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U.S. Government Shutdown Could Hit Foreign Aid

WASHINGTON, Oct 1 2013 (IPS) - A deadlocked U.S. Congress proved unable to settle budgetary differences late Monday evening, leading to a federal government shutdown that could soon be felt by foreign aid programmes and their recipients.

Tuesday was the start of the fiscal year in Washington, but polarised lawmakers have been unable to agree on how to fund the federal government in an era of austerity. As such, a vast but complex patchwork of federal government agencies and programmes has been forced to slow or shut down entirely.

"A shutdown starts to threaten the reliable, longer-term term relationship that is really central to a lot of the programmes that USAID undertakes.” --Lisa Schechtman of Water Aid America

Thus far, much of the focus here has been on the impact on domestic social spending – important food programmes for seniors, children and pregnant mothers, for instance, will be cut off completely – and on U.S. jobs. Indeed, one of the last moves President Barack Obama took on Monday was to sign into law an emergency measure to continue paying members of the U.S. military.

Members of the Foreign Service, however, will likely see impacts if the shutdown continues, as will programmes dependent on U.S. foreign aid.

“Internationally, the U.S. government will not be able to make any new contributions to agencies that deliver food aid and other services to poor and hungry people around the world, nor respond to new humanitarian emergencies. Over time, hungry people relying on U.S. aid will not receive food, and children will not receive inoculations against disease,” Rev. John L. McCullough, the president of Church World Service, an anti-poverty campaigner, said during a press call Monday.

“For decades Democrats and Republican alike have agreed on the vital importance of robust humanitarian and development assistance. But the myopia of some [lawmakers] and their unwillingness to compromise has eroded this consensus, literally taking away food from the mouths of hungry children.”

For the moment, U.S. officials have been quick to offer assurances that most U.S.-assisted development programming would not be affected by the shutdown, which formally began at midnight Monday night. But the complexity of U.S. federal programmes and their varying budgetary schedules means that it is impossible to offer an overarching analysis of the ramifications for USAID, the government’s main foreign aid arm.

“If the government shuts down, initially Department of State and USAID activities can be sustained on a limited basis for a short period of time,” Jen Psaki, a State Department spokesperson, told reporters Monday. “Because we’re able to sustain our operations on a limited basis, the vast majority of normal functions and operations will continue.”

Psaki was unable to say whether this “short period” meant additional funding periods of days, weeks or months, however, noting only that the State Department’s budget analysts were “still punching through” the fallout.

Loss of confidence

But it is clear that U.S. assistance will begin to feel shutdown-related economic pinches – or worse – if lawmakers are not able to reopen the government in the near term. The first to be impacted would likely be some of the development programmes that receive funding in just one-year durations.

According to guidance put out on Friday by USAID, the agency says it plans to “continue as many normal operations as possible … until all appropriated balances are insufficient to continue.” For many programmes, that will mean until funding for the past fiscal year is finished.

Even before that point, humanitarian and assistance programmes will feel strains. During the shutdown, new programmes will be unable to begin, new personnel will not be hired, and even unplanned travel by U.S. officials will be barred.

Further, there are already very real long-term negative implications for the stability and confidence often required for the intricate associations required for modern development programmes to succeed.

“Our biggest concern right now is the loss of confidence and predictability in ongoing U.S. government relationships with partner governments in poor countries,” Lisa Schechtman, head of policy and advocacy at Water Aid America, a development group, told IPS.

“For instance, to implement a successful sanitation programme requires a relatively long-term investment to actually change community behaviour. A shutdown starts to threaten the reliable, longer-term term relationship that is really central to a lot of the programmes that USAID undertakes.”

Further, as fiscal disagreement continues in Washington, Schechtman notes that foreign assistance – although constituting less than 1 percent of the overall budget – will remain increasingly vulnerable to cuts.

“The challenge is that USAID is often disproportionately targeted in budget negotiations, with members of Congress viewing USAID’s work as a good place to start when trying to save money,” she says.

“[Foreign assistance] appropriations are already lacking in comfortable funding levels, which means that their staying power is not as long as we would like. That’s not just about the U.S. government missing opportunities, but also translates into impacts on human lives around the world.”

Protracted disagreement

Although political pressures are quickly growing on lawmakers to arrive at a funding solution to re-open the federal government, the current situation could drag on longer than some have previously suggested.

Despite new moves towards negotiation on Tuesday, there is remarkably little overlap in the negotiating stances adopted by Republicans and Democrats. Thus, unlike previous shutdowns of the federal government (the last took place in the mid-1990s), today’s political positioning appears to offer remarkably little room for eventual compromise.

At the centre of the conservative stance is a demand to halt or dismantle new health-care legislation that also went into effect Tuesday and would require that nearly all U.S. citizens receive some sort of health coverage. Yet that stipulation is a nonstarter for Democrats, particularly for President Barack Obama, for whom the health-care law is considered a signature achievement.

The health-care debate is actually a central part of a much broader disagreement, however, over the size and sustainability of U.S. debt, an issue that has become a key mobilisation tool for conservative Republicans. This spring, a similar stalemate in Congress led to automatic budget cuts of an estimated 3 to 8 percent for every federal government agency, USAID included.

It’s important to note, then, that any hiccup in foreign assistance delivery from the current shutdown would be coming on top of those broader cuts. Further, unless politicians are able to agree to a long-term spending deal, another round of these across-the-board budget cuts are due in the spring and each year for the next decade.

These ramifications are already being felt. This year’s automatic cuts, for instance, could shrink global health spending at the State Department and USAID by almost a half-billion dollars this year alone.

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