A New Incentive

February 13, 2012

President Obama released his budget request for fiscal year 2013 today, which starts October 1 of this year.  With it, he has added a new twist to the debate about our national security funding.  The budget request, which calls for an increase to international affairs funding—the civilian, rather than military part of our overseas engagement—may actually encourage Congress to cut it. 

The law passed last August to help resolve our fiscal crisis, the Budget Control Act (BCA), partly did so by capping discretionary funding.  It created two categories  in recognition of the differing political dynamics for different types of funding, much as was done in the 1990s. The total spending in each category is enforced with caps-limits on the amount of spending in each category.  But where in the 1990s the budget was divided between defense spending and non-defense spending with each category having its own cap, the BCA divided the budget between security and non-security each with its own cap.  This creates a larger category that combines defense with many civilian agencies and activities that contribute to our national security. International Affairs, encompasses the Department of State and all of our foreign assistance programs, from USAID, to multilateral assistance; Homeland Security; Veterans Affairs; some unclassified intelligence funding; as well as the National Nuclear Security Administration, which controls our nuclear weapons materiel and resides in the Department of Energy.  In some ways, this division was a triumph for those who argued that international affairs funding is as critical to our national security as defense spending.  

The President's budget request continues this security/non-security divide.  Under this divide, international affairs funding did particularly well.  The budget requests $4.3 billion more base funding for State and Other International Programs than was provided in FY12, the largest increase of any agency.  In contrast, the Defense Department saw a decrease of $5 billion from FY12 in its base budget, the third-largest cut after the Departments of Justice and Health and Human Services. 

Unfortunately, the security/non-security divide is not the current law of the land.  The BCA also created a committee to recommend an additional $1.2 trillion in savings, called the supercommittee, and set up penalties if the supercommittee did not achieve those savings.  When the supercommittee failed to reach an agreement, a part of the penalties was a switch back to the defense/non-defense division, rather than security/non-security.  Under that division, the amounts the President's budget requests for national defense-which includes nuclear weapons funding and other defense-related activities besides just the Defense Department-would exceed the cap by $4 billion.  If Congress does not change how the caps are currently arrayed or appropriate less funds, all of national defense, including the Department of Defense, will be cut back by that $4 billion through an automatic enforcement process. The budget request seeks to avoid this by assuming Congress will change the law to codify the President's concept. 

But if the administration does get its request and Congress does change the law to restore the security/non-security divide, Congress may be encouraged to cut international affairs funding.  International affairs funding, with its $4 billion increase, will be under the same cap as the Defense Department, with its $5 billion decrease.  Since the two accounts are under the same account, Congress can move money between them without running afoul of the revised BCA's enforcement mechanisms.  If the traditional preferences of Congress hold, the two houses would be sorely tempted to filch some of the international affairs increase to prevent an unwanted cut to the Defense Department. 

The President's budget request endorses a modern understanding of national security funding.  But in doing so, it opens the door for Congress to take a more traditional view and use international affairs funding to pay for additional defense spending.  Advocates of international affairs spending face a dilemma.  Do they celebrate a strategic victory in having international affairs acknowledged as key to national security?  Or do they worry they'll lose tactically as Congress moves funding around?  As always, the budget's bottom line will differ from the President's request.

Photo Credit: DOD Photo by Erin A. Kirk-Cuomo, http://www.flickr.com/photos/secdef/6641954431/