U.S. Budget Battle Preview: How it May Affect Foreign Aid

Thursday, January 24, 2013

Congress and the White House reached a “fiscal cliff” agreement at the beginning of this month on a limited revenue and spending reduction package that, while resolving the expiration of the Bush tax cuts, delayed the more critical decisions needed to avert sequestration and achieve a significant, long-term deficit reduction deal. Under this agreement, sequestration is now delayed until March 1 when the automatic spending cuts will occur if no further agreement is reached. This deadline will also approximately coincide with Treasury Department estimates of when the U.S. will hit the debt ceiling and slightly precede the March 27 expiration of the Continuing Resolution (CR).

In a late-breaking development, House Republicans announced Friday a plan to extend the debt ceiling limit until May 18. The proposal links the delay with an effort to force the Senate to act on a budget resolution for FY14, something the Senate has not done for the past three years. Under the terms of the Republican proposal (H.R. 325), which is expected to taken up by the House tomorrow, if the House or Senate has not adopted a budget resolution by April 15, Member salaries will be placed in escrow. The legislation, however, does not affect either the March 1 deadline for sequestration or the March 27 expiration of the CR.

With all this uncertainty surrounding the budget, what are the implications for International Affairs programs?

Source: Devex (link opens in a new window)

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