Appropriations for FY2004: Foreign Operations, Export Financing, and Related Programs

Publication Date: September 2003

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Banking and finance; International relations

Type:

Abstract:

The annual Foreign Operations appropriations bill is the primary legislative vehicle through which Congress reviews the U.S. foreign aid budget and influences executive branch foreign policy making generally. It contains the largest share — about two-thirds — of total U.S. international affairs spending.

President Bush has asked Congress to appropriate $18.89 billion for FY2004 Foreign Operations. The budget proposal is $2.7 billion, or 16.7% higher than regular (non-supplemental) Foreign Operations appropriations for FY2003. If enacted, the President’s recommendation would result in one of the largest increases of regular Foreign Operations funding in at least two decades. Congress subsequently approved in mid-April an additional $7.5 billion FY2003 supplemental foreign aid spending in P.L. 108-11, for Iraq reconstruction, assistance to coalition partners, and other activities supporting the global war on terrorism. Including the supplemental brings Foreign Operations appropriations in FY2003 to $23.67 billion.

The FY2004 budget blueprint continues to highlight foreign aid in support of the war on terrorism as the highest priority, with about $4.7 billion recommended. The submission also requests funding for four new foreign aid initiatives which together account for most of the $2.7 billion increase over regular FY2003 levels. Combined, the Millennium Challenge Account, a new foreign aid concept, the State Department’s Global AIDS Initiative, and two new contingency funds, total $2.05 billion. Other Foreign Operations programs are left with a more modest 4% increase.

In total, the request includes $1.2 billion for HIV/AIDS, about $350 million more than enacted for FY2003, and $7.1 billion for military and security-related economic aid, up nearly $650 million or 10% from regular FY2003 appropriations. “Core” bilateral development assistance funding, however, would fall by 8%, although recipients of these accounts are likely to benefit significantly from the new Millennium Challenge Account and Global AIDS Initiative. Funding for Eastern Europe and former Soviet programs is cut by 21%.

The FY2004 budget resolution (H.Con.Res. 95) includes $28.65 billion in discretionary budget authority for International Affairs programs, the same as the President’s request. To accommodate other priorities, however, the House and Senate Appropriations Committees decided to reduce the Foreign Operations allocation by 9.4% and 4.2%, respectively. On July 23, the House passed H.R. 2800, appropriating $17.12 billion. The Senate panel reported S. 1426 on July 17, providing $18.093 billion.

The FY2004 Foreign Operations debate has included discussion of several significant policy issues, including foreign aid as a tool in the global war on terrorism, the Millennium Challenge Account, programs to combat HIV/AIDS, international family planning programs, and Afghan reconstruction.