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Development & Aid

Abrupt U.S. Cuts Could “Devastate” Overseas Development Programmes

WASHINGTON, Feb 22 2013 (IPS) - With just a week to go before massive, indiscriminate spending cuts kick in across the U.S. government, policymakers and humanitarian groups are becoming increasingly anxious about the enduring impact the cuts would have on the communities across the globe assisted by U.S.-funded development and aid programmes.

“[W]e fear that the U.S.agencies that oversee humanitarian response will be put in an impossible position, choosing between saving lives in one country over another,” 40 humanitarian groups wrote in an open letter to policymakers this week. “We also ask that any additional resources not come from other critical poverty fighting accounts within the International Affairs budget, which will also be under pressure.”

The groups warn that costs for international humanitarian needs have already become “overstretched” due to security concerns in Syria, Mali, Congo and Sudan, as well as ongoing food security issues across the Sahel. In Syria alone, they note, humanitarian-related costs are estimated at 1.5 billion dollars just through June, double the figure since September.

The important thing to understand is that these cuts will cost lives.

Driving these concerns is the suddenly real possibility that a piece of compromise legislation signed into law in August 2011, aimed at forcing Republicans and Democrats to agree to a long-term deal to bring down the country’s foreign debt, could be enacted starting Mar. 2.

Known here as the “sequester”, the process stipulated that if such a deal were not agreed upon by the end of last year, budgets across the federal government would be summarily slashed by 85 billion dollars this fiscal year and 1.2 trillion dollars over a decade.

Most frustrating to economists and other observers is that the sequester does not cover most healthcare-related spending, the source of much of the country’s soaring deficit. Yet because the legislation would become law partway through the current fiscal year, all cuts would have to be done on an expedited basis to meet deadline requirements.

While a minor last-minute agreement was struck in late December, it merely pushed off a decision on the sequester. Meanwhile, Democrats, led by President Barack Obama, are insisting that the debt problem needs to be solved by raising additional tax revenue, while Republicans maintain that the money needs to come solely from lowering government spending.

Importantly, the sequester cuts were crafted to be “dumb”, in that neither policymakers nor agency heads would be allowed to aim the cuts at waste or areas of lesser priority. The cuts are also purposefully painful to both Democrats, who typically favour social programmes, and Republicans, who typically favour defence spending.

For these reasons, most observers had expected that legislators couldn’t possibly allow the sequester to go through. Analysts, after all, are forecasting an economic contraction of up to 0.6 percent, with ramifications for essentially all U.S.citizens.

However, barring further last-minute deals – and Congress is currently on a 10-day break – agencies throughout the states and federal government are currently forced to scramble to plan for what could be one of the most destabilising moves the country has ever inflicted on itself.

Cuts cost lives

No exemption will be made for overseas spending, despite constituting less than one percent of overall federal spending. Indeed, as reported in a new public poll released Friday by the Pew Research Center, U.S. respondents preferred cutting “aid to the world’s needy” more than any of 18 other budget options.

According to information released this week by John Kerry, the new secretary of state, the State Department and USAID, the country’s main overseas aid agency, would need to cut around 2.6 billion dollars from this year’s budget.

That would entail chopping 200 million dollars in humanitarian assistance and 400 million dollars in global health programmes. That would include a reduction of 300 million dollars in the budget of the Global Fund to Fight AIDS, Tuberculosis and Malaria – this year alone.

“Such a reduction would hinder our ability to provide life saving food assistant to 2 million people and USAID would have to cease, reduce, or not initiate assistance to millions of disaster affected people,” Kerry wrote to legislators. He also noted that the cuts would “gravely impede” efforts at reducing AIDS-related and child deaths.

“The important thing to understand is that these cuts will cost lives,” said Jeremy Kadden, senior legislative manager with InterAction, an alliance of U.S. NGOs working in developing countries.

“We’ve made very significant progress over the past 10 years, with real people improving their lives, and this would set that process back enormously, devastating actual people on the ground.”

Sequester cuts would lead to some three million children losing access to the basic education they’re currently receiving, Kadden says. Two million people would also see reductions or outright cuts in food aid, while 600,000 children would lose nutrition assistance. (The group is offering more figures here and here.)

According to InterAction estimates, theUnited Stateshas helped some 400 million people get out of extreme poverty over the past two decades. Last year alone, aid reached around 70 million people.

New baseline

Despite the fact that the sequester was never meant as policy, its impact would reverberate for years. According to a new article by Tony P. Hall, a formerU.S. ambassador to the World Food Programme, the current budget negotiations could prove to be “the most far-reaching for the next decade”.

Pointing to the long-term ramifications of even temporarily halting basic education, nutrition or health programmes, including vaccines, Kadden likewise warns that the impact would be “enormous”. Further, this newly reduced funding could constitute baseline budgets in the future.

“If the budget in use at the end of fiscal year 2013 is, say, 5 percent lower than in previous years, and that’s the basis for subsequent years, we’re talking about millions of people who don’t have access to the food, vaccines or basic education they need,” Kadden says.

“There are so many places around the world right now that need help, and we need to ensure, first, that we do no harm. Unfortunately, that seems to be the direction we’re heading in at the moment.”

Even if the sequester goes into effect at the end of next week, members of Congress are required to pass new related legislation by the end of March. Advocates are currently looking at that window as a critical opportunity to ensure that members of Congress hear from constituents and are made to understand the full implications of all sequester-related cuts.

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jacqueline harpman