The House will mark up a funding bill for the State Department and foreign operations Wednesday that would cut the international affairs budget by billions and restrict U.S. involvement in a host of international organizations.

The House Appropriations State and Foreign Ops subcommittee, led by Rep. Kay Granger (R-TX), unveiled its fiscal 2012 appropriations bill today in advance of tomorrow's markup. The bill would provide State and USAID with $39.6 billion in discretionary funding next year, which is 18 percent, or $8.6 billion, below the fiscal 2011 level. The fiscal 2011 level, which was reached as part of a deal to avoid a government shutdown in April, was already $8 billion less than originally requested by the Obama administration. The State Department did move about $3.5 billion from its regular budget to a new "Overseas Contingency Operations" account for the wars in Iraq and Afghanistan, so the apples-to-apples reduction is closer to $5 billion.

Democrats on the committee and NGO leaders reacted with frustration at the bill's cuts to dozens of State Department and foreign assistance programs, as well as its proposal to slash USAID operating expenses by more than a third.

"I am disappointed that the 2012 State and Foreign Operations Appropriations Act funds priorities that are critical to our national security and global leadership at inadequate levels, and includes divisive and partisan policy riders that are counter-productive to effective diplomacy and development," said subcommittee ranking Democrat Nita Lowey (D-NY) in a statement today. "At a time when the demands we place on our diplomatic and development workforce are increasing, it is short-sighted to downsize the Department of State and USAID."

House Appropriations Committee ranking Democrat Norm Dicks (D-WA) blamed the Republican leadership for not giving Granger enough total funds picture to properly support the development programs.

"Once again the Republican leadership has presented us with a completely inadequate subcommittee allocation that will reduce our influence overseas and damage the security of our nation," he said. "Core program funding in this bill... would mean layoffs at both the State Department and USAID."

The State and Foreign Operations appropriations bill usually enjoys wide bipartisan support, but this year will be an exception. House Democratic aides said that the bill was crafted in a way to satisfy GOP political priorities and without much consideration for comity or consensus across the aisle.

"The decision was apparently made that this would be a Republican bill," one House Democratic aide said.

For employees at State and USAID, the cuts could be particularly biting. The bill cuts the $1.35 billion USAID operations budget to around $900 million and would eliminate what's known as "localization pay" for diplomats abroad, which would immediately bring down their salaries.

"We're starting to see the kinds of cuts that will affect the ability of agencies to implement important tools of our foreign assistance and our foreign policy," said Mark Green, a former U.S. Ambassador to Tanzania and currently senior director at the U.S. Global Leadership Coalition. "We understand that every part of the government is on the table, but what we're looking at here is a very small part of the budget taking significant cuts."

The administration had requested $51.2 billion for State and USAID for fiscal 2012, but nobody is even discussing that number anymore, because the current debt crisis negotiations promise to change the amounts of funding available for all discretionary accounts.

The fluid fiscal situation also spells uncertainty for Granger's bill, which could probably pass on the House floor but would face resistance in the Democrat-controlled Senate. But due to the debt crisis, the Senate isn't planning to start work on appropriations bills until at least September, which doesn't leave a lot of time to work with the House to come up with a compromise before the fiscal year begins on Oct. 1.

The policy riders in the bill include a reinstatement of the Mexico City Policy, which would ban federal funding for organizations that promote abortion. This was also added to the House Foreign Affairs Committee's fiscal 2012 authorization bill, though that piece of legislation isn't expected to become law either.

The bill would defund U.S. contributions to the U.N. Human Rights Council, cap U.S contributions to U.N. peacekeeping at 25 percent of the overall peacekeeping budget (which would put the United States in arrears), blocks U.S. contributions to the U.N. Population Fund, cut funding for programs meant to address climate change, restrict 30 percent of U.S. future contributions to the United Nations until it publishes all of its internal financial audits online (which isn't likely), and rescinds already appropriated funds for the International Monetary Fund.

In a letter sent on Monday to Granger and Lowey, the U.S. Chamber of Commerce urged the committee not to cut funding for multilateral financial institutions or democracy-promotion programs abroad, both of which face cuts in the bill.

"The International Affairs budget and these agencies play a vital enabling role for U.S. companies to tap foreign markets and create jobs and prosperity at home," the Chamber wrote. "Although it represents less than 1.5% of the total federal budget, the International Affairs budget is critical to creating jobs, saving lives, protecting U.S. diplomats and embassies abroad, and fighting terrorism and the spread of weapons of mass destruction."

The committee recommended funding the Overseas Contingency Operations account at $7.6 billion, which is technically $1.1 billion less than requested, but that is because about $1 billion of Pakistan counterinsurgency funding was transferred back to the Pentagon's jurisdiction.

"This bill reforms and refocuses the way we spend our foreign aid. We have established tough oversight and accountability measures that will make sure my constituents' tax dollars are not wasted overseas while making sure we support our national security priorities and key allies," Granger said in a statement. "In this difficult geopolitical and economic climate, the American people deserve policies that are based on our principles."

On the second day of its marathon markup session, the House Foreign Affairs Committee voted to reinstate and expand a wide-ranging ban on funding international non-governmental organizations that discuss abortion known as the Mexico City Policy.

Following a contentious day of debate Wednesday on Chairwoman Ileana Ros-Lehtinen's fiscal 2012 State Department and foreign operations authorization bill, the committee finally adjourned at 2 a.m. Thursday morning and then returned at 9 a.m. to resume work on the legislation. One of their first orders of business was to vote on an amendment by ranking Democrat Howard Berman to strip language that would ban any funding for groups that counsel women on family planning options from the bill.

The language that Berman wanted to strip reads: "None of the funds authorized to be appropriated by this act or any amendment made by this Act may be made available to any foreign nongovernmental organization that promotes or performs abortion, except in cases of rape or incest or when the life of the mother would be endangered if the fetus were carried to term."

The bill's language is a version of what has been known since 1984 as the Mexico City Policy, named for the city where President Ronald Reagan first announced it. President Bill Clinton rescinded the policy in 1993, President George W. Bush reinstated it in 2001, and President Barack Obama rescinded it again in 2009.  

Republicans have been trying to restore the policy ever since. Last year, Sen. Roger Wicker (R-MS) helped defeat the International Violence Against Women Act by attaching the Mexico City Policy to the bill in committee, thereby preventing the legislation from reaching the Senate floor.

Berman's amendment failed by a 17-25 vote that played out largely along party lines. Only one Democrat broke ranks, Rep. Ben Chandler (D-KY). The Ros-Lehtinen language is actually an expansion of the policy as it existed during the Bush administration because it would ban all funding for organizations that discuss abortion and not make exceptions for certain programs such as HIV/AIDS funding. Bush made allowances for HIV/AIDS programs to receive funding even within organizations that were affected by the policy.

“The provision included in this bill is far more extreme than the Global Gag Rule policy that was implemented under Presidents Reagan, George Bush, or George W. Bush," said Berman. "It bars ALL assistance to local health care providers in poor countries – including HIV/AIDS funding, water and sanitation, child survival, and education.  In the name of 'right to life,' the majority is cutting off funds that are literally saving hundreds of thousands of lives.”

There's no telling if Ros-Lehtinen's bill will ever see the House floor, much less become law or be signed by Obama, but the inclusion of the Mexico City Policy signals that the GOP intends to keep the issue alive throughout this year's cycle of authorization and appropriations bills, until or unless it is reinstated or defeated outright.

"It is a sad day for the millions of women around the world who need and want access to contraception," said Craig Lasher, director of government relations for Population Action International, an international NGO that advocates for women's access to contraception and reproductive counseling. "Committee members should be ashamed for taking the Republican Party's war on women to the global stage."

Rajiv Shah, head of the U.S. Agency for International Development (USAID), has a message for those in Congress who want to slash development and foreign-aid budgets: Cuts will undermine U.S. national security.

On the heels of a major speech on the coming reforms to America's premier development agency, Shah sat down for an exclusive interview with The Cable to explain his vision for making USAID more responsible and accountable, an effort he said will require increased short-term investment in order to realize long-term savings.

But if Congress follows through on a massive defunding of USAID as the 165-member Republican Study Group recommended yesterday, it would not only put USAID's reforms in jeopardy, but have real and drastic negative implications for American power and the ongoing missions in Afghanistan and Pakistan, according to Shah.

"That first and foremost puts our national security in real jeopardy because we are working hand and glove with our military to keep us safe," said Shah, referring to USAID missions in Afghanistan, Iraq, Pakistan, Yemen, the Horn of Africa, and Central America, and responding directly to congressional calls for cuts in foreign aid and development.

The RSC plan calls for $1.39 billion in annual savings from USAID. The USAID operating budget for fiscal 2010 was approximately $1.65 billion. The RSC spending plan summary was not clear if all the cuts would come from operations or from USAID administered programs. 

"That would have massive negative implications for our fundamental security," said Shah. "And as people start to engage in a discussion of what that would mean for protecting our border, for preventing terrorist safe havens and keeping our country safe from extremists' ideology … and what that would mean for literally taking children that we feed and keep alive through medicines or food and leaving them to starve. I think those are the types of things people will back away from."

The interests between the development community and U.S. national security objectives don't always align, and this tension is at the core of the debate on how to reinvigorate USAID. Short-term foreign-policy objectives sometimes don't match long-term development needs, and U.S. foreign-policy priorities are not made with development foremost in mind.

But Shah's ambitious drive to reform USAID seems to embrace the idea that development investments can be justified due to their linkage with national security. He is preparing to unveil next month USAID's first ever policy on combating violent extremism and executing counterinsurgency. He also plans to focus USAID's efforts on hot spots like Afghanistan, Pakistan, Sudan, and parts of sub-Saharan Africa, while transitioning away from other countries that are faring well and downgrading the agency's presence in places like Paris, Rome, and Tokyo.

Shah pointed out that Defense Secretary Robert Gates, Joint Chiefs Chairman Adm. Mike Mullen, and ISAF Commander Gen. David Petraeus have all come out in strong support of increasing USAID's capacity to do foreign aid.

"In the military they call us a high-value, low-density partner because we are of high value to the national security mission but there aren't enough of us and we don't have enough capability," he said. "This is actually a much, much, much more efficient investment than sending in our troops, not even counting the tremendous risk to American lives when we have to do that."

For those less concerned with matters of national security, Shah also framed his argument for development aid in terms of increased domestic economic and job opportunities: If we want to export more, we need to help develop new markets that are U.S.-friendly.

"If we are going to be competitive as a country and create jobs at home, we cannot ignore the billions of people who are currently very low income but will in fact form a major new middle-class market in the next two decades," he said.

One of the main criticisms of USAID both on Capitol Hill and elsewhere is that the agency has been reduced over the years to not much more than a contracting outfit, disbursing billions of dollars around the world to organizations that have mixed performance records. In Shah's view, if Congress wants USAID to eliminate waste, fraud, and abuse, it has to increase the agency's operating budget and allow the agency to monitor contracts in-house.

"It was the Bush administration that helped launch the effort to reinvest in USAID's capabilities and hiring and people, and the reason they did that is they recognized you save a lot more money by being better managers of contracts," Shah said. "We have a choice. We have a critical need to make the smart investments in our own operations … which over time will save hundreds of millions of dollars, as opposed to trying to save a little bit now by cutting our capacity to do oversight and monitoring."

Shah wouldn't comment on the latest and greatest USAID contracting scandal, where the agency suspended contractor AED from receiving any new contracts amid allegations of widespread fraud. But he did say that his office would be personally reviewing large sole-source contracts from now on, requiring independent and public evaluations, and that more corrective actions are in the works.

"I suspect you'll see more instances of effective, proactive oversight that in fact saves American taxpayers significant resources," he said.

The Senate Foreign Relations Committee was set to vote yesterday on a bill to drastically expand U.S. government support to end violence against women around the world. Before that could happen, however, there was to be a debate over GOP attempts to add broad new restrictions on government funding for abortions.

But neither the debate nor the vote happened. The meeting was cancelled because too many senators were out campaigning.

"We can't get a quorum [to hold the meeting] because Senator Boxer has a debate, Senator Feingold is not here, and some Republicans have a caucus," Chairman John Kerry (D-MA), told The Cable.

Ironically, Boxer has spoken out forcefully for the legislation, called the International Violence Against Women Act (IVAWA), at past meetings. But her absence Wednesday contributed to a delay that will push consideration of the bill until after the Nov. 2 midterm elections and probably until next year, when the political makeup of the Senate will have changed dramatically.

The legislation would give expansive new authorities to the State Department and the Defense Department to fund all types of organizations that are working to combat violence against women and girls in various countries.

This issue is a key priority of Secretary of State Hillary Clinton, and it constitutes a rampant problem throughout the world. In Congo, for example, U.N. peacekeepers have been completely unable to stop widespread rape by warring militias.

But the bill cannot come to a vote until committee members debate a Republican amendment prohibiting  any organization receiving U.S. government funds from performing or promoting abortions in any way, even with money obtained from other sources.

That is what's been known since 1984 as the "Mexico City Policy," named for the city where President Ronald Reagan first announced it. President Clinton rescinded the policy in 1993, President Bush reinstated it in 2001, and President Obama rescinded it again in 2009.

This time, the man trying to reinstate it is Sen. Roger Wicker (R-MS), who was planning to offer this amendment to the IVAWA at the SFRC business meeting scheduled for Wednesday. He talked about his amendment in an interview Wednesday with The Cable.

"It's designed to make sure that the numerous NGOs and private charitable entities that are empowered by this act do not pay for or advocate for abortions," Wicker said, adding he didn't know if the amendment would pass.

Democrats currently control the Senate and therefore the committee, so could seemingly vote down Wicker's amendment. Kerry said he had prepared another amendment that would protect the current policy.

But Bob Casey (D-PA), one of the Democrats on the committee, is pro-life and told The Cable that he also has prepared language to add to the bill that's not quite the same as Wicker's but still places new restrictions on abortion funding.

If the bill had been approved by the committee Wednesday, it could have been passed by the full Senate. Maine Republican Sens. Susan Collins and Olympia Snowe are sponsors of the bill, meaning that even if Casey voted no, Democrats could gather the 60 votes needed to close debate and approve the bill.

But since that is now impossible this year, passing the bill is expected to become even more challenging following the midterm elections, when more Republicans are expected to be in the Senate and on the SFRC. When senators return next year, they may have to make further concessions to Wicker and others on the abortion issue in order to get enough votes. Or they may just abandon their attempts to pass new laws to protect women from violence altogether.

What's clear is that the abortion issue needs to be resolved before the bill can move forward. "Seems to me that we should solve this issue first, because there a lot of good things in this bill that I support," said Sen. Bob Corker (R-TN).

By not showing up for Wednesday's meeting, pro-choice and pro-women advocates like Boxer and Feingold may have assured that this will not happen.

UPDATE: Committee sources now tell The Cable that Kerry intends to bring up the bill during the November lame duck session after the election. If he is able to do that, Wednesday's delay won't have a negative effect on the progress of the bill, at least as far as the committee is concerned.

As for the full Senate vote, that was never really a possibility before recess anyway, these sources report, because Sen. Tom Coburn (R-OK) has made it clear he will place a hold on the bill unless an offset is found for the money it authorizes, meaning that passage by unanimous consent would be off the table and floor time would be needed for a debate and vote on the bill.

President Obama will unveil his administration's new overarching strategy on global development Wednesday in a speech at the United Nations.

"Today, I am announcing our new U.S. Global Development Policy -- the first of its kind by an American administration," Obama will say, according to prepared remarks.  "It's rooted in America's enduring commitment to the dignity and potential of every human being. And it outlines our new approach and the new thinking that will guide our overall development efforts."

The president's speech will place global development in the context of his National Security Strategy released in May, which emphasizes the interconnected relationship of security, economics, trade, and health.

"My national security strategy recognizes development as not only a moral imperative, but a strategic and economic imperative," Obama will say. "We've reengaged with multilateral development institutions. And we're rebuilding the United States Agency for International Development as the world's premier development agency. In short, we're making sure that the United States will be a global leader in international development in the 21^st century."

The White House was busy laying the groundwork in advance of the president's speech, touting the highlights of what it calls the Presidential Policy Directive on Global Development (PPD). A fact sheet provided to reporters laid out the basic ideas of the U.S. strategy, which includes a focus on sustainable outcomes, placing a premium on economic growth, using technological advances to their maximum advantage, being more selective about where to focus efforts, and holding all projects accountable for results.

The White House will not release the full text of this initiative, which was previously known as the Presidential Study Directive on Global Development (PSD-7).

On some specific items of contention, the White House has decided that USAID Administrator Rajiv Shah will not have a permanent seat on the National Security Council, as many in the development community wanted. However, he will be invited to attend its meetings when issues affecting his work are being discussed.

An executive-level Development Policy Committee will be created to oversee all interagency development policy efforts, as was outlined in a leaked copy of a previous draft of the new policy. There will also be a mandated once-every-four-years review of global development strategy, which will be sent to the president.

Obama announced the new policy during the U.N.'s conference on the Millennium Development Goals. "The real significance here is the fact that the President chose to unveil this at the U.N. and in the context of the MDGs," said Peter Yeo, vice president for public policy at the U.N. Foundation. "[I]t shows how closely the administration wants to work with the U.N. and U.N. agencies in implementing them."

Development community leaders reacted to the new policy with cautious optimism and a hope that implementation would go as planned.

"President Obama has delivered a big victory for the world's poor, our national interests, and the movement to make U.S. foreign assistance more effective," said George Ingram, a former senior official at USAID and current co-chair of the Modernizing Foreign Assistance Network.  "Now the tough task of implementation begins, and we are ready to work with the Administration to ensure that key reform principles are applied and codified in law, because that is the real way to make this policy one of the President's great legacies."

Deputy National Security Advisor for international economics Michael Froman, in a Friday conference call with reporters, defended the White House's decision not to release the entire PPD. "It's general policy that we can release a detailed summary of it, but as I understand it the policy is not to release the PPD themselves," he said.

Development community leaders were nonetheless disappointed.

"We understand that NSC documents like this aren't normally released in full, but there are pitfalls in this approach," said Greg Adams, director of aid effectiveness at Oxfam America.  "The Administration should make sure that enough gets out to not only provide the American people with a clear rationale for the new approach, but also make sure that our partners around the world understand how we plan to change the way we work with them."

On a Thursday conference call with development community leaders to preview the release, one senior administration official mentioned your humble Cable guy while requesting anonymity and asking the participants to hold the information close.

"I know that with this group it's a little unusual to do calls on background and embargoed... not that I think anybody on this line has ever talked to Josh Rogin," the official said.