Elephants in the Room


Rex Tillerson’s “terrible mistake” is actually the right thing to do.

U.S. Marines assigned to Joint Task Force - Leeward Islands stack boxes of tarps from the U.S. Agency for International Development as they prepare supplies for distribution at Douglas-Charles Airport in Melville Hall, Dominica, Sept 29. (Sgt. Melissa Martens/U.S. Marines via Getty Images)
U.S. Marines assigned to Joint Task Force - Leeward Islands stack boxes of tarps from the U.S. Agency for International Development as they prepare supplies for distribution at Douglas-Charles Airport in Melville Hall, Dominica, Sept 29. (Sgt. Melissa Martens/U.S. Marines via Getty Images)

There is an important debate going on within the U.S. government about how to track money and determine funding priorities for U.S. foreign policy and foreign assistance. The discussion may seem abstruse, but the outcome will matter a great deal; it will have a direct impact on the American governnment’s ability to defeat terrorists, to create new markets for American business, to counter human trafficking, and to prevent pandemics.

For the last ten years, USAID’s spending decisions have been controlled by the so called “F office” (a central accounting and budgeting office) at the State Department. Now, under the Trump administration’s draft plans for reorganization, it seems likely that USAID will be held accountable for managing all foreign assistance implemented by USAID while the State Department, through a more refined F office, will be responsible for State Department-controlled monies that are implemented by the State Department (checks to UN agencies, security sector assistance, etc.).

On December 14, Gordon Adams and Robert Goldberg – two distinguished and accomplished public servants – published a piece in Foreign Policy in which they argue that “the knives are out for ‘F’ at the State Department”. They argued that there are attempts to “diminish F, transfer its work down the State Department hierarchy, and put USAID in charge of coordinating all foreign assistance”.

I respectfully disagree with the idea that the USAID administrator should not have greater control over policy, planning, and budgeting functions that relate to foreign assistance implemented by USAID. Giving budgeting and spending control over foreign assistance to the USAID administrator, which Mr. Adams and Mr. Goldberg called a “terrible mistake”, actually makes a lot of sense. Especially since the current setup of the F office at State is far from ideal.

F was set up by Secretary Rice in 2006 to get a better sense of how much and where the U.S. was spending foreign assistance. After F was established in 2006, there were three major unintended consequences:

  • The budget process, which was already too long, would now be delayed an additional 3 months or more for USAID to get money to where it was needed (the field);
  • The person responsible for foreign assistance at USAID (the administrator) had far less control over how USAID foreign assistance funds were allocated and reported to a mid-level manager at State (the F office director); and,
  • Long-term development programs were increasingly at the mercy of shorter term and narrower foreign policy objectives as a function of the budgeting function sitting at the State Department where, understandably, development objectives are not always as important.

F has impeded the timely distribution of foreign assistance funds to USAID missions in the field. Prior to F, USAID typically was able to move money to the field by June of any given fiscal year. Now monies frequently do not show up until September, nearly at the end of the fiscal year. This slow distribution of funds places an enormous burden to rapidly distribute funds in a way that means programs or projects often are delayed or lack continuity from one year to the next. This concern may sound like foreign aid bureaucrats whining over when the money shows up, but it has significant real world implications for making real decisions in the toughest corners of the world. Ken Schofield, former mission director in the Philippines and a former Assistant Administrator of the Policy and Planning Office of USAID, laid out this problem clearly in a classic article by my former boss, Andrew Natsios.

There exists an inherent tension, one that is not solvable, between using foreign assistance used for strictly foreign policy reasons (at times a good thing) and foreign assistance used strictly based on needs (a good thing at other times). Few want malaria and food aid moneys, for example, used in a Machiavellian way. In F’s current form, foreign assistance objectives have at times lost out to foreign policy objectives. This may produce outcomes counterproductive to both foreign policy and long-term development objectives.

Secretary Rice’s original idea of tracking foreign assistance spending was a good one and would have been a great idea if the F process had included the 17 other U.S. agencies who also carry out some form of foreign assistance (it didn’t and still doesn’t). No administration has been willing to address this because of issues of turf, competing congressional committee jurisdictions, and a lack of a central coordinator. Instead, the F office has mission creeped its way into becoming an added layer of bureaucratic control over USAID rather than exercising broader coordination of foreign assistance.

As part of my day job at the Center for Strategic and International Studies (CSIS), I convened a task force co-chaired by Senator Jeanne Shaheen (D-NH) and Senator Todd Young (R-IN) in response to President Trump’s March 2017 executive order seeking reorganization and reform ideas. In that report, we recommended that we “dual hat” the USAID administrator as coordinator of all foreign assistance reporting to the Secretary of State, also giving him or her the authority to manage foreign assistance resources. The bean counting debates discussed above are thus part of the larger discussion about reorganization; it should be the case that the USAID Administrator reports to the Secretary of State (much in the way that the head of the FBI reports to the Attorney General). Only then can the Secretary of State hold USAID accountable for its work.

U.S. foreign assistance is an important instrument of our national security and our foreign policy. However, getting what we want out of foreign assistance often takes longer than shorter term foreign policy agendas will allow. This key difference in timing is something that leaders need to understand. The incredible progress in Colombia is Exhibit A; it took 15 years to get to where we are and, as evidenced by some recent backsliding, we still have a ways to go.

We need a strong State Department and a strong USAID that have the tools to succeed. The on-going reorganization at State and USAID should clarify roles and responsibilities. Control of the foreign policy budget should be with those accountable for execution of foreign policy. Control of the foreign assistance budget should be with those accountable for execution of foreign assistance. Strengthening the USAID administrator as the person solely responsible is a part of ensuring we are using all tools of American power effectively.

Daniel Runde served in the George W. Bush administration at USAID. He also worked at the World Bank Group (IFC). He currently holds the William A. Schreyer Chair at the Center for Strategic and International Studies.

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