Examining Funding for the Millennium Challenge Account

Publication Date: November 2004

Publisher: Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): David Beckmann; Nancy Birdsall

Research Area: Economics

Keywords: Economic inequality; Social inequality; Federal budget; Community development

Type: Report

Abstract:

On November 9, the Center on Budget and Policy Priorities (Washington, D.C.) hosted a media conference call with Nancy Birdsall, president of the Center for Global Development and David Beckmann, president of Bread for the World to discuss the prospect that Congress will significantly reduce the funding requested for the Millennium Challenge Account (MCA), "a new compact for global development" announced by President Bush in March 2002.

Setting the fiscal year 2005 funding level for the MCA is among the decisions facing Congress when it returns for its lame duck session November 15. The House substantially cut the President's request from $2.5 billion to $1.25 billion, and the Senate cut it further to $1.12 billion.

At the time he announced the program, the President pledged that the United States would "lead by example" and increase its core development assistance by 50 percent over the following three years, resulting in an annual increase of $5 billion by FY 2006. In return, recipient nations would agree to performance ratings in 16 areas relating to just governance, investing in people and promoting economic freedom.

The panelists assessed both the funding levels and the degree to which recipients are being held to standards of accountability on education, health, government deficits, civil liberties, political rights, and other issues.