spending.  Set in historical context, however, international affairs spending (as a percentage of growth) tends to be more volatile and susceptible to external factors, including administration policy changes, human or natural disasters, among others.

International development, homeland security, and securing WMD spending (e.g., non-departmental budget categories) are slated to grow at lesser but proportional rates, 15%, 2.4%, and 13% respectively.

Projections for each of these spending increases nevertheless hinge on the action Congress takes regarding the President’s supplemental appropriations requests.

President Obama submitted a request for supplemental FY10 appropriations at the same time as the FY2011 proposal and amended this request in March to account for costs associated with relief and reconstruction support in Haiti.  If passed in full, these appropriations would substantially increase FY2010 spending and, consequently, reduce FY2011 growth projections.  Supplemental appropriations requests include $37.5 billion for operations in Iraq, Afghanistan, and Pakistan ($33 billion for defense and $4.5 for international affairs), as well as $2.8 billion for efforts in Haiti.

The President has made supplemental requests in each of the past ten years, and this trend is likely to continue.  Thus, the impression of spending growth lessened by FY2010 supplemental spending likely is temporary, enduring only until the administration issues a supplemental request for FY2011.

The Trade-offs

Two FY2011 priorities emerge with particularly clarity and importance from these five budget categories.  A powerful focus on Iraq, Afghanistan, and Pakistan is most evident.  Alongside the FY10 supplemental request already mentioned, the administration has justified $159 billion of its FY2011 defense submission on war-related grounds.

Outside of these ‘frontline’ states, however, spending requests seem more reactive and incident driven.  Umar Farook Abdulmuttallab’s failed bombing attempt on December 25th heavily shaped the homeland security request, including $549 million for whole body scanners at airports.  A continued fixation on the former Soviet states similarly informs a $211 million request for the Nuclear National Security Administration’s Global Threat Reduction Initiative.

Elevating these priorities has required trade-offs in other areas.  Traditional homeland security missions receive less attention in FY2011, such as the $101 million reduction for the Coast Guard.  Protecting against radiological attack also has become a lesser priority within the securing WMD mission area.  State and USAID will continue to add new Foreign Service officers in FY2011, but at a slower place requiring the administration to postpone its growth goal.

Defense, however, seems to be the exception to this rule.  DOD certainly omitted things from its request, but the size of its budget request permits the Pentagon to forego significant trade-offs.  This comes at the risk, however, of creating future pinches, particularly in the area of service-member health care and future spending for Iraq and Afghanistan.

Accountability

Accountability remains disconcertingly weak for the biggest-ticket purchases from these five categories: defense, homeland security, and diplomacy.  The Defense Department, in the words of Dr. Adams, “cannot pass a standard financial audit.”  Consequently, “it is difficult to know exactly how much DOD is spending, and whether it is spending wisely and appropriately.”

Homeland security spending is similarly troubled, in part because the breakneck pace of its growth.  Starting from $20.6 billion in FY2002, homeland security reached $70.8 billion this year and is scheduled to grow further.  Spending effectiveness often is lost in the noise.  As Bill Johnstone noted, “several underperforming programs also request increased budgets this year,” including the demonstrably ineffective BioWatch and Advanced Spectroscopic Portal programs.

Diplomacy and development are not immune from this challenge either.  The State Department and USAID rely heavily on private contractors to implement their programs and initiatives, but weak contract administration and oversight have been long-standing issues at both departments.

Conclusion

The spending, trade-offs, and accountability mechanisms represented in the administration’s FY2011 budget request are the substance that defines the American government’s approach to the world.  Purchasing this approach is requires major resource commitments that, viewed from the top, are unlikely to change in the near term.  Taken together, they underpin conventional wisdom that security defines the American government’s engagement with the world.

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