Appropriations for FY2005: Foreign Operations, Export Financing, and Related Programs

Publication Date: January 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Banking and finance

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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.

Funding for Foreign Operations programs have been rising for five consecutive years, although amounts approved in FY2003 and FY2004 have reached unprecedented levels over the past 40 years. Substantial supplementals in both years for assistance to the front line states in the war on terrorism and Afghanistan and Iraq reconstruction, have pushed spending upward. The regular Foreign Operations bill, signed by the President on January 23, 2004, combined with an earlier Iraq supplemental approved in November 2003 (P.L. 108-106), bring current year appropriations to $39.4 billion (constant FY2005 dollars), the highest level, in real terms, since the early 1960s.

For FY2005 President Bush asked Congress to appropriate $21.32 billion. The budget proposal was $2.05 billion, or 10.6% higher than Foreign Operations appropriations for FY2004, excluding funds approved for Iraq reconstruction. Despite the large overall increase for Foreign Operations, much of the added funding was concentrated in a few areas. The FY2005 budget blueprint continued to highlight foreign aid in support of the war on terrorism as the highest priority. Two recently launched foreign aid initiatives ? the Millennium Challenge Corporation (MCC) and the President's Emergency Plan for AIDS Relief (PEPFAR) ? were slated for significant funding increases. The MCC would have grown from $994 million in FY2004 to $2.5 billion for FY2005. PEPFAR would have risen from $1.6 billion in FY2004 to $2.2 billion in the FY2005 request. (Additional PEPFAR funds were proposed in the Labor/HHS appropriation measure, bringing the total FY2005 PEPFAR request to $2.82 billion.) The FY2005 request further included substantial increases for the Peace Corps and for debt reduction.

The FY2005 Foreign Operations debate included a discussion of several major 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. Although no additional funds were sought for Iraq reconstruction, attention also focused on implementation efforts for the roughly $23.8 billion appropriated in FY2003/ 2004.

On November 18, Congress approved the Foreign Operations conference report (Division D of H.R. 4818; P.L. 108-447). As passed, the measure provides $19.64 billion after adjusting for a required 0.8% across-the-board rescission. Although this is $1.68 billion, or nearly 8% below the request, Congress increased amounts passed earlier by the House and Senate, adding additional funds for the Millennium Challenge Account and emergency appropriations for the Darfur region in Sudan.

This report will be updated to reflect congressional action on the legislation.