Slaughter: State Department to propose some budget increases, some cuts

Slaughter: State Department to propose some budget increases, some cuts

The State Department and USAID, facing their most challenging fiscal environment in years, will be asking for targeted budget increases while simultaneously arguing that their overall reform effort is a money saver, the head of State’s internal think tank said Wednesday. But the upcoming budget battle is going to an uphill battle for both organizations.

The State Department and USAID secured big budget increases in fiscal 2010, which the administration argued was needed due to the shrinking of both organizations’ budgets over the years, the need to repair U.S. relationships abroad, and the ever increasing civilian role in Iraq, Afghanistan, and Pakistan.

The grim fiscal picture and altered political landscape on Capitol Hill, however, threaten to reverse those gains. House Republicans leaders are promising to slash State Department and development budgets and to apply a litmus test to disbursements of foreign aid. A large group of conservative Republicans have proposed a drastic defunding of USAID.

Last week, USAID Administrator Rajiv Shah argued in an interview with The Cable that increased funding for development is needed to protect national security. Today, the State Department’s outgoing Director of Policy Planning Anne-Marie Slaughter argued in a breakfast meeting that State and USAID need even more funding in order to implement crucial reforms and clear up the bureaucratic confusion of the current system.

"We will still be asking for increases in very targeted areas," she said, referring to the administration’s fiscal 2012 budget request which will be released in February. Fiscal 2011 funding will likely stay at 2010 levels due to the likelihood of a year-long continuing resolution. But Slaughter said the budget request will also call for reduced funding in other areas.

"The things that align with our priorities will be funded and those that don’t align with some of these priorities will not," Slaughter said.

Slaughter also noted that the Quadrennial Diplomacy and Development Review, which she helped to lead, contains the analytical arguments for more money for some State and USAID programs.

"[The QDDR] is the basis for our budget presentation," she said. "[House Foreign Affairs Committee Chairwoman Ileana] Ros-Lehtinen said we want you to figure out how to work much better and much more efficiently. Secretary [of State Hillary] Clinton’s answer is, we’ve spend the last 18 months doing that."

Meanwhile, State will immediately begin work on the 60 percent of the initiatives in the QDDR that can be implemented without new resources.

What can’t be funded in the State Department’s budget could come from Pentagon coffers. What State and DOD have been doing in the warzones is to use money from the Pentagon or pooled State-DoD accounts  to support missions abroad.

"It is very unlikely that we are going to see a huge shift in resources from DOD to State and USAID, but it is likely that we are going to find ways to be able to spend these resources together, with State and USAID in the lead," she said. "It’s the military that understands better than anyone that is has to be civilians in the lead."

Slaughter doubled down on the QDDR’s call for a unified national security budget — which she hoped would encompass not only the State Department, USAID, and the Pentagon, but also the Department of Homeland Security and parts of the Department of Justice — but warned it isn’t coming soon.

"We do think it’s feasible…I do expect a lot of work on that over the next two years," she said. "Getting there is going to take some doing."

Meanwhile, USAID must rely on the leadership of the State Department if it wants to thrive in the current cutthroat political environment, Slaughter argued.

"Could anybody right now think that USAID would be better off at a time when people are calling for defunding it completely if Raj Shah were the only one fighting for it, rather than Secretary Clinton?" she asked. "Could anybody possibly imagine that they would be in better shape to get the funding that they need?"

Slaughter steps down later this month to return to Princeton University and will be replaced by Clinton’s Deputy Chief of Staff Jake Sullivan. So what will happen to the implementation of the QDDR, now that its top two officials, Slaughter and former Deputy Secretary Jack Lew, won’t be around?

"It would be crazy for me to try to drive the implementation," said Slaughter, who handed off official responsibility for implementation to Deputy Secretary Thomas Nides. "We basically empowered a lot of people in the State Department and USAID who want to do this… They have to actually implement it. Otherwise it remains way too theoretical."