Appropriations for FY1999: Foreign Operations, Export Financing, and Related Programs

Publication Date: November 1998

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: International relations

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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 — over two-thirds — of total U.S. international affairs spending. For Foreign Operations programs, President Clinton sought $13.6 billion in discretionary budget authority for FY1999, nearly $800 million, or 6% higher than available for FY1998. But unlike a year ago, when the President concentrated most of the added funds requested on a few high priority areas, the FY1999 request asked for increases across a wide array of Foreign Operations programs, including export promotion agencies, development assistance, debt reduction initiatives, the Peace Corps, drug control aid, arrearage payments for multilateral development banks, and others. Israel, Egypt, Russia, Ukraine, and Bosnia would be the largest recipients of bilateral aid, as has been the case in the recent past. Beyond these regular Foreign Operations programs, the President also sought $17.9 billion for U.S. contributions to two IMF facilities and $502 million for U.S. arreage payments to multilateral development banks.

In addition to funding questions, the Foreign Operations debate also included important policy issues, such as priorities of development aid strategies, abortion restrictions on international family planning programs, adjusting Middle East aid allocations, policy restrictions on aid to Russia and Ukraine, and the use of American assistance as a tool in the Armenian-Azerbaijan dispute over Nagorno-Karabakh.

Foreign Operations is one of eight appropriation bills incorporated and enacted in H.R. 4238, the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999. As passed on October 20/21, H.R. 4328 includes $12.827 billion for discretionary Foreign Operations. In addition, the omnibus bill includes $539 million to clear U.S. arrears at multilateral development banks, $399 million in "emergency" Foreign Operations supplementals, and $17.9 billion for the IMF, funds that are not "scored" against the Foreign Operations budget cap, but which provide additional resources for U.S. foreign aid activities. In total, H.R. 4328 provides $31.63 billion for Foreign Operations in FY1999.

Although this still falls about $385 million below the President's request, it provides a substantial increase from what the House and Senate had approved in bills (H.R. 4569 and S. 2334) passed in September. Senior executive branch officials had advised the President to veto these earlier measures because of inadequate funding. Compared with the Senate-passed bill, the higher of the two, budget negotiations between congressional leaders and the White House during the final days of the 105th Congress resulted in $880 million more for Foreign Operations in FY1999. Much of the additional money included in H.R. 4328 is allocated for former Soviet aid, USAID operating expenses, disaster relief, the Peace Corps and U.S. contributions to the Global Environment Facility. The bill caps international family planning aid at $385 million, but drops House-passed abortion restrictions. The enacted legislation also initiates a ten year process to phase out economic aid to Israel and trim by half Egypt's aid, reducing total combined assistance for FY1999 by $100 million to just over $5 billion.