October 1 is New Year’s Day, at least for those whose lives are measured in fiscal years. No one at the Department of State is toasting the occasion. The new fiscal year, FY 2012, is certain to bring deep cuts in budgets for the Department and for USAID, although how deep depends on how the cuts are measured.

To understand what may happen in the year just beginning, we need to go back to the fiscal year just ended. Congress, thoroughly gridlocked, failed to enact a budget or to pass appropriations for federal agencies until April 2011, when the year was halfway over. The April deal provided $47.4 billion for State and USAID, about 18 percent below the $57 billion that the administration wanted, but only about 2 percent less than the $49 billion provided in FY 2010.

Gobbledygook alert!
In Washington, the custom is to measure budget “cuts” by the difference between sums requested (or projected to be spent) and sums provided (or projected). That is why it is quite possible for spending to rise while budgets are cut. For example, start with spending at 100: if the administration asks for a 20 percent increase in spending, and Congress funds a 10 percent increase, both sides will claim, and the media will report, that spending has been cut by 8 percent (from 120 to 110), while actual spending rises 10 percent (from 100 to 110). Readers who wonder how the federal government managed to run up a debt of $15 trillion can lay part of the blame on this kind of gobbledygook.

FY 2012 and the core budget
The State Department divided its budget request for FY 2012 into two parts. For overseas contingency operations (OCO), which include “temporary and extraordinary” costs in Iraq, Afghanistan, and Pakistan, the administration requested $8.7 billion. For what the Department calls its “core” budget, which includes everything else, the request was $47 billion. The total request was almost $56 billion. (The request for foreign operations, which includes money for foreign aid and operating funds for USAID and certain independent agencies, was an additional $36 billion.) If the OCO budget is fully funded, cuts from the administration’s request will come out of the core budget.

The Super Committee
The April budget deal, the Budget Control Act of 2011, established a super committee, the Joint Select Committee on Deficit Reduction. The six senators and six representatives on this committee are charged with developing a plan to cut projected federal spending by at least $1.5 trillion over ten years. Congress will vote on the plan by December 23, under rules that limit debate and prohibit amendments. If the plan is not enacted by January 15, 2012, a program of reductions in projected spending through across-the-board cuts in defense and non-defense spending would come into effect in FY 2013. (Most mandatory spending, like Social Security, Medicare, and federal retirement, is exempt.) Work on the FY 2012 budget and appropriations bills, which of course should have been enacted about six months ago, is in abeyance until the super committee issues its recommendations.

Piñatas
Authorizing and appropriating committees have reportedly been asked to make recommendations to the super committee by mid-October, but the process is not transparent. It seems fairly clear, though, that the State and USAID budget requests will be useful piñatas. The House and Senate appropriators who deal with with State and foreign operations proposed in another context cuts of 18 percent and 12 percent respectively in the administration’s combined State/AID budget request for FY 2012, and they are likely to make similar recommendations to the super committee. House appropriators in a draft bill released by the Republican majority specifically proposed to cut the budget request for bringing on new entry-level foreign service officers and included provisions to allow State and USAID to expand the use of limited-term appointments — non-career personnel brought into the service in mid-career or senior grades to serve for limited periods of time. A budget that looks like the House appropriators’ draft bill will bring State’s foreign service hiring down to replacement levels, roughly 400 officers and specialists a year.

For further information, follow these links:
State/AID budget request
FY 2011 budget (go to Title XI)
Deputy Secretary Tom Nides on a unified security budget
House appropriators’ draft FY 2012 bill
Walter Pincus in the Washington Post, October 1 and October 4, 2011
Steven Lee Myers in the New York Times, October 3, 2011